The town of El Zonte in El Salvador is one of the first to resort entirely to bitcoin to keep its economy and infrastructure stable.
El Zonte: A Town of Bitcoin Enthusiasts
The digital funds came by way of an anonymous donor who ultimately discovered some lost bitcoin he had purchases several years ago. Following several attempts to remember his password, the donor ultimately gained access to the wallet and partnered with a San Diego native named Michael Peterson to shell out annual, six-figure donations to the El Salvador town that he’d grown to love over the years.
The primary aspect of the donations was that that they couldn’t be cashed out. Users in the town were required to learn how to utilize bitcoin to purchase the goods and services they needed to survive. This set up what is now known as the Bitcoin Beach initiative, which aims to create one of the world’s first official economies based fully on bitcoin and crypto technology.
Thus far, the initiative has worked for El Zonte and a neighboring town known as Punta Mango. Both towns are adopting bitcoin quickly, and to make up for any congestion or high fees, the Lightning Network is also being integrated to ensure transactions that are small occur off-chain and don’t bog down the system.
Michael Peterson says:
Originally, it didn’t make sense for 25 cent transactions, but it did for five dollars. But when the transaction costs ramped up again, we switched over to the Lightning Network.
At the time of writing, bitcoin in the area is being put towards the development of youth work programs, educational grants, transportation, utilities, and food for local families. Peterson explained:
As we injected bitcoin into the community, we also taught local businesses how to accept it and helped educate them on the advantages and drawbacks of accepting bitcoin… There was a lot of resistance among the adults. [It was] too technical, so we moved on to youth and they picked it up right away. The key is to get them to start transacting right away. Then, they want to learn more about it, the security of it, and how it works.
Ensuring Young People Understand
One person that’s been volunteering alongside Peterson is Jorge Valenzuela. He’s been involved in youth philanthropy for some time and is working to enhance all the training efforts of the Bitcoin Beach initiative. In an interview, he stated:
It’s great to see youth excited and dreaming about their futures in El Salvador and seeing a path forward here, instead of thinking they need to go to the U.S. They are able to work, help support their families, and go to university… Bitcoin has helped me understand what money really is and has given the resources to impact the lives around me.