Endless Thread - Tales from the Crypto | Part II: Bitcoin Beach

Episode Date: September 23, 2022

One year ago, El Salvador made Bitcoin legal tender — the first nation in the world to do so. But how did Bitcoin make its way into this Latin American country? It all started in the coastal town of El Zonte, which earned the nickname 'Bitcoin Beach' after being flushed with the cryptocurrency thanks to a mysterious donor. In the second part of our mini-series, Tales from the Crypto, we take a dive into the key players (and controversies) of El Salvador's Bitcoin journey. ****** Credits: This episode was written and produced by Megan Cattel. Mixing and sound design by Matt Reed. Ben Brock Johnson and Amory Sivertson are the co-hosts.

Support for endless thread comes from MathWorks, creator of MATLAB and Simulink Software, to design and develop engineered systems, accelerating the pace of discovery in engineering and science. Learn more at Mathworks.com. Support for WBUR comes from Is Business Broken, a podcast from the Mayrotra Institute at Boston University that explores questions like, why is innovation in healthcare so hard? Is ESG just greenwashing? And, of course, is business broken? Listen, wherever you get your podcasts. WBUR Podcasts, Boston. Well, I hear a rooster. What?

A rooster. Hey, Ben. Hey, Emery. Who did we hear just now other than The Rooster? Hmm, that would be Endless Thread producer, Megan Cotel. Who's not a rooster? Nope. No? Okay.

Nope. Unless. Megan, are you a rooster? No, but I did get some solid rooster sounds thanks to a video call tour I recently took of this little town in El Salvador called Elzante. My tour guide was this 19-year-old guy named Ismail. He's tall, lanky, has fluffy brown hair and braces, which makes him seem younger than he is. Ismail showed me around with a video call and he was very patient with our language barrier around roosters.

What is that? Oh, yeah, yeah, yeah, yeah. Here there are a lot of them. This is something common right here, yes. Ismail is a sophomore in college and lives at home with his sister, two brothers, and his parents. When he goes outside to get a better Wi-Fi connection, his laptop camera shows palm trees clustered around the yard and corrugated metal

roofing on top of his house. The blue sky and palm trees really makes it look like the scenery from one of those tropical island default screensavers for computers. It looks pretty dreamy. Yeah, like Hawaii or something. As a resident of Queens, New York, it made me jealous. But Ismail himself wasn't there for the scenery. He's a always dreamed of becoming a pro surfer and a surf instructor. So just get good at surfing, right? That's all you have to do? Well, not exactly. Ismail says that in order to make his surf dreams a reality, he really needs some level of formal education. So he's been trying to juggle three things.

Surfing, taking classes, and taking on a part-time job to pay the bills and help his family out financially. One issue? Making that job. part-time. It's not possible because people who give you, like, a job, they want you to work all day. But then he found something. A job that was part-time and would let him stay in Al-Zante. Ismail talked with a youth group leader at a nonprofit called Hope House.

Hope House organizes surf camps and beach cleanups, programs to keep young people from getting involved with gangs. A staff member suggested to Ismail. You can come and join us and you can work. This sounds like the perfect setup. Go to school, work for Hope House in his downtime. What did he do? Clean the river or go to the beach, clean the beach.

Ismail got paid in U.S. dollars at the end of each workday. But then in 2019, something changed. Hope House's leader told Ismail and other employees about a change in their compensation. He said we are going to pay you in Bitcoin. A paycheck in Bitcoin. Over the next few months, Ismail's hometown would transform. Shopkeepers and locals would be encouraged to adopt Bitcoin by community leaders. Alzante turned into Bitcoin Beach.

The last 18 months or so, the tiny surf town of Alzante has been running an experiment. And it's a weird and mysterious origin story. A weird and mysterious origin story that in some ways typifies the real world ambitions of crypto evangelists and wannabe Bitcoin Utopia Architects. And in other ways, represents the failures of those ambitions. Failures that have reverberated way beyond Bitcoin Beach and impacted the entire country of El Salvador. I will send to Congress a bill that will make Bitcoin a legal. tender in El Salvador.

