El Salvador Dispatch: The Origins of the Bitcoin Experiment

This article is part of a four-piece series on El Salvador. You can find the previous dispatch, a story on Bitcoin City, here .

The sun was setting as I rolled into El Zonte, a small surfing village on the coast of El Salvador. It was a late January afternoon. The sky had turned pink and orange; the ocean seemed made of gold. Shafts of light shone through the leaves of the coconut trees. Young, sun-tanned surfers were coming back from the beach, carrying their boards, joking around. Tropical birds shrieked above your head.

El Zonte is a unique kind of paradise because it supports the world’s first Bitcoin circular economy. Almost every business — restaurants, coffee shops, surf shops, hotels — accepts bitcoin (BTC) payments. It takes effort to find anyone who won’t take your satoshis. The village of roughly 3,000 people has turned into a mecca for crypto folks, who come from all corners of the globe to experience life on the Bitcoin Standard.

The village is also the birthplace of El Salvador’s Bitcoin journey. President Nayib Bukele, has credited the small coastal community for inspiring him to make bitcoin legal tender in 2021. That was my reason for visiting: I wanted to see for myself how the experiment was evolving.

What I found was a town in the midst of tremendous change — a place where Salvadorans and expatriates, together, spearhead the technological development of a whole nation.

The residents of El Zonte, once heavily weighed down by poverty, now have educational opportunities and interesting work prospects. Their children are being given tools to achieve prosperity, right here in their community.

I came away with the feeling that you cannot truly grasp the country’s Bitcoin project without understanding what happened in El Zonte.

How it all started

Throughout my stay, almost every time I talked about Bitcoin with the locals, the conversation would eventually turn to an American expat named Michael Peterson, a revered figure. The village’s Bitcoin initiative would probably have never happened without him.

El Salvador Dispatch: The Origins of the Bitcoin Experiment

El Salvador is famous for its world-class waves. Peterson visited El Zonte for the first time in 2005 on a surfing trip, and immediately fell in love with the place. He came back with his wife and bought a house, thinking of it as a vacation home for the winter. But, as time wore on, the couple felt increasingly drawn to El Salvador — and to the nation’s problems.

“We were attending a church in San Salvador, and a lot of people there were doing stuff like running children's homes or working with victims of sex trafficking,” Peterson told me.

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