Bitcoin Beach: How El Zonte became a bitcoin paradise

A small isolated village in El Salvador called El Zonte is making a lot of headlines in the media around the world. The village is known as Bitcoin Beach.

We are far from the concrete towers that rise into the sky. El Zonte is a coastal town that attracts surfers and tourists during the summer periods. Yet it is the most crypto-friendly city on the planet. All merchants and all services in the village accept bitcoin as a means of payment.

More precisely, Bitcoin Beach aims to be the first Bitcoin experimentation city. A real full-scale empirical laboratory in El Salvador. The attempt to test on a human scale what a circular economy based on bitcoin.

This is no coincidence, because the Salvador is the first country in the world to make Bitcoin legal tender. It was recently joined by the Central African Republic (and its sangocoin), in April 2022.

How El Zonte became Bitcoin Beach?

It seems that it was an American expatriate from San Diego, an economist by profession, who was responsible for the initiative. Arriving in El Zonte in 2015, he created a charity (Misionsake) which offers scholarships and helps create local jobs.

When the president announced that bitcoin would now be the legal tender of El Salvador, Peterson jumped at the opportunity to create his experimental village.

The first action was the installation of a bitcoin distributor (BTM) Company Athena Bitcoin.

This was very useful in providing liquidity and more direct interaction with cryptocurrency. The use of BTMs is in fact very close to classic ticket machines. You can exchange bitcoins for fiat currency and vice versa.

Bitcoin wants to fill the gaps inSalvadoran economy

Before the Bitcoin Beach experiment, most residents of the village of El Zonte like many other villages in the country (and Latin America in general) did not have a bank account.

It is one of the countries with the most unbanked people in the world with more than 70% of the national population.

Statically, it is also one of the most dangerous countries in the world. The crime of maras gangs particularly prevalent on the island. For the most part, they are poor, out-of-school young people who find crime the only accessible financial resource. No need to do major studies in sociology to know that poverty and crime are terrible lovers*. Even so, we would not agree with the idea that the root causes (root cause) of crime is not linked to poverty, the fact remains that many young people have no other alternatives than those of petty theft.

In reality, it is the entire Salvadoran economic and financial system which is fragile and maintained in a status quo which seems difficult to achieve. More than a third of the population lives below the poverty line.

It should be remembered that El Salvador had abandoned its currency " colon " in 2001 (due to excessive inflation) in favor of the US dollar. Since then, the entire local economy has operated with the US dollar as a substitute currency.

So when the president Nayib Bukele decided to make bitcoin a legal tender, it is also to reduce its dependence on the American dollar. Beyond his attraction to cryptocurrencies and blockchain, Bukélé has much more pragmatic views for his country. Become “Bitcoin City”, a global hub including tax advantages to attract crypto businesses from around the world.

—>Read the text written by Nayib Bukele: "Stop drinking the (Kool-Aid) lies of the elites" in which he explains why Bitcoin can improve the country economically.

nayib bukele salvador — President Nayib Bukélé, in 2021. Photo credit. REUTERS/Jose Cabezas

With bitcoin, the country wants to regain a certain financial and political autonomy. Bitcoin is the ideal tool as it does not belong to any government. Bukélé made it his ultimate weapon to fight against poverty and American domination at the same time.

What are the benefits for the population of Bitcoin Beach?

According to the interview given by Peterson on the Business Insider newspaper, bitcoin beach is already showing its beneficial effects on its population.

It is estimated that more than 90% of families living in El Zonte have made at least one bitcoin transaction. This demonstrates the villagers' enthusiasm for cryptocurrency.

The community felt more invested in the village project. Young people have shown themselves to be more sensitive to bitcoin. They learned, indirectly, about personal finance. They are aware that they can build new wealth with their bitcoins.

For example, they are more able to create online businesses, something previously unthinkable. Everyone is capable ofaccept bitcoin payments. There is no need to have capital or purchase expensive equipment as is the case in traditional finance. A payment terminal, for example, can cost up to $500 not including maintenance costs…

Since their appearance in the 80s, some regions around the world have still not been able to obtain them. This has been a major obstacle to financial inclusion in certain regions for more than five decades. THE Bitcoin is the first financial technology accessible as open source, to everyone for free.

