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My Bitcoin Trip to El Salvador

Updated: Oct 21, 2022

I actually feel like I’m in a time machine. It’s an amazing feeling. It’s really cool. I’ll tell you where I am and why I feel that way.  Well, I am in a big, big corner, as you know.  It took me a while to get there. But now that I’m there, I’ve gone down the rabbit hole. I’ve eliminated all my objections about Bitcoin. And I actually think that it’s probably the most perfect money that we’ve ever created, better than gold, because you can’t really take gold in your pocket, go across the border, or go to Europe with it, you know, $10,000 worth of gold. It’s just, it’s just too hard to do.  But you can do it with Bitcoin. And you could do it in a matter of seconds, you could do it with a very little transaction fee. It’s really amazing, it’s an amazing thing. Anyway, I could talk for four hours about Bitcoin.  

So, I am in El Salvador. Now. Salvador is this beautiful tropical country; you could see it behind me. And I would show you the beach but the waves are so loud, that you wouldn’t be able to hear the podcast. So, I’m going to show you a couple of pictures of the beach and where I am and what I’m doing. But El Salvador is actually ground zero for Bitcoin. What do I mean by that? Well, back in the middle of 2021, they passed the law that said, now they use the US dollar, right, but they passed a law that says bitcoin is now legal tender, in El Salvador, which means you can basically buy and sell things with Bitcoin. You couldn’t do that before. And you can’t do that in a lot of places. And they basically told every merchant they had to start accepting bitcoin. Now, this is a third world country. 

Let’s start with the basics. 30% of the people here had some kind of banking relationship. 70% did not which is pretty typical of the world. So, the world is 70% unbanked.  Think about the people and in those countries in Africa, think about the people in a lot of countries in Central America, there’s just no banking relationships. You and I take for granted that we’d go down to any bank within a couple of miles. And there’re probably 30 banks, right? We could open up an account.  They can’t do that in El Salvador, they can’t do that in a lot of countries. And therefore, they have to exchange currencies, or barter or do something else. A lot of people for example, I know story of some people in, in some of the African countries, they’ve never seen a bank. In order to get to a bank, they have to go an hour, hour and a half to be able to open up a bank account. So, they don’t have a use for that. They have other ways of doing it. So, 70% of the world is unbanked. 

In El Salvador, they have a country of about 6.8 million people. And what they did is they took 70% of their unbanked, and within three or four months they made them banked. So, this country has now gone from 30% banked to 70%, banked, which means now 30% are only unbanked, which now that it’s interesting, because banking just means that you have some way of controlling money, some way of giving money, or receiving money to somebody. You know where they do their banking, right here. And if you have a $50 phone, which almost everybody does, they use that as their bank. Now, I want to be part of this really cool culture. And so let me tell you why I’m here. So, I came here because I run a cryptocurrency hedge fund. And I thought, well, if I’m going to be running a crypto currency hedge fund, and I’m going to be responsible for all the people that are in my fund, and I feel extremely responsible to them. Because we’re in this in this new territory and we’re trying to figure out the best way to navigate the new territory, I figured I might as well get to Ground Zero. Where this is the first country in the world that is accepting bitcoin as their legal tender. So, I came here, kind of not knowing what to expect. And let me tell you, in a lot of ways, it’s still clunky, but in some ways, like if you think about these Third World people that are not used to transacting things in this way, and they’ve embraced it, imagine the rest of the world.? Imagine how silly we are for going oh,” Bitcoin will never work.” It works here. So let me give you an example. Last night, I went and had dinner and you know, food down here is incredibly inexpensive. And so I got a couple of pizzas and a beer. And I asked if they take Bitcoin and the woman said yes and I said, Okay, great.  This is my first Bitcoin transaction. I heard it was pretty easy, but I was expecting it to be a little clunky because it was my first transaction as well. So, I had my wallet where I had my bitcoin, right, it was right here on my phone. And she opens up her app., she puts in, $3.75 for dinner and the beer. And she showed me a QR code. And I turned my wallet on, and I took a picture of the QR code, I put it up there. And the money is transferred immediately, as soon as the button that says send, that was actually quicker than a credit card transaction. Imagine, quicker than a credit card transaction. I looked down to make sure that all my bitcoin wasn’t missing, But I had verified it on the QR code that she was getting that it was $3.75 or whatever the Bitcoin was, and then it verified on my phone, and then boom, it just transferred took two seconds. It cost me very, very little, like two or three cents to do the transaction. And that was it.

If you see the video version, I’m going to show you some pictures up here on the video version of this podcast of how beautiful this place really is. It is one of the most beautiful places in the world that I’ve seen. And I’ve seen, I’ve seen 50-55 actually 56 countries. And where I am staying it’s what’s called Bitcoin Beach. It’s El Zonte, which has a beach here, but they kind of renamed it Bitcoin beach because everybody takes Bitcoin. And they’ve tried this, this experiment to see if it would take off. And it’s taken off for more than a year. And now you go down, you’re on the beach. And I’ll show you a picture here too. And there’s a woman that’s selling these little lemonades, or this little flavored ice, and she has a little umbrella and she’s on the beach and she sells these things. It’s just a sign it says Bitcoin accepted. Pretty cool, right? You don’t even have to be connected to a power station to be able to accept Bitcoin, you just have to have a phone. So pretty amazing to me that this is happening. So, this is a beautiful country. It’s progressing. And I went to a launch party of a company that is heavily involved in crypto space. Now I don’t really know much and talk much about NFT’s in a practical way. But I can tell you this company that I was that they had done a launch in conjunction with the country of El Salvador, it was a real estate play with crypto. It makes a lot of sense.  

