TFTC: A Bitcoin Podcast - #173: Mike Peterson from Bitcoin Beach

Episode Date: June 23, 2020

Join Marty as he sits down with Mike Peterson from Bitcoin Beach in El Zonte, El Salvador to discuss: - Why Mike started giving out Bitcoin in El Zonte - Creating a bitcoin circular economy - Using Lightning to achieve this goal - Educating individuals about bitcoin - Airdrops, do they work? - Price volatility - Custodial v. non-custodial - Interesting externalities from the experiment - The youths understand Bitcoin more innately - much more Follow the project on Twitter Checkout the BitBlockBoom Conference use the promo code "RHR" Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app.

What's up freaks, it's your boy Marty here to introduce this episode of Tales from the Crypt. The immense pleasure of sitting down with Mike Peterson, more popularly known as AtBitcoinBeach. He has been running a project down in El Zante, El Salvador, in which they are trying to create a Bitcoin circular economy. This is a fascinating episode, actually talking to somebody who has feet on the ground and is attempting to create a circular economy in Bitcoin. This has been a big topic on the Twitter sphere and in conversations with other Bitcoiners. A lot of people think that people aren't spending Bitcoin enough and they aren't utilizing it enough. There's too many hodlers out there.

Well, Mike's here to illustrate that that is not the case. There is some great things happening on the ground where Bitcoin is needed more than it is here in the West. So I think you guys are really going to love this perspective. This episode of Tales from the Crypt is brought to you by good friends at the Cash App. You already know all about them. They're helping you stack sats. They're helping you send sats. They're helping you receive sats.

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So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. You probably should be. what is up freaks welcome back to tales from the crypt it's your boy marty bent here on a lovely friday afternoon very excited for this conversation i'm sitting down with mike peterson from the

bitcoin beach project which has been on the ground in el salvador helping individuals adopt and use bitcoin in a in a circular economy this is something that caught my eye on twitter recently within the last six months and just been seeing people retweet and update what you guys are doing on the ground there. And I'm very curious to learn about why you're doing this and how it's working down there. So Mike, welcome to the podcast. Thank you. Stoked to be here. Yeah. Thank you for agreeing to do this. Why are you, how did you end up in El Salvador spreading the gospel of Bitcoin and trying to get it into people's hands?

Yeah, so I went on a surf trip to El Salvador about 15 years ago and just kind of fell in love with the country. And we have a seasonal business in the U.S. that we basically work crazy hours for four months during the summer and we have the rest of the year off. And so we were looking for a place that we could spend some time during the winters. And El Salvador has good waves and warm water. And so we wound up buying a house down there. And over the years we were down there, we started getting involved within the community, seeing some of the challenges with the gangs. They had, I think they still have the highest murder rate in the world,

a lot of challenges, a lot of poverty, but just some amazing, hardworking people. And so feeling like if we're going to be down there, we want to do something to make a difference. And so about six years ago, we moved basically there full time. We've just come back to the U.S. for a few months every summer to work. And we've been doing community development projects, working with different churches and nonprofits throughout El Salvador and trying to coordinate efforts and make sure that the organizations have a bigger impact. And then I also have been following Bitcoin kind of since the beginning, more from the money side of it than the technology. that's kind of more my focus and interest and so a couple times i tried to buy bitcoin i think in 2013 and then again in 16 but just the technology aspect of it just put me off

just trying to figure out how to actually purchase it and custody it and so i kind of kept putting it off and then finally dove in in 2017 and i've actually put a good deal of my retirement accounts and those sorts of things in Bitcoin. So I've definitely invested in Bitcoin in the long term and a hodler, but also focused on the monetary side of it and how it can make a difference for people in the developed world. Yeah, I think coming from the US or any developed country, you kind of assume that everybody has the same access to the banking services and that money is pretty easy to move around. And we found out real quickly in el salvador that's just not the case for most of the world it's challenging

to move money even for us being down there um purchase some properties and some vehicles just actually physically getting the cash and moving that and the purchase was just a huge headache so you just realize how much friction is in the system there and how much that's holding the economy back and how much bitcoin really can be a huge solution for them um especially the people that the banks don't want to deal with it's not worth it for the banks and so yeah so that that kind of drove our initial um kind of interest in me kind of thinking how bitcoin could be used and then we were uh introduced to a early bitcoin adopter from what i understand bought bitcoin when it was five cents and sitting on a large cash of it and

