Inside El Salvador's Bitcoin Experiment — And How It's Changed Life There

It's been nearly four years since El Salvador kicked off its revolutionary Bitcoin experiment by becoming the first country in the world to accept it as legal tender.

Now, fresh off a new $1.4 billion deal with the International Monetary Fund, the country is acquiescing slightly by giving businesses the option of whether they want to continue accepting Bitcoin as payment or not.

With that change unfolding, Coinage headed down to El Salvador to see just how Bitcoin has changed life for El Salvadorians.

While many had critiqued President Nayib Bukele for the move in the early days after Bitcoin crashed post-FTX collapse, the country currently sits on more than $125 million in paper profits — good enough for nearly a 90% return. More important than that, he had orchestrated a $30 Bitcoin airdrop for El Salvadorians via the country's Chivo digital wallet to kickstart crypto adoption.

As we saw when we went down for the Plan B Conference this year, that move has more than put El Salvador on the map among crypto fans — it's now enticing some of the largest crypto companies to relocate their headquarters. Tether and Bitfinex already have, it's likely more are to follow to capitalize on a booming population that now has a sizable population that's using crypto daily.

For a first timer, it might be surprising to see just how many people are accustomed to paying with Bitcoin's lightning network. It was almost as commonplace as paying with a credit card. For many vendors we came across, including Gabriela Vega who sells her candles and other wares at a Bitcoin farmers market in El Salvador's famed Bitcoin beach El Zonte, it's a positive development that has boosted tourism.

"In El Zonte, a lot of people before used to only sell locally," Gabriela tells us, adding that accepting Bitcoin has attracted Bitcoin tourists looking to spend their crypto. "Now, they've expanded and their products reach people from all over the world." Every Sunday, Gabriela and about 20 vendors group up to host their farmers market together.

"That's what the Bitcoin farmers market does — open other people's minds to it being possible to have their own business," she said. "I really do see it as something very positive."

Just around the corner in the beach town is a hardware store that sells Bitcoin storage devices and various bars and restaurants that all proudly still accept Bitcoin. The only problem is foreigners can't use El Salvador's Chivo wallet, which means I needed to download others. Unfortunately, that wasn't as easy as I thought it would be as Strike and other famous lightning-enabled wallets down there all required approvals that took days and were not instantaneous.

A local pharmacy operator in El Zonte explained that most people paying with lightning in the town used Blink. Watching locals effortlessly scan the QR code on the Blink payment terminal was somewhat frustrating as I struggled to find a lightning wallet with instant approval.

Eventually, at a bar around the corner I realized Coinbase had recently added support for Bitcoin lightning withdrawals and sure enough — just seconds later after my transaction was confirmed I was getting started on a $12 bucket of the tastiest eight beers my producer and I ever tasted.

As our Uber driver had explained earlier in the day on the trip down — there are still plenty of El Salvadorians who had not bothered with the struggle to get onboarded either. Even with the Chivo wallet or the prospect of a free $30, President Bukele lamented that adoption waned behind where the country had hoped things would be. But for those who held, like our Uber driver Francisco, it's opened a door into another world of onchain payments.

"I met a lot of people who wanted to spend it, and I said,' Save it!'" Francisco said, adding that friends would call him later saying their $30 had turned into $60.

On top of that, El Salvador has rolled out plenty of unique ways to grow the overall attitudes around Bitcoin since the launch of the experiment triggered riots in the street where one Bitcoin ATM was even set on fire.

One of the most popular additions has been Chivo Pets, a pet veterinary hospital that lets people pay bills to the tune of just $0.25 when they pay with Bitcoin versus the full price in dollars. Before the Bitcoin experiment, there wasn't a public vet for people in El Salvador.

All things considered, it's pretty awesome to see up close for yourself how a country embracing Bitcoin has changed things for so many people. And perhaps, even more impressively, it doesn't look to be slowing down any even as things turn optional.

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