In fact, by accepting bitcoin, Salvadorans can find customers from all over the world, without any restrictions or geographical obstacles. A historic godsend.

For the most part, they can also find teleworking jobs and get paid in bitcoin. Competence in the professions of 3 web and blockchain being constantly on the rise, they have more chances of finding a job. The goal is not to make crypto-billionaires, but to educate them about the finance of tomorrow.

Naturally, they also feel more connected to the rest of the world. Bitcoin opens doors that were previously closed and even non-existent.

What about bitcoin volatility? Is this an obstacle for the population?

The main arguments against the use of bitcoin are based on its volatility. If last December, a bitcoin was worth almost $40,000, today it costs around $20,000.

The volatility of bitcoin (sometimes extreme) could frighten some traders who would see it as a gross financial loss. For many countries that have a fragile national currency, bitcoin seems to have become a safe haven, in the same way as'gold. The perception of the volatility of bitcoin is then considered a safe savings. Since its creation in 2009, bitcoin has continued to increase in value, even if this is interspersed with bearish periods. Today, bitcoin celebrates its 14th anniversary, and it is becoming ever more popular.

Aware of this, traders continue toaccept bitcoin payment. At Bitcoin Beach, you can book hotel rooms, buy basic products in grocery stores or even eat in small restaurants by paying in bitcoin.

This is because traders can immediately convert their bitcoin into dollars. The Salvadoran population uses the Chivo wallet which is the “official” crypto wallet of the country.

So, in just a few clicks, they can exchange their bitcoins into dollars if they need liquidity. Otherwise, they can keep them for investment purposes.

It therefore depends on the investor profiles of people who use bitcoin.

What are the future prospects of Bitcoin Beach?

Currently, developers are working on creating a real tourist area with small private villas.

There would be around 450 houses with purchase prices ranging from 150 euros to more than 000 million dollars. The idea is to attract bitcoiners from around the world as well as foreign investors.

Project to create houses in El zone, by the developer ECI Development.

Obviously, houses can be purchased in bitcoin, that goes without saying :). Thus, El Zonte could transform into a corner of paradise for the community and for other crypto enthusiasts. Crypto millionaires are generally known to appreciate islands like satoshi-island. There is no doubt that the concept will attract them.

What are the criticisms raised about BitcoinBeach?

Most of the criticism comes from foreign investors coming to El Zonte and driving out the local population. Foreigners then come to buy land for modest sums, making the village less authentic. The harshest critics say that El Zonte will not have many of its autonomous villagers within a few years. A height? A dramatic scenario? Only the future will tell us. Hopefully the native villagers can seize business and financial opportunities with the new arrivals…

Bitcoin Beach has become a reference and a model for other villages

Since then, his village has attracted imitators. Other initiatives of this kind, such as in South Africa, have emerged. The town named " B itcoin Ekasi » located in Mossel Bay, is directly inspired by Bitcoin Beach. The idea is gaining traction, it was inevitable. Recently, it was a village in Jericoacoara in Brazil that launched the experiment (Beach Bitcoin).

On a larger scale and from a macroeconomic point of view, El Salvador can become an example for countries suffering from embargoes or financial sanctions. We can think of Cuba and Iran for example. Both countries are hit by American sanctions which weigh heavily on their economies.

Opening your economy to crypto also means freeing yourself from the injunctions of the IMF. The International Monetary Fund no longer becomes a useful recourse for these countries. It is also with this in mind that the Central African Republic has made bitcoin a legal tender as well.

Given such prospects, it would not be surprising to see more and more countries adopt Bitcoin…

*Sociologists Richard Cloward and Lloyd Ohlin supported the idea that crime is a direct consequence of poverty. For them, this criminality approaches a form of criticism and social rebellion.

See also:

#bitcoin #salvador #bitcoinbeach #elzonte #nayibbukele

Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

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