You got to think of all the jobs that this is bringing. I mean, it's like a gentrification on steroids type thing. What El Salvador did was going to a casino and betting with people's money. And so I think, you know, 10 years from now, they'll point back at this was kind of a transformational time in the country that they went from, you know, people just barely eking by to, you know, moving into more of a middle income country. I'm Amory Siebertson. And I'm Van Brock Johnson and you're listening to Endless Thread.

And we're coming to you, sadly, not from a beach in El Salvador, but from WBUR, Boston's NPR station. For our second installment of Tales from the Crypto, our mini series on cryptocurrency today with Megan's help, we are going to tell you the little story about Bitcoin Beach and the big story about crypto and El Salvador. El Salvador is the smallest country in Central America, nestled between Honduras and Guatemala and the Pacific Ocean. El Salvador, its primeval beauty is alluring but deceptive. Throughout this land of lakes and volcanoes, a civil war has been raging since 1980, claiming the lives of more than 40,000 people. For much of the 20th century, the country has either been at war with its neighbors or with itself. A 12-year civil war in El Salvador ended in 1992, one of the most devastating conflicts in recent Latin American history. The junta quickly formed a military dictatorship, killing peaceful demonstrators,

assassinating leaders who were trying to form socialist cooperatives among the poor people. Since then, El Salvador has enjoyed a succession of democratic elections, a period of relative peace for the country. But there have been problems to contend with in recent years, like gang violence, in the country, which has spurred a migrant crisis for El Salvador's neighbors. The captain of El Salvador is about to feel fought over by war in street gangs. El Salvador is a daunting place to grow up. There are a few job opportunities for young people and the specter of gang violence. Not long ago, the infamous MS-13 and 18th Street gangs made this the deadliest country

outside of a war zone. But murders have plummeted, and one man takes the credit. President Najibu Keli. In 2019, President Naïbe Bukele took office. He is the country's first leader in nearly 30 years who is not from the country's two major political parties. He ran on promises to get rid of corruption, fight inequality, and crack down on the gangs.

In 2019, he told the New York Times that the lack of economic opportunity and gang membership are intertwined. The real way to tackle gang violence is to correct the social dysfunction that we have in our country. Bitcoin Beach was a huge reason why President Buckele made Bitcoin legal tender last year.

Supporters of Bitcoin adoption were thrilled with this decision. 70% of people in El Salvador don't have a bank account. And to receive Bitcoin, you don't need an account or even a state-issued ID. You just need internet access and a smartphone.

This made it easy for people like Ismail to get on board. He'd never had a bank account before. When Ismail first got paid in Bitcoin through the Blue Wallet app, he changed the currency to U.S. dollars right away. The other kids in his group did the same thing. He paid us like $50. But we needed to use it for school, for parents to buy things we needed. But then in 2020, well, you know what happened. The coronavirus shut down the world. And Alzante was no exception. The town was on lockdown. Meanwhile, Bitcoin advocates at Hope House had an idea.

a stimulus plan for everyone to receive money not in U.S. dollars, but in Bitcoin. Some sponsors support Bitcoin Beach. So they started giving us like $35 per each family. Ismail said his youth group helped teach people in Elzante how to download the Bitcoin wallet from the app store and access their stimulus money. With a little bit of tech support, Ismail said people were excited to get their stimulus money. even if it was through a crypto wallet app. Yeah, free money. That'll get people pumped.

Yeah. So Elzante got really into Bitcoin in 2020. With Bitcoin in circulation, shopkeepers, street vendors, and gas stations started to post QR codes next to cash registers to receive payment in Bitcoin. Elzante is credited with creating the first successful circular economy for Bitcoin. So what does circular economy mean, you ask? Great question. Most people in the U.S. who own Bitcoin keep it as an investment. You can't go to your local Starbucks. Or your local donkeys if you're in Boston. Yes. Some of us run on Duncan. That is right. You can't pay for your coffee with Bitcoin, though. We don't have the infrastructure or interest set up for that. Not yet anyway. But these people in Elzante did it. And you can buy anything in the local shops with Bitcoin. The circular economy really means peer-to-peer transactions and trade.

