A Village in El Salvador has become the first bustling geographical area with an almost universal bitcoin adoption. The beach town’s residents use the king of crypto as a form of payment.
According to a Forbes report, most of the residents of El Zonte have adopted Bitcoin for every transaction. The Bitcoin beach initiative is the brainchild of Michael Peterson, a native of California who settled in the village. The objective of the initiative was to create a sustainable Bitcoin ecosystem.
Integration of Bitcoin
The surfer’s paradise residents use BTC to pay for anything from food, groceries and paying their utility bills. The town’s youth who repair roads and broken water systems are paid in Bitcoin. College and high school students also receive their educational grants in BTC. Those enrolled in local schools pay for their lunch bus rides and snacks in bitcoin.
El Zonte is seriously run down by the impact of Covid-19. But the small beach town has continued to strive due to the integration of bitcoin. The ongoing Covid-19 pandemic has put most people out of employment. However, the direct bitcoin transfers of $35 facilitated to 600 families every three weeks have come in handy. The Forbes report states:
“Like so many Central-American beach towns, the families of El Zonte were hit hard by the COVID-19 pandemic. Other tourist hot-spots continue to struggle as borders remain closed. But the people of El Zonte have forged their path forward, thanks to its newly formed Bitcoin economy.”
Government Hasn’t Interfered
The idea of the Bitcoin economy crossed Peterson’s mind after an anonymous person made a Bitcoin donation to assist the El Zonte residents. Most of them were unable to open bank accounts as they didn’t meet the requirements. The transition to a bitcoin economy met some resistance before the elders fully understood the crypto concept. The Bitcoin Beach Initiative now makes every effort to educate the people. The program is thriving, and the government of El Salvador hasn’t interfered with the bitcoin project.
Bitcoin could disrupt El Salvador’s remittances industry, estimated at $5 billion annually. Most people living in places like El Zonte have no access to bank accounts and rely on Western Union. Wire transactions cost between 5-10%, and the nearest Western Union office requires a journey of one hour by bus.
Faster and More Cost-Effective
The initiative is testing a new product called Strike App which runs on the Lightning Network. The App can connect with a sender’s bank account and recipient’s bitcoin wallet. This will make transactions from the U.S. to El Salvador faster and more cost-effective. Crypto experts were initially concerned about the efficiency of Lightning Network, but Blockstream’s CSO Samson Mow says:
“We’re seeing rapid growth in Bitcoin adoption already. And with Lightning, it’s becoming more and more relevant and prevalent everywhere we go. I think all it will take is for some point of sale terminal operator to integrate Lightning. You can essentially can have Bitcoin payments everywhere”.
