El Salvador Slums Need Bitcoin – Bitcoin Magazine
This is an opinion piece by Rikki, author and co-host of the “Bitcoin Italia” and “Stupefatti” podcasts. He is one half of Bitcoin Explorers, along with Laurawhich charts Bitcoin adoption around the world, one country at a time.
A few days before this was written, El Salvador’s President Nayib Bukele announced a massive police crackdown. San Salvador’s satellite town of Soyapango was surrounded by 8,500 military and 1,500 police officers, who went house-to-house searching for gang members still hiding in the area. More than 150 arrests were counted.
Soyapango represents one of the most difficult realities for the country. With 300,000 inhabitants, it is home to several “comunidades”, the name used locally to define slums or “favelas”, if you prefer.
The news of the police action hit me hard because only two days before I had visited two different neighborhoods in that very city: the extremely poor Ciudad de Dios, which stands on an old garbage dump, and the violent Santa Lucia, one of the historical dens of criminal gangs .
My visit was carefully planned well in advance and the only reason it was possible for me to enter these places was that the “pandilleros”, the gangsters, have been hit hard by government crackdowns in recent months, a direct result of the rise. in clashes between rival gangs that had bloodshed again earlier this year.
Had I tried to get in a year ago, my own life would probably have been in danger. Still, as a precaution, I had a local driver, only rarely did I get out of the car, and we were escorted by a well-known person in the neighborhood who rode ahead of us on a motorcycle. Our guide was from these streets, had lived for five years under a bridge and had a history of drug addiction, from which he recovered with the help of the community.
It was an enlightening day for me and a necessary one.
Solving extreme poverty
My reason for visiting these places to report on them comes from a conversation I recently had with a fairly well-known Bitcoiner: a developer who is well-educated and highly intelligent and has been in the business for many, many years. Well, his thesis is that El Salvador is not really as poor as people would have you believe, but rather an economically backward country where the incidence of extreme poverty is not unlike that of far more developed nations.
This point of view honestly shocked me.
According to official data in El Salvador, 26% of the population lives below the poverty line. There are 1.7 million people.
Still, it’s true that many of the Bitcoiner tourists who come here think it’s the lady selling pupusas on the street corner who is poor. She is not. That lady is an entrepreneur. She has a shop, a business. The lady, despite the simple clothes wrinkled from hard work, is lower middle class in El Salvador. Poverty, the real kind, is hidden in vast neighborhoods made of tin houses, with no running water, sewage or electricity. Invisible cities, where no one goes and that no one talks about.
This is a serious error.
If Bitcoin is to succeed here, we must also improve the living conditions of these people. Because they are the ones who need it the most and because it is their poverty, as the police action of the last few days showed us, that directly fuels crime.
The bitcoiners who come to El Salvador dreaming of a freer nation than the one they are fleeing, the entrepreneurs who want to invest here, must understand that among their priorities must be the inclusion of those who live in the slums of Soyapango, otherwise their very future is here , it is their very investments that are at risk. The military solution to the gang problem can actually only be a temporary palliative. Crime thrives in the slums. This is where bosses recruit new thugs, this is where they sell drugs and profit, this is where they live, rule and hide. If we do not solve the problem of extreme poverty in El Salvador, the gangs will keep coming back, more dangerous and better organized than before, and El Salvador will never be a truly safe country.
The footage I took in the slums of Soyapango is a blow to the stomach. But I think it was also necessary to show our society this side of El Salvador, which is too often forgotten.
My last days in El Salvador
I am writing this during my last days in El Salvador – soon I will be moving to Guatemala to report on another nation, with a very different attitude towards Bitcoin and many communities trying to use this technology to improve their lives. It is therefore time to take stock.
As I have documented extensively, Bitcoin adoption in El Salvador is declining. There are many merchants who have stopped accepting BTC as a payment method. The reasons they always give have been twofold: Bitcoin is too complicated and there is a lack of volume. Very few people want to pay this way.
While we have already shown how too much complexity is to blame for the shortcomings of the Chivo wallet, the second problem is far more serious and delicate. On the one hand, there are the citizens of El Salvador who earn and spend dollars—a strong currency, not a victim of severe inflation—and they view digital payments with suspicion. On the other hand, there is encouraging data that tells of a strong increase in tourism in this country, also linked to the many Bitcoiners who come here to visit the country for BTC legal tender.
But if there are thousands of Bitcoiners coming to visit, how is it possible that the volume of BTC transactions on the streets is not increasing? Maybe we are not numerically sufficient?
May be. But I think the problem is also different.
Let me give you an example: A few weeks ago, outside the Mi Primer Bitcoin closing ceremony in the small town of Ataco, I met a Spanish gentleman who had come to the country specifically for Bitcoin. Tall and grey, in his 40s, he helped this association that educates very young people in El Salvador about Bitcoin. He was an examiner, one of the “experts” called in to assess the children’s preparation. Wearing a Bitcoin Beach cap and Bitcoin t-shirt, with a slim and tanned physique, he appeared to be a typical fanboy in appearance.
We were talking outside the school and I happened to mention, almost by accident, how I was a little disappointed with the ever-increasing use of Bitcoin among people there.
It was at this point that he started telling me how he himself, strongly, in perfect Spanish, always asks when he buys something if he can pay with bitcoin. But when he gets an affirmative answer, he starts investigating with the seller to find out exactly what to do with the satoshis he wanted to send him. Basically, it is an interrogation. If the poor merchant replied that they wanted to keep their stake for the future, they will receive something from the experienced Western Bitcoiner via a Lightning transaction. But if they instead admit that they want to exchange or receive the bitcoin directly in dollars, then this westerner gives up using bitcoin and pays directly in fiat.
Can you see how idiotic that is? It makes no sense at all.
I thought that our mission in El Salvador was to stimulate adoption as much as possible, to help these people through a new and alternative economic system. But no! Now we even require them to be HODLers. Otherwise they are not worthy of our bitcoin. This is a scary way of thinking and pure selfishness.
When I pointed out to him that the future of these people also depends on the success of bitcoin in the country, and that perhaps his attitude is a little selfish – because after all, we can sacrifice a few thousand satoshi to stimulate adoption, even if they are converted to dollars — he went berserk and started screaming that he lives in El Zonte and that all his friends are the poor in the village and that he cares about the fate of all of them.
But obviously not enough to sacrifice a few dollars in effort.
And mind you, there are many others who think this way. I have seen many bitcoiners here paying in cash or with their flaming credit cards. We’re all familiar with the narrative behind this gesture: “Bitcoin should not be used. HODL to death. Bitcoin will be worth billions, it’s not like they’re being used today. We don’t want to end up fooling Laszlo like that!”
It’s a shame that Bitcoin’s success in El Salvador is also linked to transaction volume and that if we win the battle in this country, the value in bitcoin’s markets will be positively affected, to the benefit of our entire society. So obviously we all want bitcoin to increase in value, but only a few are willing to sacrifice a handful of satoshis to truly contribute to the ultimate victory. How rude and selfish.
I mean this in no way: At the risk of offending someone, if you’re coming to visit this country for Bitcoin and you’re not willing to pay with bitcoin, do El Salvador a favor, stay home.
PS
I saw the guy again a few weeks later in El Zonte, sitting comfortably, eating a shrimp cocktail, looking out to sea at Palo Verde, one of the most exclusive resorts in the village. It’s one of those places his “so many poor friends” can’t even afford to look at from a distance.
PPS
Laszlo Hanyencz is a hero and has gone down in the history books, unlike all those who consider him a fool.
This is a guest post by Rikki. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