without third parties like banks or governments involved. The currency is embedded in a community so much so you can even buy a fresh coconut. Okay, that's cool. It's literally just a beach stall, someone with a coconut, and I could just pay to their mobile phone with Bitcoin. It makes the nickname Bitcoin Beach very fitting. Local construction workers and laborers

were also getting their salary in Bitcoin. And experts say that's a huge advantage to the residents of Elgin's. Al-Zante. Experts like Alex Gladstein. My name is Alex Gladstein, in California. I work as the chief strategy officer for the Human Rights Foundation. We sat down and talked with Alex, who has written a lot about the benefits of cryptocurrency

in nations around the world, particularly nations facing the threat of authoritarianism. Talk to people who fled from Venezuela or more recently Ukraine than Afghanistan, Syria, many places they've been able to give them that financial freedom and bring their wealth with them. But we do have to acknowledge Alex's investment in the topic. Are you invested in crypto in anyway? I own some Bitcoin, yes. Alex visited Elzante in 2021 and told us how Bitcoin is impacting the town. Well, it's a very hopeful effect.

I mean, these people essentially live in a town where for generations they've been caretakers or fishermen. And, you know, through happenstance, they got this opportunity to build a community and then integrate Bitcoin into it. And you see a couple things. You see people thinking about savings. So I met this woman who was probably 75 years old. And she had never owned really anything in her life. But because she started accepting Bitcoin in exchange for Papusus in 2020, she was able to afford a truck. and bought a truck for her family.

During our conversation with that young surfer Ismail, he talked a lot about this too. He says the possibility to save and grow wealth was really not feasible for people in his community before Bitcoin. In the past, people just spent what they had. In this community, even the country, our culture has been like working every day and spending the money you earn. And it's crazy, but it is how it has been. Ismail said educational programs at Hope House helped the community change their mindset. So he said that, like, tried to save and was new for us. Because even in the school, the kids from here, if they have $10, they spend it in one day.

He started to save his money. He bought a cart to sell ice around Elzante. And Ismail gave surfing lessons to tourists who paid him in Bitcoin too. The town was starting to attract crypto fans from all over. They wanted to support this new. hub for digital currency. Since Bitcoin isn't tied to any national bank, transfers can happen from anywhere without fees. There's no need to exchange currency. Alex talked about this when he told us about his visit to Elzante. Bitcoin's not a liability. So for me to go down there

without having to call a credit card company or call a bank or, you know, warn anybody, and I can just roll in there and just use neutral, open global money that's not owned by any particular country to buy things was amazing. And I was able to use an 18. without ID. I thought that was really cool. So I was able to go to... Sending money abroad without transfer fees is a big deal. Over 2.5 million Salvadorans living abroad send much-needed money called remittances back home to family members. Remittances make up a quarter of El Salvador's GDP. To wire money through a bank or a service like Western Union, you have to pay a fee, a remittance fee. Depending on how much you're sending, the exchange rate, and the bank's

flat rate for a transfer, this could be up to $45 U.S. dollars per transfer. So sending remittances without a fee and without exchanging currency is super convenient. When Alex visited Alzante last fall, he met a local barista who was really benefiting from this. Well, I went to Point Break Cafe, Great Cafe, one of the people who works there, her name's Carla. Carla makes an amazing cappuccino. Alex filmed a video of paying in Bitcoin at the cafe and posted it to Twitter. The tweet says, in part, flawless experience. If you visit, make sure to stop by for a coffee with Carla, an excellent barista.

You can tipper instantly from anywhere in the world. He added the QR code for Carla's tip page on his post, and his tweet blew up. So this, my video got them intrigued, and they went ahead and they sent a dollar, $5, $10, $0.50 a cent, like with lightning, which is like a way to spend Bitcoin cheaply and quickly, you can send any amount. It doesn't really matter. You can do micro payments. But she just received hundreds and hundreds of these things.

And I just thought that was a beautiful moment. That was really cool. It showed what's possible when humans aren't restricted by national borders. So Bitcoin is making a difference to some people in Alzante. But how did this community get flushed with Bitcoin in the first place? This all goes back to the guy who first high. hired Ismail to work at Hope House. That guy's name is Jorge Valenzuela.

Ismail says it was Jorge who first got him access to Bitcoin. And Jorge was working with a fellow teammate from America, an investor in this economy named Mike Peterson. Mike started visiting Elzante for its surf scene 18 years ago. I think we're good to go to record. So you okay to if I hit the record button? Yeah, let's go. Mike started visiting Elzante for its surf scene 18 years ago.

