Bitcoin Beach: A Community Initiative That Led to El Salvador Adopting Bitcoin
Bitcoin Beach showed the world that bitcoin can be used to transform the lives of the underserved.
Bitcoin Beach is a phenomenal community project that showed the world that bitcoin can be used to transform the lives of the underserved and unbanked. This project in a small coastal town El Zonte of El Salvador led to the entire country adopting bitcoin as legal tender. It took them only two years to prove bitcoin’s use case in improving the lives of the unbanked. As president of El Salvador mentioned on Twitter Spaces,
“Bitcoin Beach is the fire. You have provided us with arguments, pictures and stories to adopt bitcoin at country wide scale” - Nayib Bukele, President of El Salvador
Backstory: In 2019, an anonymous bitcoin donor made a huge bitcoin donation for a multi year project in El Zonte to kickstart a bitcoin circular economy. Micheal Peterson, an American and a long time resident of El Zonte formulated the plan and was tasked with the execution of the project. One condition of the donor was to not convert the bitcoin donation to fiat as most nonprofits do. The goal was to get the community comfortable in using bitcoin the way it is that is in digital format.
How they did it: Michael faced numerous challenges in getting the community to adopt bitcoin. He first began with explaining the community about bitcoin and why it’s important. But people didn’t show much interest in the technical stuff. He quickly flipped his approach to getting them to use bitcoin for everyday transactions in order to make them realize the magic of using digital currency. Initially he also focused on educating the adults but soon realized getting the youth to adopt was much easier and they in turn taught their parents to use. Education was key for adoption. Michael and the local members of the project handheld community for the first couple transactions, being right next to them when they pulled out their phone to pay in bitcoin. In order to have the circular economy going bitcoin beach team worked with shopkeepers, training them and showing them the value in accepting bitcoin.
The tipping point came during the pandemic when people weren’t able to leave their houses to go to the shops. Michael injected bitcoin in the community. He made direct deposits to their bitcoin wallets without any physical contact. Direct bitcoin donations gave the power to the locals to buy what they needed most, and helped the local businesses keep their door's open.
Bitcoin Beach is a truly amazing community led initiative that changed the trajectory of the entire country and potentially of many others who may follow El Salvador in making bitcoin legal.
There were a lot of things that the initiator, Michael Peterson of Bitcoin Beach did right. I’ll like to highlight a few
As an outsider and a gringo he mostly led the local youth be the front of this initiative. Though Michael is not a native of El Salvador he has had over a decade of relationship with that town, has bought a house there and is a permanent resident of El Salvador. He knows the community inside out and they know him. There was trust to begin with
He incentivized giving. Rather than just doling out free bitcoins he turned it into an incentive for people completing tasks. Youth Work Programs for cleaning up trash and rivers. Education grants for continuing education to high school and universities etc. Micheal did give out bitcoin for free but that was during the pandemic when families and businesses were struggling. To energize the economy Micheal made bitcoin transfers of $35 per family to 600 families every 3 weeks. This helped people meet their basic needs of food and other supplies and shops had customers even during those most difficult times. Michael also had plans to incentivize remittances in bitcoin by offering a matching program.
He was quick at course correcting. He initially worked with adults but realized its easier to get the youth using it first. He empowered the youth, took them to bitcoin conference, be part of the bigger community. He focused a lot on education - handholding at every step with the support of local youth.
He puts in an equal parallel effort to let the world know about his little project in a small town of El Salvador. He shares the story with top podcasters, journalists and with the bitcoin community on Twitter. He shares the story with government of El Salvador. It’s said that the Bitcoin Beach Forbes article that got the world to learn about El Zonte and El Salvador may have got the President of the country to take a deeper look that led to him making bitcoin legal tender.
Bitcoin Beach is a great study for anyone who’s looking to get inspired and to replicate the model of financial inclusion in other parts of the world.
This podcast gives a deep dive into Bitcoin Beach and how they got the community to using bitcoin 👇
Breakdown: An interview with Bitcoin Beach
A podcast on Bitcoin Beach in 2020 when they were in the middle of creating the circular economy and were still figuring out the future course 👇
Mike Peterson from Bitcoin Beach
Another great detailed piece about Bitcoin Beach 👇