The Real Story Behind the Recognition of Bitcoin as an Official Currency in El Salvador
The Real Story Behind the Recognition of Bitcoin as an Official Currency in El Salvador
Nayib Bukele decided to bet on Bitcoin to change the future of an entire people.
Written by Sylvain Saurel - In Bitcoin We Trust
El Salvador became the first Bitcoin nation in the world on September 7, 2021. The first but obviously not the last. Many other countries are closely watching what is happening in El Salvador with a simple idea in mind: to also seize the unique opportunity represented by Bitcoin.
If Bitcoin Day in El Salvador turned into Bloody Bitcoin Day in the markets, which suggests a willingness to attack Bitcoin on this special day, things have since calmed down.
The price of Bitcoin has stabilized in a range between $44K and $47K, and El Salvador was able to reach a reserve of 550 BTC by buying the dip. President Nayib Bukele having quickly figured out how things worked with Bitcoin. Every opportunity to accumulate more should be taken.
Bitcoin adventure gets off to the best possible start in El Salvador
Just one week after the official launch of the Bitcoin adventure in El Salvador, the country has more than 500,000 users of the country's official wallet. The use of the Chivo wallet is not mandatory, but its creation was a necessity to provide at least a reference solution to Salvadorans in this field.
At the same time, more than 200 Bitcoin ATMs have been deployed in the country to allow the population to come and buy Bitcoin. A little more than 50 terminals called "Point Chivo" have also been activated in America to facilitate transactions to Salvadorans living abroad.
While the Bitcoin adventure is off to a good start in El Salvador, many don't know how the story really began. Many probably imagine that Nayib Bukele woke up one morning in May 2021 with the desire to make Bitcoin an official currency of his country.
But Nayib Bukele's interest in Bitcoin goes back much further.
El Salvador's story with Bitcoin begins in 2019 on the El Zonte side
So let's go back two years. It's 2019. Michael Peterson is a 47-year-old Californian who likes to split his time between California and a surf spot he's been frequenting for over 17 years. This spot is located in El Zonte on the Pacific coast of El Salvador.
Passionate about this country, Michael Peterson helps various development projects in the village of 3000 inhabitants, through the local church. One day, an anonymous donor proposed to Michael Peterson to conduct a full-scale experiment and develop a local economy based on Bitcoin.
The idea seemed appealing, as El Salvador is a poor Central American country, mostly rural, with poor infrastructure. El Zonte has no banks, no ATMs, and in any case, 70% of El Salvador's population has no access to banks.
Salvadoran expatriates send around 4.5 billion dollars each year to their home country. These transfers are made through companies like Western Union. These companies charge high fixed fees, often for small transfers.
Michael Peterson converts El Zonte locals to Bitcoin
To carry out this project, Michael Peterson surrounded himself with three residents of El Zonte. He began preaching about Bitcoin to the people of the village.
As you can imagine, the older population is the most reluctant. So Michael turned to the younger generation first. The project stalled, and only one store accepted Bitcoin as a currency.
Then comes the pandemic of COVID-19 in early 2020. The village of El Zonte, which lives mainly from tourism, was deserted for months, leaving the population without a source of income. Michael Peterson began to transfer the equivalent of $35 per month in BTC to 500 families in the village.
An ATM was set up to facilitate transfers between Bitcoin and the local currency, which was the US dollar. The population began to embrace the Bitcoin revolution. More and more stores were accepting Bitcoin.
To make payments and money transfers easier and faster, Michael Peterson needed an app. He turned to 26-year-old Jack Mallers, founder of Zap Solutions, who created the Strike application, which allows Bitcoin to be transferred without commission.
Eighteen months after the project began, 90% of El Zonte's population was using Bitcoin regularly. El Zonte then became Bitcoin Beach.
Fascinated by Bitcoin since 2017, Nayib Bukele is secretly approaching Jack Mallers during 2020
It was also in 2019 that a 38-year-old millennial became president of El Salvador. Nayib Bukele then becomes the youngest president in Latin America, with the distinction of not being part of either of El Salvador's two major political parties. An anti-system candidate who wanted to tackle gang crime and poverty, Nayib Bukele was elected in the first round with 53% of the votes cast.
With an entrepreneurial spirit, Nayib Bukele is already familiar with Bitcoin. In 2017, when he was mayor of Sans Salvador, he had even invested in Bitcoin with his political party by posting a prophetic tweet:
Once elected to lead El Salvador, Nayib Bukele embarked on an ambitious effort to modernize the country's infrastructure. He secretly called on Jack Mallers to help him finalize his plan to make Bitcoin the official currency of El Salvador.
At the Bitcoin 2021 conference in Miami, Jack Mallers had the honor of announcing the big news to the world by showing a video of President Bukele. President Bukele was quick to pass the law that made Bitcoin the official currency in El Salvador as of September 7, 2021.
Determined to make the Bitcoin experiment a success in El Salvador, Nayib Bukele then began a process of educating citizens to understand Bitcoin and avoid its pitfalls. He even decided to set up a Bitcoin mining farm using geothermal energy from the country's volcanoes.
In a poor country like El Salvador where 70% of the population has no access to banks, Bitcoin is a revolution and an incredible opportunity. Rather than live within the current system, Nayib Bukele decided to bet on the future success of Bitcoin to change the future of his country.
No one knows how the Bitcoin adventure will end in El Salvador, but by now everyone has heard about this small country that is changing its future
No one knows if the Bitcoin experiment will be fully successful in El Salvador, but it is a major step in the development of decentralized finance and Bitcoin. Many other countries are watching this experiment closely and are already standing by to join it.
Time will tell what will happen, but we can already praise the creativity, innovation, energy, and audacity of this group of entrepreneurs who, gathered around Nayib Bukele, are ready to write a new page in the history of the world. Often young, they are driven by the philosophy of decentralization, philanthropy, capitalism, and technology.
They are ready to revolutionize the world by taking the Bitcoin experience to the next level, just as the generation before them was able to do with the Internet. I'll let you imagine what this could mean for Bitcoin if they succeed.
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It's like an El Salvador success story. They didn't give up. And they succeeded. Now they have set an example for the whole world. I think it's a very logical choice.
It might not have made sense if England had done it. I'm not sure. Because it's untested. No matter how much I believe, there is always a chance.
If it backfires, it won't be a problem for El Salvador. A little blow, maybe.
Also, I think the biggest reason why it makes a lot of sense is that El Salvador is a tourist country. What does tourism happen with? Of course, with advertising. A month before this news, I didn't know that there was such a place as El Salvador on the map. But now the whole world knows. And people will want to see El Salvador.
This will stimulate tourism. In this regard, it is a very logical move.
In addition, bitcoin is the technology of the future. They are one step ahead of all the countries of the world right now. In an economic and social sense.
Thanks for the nice article.
The most logical move has been made so far.
A country whose economic situation is not good has accepted Bitcoin. Of course, it will be a difficult process, but when they understand the business, there will be an improvement in the economy.
My favorite thing is that the country will lead the world. If people or countries want to use bitcoin, El salvador will look first. Experience is the applied state of knowledge. We know the information, El Salvador will try.
I can't wait to see your experience.
Thanks for the article.
Have a nice day.