wants to use it to really have an impact in the world and but he doesn't want people just to cash it out in the fiat which is what most non-profits are still doing he wants them to really actually use it transactionally so put this kind of nutty proposal together for him that we would start a circular economy in El Salvador and we have kind of a three-year time horizon and he surprisingly agreed to it and so it's been just a blast we have resources behind us we've had other partners that have come in and you know actually supplement and provide more resources and you're able to get Bitcoin probably at this point I think about 700 families total we have using

between the three communities that we're working in 700 families yeah 700 families wow that's that's crazy um no because you see i see the pictures on twitter people like lined up uh just getting bitcoin allocated to them you guys pull up on a truck people line up you're i assume teaching them how to download wallets and stuff like that before but before we get into all that you mentioned the friction of actually acquiring hard cash and moving money in El Salvador can we sort of dive into these frictions so that we can see how Bitcoin is helping with these yeah I think it's a combination of just in four countries banks not wanting to deal with a big portion of the population because

they can't make any money off them there's just not enough volume or volume or value there so that's one aspect the other aspect is those people in the world don't realize how much the u.s banking laws impact the financial system around the entire world and a lot of the anti-money laundering laws and kyc laws that are in place in the u.s that we don't they don't they provide they're very little friction for us i mean i have a business i move large sums of money around and it's it's pretty frictionless you go to el salvador and try to use something for five hundred dollars they want you to fill out all these forms and where you got it by tax returns i mean it's it's crazy and so to move money around for

for locals is challenging to bring money in from outside the country is challenging um sadly this the easiest way to actually get money from the us to el salvador is to visit the atm every day and make multiple brawls and it's we're still at that point where that's the easiest way and so for people that are looking to invest in businesses in el salvador or buy properties or try to even for non-profits trying to bring money in it's a huge huge challenge and the other aspect is el salvador about i think it's like 22 of their economy is based on remittances which means that's money sent from relatives working in primarily in the u.s someone in canada and europe sending back to their family members and it's still this antiquated system that they're using

primarily using companies like western union that still grab a good chunk of the transaction they have to take the bus sometimes an hour two hours to the capital city to visit an office stand in line retrieve the money and then they have the security risk of traveling on the bus with all this money get back home and so the whole process costs them days sometimes and then a significant percentage of the money that's being sent so family members can't just send you know twenty dollars because we could all get eaten up in fees but that's kind of our next thing we're focusing on is the bitcoin especially over the lightning network somebody needs five dollars to pay their school fees and they have a relative in the u.s they can send them lightning right away and it's

on their phone and then they can go transact especially in our community where there's business accepted so that kind of um i think just gives kind of an overview of just how challenging images to move money around yeah really highlights the problem and so how are you educating these families about bitcoin what's what's the process how do you how did you first start out it seems like a pretty uh daunting task like hey i'm gonna i'm gonna start uh spreading bitcoin adoption in El Salvador and a whole country, how did you convince the individuals within El Salvador who are working with you and have accepted Bitcoin and are accepting Bitcoin at their businesses to do this?

Yeah, we definitely faced kind of that chicken and the egg scenario that anytime you're trying to start a network and there wasn't much use of Bitcoin in El Salvador when we started, so it really was starting from scratch. um initially we we tried to do a lot of education and kind of teaching people the value of bitcoin and what it is and where it came from and quickly found out that for most people that just kind of overwhelmed them and put them off and so we kind of switched um we switched how we we hit at it we're actually first we try to get them transacting and so we'll have them do some transactions and once they do the transactions they realize okay this is easy i understand it

i have this value on my phone it's money and in order to create that network we had to incentivize businesses to start accepting it so one aspect was we were distributing it within the community so there was people that had liquidity there that were looking to spend and so that was new customers for the business businesses but we also agreed to walk alongside them for the first few months especially with volatility so if there was a huge drop in bitcoin prices we would actually uh give them some additional bitcoin to make up for any losses we pulled them up front this is just a temporary thing so you guys learn how to manage the volatility but we didn't want them to start off with a bad taste in their mouth everybody in bitcoin knows that it you know can drop a

thousand dollars overnight um you know without it really being that big of a deal so for a small business owner that you know maybe has 500 in it and the next morning they wake up and they have 450 and that could be a huge hit for them so um we teach them that long term we think that it's appreciating because of the hard money aspects of bitcoin and so we think it's good for them to save you know a small percentage of their savings in it but also kind of teaching them to kind of ride the ups and downs so yeah it's definitely been challenging we've we originally were doing everything on chain and we uh the lightning as you know for small transactions just on chain it's not really viable have people lose their wallets we've kind of had to go through