The waves are great, the water's warm, but most of all the people were just super friendly. And so I felt like I had a real connection there. And so I told my wife, hey, we need to buy a place here. My name is Mike Peterson. I'm the director of Bitcoin Beach, and currently living in Elzante in El Salvador. I'm part of the team that was behind the Bitcoin Beach initiative that spurred. the adoption of Bitcoin in El Salvador. And we're kind of in the midst of that craziness right now.

Mike's saying craziness like it's a good thing. And a few months back when we spoke with him, he had good reason. Bitcoin was way up. But now some people would say with plenty of evidence that things are bad crazy. More on the bad crazy in a minute. At Radio Lab, we love nothing more than nerds. out about science, neuroscience, chemistry. But we do also like to get into other kinds of stories.

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we can help. Discover how the magic is made at WBUR.org slash creative studio. Mike Peterson, who's whose business card describes him as director of Bitcoin Beach, used to be a crypto skeptic. When I first read about it, I thought, this sounds like some type of scam or some type of Ponzi scheme.

You know, how could this actually work? But then I started digging into it and really starting to understand what Bitcoin was trying to do, that it was a type of money that wasn't dependent on government and the state couldn't get in between you and being able to use it. and then also couldn't just print more of so you didn't have to worry about your money being inflated away. Mike first tried to buy Bitcoin in those early days about 10 years ago. He was not successful.

It was a super complicated process. So I didn't really buy any Bitcoin until probably, I think, 2016, when it was, you know, much easier. So Bitcoin was an interest Mike had on the side. Until one fateful day in 2019, Mike was hosting a conference for his NGO. The leader of another organization came up to speak with him about a mysterious Bitcoin donor.

And the head of that organization knew that I was into Bitcoin and he asked me, hey, we had Bitcoin donated to us. How can we use it? And so I talked them through different scenarios of what they could do with it and didn't think anything else of it. Mike says three months later, that same person, called him up again and asked, Hey, do you want me to connect you to this donor

and see if they want to support what you guys are doing in Elzante? There is very little information on who this donor is, an anonymous philanthropist who purchased Bitcoin back when the currency was worth $5 to $0.10 a piece. I didn't even meet the donor. I still don't know who the donor is, even the donor's name. I met a representative of the donor, and I thought I was meeting the donor,

but I went to this meeting. There was somebody the donor had hired to, you know, work with organizations like ours. Can we just pause for a second and acknowledge that this is nuts? That this completely anonymous donor is having a huge impact on this tiny town? It is wild. But it isn't keeping with the history of Bitcoin and crypto. The jury's still out on who the inventor of Bitcoin is. True.

Satoshi Nakamoto, if you're an endless thread listener, please get in touch. We'd love to talk. Our sources told us on background that they couldn't comment on any terms the donor agreed upon, you know, to maintain their anonymity. But we do know that Jorge and a select few at Bitcoin Beach know about the donor's identity. But Jorge, Mike, and our other sources say the donor's identity is not relevant. We tend to think of anonymous donors as being neutral or something. They're benefactors. They're so generous that they want to give away their money without getting credit.

But just because someone doesn't have an identity in the transaction does not mean they don't have an agenda in the transaction. And Mike says the mystery donor's representative told him that he was willing to give away a lot of money in Bitcoin to the NGOs in Elzante, the equivalent of $100,000. But on one condition. We have the stipulation that we want, better not to just cash out the Bitcoin. We want to see it be used in real ways. and the more it circulates, the better from their perspective. And so that planted a seed in my head and I started thinking through all the different ways we could integrate it into what we were already doing,

but then also take it a step further and really create a circular economy. If you look online, you'll find a lot of success stories in Alzante, similar to what happened with Carla and Ismail. So I think, you know, 10 years from now, they'll point back at this was kind of a transformational time in the country that they went from, you know, people just barely eking by to, you know, moving into more of a middle-income country. But Mike and Alex Gladstein of the Human Rights Foundation say Bitcoin's success in Alzante only happened because of the close-knit community and Bitcoin educational programs that spread the word.

