Bitcoin in El Salvador
Episode VI. Block height: 784000. The people. The political situation. The adoption of Bitcoin. An honest live report straight from sunny El Salvador.
Capital: San Salvador - President: Nayib Bukele - Currencies: Bitcoin (Since Sept 21), USD Shitcoin (Since 01) - Population: 6.5 million - Official language: Spanish - Time zone: UTC-6.
Visa requirements: Europeans receive a visa for a max stay of 180 days at arrival. Folks from the U.S. have to present a current U.S. passport and either a Salvadoran visa or a one-entry tourist card, which is valid for a max stay of 90 days. The tourist card can be obtained from immigration officials for a $10 upon arrival, payable in Bitcoin.
When to go: The weather in El Salvador consists, simply put, of a dry season and a rainy season. The dry season starts in October and lasts until the end of April. From May to October, increased rainfall is to be expected.
Traditional food: Pupusas is the national dish of El Salvador, a thick, stuffed, skillet-cooked corn tortilla, traditionally served with a side of tomato salsa and coleslaw. Pupusas are almost always handmade, sold at numerous street corners for 35ct to $1 a piece and eaten by hand.
Transit Canada: Most flights from Europe have a stop-over in Canada. If this is the case, do not forget to apply for an electronic travel entrance (ETA) before, otherwise you go from Canada directly back to Europe. Yea, you will need this ‚visa‘ just for transit.
Using Bitcoin: To be able to use Bitcoin, a steady internet connection is recommended. You can buy a Salvadoran Sim card (Claro or Tigo) on almost every corner of the country for about $10 a month. Internet connectivity is very steady, lads.
I did it, folks. I have been to El Salvador, the smallest country of Central America, who, as you might all know, is the first to introduce Bitcoin as legal tender. And of course, as so many others, I wanted to check it out myself ‘Don’t trust, verify’, right? Two months of Bitcoin, surfing, sun, sea and pupusas. How that was and how far the Bitcoin adoption has progressed, that's what this episode covers. Despite my broke ass spanish, I tried to get in touch with the El Salvadorans and ask them about their opinion on the ‘coolest dictator’ in the world and their views of the hardest money on earth. A lot to cover, so let’s get started.
Already dead
Oh man, I can tell you, if you are planning to go to El Salvador, you should better not tell anyone about your trip outside your Twitter bubble. All the No-Coiners I told were practically already planning my funeral. I've traveled a lot, but I've never heard such a concentrated and unanimously negative opinion about a country. And I have been to Columbia a couple of years ago, right before they signed the contract with the FARC for example.
Of course, we are not all fully resistant to outside influences, and it gave me food for thought. If there is a unified opinion, then it must be right, or not? So I took precautions for my near-death experience: The first thing I did as a Bitcoiner of course, I tried to secure my Bitcoin treasure for my descendants, in case of death. How I did it and why you should think about it as well, independent of your travel plans, can you read in my last episode 'Storing and inheriting Bitcoin.’
So, regardless what is going to happen to me, my precious Bitcoin are not a donation to my fellow plebs. I am sorry! In the same breath, I also loaded up my lightning wallets (Zeus, Muun, Wallet of Satoshi, Bitcoin Beach) with a couple of Sats, because as a real Bitcoiner, you make such a trip Bitcoin only, of course. Unfortunately, my family and some no-coiner friends then talked me into taking a credit card and a bit of cash with me, just in case of emergency. Classic Boomers! Well, to calm them down, I did as told.
The Twitter bubble
All the preconceptions from family and friends and reinforced by my loyal Twitter Bitcoiners, off I went. Let’s be honest right away, in retrospect, I had a bit of a naive idea of how it would look with Bitcoin adoption in El Salvador. I mean, the law is not even 2 years old, and I imagined it like a Bitcoin Spring Break party, but for a whole country. Those booze-filled events that you undertake as a teenager, where you start celebrating with all the others right at the airport before take-off. That's more or less how I imagined it, so as I arrived in Toronto and went to the boarding zone to El Salvador I was in fact very disappointed: Oh man was I wrong. The only people I met there were El Salvadorians living in Canada and visiting family, and old white Canadians flying on to Costa Rica. No parties, no Bitcoin shirts, no flags, I wasn't even asked about my ‘HODL Bitcoin’ hoodie that I bought before the trip. The Twitter Bitcoin bubble is real, folks!