through different things and teaching people the importance of keeping their keys or backing up their key phrases and seed words if they're using custodial. And so, yeah, it's been a wild ride. What tools have you been introducing to these individuals? So we've primarily focused on phone wallets. and the biggest focus is on the user experience and interface because we quickly figured out that was the biggest hurdle people can understand it if they could see how it easily converts the dollars which El Salvador uses US

dollars their official currency so they wanted to be able to see what the prices were in dollars how much they're spending in dollars and so to use a a wallet application that just has a very friendly interface. So we originally started using a blockchain wallet app just for the usability aspect of it. And then we have switched over to primarily using Wallet of Satoshi for Lightning. They have, you don't have to open channels,

you don't have to manage any channels, all that stuff's kind of done behind the scenes. custodial so you understand the pushback that people have about that but as far as user ability people being able to go down and buy 50 cents worth of tortillas and pay one satoshi in fees to do that to have that happen immediately and it all be easy for the stores to handle not a big hurdle for them much easier than accepting credit cards that's been what's going to really make a difference for the average people the non-tech people in adopting bitcoin is for it's just work and then not to think about it yeah that's always an interesting discussion that goes on is the

trade-offs between ux and self-sovereignty in the form of using non-custodial apps but i think it's definitely a spectrum myself have uh me myself i've uh uh traveled that spectrum started out with highly custodial wallets and now running a full node verifying all my transactions running non-custodial wallets but i think for what you're trying to do in el salvador this is probably a good stepping stone and so with that being said like have you noticed people who have been a part of what you're doing down there for for a while sort of learning along the way and becoming more competent as a bitcoin user oh yeah for sure we found that once people start interacting with it then they're incentivized to go out and learn and be reading stuff and so

they're coming to us all the time and sometimes you know surprising me for the level of knowledge that they have and we're talking people that are living in and i am in a 10 shacks with dirt floors that you know understands bitcoin at a level that you know a lot of people even at bitcoin conventions you know don't really understand especially on the usability side and actually transacting in it so we definitely encourage people longer term to move to non-custodial solutions and i think there's always a trade-off even some of the stores will use the ballet you know card wallet that i know there's some controversy on that that people could you know possibly have the keys of the manufacturing side and that stuff but

everything's a trade-off and so or like some of the stores and stuff that's been a good tool for them to use the ballet wallet and so you know eventually obviously we'd like everybody to more to having a ledger and and you know that's what we use to transact everything on our side but we think that you know have to take baby steps and put up all these hurdles in the beginning people will never enter the ecosystem i can i can hear the freaks cringing at the ballet no for sure i i mean i understand i understand all the criticisms i understand the you know the but for a lot of people it's easy to say something when you're kind of in theory or you live in a ideal situation but for people in developed world that are sometimes the internet's

unstable sometimes power is an issue security is always an issue even being able to store your your seed words and you know a secure location is a challenge and so definitely found you have to balance all those things and i think a lot of bitcoinists are so purest that if we stay to the route that they would like, we'll never get more than 1% of the world population using it. So I definitely

think we have to find that balance. To be clear, you're not arguing everybody needs to adopt fully custodial things. It's just that the options need to be there. No, not at all. I think longer term, non-custodial will be the way.

I think that the technology will keep getting better the usability will keep getting better and so definitely um non-custodial is the preference but in order to get people to enter in the custodial products definitely provide an easier on-ramp overall and i think if anybody spends any significant amount of time in a community that's living in poverty they kind of will understand that that okay it's It's our idealism is here, but the, uh, the practicalities are over here on the other side. And so how do we kind of find a happy medium?

Yeah. And it'll be interesting to see, especially where you are in El Salvador, if there's somewhat of a tipping point, like, so let's dive into this, like how is the circular economy doing? Like are people, uh, in the villages that you're in actually using it every day? You said the person who's funding some of this does not want them to cash out. So are they using Bitcoin like down the supply chain? And then on top of that, what are the sort of volatility hedging strategies that you're teaching them? Yeah, so it's definitely, you know, definitely some Bitcoin comes out into fiat.