Programs like the one at Hope House, where Ismail first received a salary and education in Bitcoin. I think it's important to kind of stipulate that, you know, we don't think Bitcoin some magic bullet. And even the changes we've seen is Bitcoin being used in conjunction with some amazing social programs that we've rolled out and that our team really investing and mentoring in the lives of the young people in Alzante. It works in Alzante because it's a small community and people trust each other. And they're willing to learn and spend time learning about it. And they want to learn about it because they're like, why are all these foreigners coming here? What's going on with this thing? Mike told us no one in El Salvador

or expected Elzante's circular economy to be replicated in other parts of the country. Even as President Buckele also said Bitcoin would create job growth, take away reliance on the U.S. dollar, and stimulate investment in the economy. In the short term, this would generate jobs and help provide financial inclusion to thousands outside the formal economy. But a national top-down adoption is very different from a community-centered approach. In one poll by Central American University, over two-thirds of response. said they disagreed or strongly disagreed with the decision to make Bitcoin an official currency.

When Bitcoin was implemented, over 1,000 people protested in the capital of San Salvador. And members of Parliament wore t-shirts during hearings to oppose the Bitcoin law from being passed. The shirts had that red circle with a slash running through it. It looked like the no-smoking sign, but it had the Bitcoin logo in the middle. One parliament member, Claudia Ortiz told Buckele, No one wants Bitcoin. We said, ah, we said no-we-giene Nobody wants Bitcoin.

People are worried about crypto's volatility and how the value of Bitcoin can fluctuate dramatically. Ismail says this was confusing, especially when Alzante was first getting into Bitcoin back in 2020. Because as I told you, we never understood that at that time. And then Bitcoin was like decreasing or increasing. And it was crazy. Like how you can see, like if you had $50, maybe next day, $49.

And it was crazy. And we said, like, how can I be losing money? Bitcoin can feel like a gamble because of this volatility. And currency isn't really supposed to be volatile. this way. Like, a dollar is supposed to represent a dollar, and it's supposed to buy whatever you can buy for a dollar. This is why most Salvadorans around the country do not use Bitcoin even one year after the law passed to make it legal tender. In one survey published in April of 2022, the vast majority of Salvadorans are not using Bitcoin for day-to-day transactions or transfers.

Only about 3% of those surveyed said they receive remittances through Bitcoin. That means Western Union and other familiar methods of sending remittances are reigning supreme. When Bitcoin was made the official currency, a number of academics and Buckelay's political opponents spoke out against the decision. Critics say taxpayer money that funded Bitcoin's rollout will only benefit wealthy elites and private companies, not the average Salvadoran. Alex Gladstein of the Human Rights Foundation told us that locals are already being pushed out of Elzante. You got to think of all the jobs that this is bringing. I mean, it's like a gentrification on steroids type thing.

Like there's all kinds of foreign money coming in to build things. When the law was passed to make Bitcoin legal tender last summer, a group of 80 Salvadoran academics issued a statement, asking the government to repeal the law. We talked to one professor who signed the statement and is a critic of Buckele, Ricardo Castaneda and Cheta. He's an economist and works for the Central American Institute for Fiscal Studies. When the Bitcoin law was in deliberation, he tweeted, quote, making economic policy is not a game of monopoly. The situation's critical, since we are not talking only about the income of one person. Looking at the big picture, other places in El Salvador do not have coordinators like at Hope House in Elzante

to provide the education and Bitcoin infrastructure to locals. And it's important to take into account that more than half of the population is not able to access stable internet. Therefore, if Bitcoin was accepted as currency, they wouldn't be able to even have access to it on a daily basis. Ricardo said he's not necessarily against cryptocurrency as a whole, but he's against how the government rolled out Bitcoin. For one thing, President Buckele is using funds from other federal programs to invest into Bitcoin.

$225 million is one-fifth of the budget for the Ministry of Education Fund. This amount is being used for the implementation of Bitcoin. It's one-third of the budget for the only public university in El Salvador. This opportunity cost is very high. Ricardo also pointed out that for a currency that is meant to be decentralized, making it a national currency kind of goes against crypto's basic principles. And he pointed out, we only know how much Bitcoin the country is purchasing if the president tweets about it. Otherwise, this information is not publicly available.