After a 5-hour flight and without conversations on how Bitcoin is going to change the world, I arrived in the capital, San Salvador. The airport is about an hour away from the city center. A Bitcoin Pleb I got in touch with beforehand recommended BitDriver, who accepts Bitcoin as payment for the ride. His name is Napo and when you talk to him, you realize how life changing Bitcoin can be. Finally, after the ride, as he handed me his phone with the Bitcoin lightning invoice, I thought to myself I made it to Bitcoin paradise.
We are early
Well, I was immediately brought down to earth when I confidently and naturally wanted to check in at my accommodation and asked for a Bitcoin payment. First, the lady behind the counter looked at me a bit puzzled and left. I, a bit confused, waited. When she came back with the manager, I still thought to myself, wow, that's some concierge service for a Bitcoin payment. When he then apologized and explained to me that the wallet would unfortunately not work at the moment, disillusionment set in. He clarified that I could either pay in dollars or by credit card. Both shitcoins, I thought, secretly thanking my boomer friends for coercing me into taking some dirty fiat money with me. Apparently this wasn't going to be a Bitcoin only trip after all. This would unfortunately prove true over the next few days, as I explored the capital and met a few Bitcoin plebs, who are working on Bitcoin education. I can already hear the many critics crying out, ‘I knew magic internet money adoption wouldn't work!’ I would rather say that it just takes time. But let's have a deeper look.
Bitcoin Adoption
So, can you now live on Bitcoin-only in El Salvador? YES, you can, but the convenience depends a bit in which region in El Salvador you are located. On the Pacific coast, especially in and around El Zonte, La Libertad and El Tunco, where the Bitcoin movement started, you can live Bitcoin only without restrictions: Supermarkets, restaurants, accommodations, surf stores, real estate agents (Yea you can buy a fancy pool house with Bitcoin), … In summary, a LOT of entrepreneurs accept Bitcoin. In the rest of El Salvador, it is a bit more complicated. There are also many businesses accepting Bitcoin, but far from universal.
Thus, it is very helpful to use Bitcoin Maps (BTC Map, Bitcoin Beach Map) to locate businesses that accept payment in sats. That said, I also discovered quite a few smaller companies that were not listed, but happily accepted Bitcoin. So the best strategy is to just ask everyone ‘¿Acceptas Bitcoin?’, the only spanish phrase I know in my sleep. Asking for Bitcoin payment is essential, even if companies do not accept it, they will eventually think about it, if demand for Bitcoin payments rises. And yes, there is a way to just bring your Bitcoin Lightning wallet and enjoy El Salvador fully. The magic trick are Bitcoin ATMs run and operated by Chivo. There are more than 200 of these spread throughout El Salvador, where you can either buy or sell Bitcoin for dollars, commission-free. All you need is a phone number and a Bitcoin Wallet to process On-Chain transactions. Lightning is unfortunately not yet supported, but coming.
Remittances Payments
The Chivo ATMs also serve an important function for El Salvadorans. I was able to meet many who received payments from family members in Canada or the US via Bitcoin and then had them paid out in exchange for dollars at the Chivo ATMs. Instead of 10-15% in fees that Western Union and Co charges, you have no commission and money is sent final in a matter of minutes than days. Remittances payments account for more than 26% of the gross domestic product in El Salvador.