I go to Greece a lot, and Greece is similar, the property disputes are rampant because they don’t have a really centralized, good way to lock up property rights. They don’t have ways to say, well, this corner of the property is mine, or it’s not yours, and we can prove it. And this company is taking a cryptocurrency NFT. And using that, to delineate property rights, and El Salvador very progressively is embracing it.

More stories about El Salvador, they have something called the Bitcoin bond. So, El Salvador third world country, you might remember the drug stories of the gang stories, all the stuff they have here, I feel so safe here, unbelievably safe. And so that keeps a lot of people away. The press in a lot of countries I go to keeps a lot of people away. Even when I went to Greece a few years ago, I was they were having riots. And I told my buddy, I’m not going to come this year, because while they’re having riots, because they’re always having riots. And I go there and the riots, like 20 people or 30 people. It was really no big deal. But there’s nothing to be afraid of here. They want money from the world. They want to grow their country, they have a lot to offer, right, this place is just incredible. And the rest of the world is not giving them money, right, the International Monetary Fund, they don’t play by the IMF rules, because they’re a third world country. They don’t have you know, military operations, things like that. So, the IMF basically kind of gives them the cold shoulder. But they owe to the IMF. They borrowed some money some years ago. And they’re looking for some more. And the IMF said, “No, we’re not going to give any money.” So, what would you do if you run a country now, by the way, the guy that runs the country is this 29 year old guy named a Bukele and he is very loved by his people, because what he’s trying to do. He is trying to bring this country up, and I think this country is like where Costa Rica was 10 years ago. It’s that up and coming, that beautiful with that much potential? And he said, “You know what I’m going to do, I’m going to issue my own bonds,” he calls them Bitcoin bonds. He’s gonna issue those bonds to mine. Bitcoin was part of it, and to build infrastructure for the country, with the other part of it. Pretty smart, right?

But then you don’t owe any money to anybody else. You owe money to the bondholders who believe that you’re going to pay them back based on the promises that you have and based on what bitcoin does now, whether Bitcoin takes off or doesn’t, I think it’s going to be amazingly successful. You know, that’s a different story, but he’s raising that money. He’s raising a billion-dollar Bitcoin bond, right to help us infrastructures that that goes a long way in a small country like this. Think about a billion dollars in a small community that you live in?  They have this beautiful series of volcanoes in the mountains here that create geothermal energy. And they’re going to be putting power stations next to these geothermal conductors, these volcanoes, and they’re going to make basically free power. Now, what do you need to mine? Bitcoin? Well, to mine Bitcoin you have to solve these complex mathematical equations and verify the transaction on the blockchain in order to make sure that the blockchain is solid. And it takes energy, right? So, it’s starting to take more and more energy, because the mathematical equations are getting more complex as Bitcoin grows into adaptation. And so, you need energy to be fairly cost effective. Because if it costs too much to mine, a Bitcoin, even by the time you get one, if you get one, you won’t be that much. So, imagine locating next is something that has free energy, like a volcano or a waterfall, right? Or, you know, some kind of solar park. Right? Those things are amazing. This one here happens to be next to a volcano. They’re doing some really cool things. And then finally, and I haven’t read all the rules yet, but President Bill Keller has actually pushed forward 52 new laws, they’re going to remove regulations and try to encourage people to bring their capital to this country. Now, what’s that going to do? Well, I’m telling you, right now, if you have this beautiful place which is right over here, 100 yards away, as beautiful as this beach, and you have technology that people are embracing. And you have a reason for people to be here with their money. Like there’s some future here. Contrast that with some of the other countries in the West, that you and I may live in that have, they don’t welcome your money, they tax the crap out of it. You know, they’re freezing bank accounts, if they don’t like what you’ve donated to. There, they’re not making things easy.

But here, you get somebody with a little vision to be able to go forward and you’re going to create this amazing paradise. I think that, you know, we’re in this we’re 10 years before Costa Rica was but we’re also 10 years before a country like Monaco or Monte Carlo or, places in Europe that have already figured out how to draw money in by lowering taxes by offering this beautiful lifestyle by being technologically advanced by giving people a reason to be here. I think we’re looking at a gem in Central America. And if you haven’t been to El Salvador, and it was never on my list, you really owe it to yourself to check it out. I’m checking it out on behalf of my investors. A little bit selfishly, I’m also enjoying myself, and I think you should too.

El Salvador put it on your list.

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#Bukele #ElZonte #ElSalvador #MarkYegge #Bitcoin #BitcoinBeach

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