Bitcoin Education for Nation-State Adoption
Bitcoin Beach in El Zonte, El Salvador is ground zero for Nation-state adoption of bitcoin. I first began paying attention to this project in March 2020. Bitcoin Beach organizers played a massive role in keeping food on the tables of hundreds of families during El Salvador’s severe covid-lockdown. Using Bitcoin’s Lightning Network, I was able to send money to two families directly and instantly. The next year, my family and I spent two months in El Zonte. We went to surf, to escape the US winter, and to see how bitcoin was being used.
The Bitcoin Beach project began thanks to the groundwork of long-time expat Mike Peterson with support from an anonymous Whale (large bitcoin holder) who wished to see bitcoin used as a day-to-day currency. But the Bitcoin Beach project has been led from the beginning by local Zontenos with support from Mike. The program has funded social projects ranging from youth beach cleanups, to establishing lifeguard services along the wave-filled coast, to incentivizing kids to complete schoolwork and attend after school programs.
Surfing is a huge part of life in El Zonte. For years, surf tourism has been a primary source of income for this area. You’ll find that locals make up the majority of surfers in the lineups. It’s no surprise that many Bitcoin Beach projects have focused on fitness and ocean safety, and that the Bitcoin Beach organization is appreciated by the community.
Surfing the Volatility: Some Fare Better than Others
Bitcoin is simply the world’s best money. I won’t argue for why here, as many writers have covered the topic already. At this point in the adoption cycke, whether bitcoin actually improves one’s life, at least in the short term, depends a lot on how individuals interact with it.
Throughout my time in El Zonte I paid 3 surf photographers and 1 surf instructor in bitcoin. At the time, its price was rising weekly and the photographers were enthusiastic to accept and hold it. One even referred to me as “Bitcoin!” when seeing me around town. I didn’t give them much advice beyond holding it for a long time. All but one already had a bitcoin wallet and I presumed they knew what they were dealing with.
But when I checked in with them in early June, after the Spring 2021 price correction, they all were less than enthused about bitcoin:
“Pues la verdad a mi no me gusta [bitcoin] mucho.”
“The truth is I really don’t like bitcoin.”
For me, I don’t like bitcoin and I think it’s bad for El Salvador.
Tenia como $350. Pero bajo a $310. Mejor lo saque.
I had like $350. But it dropped to $310. Better to take it out.
(this person needed the money to invest in his surfboard business, and didn’t want to risk more capital.)
It’s understandable that in an environment of day-to-day living in a country without a social safety net, many don’t have the ability to save much money, never mind the desire to holding a portion of their savings in a volatile asset. .
But this isn’t the whole story of bitcoin adoption in El Zonte. A coffee shop owner who I regularly spoke with (in English) seemed to manage bitcoin on his balance sheet well enough. He took “profits” into USD when the price seemed high or had large business purchases to make. I asked him his thoughts on the new law:
I am very bullish about it. It could be a really good thing…The key for me is that Strike [a new payments app] keeps your balance in USD and it will be linked to your bank account even though you can pay BTC on the fly. So for the majority of people doing everyday transactions, Stike could keep things relatively stable and business as usual.
Another Salvadoran friend of mine- a female professor with secure employment- had this to say:
Personally I view it as a long term investment, not for everyday life.
It’s clear to see from these examples that different people have different experiences with bitcoin. A persons’s financial sophistication and degree of financial security will most likely determine how they interact with it. This is the case in every country.
What’s Next? Fund Bitcoin Education Efforts
Despite the wish by some that Bitcoin would just go away, the network grows as its price climbs to new all time highs. It’s been said that price action attracts new users, leveraging a built-in viral loop that organically scales bitcoin awareness and adoption. The fact is even if most people prefer USD stable coins, the attraction towards bitcoin will be inevitable. Accepting that bitcoin cannot be eliminated, and that human self-interest and hope will continue to draw in new users world wide, the question becomes how community leaders, entrepreneurs, and policy makers can work to mitigate the potential downsides of this?
I believe our best chance for success can be found in financial education.
The conditions should be created for people to most likely relate to bitcoin responsibly and successfully. That is- not bet the farm and face volatility, but benefit from the annual appreciation in purchasing power through consistent saving.
First, knowledge of what bitcoin is, where it came from, and why it exists should be readily available and to anyone with an interest in learning. This illustrated article from the CashApp team is a great example. Topics like bitcoin as remittances and savings are essential.
Second, to help people avoid risky and dumb “investment schemes” like speculating on altcoins and outright ponzis, information and stories should be produced that share experiences of people who have been scammed (Bitcoin affinity scams are plentiful world-wide), helping everyone to recognize the warning signs.
Third, messaging that promotes the idea of low time preference savings and responsible financial management should be promoted. Learning and holding bitcoin changes you. A focus on low-time preference value and savings is beneficial all around.
This educational content should be designed with these things in mind:
- It should be developmentally appropriate. The surf photographers differ greatly from the business owner and professor in levels of financial sophistication and experience managing money. Additionally, where and how these groups consume information should be taken into account to most effectively promote equitable outcomes.
- It should be culturally competent. Designers and educational content developers should understand the nuances, memes, and opportunities in the local culture, so as to design the most effective messaging possible.
- It should be multi-channel. Funding and incentives should be sufficient to establish billboards, pay for social media, employ community level ambassador programs, develop in-app educational incentives, and even have messaging integrated into local television (as demonstrated by the show Soul City in South Africa).
- It should be grassroots. Person-to-person education is what Bitcoin Beach has been doing for a reason- it works. There should be a massive advisory team that can help individuals understand bitcoin and use bitcoin.
While I’m advocating for general financial literacy, it’s important that bitcoin-specific education on topics such as running nodes, using the lightning network, software development, and mining be available for those interested and ready. Bitcoin-specific education will allow Salvadorans to contribute to and benefit from the development of the Bitcoin network.
Who will fund bitcoin education?
I believe this education should, in part, be paid for by the State. In the case of El Salvador where the government requires by law that businesses accept bitcoin, it is only natural that they should fund educational efforts. Additionally, bitcoin companies seeking to do business in El Salvador should incorporate education into their apps and marketing budgets.
It would make sense for projects like Bitcoin Beach to be put in charge of education strategy and potentially administration since they have a longer track record of success in grassroots bitcoin education. It’s important that whoever is selected as an advisor is bitcoin-only.
In conclusion
A bitcoin-literate population is a financially-literate population. The new development in El Salvador is promising in many ways, yet much work remains to be done to maximize the chance of success. We must focus the discussion on how to prepare people to interact with both State and Non-state digital currency because Bitcoin is undoubtedly here to stay.