The stores have to buy supplies. They have certain things that they have to convert to. we've seen probably uh half of it is flowing out at some point but as we inject more that means there's always more circulating but the nice thing is is most of it is actually flowing out to other salvadorans so we're seeing people from the capital city which is about an hour away come down and want to buy and buy on a peer-to-peer basis from some of the store owners so people that are doctors or other professionals that are from the capital city are now using our town as um you know it's gained that reputation as the place you can go and buy

bitcoin because it's hard for people capital city to have access to places to be able to buy so we're definitely seeing some of that we put a um partnered with athena bitcoin to put a bitcoin atm in the town and initially we assumed that there would be because we are injecting so much bitcoin into the community we assumed that there would be more bitcoin being sold to the atm than purchased from it but it's actually been the opposite so we are seeing even the atm machine is as being used as another um way to inject more bitcoin into el salvador as a whole so that's been very encouraging to see that you know some people need to convert some to fiat but those who are saving are choosing to do it in bitcoin other people who aren't even directly participating

in our program that live in the community are buying bitcoin from their neighbors and they like the convenience of using it there's two different water districts in our community and both of them are accepting bitcoin we have i think now like 15 different businesses that are accepting bitcoin a number of stores uh three restaurants a coffee shop and a hair salon pedicures like there's a wide variety of places where people can use um bitcoin and then we're working also on people being able to pay their electric bill in bitcoin so once they can pay all their basic services especially like with the electric bill they'll be able to pay that in el zante where we're at rather than taking the bus for an hour into the neighboring town where they usually have to pay

it it actually makes it so people start preferring bitcoin over cash it's affordable it's easier to secure they can transact without having to pick the bus somewhere and so we're seeing we're starting to see that breaking point where before they would take bitcoin but it was kind of seen is slightly less um good than cash where now they're seeing it as slightly better than cash so you feel like that that continuum is going to grow where they're the preference for bitcoin yeah it's fascinating because that's one thing if you've been around bitcoin long enough uh airdrops uh come with with a negative connotation under the assumption that if people get airdropped bitcoin they'll just sell it to their native currency or in this case the us dollar which is

the currency that el salvador leverages um so that's actually fascinating and encouraging to see that they're they're actually the buying more bitcoin than selling yeah i think it comes from two points one you have professionals from the capital city who just have always been intrigued by bitcoin and wanted to have access and now we're providing access but within the communities we're at we built the economic system so a lot of times when you do airdrops if there's no place where people can spend bitcoin then what are they going to do other than convert it so that's why we it's not been easy and it's been a lot of hand holding and a lot of work but getting these businesses up and running and accepting bitcoin has been key to the project working longer term

And what we're really, the holy grail will be if we can start to get people receiving their remittances from family members in the U.S. in Bitcoin, because we have funds basically to fund this program for three years. And the goal is by the end of the third year, there will be enough Bitcoin coming in from the outside, from family members sending it down, from tourists spending it in town, that the economy will keep going without our injecting the Bitcoin there. and initially we ran a number of small programs focused on youth and keeping them out of the gangs but the airdrops happened more when the covid crisis hit because there was so many people in our in our community that literally were going to bed hungry and so that's where we broadened it and started doing universal cash transfers to about 700 families between the three communities But we were able to use all the people in our programs before the youth to do all the training to help people set up the wallets. So it actually rolled out pretty seamlessly.

Yeah. And so is that the pictures I've been seeing of people lining up and then you guys have a trunk with like a Bitcoin or trunk, a truck with a Bitcoin banner on it and people basically line up? And how does that distribution work? Yeah. Do they come with while it's downloaded or do you walk them through that process when they get to the front of the line? Most of them will come with the apps already downloaded. So we've done some kind of training tutorial videos that they can watch on how to do that. And then generally for the first and second transaction, we do that in person.

But by the third distribution, we just have them send us their wallet address. And, you know, obviously we log everything and keep track of everything. So the pictures that you saw, that's usually the initial two transactions we do in person just to make sure they don't have any questions, that they understand how it works. The goal is longer term, especially during coronavirus, for people not to have to come physically there. That's one of the values of it is you can reload their wallet, you know, whether I'm in the U.S. or a block away, it doesn't matter. yeah that's fascinating so talking about like remittances and hopefully with before the three years of funding is up you're able to convince family members outside of el salvador to use bitcoin to send money back it'll be interesting so are that the el salvadorians is that the correct

term yeah are they uh so they probably have more intimate knowledge of bitcoin and will be educating their uh family members in the western world who are in the first world yeah no i mean that is the hope and we do have some plans to incentivize the initial transactions because people are creatures of habit they always just keep doing what they're used to and so to get somebody to learn something new and to try a new way there's definitely a hurdle there and so we're going to roll out a program we'll we'll match the remittances up to 50 for the first transaction just to encourage their family members to send that first one so if they send 50 dollars worth of lightning down then we'll give them another 50 dollars worth of light