Figured out a sly roundabout way to make my trip somewhat Bitcoin only, I then started to ask myself why some companies are not accepting Bitcoin? The first thing to know is that El Salvador does not have its own currency. Rather, they have been using the US dollar since 2001, undoubtedly one of the better fiat currencies out there. And as it is with long-established traditions, they are difficult to break. Since the population does not see the immediate rapid devaluation that is the case in Zimbabwe, Venezuela, or Lebanon, for example, it is rather a steady slow grind to the bottom, so they do not really see an immediate need to hold or accept Bitcoin. Comparable to our slow adaptation in the West, regardless of whether there is a law or not.
Education is key
Bitcoin is a grassroots movement, a bottom-up approach, from the people, for the people. For this reason, a government enforced law that suddenly everyone has to accept Bitcoin overnight will not work. The Bitcoin law in El Salvador has without question put the country light years ahead of all other countries because it has the most favorable infrastructure and the most bitcoin-friendly laws. Nevertheless, for Bitcoin to catch on, people need to understand why they should use hard money. Thus, education about money in general and the benefits of Bitcoin specifically is key for adoption.
Secondly, El Salvadorians are very suspicious of the state. Reasonable, because the population has suffered criminality and corruption on the highest level in the last decades. Now, it was precisely this state that introduced Bitcoin as an official currency and launched the state-owned Chivo wallet. The distrust against Bitcoin was naturally very high, because many El Salvadorans still do not know that Bitcoin is a permission-less and state independent money. Rather, many think Bitcoin belongs to the government and is their own currency.
Proof of work
In this context, I was able to meet the guys from “Mi Primer Bitcoin”, one of a handful of non-profit organizations who spread donation based Bitcoin knowledge around El Salvador. They just introduced their own Bitcoin Diploma for schools and universities. The kind of proof of work, we all have to work on in the Bitcoin space: Spreading knowledge about Bitcoin in easy digestible bits, because knowledge is key to Bitcoin adoption. And that doesn't happen overnight, but takes time. Only when people understand the benefits of Bitcoin, they will start using it. By the way, you can also download the Bitcoin diploma yourself and start educating others about money. That ‘education is key’, is slowly recognized by the El Salvadoran state, which now wants to work with Mi Primer Bitcoin to offer courses at schools and universities. A great development indeed!
Politics
The political upheaval in El Salvador has made a lot of negative headlines in the West and was also a big reason for my trip. Without question, Nayib Bukele has radically changed the political system in the country and imprisoned many people. Right up front, among them are probably also innocent ones. In order to form an opinion, however, one must consider the situation before Nayib Bukele became president. In this regard, I also tried to talk to El Salvadorans, so whenever I need transportation I either took the public bus or hitchhiked my way, to get in contact with as many as possible.
One thing is certain when talking to them: El Salvador was a living nightmare before Nayib Bukele took over. Imagine, a year ago it would have been impossible for them to work or go out later than 6 o'clock in the evening, because in the dark it was very likely that they would be stopped, robbed or even be murdered by a gang member. In fact, at that time, El Salvador was one of the most dangerous countries in the world and regularly topped all murder statistics. Not a day went by without at least one recorded murder. Locals were also not allowed to leave their political district to visit friends or relatives, because even then they were at great risk of getting into a hostile gang fight. I often thought to myself, where were all the human rights organizations and states that now point the raised finger, when innocent children were shot every day on the open street? Why were none willing to help El Salvador with the problem?
Of course, not everything that is currently happening in El Salvador is bliss, but how can someone combat organized gang crime and corruption, which in fact dominates the entire state, if not with radical measures? And no doubt Nayib Bukele has taken radical measures: In response to the country’s most violent day in history (3/27/21), where 62 people were murdered in a surge of seemingly senseless violence against average Salvadorans, El Salvador’s Legislative Assembly approved a “state of emergency.” Since then, countless gang members have been arrested and sent to prison. It looks like that the measures are working (More about safety in El Salvador in a moment).