The idea behind Bitcoin is to get away from supervision even by governments themselves. But the paradox in El Salvador is that the entity completely implementing it is the government. Nobody has access to know how much Bitcoin they have bought. The numbers indicate from when the president, tweets that the Bitcoin purchased by the government has decreased in value. But that does not exist that public information. Naïbe Buckele prides himself on being a millennial president. At 41 years old, he's one of the youngest heads of state in the world.

He tweets, a lot. Alex Gladstein, who studies the intersection of crypto and politics, says... He plays the media extremely well. He's probably the most social media savvy leader I've ever seen. a lot of people say Trump was very good, but Buckele is different. Buckele is like cool, like he's hip. But he really masterfully plays the international audience, like a musical instrument. You know, after that, we had some attacks of the opposition.

Believe it or not, we have an opposition. They all full of bullshit. They're still there alive to be full of bullshit. He's also very controversial, and he knows it. He calls himself the world's coolest dictator. Whuff. I know. Since taking office in 2019, Buckele removed all five judges from the Supreme Court and the Attorney General.

He also held legislative sessions with an entourage of armed police and soldiers. And he's making moves to run for a second term as president, even though the Constitution does not allow two consecutive terms. Buckele also made headlines by announcing plans for a Bitcoin city. Not just a beach, a city. to be built at the base of a volcano, which will mine Bitcoin and power the city using geothermal energy. Just to say that again, a city to be built at the base of a volcano, which will use the geothermal energy to mine the Bitcoin.

If this isn't a supervillain scheme of epic proportions, I don't know what that. I just, wow. Yeah, I'm with you. And experts are not really enthused about this. It's absurd. I mean, I don't know. It's pretty absurd, right? Yeah, I agree.

Even hardcore crypto supporters we talked to on background said Bitcoin City was just an aspirational goal for the president. Most definitely. Most notably, Buckele swore to crack down on gang violence in El Salvador. In 2015, an article in The Guardian called it the homicide capital of the world. Earlier this year, Buckele came on. under fire for enacting mass arrests, nearly 40,000 Salvadorans have been arrested for suspected gang affiliation. Human rights advocates and foreign leaders have criticized Buckele for issuing a state of emergency, suspending the right to legal counsel, and giving police special

permission to arrest anyone who might be a suspected gang member. What's striking to us is that many Bitcoin advocates don't really care about these valid criticisms from the international community or from local experts like Ricardo and Cheta. Mike Peterson, who remember has a business card that says director of Bitcoin Beach, praised Buckele during his interview with us, which by the way was conducted by non-rooster producer Megan Cattel. When people say that Buckele is a dictator, what they leave out is the fact that he has over an 85% approval rating in the country.

So he is extremely popular. There is a vocal minority that don't like him and because of that don't like Bitcoin and have tried to make that more of a political issue. And so I think one thing we have to be careful of as Americans is thinking that we know what is best for other governments and let people in other countries choose the type of governments that they want to have. We have a history here of trying to impose our will on other countries. and usually it hasn't worked out very well. It's a pretty weird thing to say coming from an American who tried to impose his will on another country. Mike isn't necessarily wrong about Buckele's popularity.

NBC News reported that the president's approval rating is at 90%. And murder rates dropped by 15% during Buckele's first three years of his presidency. But mass arrests has yet to be seen as helpful in curbing the amount of violence Salvadorans' are facing from gangs. We brought this up while talking with Alex Gladstein. You have groups that are pushing against what they see as a strong man in the making, kind of dismantling democratic institutions and checks on his power.

But they're having a hard time maybe understanding how to grapple with this seeming paradox that while he's doing those things, he's also introducing a new technology into the country that empowers individuals. Alex and Ricardo both told us that Buckele used Bitcoin first and foremost as a marketing tool for himself, not to help the average citizen improve their way of life. What he bargained on was that it would make him more prominent. And it did. And I think that he's the most recognizable Central American leader right now, probably for a lot of people.

And barely anyone knew who he was, like literally a year ago. So it worked. I don't know where it goes from here. reality is if Bitcoin continues to grow and expand around the world as it has been, he will be seen as a visionary, you know, but his record could be quite tarnished by his political legacy unless he stops with the authoritarianism stuff. It's been about a year since Bitcoin was made legal tender in El Salvador.