and once they see how easy it is the hope is that in the future they'll send all their remittances in that way especially if people can use it in town to pay for all their necessities to buy food pay their electric bill pay their water bill there's no reason to have to have their family member go to western union in the u.s send it them have to get on a bus travel all the way western union take their fee and then bring it back when a mom can literally send a text to their son in the u.s and say hey five dollars to buy eggs for tomorrow can you send five dollars that just that can't happen with western so it definitely makes a huge difference yeah it's i mean it just makes makes more sense i think i really like the example of paying

your electricity bill like having to travel to another city just to pay that i mean the time saved uh alone even if it may be a little more expensive to pay in bitcoin uh maybe that that cost is made up in the time that you save uh from not having to travel well and the nice thing too with basically everything we run being on lightning it's the transaction fees are negligible Most people are not moving back and forth, they're mostly transacting in Lightning. Now obviously the stores are moving stuff back on chain, and we tell people for any large amounts, definitely want to keep it on chain, but for smaller transactions that are happening in Lightning, and we're talking people's electric bills are $3, and so for

them to be able to pay their electric bill from their phone rather than having to spend the dollar to take the bus to go into town and waste the day. And instead they can just transact from their house to pay their bill. It's a huge advantage to them. I think in the US and us having PayPal or Venmo or all the different ways we can transact maybe doesn't seem like that big of a deal, but in most of the world they don't have those options. Even for local stores, we found like they'll never be accepted to handle Visa or MasterCard. They just won't meet the regulations. So they don't have any way to take mobile payments.

They don't have any way for people to buy anything in a cashless manner. And so for them to accept Lightning and have fees be negligible and happen right away, no charge back issues um and for a lot of them they'd hope to be able to eventually take credit cards now they're like why would i even take credit cards there's no real advantage to it yeah so bitcoin and that's always i mean here in the states i'm i'm also outside the podcast the newsletter work for a bitcoin mining company and we use waste gas to mine bitcoin that's something that's always represented a sort of tipping point in my mind in the future is the point at which because bitcoin is very reliant on energy and we are turning energy into bitcoin at

the source of which it's produced and that's always like when the energy companies start accepting bitcoin and just using bitcoin as their currency of choice that'll be a huge day and i always expected that to happen uh somewhere in the developed world like potentially here in america but it seems like that's developing uh in el salvador and potentially other countries like it which is which is fascinating and it's purely because of an ease ease of use perspective it seems i think that you find that with a lot of technology that it leapfrogs in the developed world because they don't have the legacy systems in place. And so you saw that with cell phone usage versus landlines. I think now you're seeing that with Bitcoin. In the U.S. and

a lot of the developed world, we have banking systems that more or less work. In the developing world, they don't have that. So for Bitcoin, you all of a sudden come in and help them leapfrog and be further along than you know the developing the developed world i i think that's what we should expect i think that's why you're seeing advances in africa and i really think the developing world is going to lead the charge in that well then thinking further ahead even like if bitcoin does go through another bull market um and does appreciate to levels at which many bitcoiners think it may like what does this mean for the the people that you're helping adopt bitcoin right now like how could this structurally change their economy and and their lives in the

long run and obviously that's the biggest issue with dealing with poverty is the lack of assets and the ability to accumulate assets so we definitely encourage people to be saving a portion in bitcoin we're trying to walk the line we don't want to create a bunch of speculators who are maybe selling family land because they think you know see dollar signs and they think they can double their money and dump it all into bitcoin and then panic when it drops and you know sell at a loss so we're really trying to take a measured approach and tell them longer term we think that bitcoin will appreciate in value especially in today's atmosphere when you know federal reserve and the reserve banks around the world are just printing money like crazy

um you know obviously we believe in bitcoin and we think that it will be the hardest money but we also don't want to create speculators i don't think that that's a healthy thing we want it to to be kind of a slow long-term approach no i think that's the wisest approach but um if if if the users in el salvador are being humble and stacking sats it would be amazing to see like if bitcoin does appreciate in price a lot uh like what how would that change these villages um you said people living in tin shacks and stuff like that like being able to access more goods outside of their local economy has to be positive long term correct oh yeah for sure and i mean we're already seeing it just with uh the growth in the economy