The impression I got was that Bukele is VERY popular and exactly this popularity brought him a lot of power. With a lot of power comes a lot of responsibility, and the line is always a very fine one. In history, at least, it has often been the case that politicians with a lot of power have abused it in their own favor. Of course, this risk also exists in El Salvador. How the whole thing will develop, one can not say yet, and we will have to wait to see. Next spring, elections will be held, and if Bukele is allowed to run, his re-election is out of the question, provided nothing unexpected happens.
Safety
Is El Salvador safe? The question I have received by far the most during my trip, and the answer is a resounding YES. To be honest, I experienced El Salvador and the capital San Salvador as one of the safest Latin American countries I have been to. After my first trip from the airport to the accommodation, I drove exclusively by public transport (A bus ride costs between 40ct to $1) and/or hitchhiked my way through the country, which gave me the opportunity to talk to many Salvadorans. I got to know very warm, super friendly and helpful people. Some of them even invited me for a meal to their home and most of them support the drastic measures of Bukel, because in fact for a lot of them quality of life has improved significantly.
It seemed to me that the locals themselves cannot yet believe their newly acquired freedom. Since this state is only about a year old, it also has the advantage that very few tourists are on the road. This allows a very authentic impression of the culture and the people, which is otherwise very difficult to find in many countries. I am also convinced that if the security situation remains like this, El Salvador will become a tourist hotspot in the coming years. Not just for us Bitcoin crazy people who want to spend their sats, but also for people who love surfing, beaches and nature in general.
Many travelers I spoke with in Guatemala and Belize skipped El Salvador because they thought it was dangerous. For everyone who has been in El Salvador, the country was a highlight of their trip. All perfect conditions for a great future. But who I am to tell you. Don’t trust a random stranger on the internet, go and check it out for yourself. Just don’t forget the most important spanish phrase, “¿Acceptas Bitcoin?”
Spend and Replace
This also brings me to my last point. Yes ‘HODL’ is important and right, but to drive Bitcoin adoption and because it's just an amazing feeling, we have to start spending Bitcoin at some point. Why should people accept Bitcoin when no one is paying with it anyway? So my new principle is SPEND and REPLACE. After a while of hodling, spending Bitcoin may feel a bit unusual at first, but trust me, it's fucking nice after a while, thinking of transacting without a centralized intermediary and without coercion of the state. I mean, Bitcoin was created to be used and not to be stored in some (virtual) vault until you are dead, like gold.
The End
That's it for this episode. Hopefully, you could take some valuable knowledge about El Salvador and the current situation. Every Bitcoin visitor supports Bitcoin adoption in El Salvador, therefore I am very happy to read about your trip! If Bitcoin adoption turns out to be successful for El Salvador, it will serve as a role model for many other countries to follow. So what are you waiting for, folks? Get some sun and spend some sats in Bitcoin land.
I see you hopefully in the next one. Until then, remember: Education matters. ₿ critical, ₿ informed, ₿ prepared.
Yours,
Books you can’t fuck with
[1] Carl Menger, The Origins of Money
[2] Ludwig von Mises, Human Action: A Treatise on Economics
[3] G. Edward Griffin, The Creature from Jekyll Island: A Second Look at the Federal Reserve
[4] Jens O. Parsson, Dying of Money: Lessons of the Great German and American Inflation
[5] Robert L. Schuettinger, Forty Centuries of Wage and Price Controls: How Not to Fight Inflation
[6] Adam Fergusson, When Money Dies: The Nightmare of the Weimar Hyper-Inflation
[7] Saifedean Ammous, The Bitcoin Standard: The Decentralized Alternative to Central Banking
[8] Ryan Holiday, Discipline is Destiny: The Power of Self-Control
Recommended Hardware - Wallet
Not your keys, not your coins: The Bitbox Bitcoin only
"I knew Carl Menger. And, mister, you're no Carl Menger." ~Ludwig von Mises or Lloyd Bentsen, probably...
Thanks for the cool report and update on El Salvador uber alles.
Hi Carl this is dope - I was literally thinking who will compile all this info so we can consider our options
Thanks so much
Will read and share