Many, many outlets have reported that Bitcoin in the Central American country is benefiting only a few elite players. stockholders and companies and government officials. Ricardo Enchetta, the economist from El Salvador, talked about how this Bitcoin experiment has dire consequences. What El Salvador did was going to a casino and betting with people's money. Money that actually means a lot to them. It means their stability, their well-being, and the possibility of the country's path to develop. Surely, the future will go through

greater use of technologies such as blockchain, but they must ensure that the benefits are greater than the cost for the population, especially the poorest. The Bitcoin market crashed in May of 2022. It lost $1 trillion in value, according to the New York Times. But that hasn't struggled to regain ground after losses not seen in years. But that hasn't stopped Bitcoin evangelists from keeping the faith. Bitcoin supporters say the volatility is temporary. If people keep their currency in Bitcoin, they won't lose any money because the value will eventually go back up. Naib Bukele tweeted in June for the country to stay patient, to quote, stop looking at the graph and enjoy life. But many people do not keep their Bitcoin

saved as an asset. 88% of merchants who accept Bitcoin convert it to U.S. dollars immediately. That means the volatility of the currency is impacting people in real estate. ways. If you, for example, have $1 million and invest $100,000 and you lose money because of how volatile the market is, you're going to be okay. You're going to be able to have food, have access to luxury items. But if $0.20 makes a difference between eating or not eating, between taking the bus, or walking tens of kilometers, well, that's where volatility is taking its toll. According to multiple news outlets, the Bitcoin El Salvador bought with public funds is worth 50% now than what it was back in September. Financial analysts say it's a steep cost to pay.

But the country's finance minister argues the bet will pay off in the long term, saying, we aren't going to have results overnight. We can't go to bed poor and wake up millionaires. So here you have the first government in the whole world making Bitcoin an official currency of the nation. And I think that that's potentially something that will spread. It will take time. It's going to take many years. But I do think Bitcoin ends up being official currency of many different nations. When we first talked to Ismail, he had some internet trouble. The connection fizzled out, and when we asked to reschedule, we never heard back.

In late August, we saw a tweet from Jorge Valenzuela with photos including Ismail. He was standing outside Hope House with other members at an event welcoming President Buckele, who was visiting El Zante. We tried getting in contact through Hope House, Bitcoin Beach advocates, and other surf groups in Elzante. But we have not heard back. Whatever or however we feel about Bitcoin, it's here to stay as a polarizing topic around the world. In April 2022, the Central African Republic followed in El Salvador's footsteps and made Bitcoin legal tender. Meanwhile, the Afghanistan Central Bank outlawed crypto just last month. Other nations who have restricted or banned cryptocurrency include Bolivia, China, Nepal, just to name a few.

But that hasn't stopped crypto evangelists from heading to places like South Africa and Venezuela looking to create a Bitcoin beach of their own. From Elzante to Bitcoin Akasi in South Africa, crypto evangelists know that recruiting the next generation to their cause to help spread the crypto gospel is key. So next and last in our series, we're going to live. look into a whole other aspect of the Cryptoverse connected to that next generation. How much money do you make right now mining crypto? Before I was around $40,000 a month and now it's around $10,000 to $15,000.

Endless Thread is a production of WBUR in Boston. Want early tickets to events, swag bonus content. The recipe for My Bitcoin Beach Cocktail, Amory's Surfing Instructional Videos. Join our email list. You can find it at WBUR.org.org slash endless threat. This episode was written, produced, and web produced by Megan Cattel, and co-hosted by us, Amory Seaverts. And Ben Brock Johnson, mix and sound design by Matt Reed, editing help from the rest of the team, Dean Russell, Norrisax, Quincy Walters, and Grace Tatter. Special thanks to Sophia Alonzo and Jessica Alpert for their help with translation and interpretation.

and to our colleague Darrell C. Murphy for voicing Ricardo and Cheta's contributions to this episode. Endless Thread is a show about the blurred lines between digital communities and buying a latte with two 10,000ths of a Bitcoin. If you've got an untold history, an unsolved mystery, or a wild story from the internet that you want us to tell, hit us up. Email Endless Thread at WBUR.org.org.