from the bitcoin we've been able to inject there i mean kids and i think kids youth that you know anywhere from 12 to 16 years old that are usually targeted by the gangs and usually see that as their only alternative now they're working in projects to benefit the community you know cleaning the river cleaning the beach working to repair the the homes of some of the elderly people so they're able to start stacking sacks they're able to start making purchases that got to reach normal for them and we've seen even like small business owners you know are accumulating 0.2, 0.3 Bitcoin,

which they've never had that much money as cash before, but they're just every month kind of putting a portion aside and Bitcoin has been appreciating over the, most of the duration that we've had the program go in, especially after it took the big dive there a few months ago. So we're seeing kind of excited to be able to save in something that they think is kind of long-term appreciated. Yeah. And so you mentioned hedging volatility and teaching these individuals how to do that. What strategies are you advising them to use?

I mean, maybe hedging volatility would be a stretch, but just for them to understand kind of the ups and downs and so not to freak out when it when Bitcoin takes a dip for them not to hold more in Bitcoin than they can safely manage as far as paying their other bills. if it's something that they have to pay in U.S. dollar the next day, then they should probably cash out in a timely manner, just for them to kind of see the ups and downs of the markets and not that we encourage market timing, but for them to just kind of feel comfortable that like, hey, it's taking a good run, I need some cash to pay these bills in the next couple of months, I'm going to take a little bit off the table or vice versa if it's dipped and they have some extra cash in there that they're not using, deciding to go ahead and invest that into Bitcoin.

And for them to see overall, even though sometimes they'll take losses, there's other times that there's gains. So what we have them do is we have them keep a journal of the dollar amount and the amount of Bitcoin for all their purchases, and then they can look at the end of the month if they're net positive or net negative. And usually it actually winds up pretty close because they're making transactions all the time. So sometimes they're making it with Bitcoins lower,

sometimes with higher, and they kind of all tend to balance each other out as long as there's no huge moves. So we've only actually had to help like two or three times to somebody took a big loss. We gave them a little extra Bitcoin to make them even, But it was a pretty minuscule amount compared to the amount of transactions that are happening. So most of the stores that have been doing it for a few months don't even track it anymore

because they've said, we see overall it usually kind of balances out. And over the term, we think it's trending up. And so they just kind of roll with it. Yeah. That's some very important work you're doing. Thank you for doing it. I mean, it's a huge topic of conversation on Bitcoin Twitter, at least, even though it's probably uh people think it's more profound than it actually is the conversation

that goes on there um the the concept of actually using bitcoin a lot of people like to point at hodlers and say they're not using bitcoin and bitcoin's not being used in a transactional manner in the way it was meant to be and it seems like uh when people are educated and actually need it that it can take off yeah especially in in the developing world where they don't have the legacy system in the u.s i use bitcoin i mean you know buying an airline ticket or something that makes it easy but in general i'm not using the client to buy coffee or to buy food at a restaurant where in el salvador we can do that and it makes sense the business is there and so i think that's going to be a growing trend i don't think it's just going to be el salvador um you know obviously

the fact that we've been willing to throw some resources and time into it we kind of had a jump start but i think we're going to see these things kind of naturally springing up around the world that's what i really like about what you're doing there's a lot of armchair uh commentators who like to say oh this will never be possible but if you roll your sleeves up and put in some hard work i think uh you'll see good things happen like what what's happening with you in el salvador and it's uh it's funny like a lot again armchair commentators like to sit back and say ah this is impossible like it'll never get adopted but if you actually have people on the ground evangelist if you will teaching and getting people acquainted with it it can certainly happen

No, I mean, I only kind of half jokingly will say that the reason we've been able to do it is because of how little I know. I mean, sometimes the experts know too much, and so they know all the reasons it won't work. And you see that with a lot of industries, with a lot of businesses. People say, no, it can't be done for this reason or that reason. But you just go out and start doing it, and, yeah, you're going to take some licks along the way, you're going to have some failures but find out what works and what doesn't and kind of keep going so i think that um especially in the bitcoin world a lot of people don't even realize a lot of the advances that have happened in the usability so we rolled out lightning everybody

said no there's no way lightning's not ready it's still years away but i mean the reality is it works it's working for the transaction we're doing the people that we're working with are using it multiple times a week it's functioning maybe it's not perfect maybe it's not perfectly secure but for the amounts of money that they're using usability matters more than you know 100 security and everything so i think longer term we're going to have to be willing to at least wrestle with those trade-offs and realize for smaller purchases there's going to have to be some give and take yeah i mean i think that's just natural and it's good i mean it's good to have both sides right oh yeah like i mean but it's the hard the hard is or like ah if you're

