Bitcoin Beach Playbook

Bitcoin Beach Playbook v0.02

Introduction

Bitcoin Beach is an economic empowerment project in El Zonte, a small beach town in El Salvador. It was launched in 2019 by Michael Peterson and others and recently made global news as the impetus for the President of El Salvador granting Bitcoin legal tender status.

We believe that the lessons from this initiative can help other regions gain the benefits from adopting bitcoin within their local economies. This Playbook has been assembled second-hand by reading, listening, analyzing, and summarizing everything we could find online and at the Bitcoin 2021 Conference in Miami. We had no direct involvement in the project and any errors, omissions, or inadequacies are strictly ours. 

We hope this will become a community document that evolves over time and incorporates lessons learned from other community initiatives.

Five Stages

There are five stages to successfully launching Bitcoin within your community:

  1. Involve 
  2. Infrastructure
  3. Inject
  4. Instruct
  5. Inform

Involve

You must involve the community from the very beginning. Establishing trust is an essential prerequisite for Bitcoin adoption. When it comes to money, especially claims of a ‘new, better money’ expect massive skepticism and distrust. Bitcoin has all the hallmarks of a Ponzi scheme and any sane thinking person will take a great deal of convincing and multiple touchpoints over long periods of time before trust is established. Trust in Bitcoin must be earned and grow organically.

Michael Peterson lived in El Zonte for 14 years before he launched his Bitcoin initiative. And it still took two years, lots of convincing, recruiting, Bitcoin giveaways, the COVID-19 lockdown, and many other steps before there was meaningful adoption. 

Infrastructure

Bitcoin and the Lightning Network require some minimal infrastructure. Your community needs basic internet. It doesn’t need to be fast, but it does need to be available in places where currencies are likely to be used. 

Your users need a smartphone or at least access to a smartphone. Bitcoin/Lightning for transactions requires a Bitcoin/Lightning Wallet App running either on Android or iPhone (data usage is very low). In El Zonte approximately 80% of the target audience had a smartphone or access to one.

The most efficient platform for Bitcoin transactions is the second-layer Lightning Network, which runs on top of Bitcoin and makes transactions nearly instant and nearly free. 

An interesting architectural possibility worth exploring would be to install Umbrel Lighting Nodes in local merchants which would create a network of fast convenient channels for transactions. Umbrel creates a Lightning node on a very low-cost low-power reliable computer platform:  Raspberry Pi 4 (total cost < $250) which then connects to the global Lightning Network.

Inject

One of the key lessons from Bitcoin Beach was the need to inject Bitcoin into the local economy. Early recognition of this requirement was one of the truly brilliant aspects of the Bitcoin Beach project. This injection was accomplished in multiple ways. Bitcoin Beach had 22 separate programs to inject Bitcoin into the economy and prime the crypto pump.

Paying people in Bitcoin. Numerous initiatives were launched that directly paid local people in Bitcoin. There were multiple youth work programs. A core mission of the project was to keep kids from joining the pervasive El Salvador youth gangs by keeping them employed. 62 Lifeguards were paid in Bitcoin. Kids were paid in Bitcoin for cleaning the beaches and collecting trash. Linking Bitcoin directly to employment was essential to encourage the adoption of Bitcoin as a true currency. You got paid in Bitcoin and you paid for goods in Bitcoin.

There was one exception to the Bitcoin as payment motif. During the COVID-19 lockdown in El Salvador, funding was provided directly to local families in Bitcoin. 500 families received $40 USD of Bitcoin on three occasions to enable them to purchase food and other supplies.

Instruct

Both consumers and merchants need to be trained. While Bitcoin/Lightning wallets are now generally easy to use, some consumer training is required. Bitcoin Beach instructed merchants how to receive Bitcoin, how to integrate it into their usual point of sale, and how to save it or convert it to USD. As more and more Bitcoin was injected into the community the merchants had a built-in incentive to learn how to accept it for payment

One thing to avoid is too much instruction. The whys, hows, and wherefores of Bitcoin are certainly interesting, BUT that will come naturally after initial adoption. (On this point I am independently well qualified. I have presented dozens of sessions instructing hundreds of people how to install and use Lightning wallets). This is clearly a case where less is more. The convenience of Bitcoin/Lightning sells itself. So just show people how to use it. 

Bitcoin Beach started with the Wallet of Satoshi, probably the easiest of all the Lightning wallets. (note to Bitcoin purists: custodial lightning wallets are MUCH easier to use and should be the starting point for adoption. Self-custody can start once users begin to accumulate/save Bitcoin). Once the concept of receiving USD remittances from relatives in the US became apparent the Strike wallet picked up some traction. Strike was also used as a simple way to convert back and forth between BTC and USD as both wallets support Lightning transactions.

Inform

Once you have community involvement, the necessary infrastructure, injected sufficient Bitcoin into the economy, and instructed people and merchants how to use a few Bitcoin/Lightning tools it is time to inform the world. 

Bitcoin is a global currency that enables entirely new forms of commerce. Payments for goods and services can now freely flow from your Bitcoin Beach, neighborhood, village, town, city, region, or country to anywhere in the world. 

References

https://www.bitcoinbeach.com/

https://www.coindesk.com/podcasts/coindesk-podcast-network/bitcoin-beach-el-salvador-mike-peterson

https://www.nasdaq.com/articles/on-the-coast-of-el-salvador-bitcoin-is-becoming-the-standard-2020-01-13

https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-el-salvador-village-adopts-bitcoin-as-money/

https://www.wiscnews.com/news/world/at-el-salvadors-bitcoin-beach-a-glimpse-of-crypto-economy/article_8a2425d1-1e76-58e2-97fe-7c1551d52226.html

https://www.reuters.com/business/el-salvadors-bitcoin-beach-town-digital-divide-slows-uptake-2021-06-14/

https://www.reuters.com/business/finance/exclusive-el-salvador-bitcoin-transfers-soar-still-fraction-dollar-remittances-2021-06-14/

Text is available under the Creative Commons Attribution-Non-Commercial 4.0 International Public License