El Salvador: What’s Happening in ‘Bitcoin Country?’ (2024)

byNate Kostar

Despite El Salvador being the smallest country in Central America, most people have heard of its president Nayib Bukele — especially folks in the crypto space. In 2021, Bukele made El Salvador the first sovereign nation to accept Bitcoin as legal tender, and since November 2022, he’s been buying one bitcoin a day, which he claims he’ll keep doing until it “becomes unaffordable with fiat currencies.”

While news outlets around the world were quick to blast the folly of the president during the recent crypto winter, after bitcoin’s price reclaimed all-time highs in March of this year and put El Salvador in the black, it’s been mostly crickets from the press.

Some see Bukele as a visionary, and many Bitcoin maximalists have even set up permanent shop in El Salvador. Among them are Max Keiser and Stacy Herbert, two influential bitcoiners who claim that Bukele’s investments and policies are the beginning of a “Renaissance 2.0” — with El Salvador replacing Florence as the epicenter.

So we decided to take a closer look to see what’s happening with Bitcoin in El Salvador. Here are some of the most interesting projects we found:

  • Bitcoin Beach. El Zonte is a beach town about an hour from El Salvador’s capital that lures surfers from around the world. But since 2019, the town of about 3,000 has also attracted a different kind of tourist: bitcoiners. That year an anonymous bitcoiner donated a huge some of bitcoin to the community with one condition: the bitcoin could not be converted to cash. Instead, the funds would be used to invest in local programs and businesses, create jobs, and to foster a circular Bitcoin economy. Now at Bitcoin Beach, you can buy everything from surf lessons to tamales in bitcoin, and the popularity of the movement has spread to nearby towns like Punta Mango.
  • Bitcoin City. One of Bukele’s most ambitious and hyped projects, this planned city in La Unión will use geothermal energy from the Conchagua volcano to mine bitcoin and power the city’s infrastructure. Announced in November 2021, it is being funded by a $1 billion bitcoin bond issued by LaGeo, a state-owned power company. According to Bukele, the city will have no taxes whatsoever and “zero CO2 emissions.”
  • Node Nation. This educational program was launched in February 2024 with the mission of teaching the fundamentals of Bitcoin, coding, configuring, and managing liquidity on a Bitcoin Lightning Network node. The project is supported by the Ministry of El Salvador and the National Bitcoin Office. Besides teaching the country’s youth between the ages of 15-17 how to run Bitcoin and Lightning network nodes, it also aims to make the Bitcoin network more robust and decentralized.
  • The Freedom Passport. In December 2023, Bukele announced a visa program that lets foreigners obtain an El Salvadorian passport and residency for a one-million-dollar donation in bitcoin or tether. The donations will support the country’s social and economic development projects, and help to evolve its Bitcoin economy. In February 2024, Bukele also announced a program to offer 5,000 free passports to highly skilled foreign engineers, scientists, artists, doctors, and philosophers.

One aspect about the Italian Renaissance that’s often overlooked was the importance of sound money to enable cross-border trading. Florence, the heart of the Renaissance, was known for the Florin — a standard gold coin (1252-1533) that was the first money to be mass-produced and recognized across large swaps of Europe. Without it, it’s unlikely Florence would’ve thrived the way it did and spurred a movement that’s widely regarded as one of mankind’s most important moments.

Now, 500+ years later, some people believe El Salvador could lead the world into another Renaissance, this time on the back of the soundest money the world has ever known — Bitcoin. Of course, these are lofty goals, and only time will tell what happens with Bitcoin, El Salvador, and president Bukele, who still has five years left in his term to manifest his vision.

But the move by Bukele has brought global attention to the nation of only 6.5 million, and if the young president is correct — if bitcoin reclaims historic highs and keeps going, or if it becomes the reserve currency of the world — “Bukele’s Bitcoin Bet” would be one of the most transformative economic moves ever made by any president in history.

At Rarity Sniper, we think that’s something worth paying attention to.

In case you missed it:

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  • Sniper Spotlight with Brian Ross, CEO of Draft Labs
El Salvador: What’s Happening in ‘Bitcoin Country?’ (2024)
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