not using it non-custodially you're you're not using bitcoin correctly which i agree with to an extent but uh they they act as a good sort of guiding beacon of hey we should always have these uh the ability to use bitcoin in this way as a priority um and and sort of convince people towards that direction but like we've been saying throughout this whole episode uh the the easier ux products will be a good gateway like just talking about a gateway drug to non-custodial products it's just getting getting it in people's hands and having them use it asking more questions teaching themselves and then just naturally as they educate themselves and get better information it'll just be a no-brainer to go use those not custodial products oh definitely people when when

they use it when they interact with it that's the natural gravity is for them to move in that direction so just getting them into the ecosystem the other thing we battle with all the time is people saying that we should use you know one of the other coins that are out there available the technology works better they use you know that the fees are less but i think people underestimate um just the power of bitcoin the fact that it is recognized throughout the world the network effects of it even if the technologies of other coins are better never going to get that traction i i don't think i personally think that bitcoin um will continue to be the go-to and so we've taken a lot of flack from from people suggesting we use these other coins uh also but we really

believe that kind of overall um the store of value aspect of bitcoin and the usability that lightning provides that i don't think any other point is going to be able to touch it no i would concur i would concur people are too impatient right and people that would recommend you use another coin if it ever attained the same network effect that bitcoin has today would probably run into the same problems that they perceive bitcoin has and all this is going to take time it's my biggest gripe with people who um who bash bitcoin is that they're impatient you're not going to get everything out of the box you're not going to get perfect ux uh like perfect reduction of fees via layers out of the box it's going to

take time and it's going to take people using it and figuring out the use cases that are most pertinent and uh giving user feedback and what you're doing in el salvador and the individuals using bitcoin in these villages for lightning particularly i think it's huge um just user experience data right no for sure and i think that's what the bitcoin community really needs I've talked to a lot of Bitcoin experts that I know they've made very few actual Bitcoin transactions in their life other than just purchasing it. And so for a lot of people, they should just get out and try the different things that are available, try the different tools and make sure that they actually understand where

Bitcoin is, specifically with Lightning. I'm really looking forward to the Strike app that's going to be released and hopefully We keep waiting for them to release that because it's going to be a huge tool for people in the U.S. to be able to send remittances down to El Salvador. Because with that application, they can link their bank account in the U.S. Their mom calls up and says, hey, we're short $5. They can automatically send that from their bank account through the Lightning Network to El Salvador. Their mom will have Lightning in the El Zante in El Salvador and be able to go to the store and buy milk. I mean, you can't do that with anything else.

So I think people should get out and transact. They should. Even if you're a hodler, even if you just see it as a store of value, go out and spend a little bit of Bitcoin just so you at least know where we're at on the usability spectrum. No, I agree. I make it a point through tftc.io, we accept Lightning as payment. and then I try to use and experiment with Lightning as much as possible. There's a cool game out there.

I'm not sure if you've seen it, Bitcoin Bounty Hunters. No, I haven't seen that. I'll check it out. So in this game, you can fund ads within the game with Lightning. So I have a bunch of TFTC ads in the game, and I top it up a couple times a week to make sure the players playing in the game can see the TFTC ad, which is a pretty cool use case of Lightning. yeah paying like 10 cents to get an ad in a video game it's a crazy thought

so what is the most surprising thing throughout this whole experience uh for you personally what has surprised you the most as you've been introducing bitcoin to elzonte and and uh into the individuals within that that city i think it has been surprising at uh how many people have smartphones that even you know people that are living in places without electricity or without um you know living in shacks with dirt floors they still have smartphones they have neighbors that charge them for them and so that we originally thought was going to be a huge hurdle it's been option and it's been very minor i mean there's been some people we've helped get phones but for the most part even in el salvador most people have smartphones that

that are capable of running wallet applications. And we've also realized that you start with the youth. Youth just, they take stuff up so much quicker. And so originally we were starting with the adults and felt like there was, they just put up, put up a lot of roadblocks. They just couldn't wrap their head around it. But so once we started working with their kids

and they were transacting in it, kids would teach their their parents how to use it and once their kids taught them how to use it once they saw their kids using it they realized hey if my kids can do it i think i'm gonna be able to do this and so um the actual using it has been a lot easier than thought it would yeah that's something i've been saying like it's going to be like a generation z led revolution just because they're native to the internet and technology and so it's good to see that's being proven out in el salvador yeah even kids that are like eight nine years old i mean it's amazing like they take it up like it's nothing they don't have any legacy you know

thoughts of how things should work and so it just you know it's intuitive to them and so it's that's been exciting i feel like the further we get into this the easier the adoption is everything yeah this has to be fulfilling work do you uh do you even view this as work is uh are you do you go to bed happy every night because of this definitely no i i don't really view it as work um you know every we have a different business in the u.s so we don't take any uh funds from the project and so it's all volunteer on our side and and it's just fun it's exciting. I get to be part of something, you know, that's just kind of wacky. We're very grateful to the donor that is, you know, supplied the majority of the funds that he's been willing to take a

chance on us to, you know, it was kind of this ludicrous proposal that so many people told us would fail and never work. He took a chance on us. And so, yeah, it's just been every day. It's kind of amazed the new things we're going to do are we going to do some kind of just kind of more kind of novel things right now we're working on building a big bitcoin monument out of cement we're going to build like a 10-foot bitcoin symbol at one in one of the villages as kind of a tourist attraction for people to come and take their picture next to and and just for the people to become curious as to what what is this what is this what is bitcoin and why do i see people's instagram feeds full of them taking a picture of this beautiful beach with a big bitcoin coming

out of the ground and so we're just doing some wacky kind of fun things to increase just awareness of bitcoin yeah no i love it and thank you for doing it uh as a bitcoiner who sometimes sits in his armchair in in america and thinks about this it's highly encouraging that individuals like you are out there in the field educating and actually rolling your sleeves up and getting bitcoin into people's hands um so what's what's up after this when the three years is up what are you going to do next we're actually we're toying with the idea doing a Bitcoin basically development in in El Salvador and El Zante it's a beautiful beach community and so it has increasing tourism so we actually bought

some land there and we are fine with the idea development is kind of a unity where land sold in Bitcoin all the fees are sold are paid in Bitcoin use Bitcoin in town through all the businesses that we've established. So I think we're going to call it Citadel by the Sea. It's still in the planning stages, but you've got to keep dreaming. I want to see how can we make this sustainable. I don't want after the three years for this thing to kind of dry up. We want to make sure that we're still pushing more Bitcoin into the community that this becomes a tourist destination for Bitcoiners. So we're always encouraging people to come down and check out the project. People that have doubts that we're

actually doing what we say we're doing, say, hey, come down and visit. Come talk to the people that are using it and see for yourself. Does Elzante have good lefts? It does have a good left. El Salvador is primarily all rights, but Elzante actually has one of the few lefts in el salvador it's really fast hollow and and it's just a it's just a great community i mean it's just a small beach town with just a really great vibe yeah as a goofy footer i'm definitely gonna have to make my way down there check out the the bitcoin economy and then the waves definitely hey you're definitely invited we'll uh we'll put you up um we definitely want to see people coming down and checking it out and

hopefully see similar projects happen in other places yeah no i mean it's very inspiring and so again thank you for what you're doing we got to wrap it up here is there any parting notes you would like to leave the freaks any any words of maybe not advice but uh maybe clear up some misconceptions or just anything that's on your mind that you'd like to get out there just say for for people that you know really believe in bitcoin try to figure out how you can be involved in advancing it to really improve lives and not just

improve bank accounts that are eventually going to be cashed out back to fiat. How can Bitcoin really be used to transform the developed world or even the poor communities in the U.S.?

I completely agree. Appreciate what you're doing. Thank you for taking some time to sit down and do this interview. I think the freaks are really going to like this one. This is a perspective that does not get a lot of shine here on this podcast. So I'm very, very happy that we were able to record this episode. Well, hopefully they won't crucify me too much for our use of custodial products. But, you know, I think it's important to just have a variety of points of view out there

and for people to understand the different sides, you know, of the equation. yep i agree but i will warn you you're probably gonna uh you're probably gonna hear something about the ballet crypto stuff i'm sure i'd be disappointed if i if i didn't well mike again i appreciate your time i hope you have an incredible weekend and hopefully we can catch up at some point in the future uh when there's more data on what's going on and more adoption in el zante yeah no definitely like i said you're there's an open an invite if you want to come down and check it out we'd love to have you awesome i think i will definitely take you up on that at some point well that's all we got today freaks peace and love