Michael Peterson, the figure who convinced Bukele to adopt Bitcoin as a currency

The American, originally from San Diego (California), came to El Zonte beach in 2006 as a surfer and then started his business and implemented Bitcoin.

On June 25, Amy Castor, a journalist specializing in cryptocurrencies, published on her blog an article called “Michael Peterson, El Salvador and Bitcoin Beach, which is summarized in the following paragraphs:

“On June 8, El Salvador passed a law to make bitcoin legal tender, in parallel with the dollar. Overnight, President Nayib Bukele became a complete bitcoiner, still embracing the laser eyes of bitcoin on his Twitter profile – he and members of his cabinet too.

Who sold this plan to Bukele? Many think it was Michael Peterson, a 47-year-old white evangelical from San Diego. A surfer, Peterson first came to El Zonte in 2006 to test the waves. He fell in love with the place so much that he bought a house there and now has several cabins that he rents for surfers.

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The same year, Peterson established MissionSake, an institution that gives community aid and support to evangelical missionaries, who in turn give advice for daily life, financial planning and the use of Bitcoin.

Peterson lives there 9 months of the year with his wife and two children, and the rest in San Diego, where he runs a bacon-wrapped food business.

Eventually Peterson started what he calls “a Bitcoin circular economy” in El Zonte and Punta Mango, with some paying others in Bitcoins and back, using a mobile phone payment application.

In the world at large, Bitcoin has failed as a payment system from day one. It’s too volatile, too slow, and finger mistakes mean the money is gone forever. The only ones who use it for payments are criminals and hackers who hijack computer systems for a ransom. In order for people to use his software at El Zonte, Peterson had to gift them Bitcoins.

As he was trying to make his system work, he was making modifications to it, adopting a “wallet” to store Bitcoins that he called Bitcoin Beach Wallet, complemented with a private version of a network called Lightning to make transfers, and cooperating with another version of the same network used in another Bitcoin payments application called Strike.

This has added complication and confusion to the task of moving from one beach to the entire country to make payments, with a system that was not competitive to begin with.

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Peterson says that the Bitcoin Beach app is doing very well. Reports from the place tell a different story. Many El Zonte residents downloaded the app just to convert the given Bitcoin into cash. The case of Zelma Rivas is illustrative of the people who tried to use them.

She started by accepting Bitcoins for the fruits she sells, but now she uses Bitcoins very rarely because her phone barely handles the payments app. When Reuters interviewed her, her phone was not working.

The project is also suffering from other problems. Some of the residents of El Zonte see in the image of the Bitcoin, in the lower right edge, the number 666, which the Apocalypse identifies as the number of the mark of the Beast (the Antichrist), a mark that would be used in the last times to buy and sell, and that it would be used as a sign of obedience to Satan.

Also, these neighbors think that the first part of the cryptocurrency name is a satanic mockery of the name of Christ.

On the other hand, the commissions at Bitcoin ATMs have proven to be very high at the scene. A user received $ 13 when he tried to cash $ 20 into Bitcoins. In addition to a $ 5 charge, the ATM added a 10.5% fee.

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Peterson promotes Bitcoin while glossing over its sad realities, such as that Bitcoin does not work well for payments, that the Lightning Network he uses for transfers cannot be made large enough to handle the entire country, and that El Salvador does not have the infrastructure necessary for this to work by September 7th.

What is Peterson’s master plan? He wants to see Bitcoin adopted by the 6.5 million inhabitants, with El Zonte functioning as the nerve center. Peterson told “Go Full Crypto” that his vision includes erecting a monument to Bitcoin in El Zonte, with a large “B”.

“We want it to be a point of reference where people can come and take selfies,” Peterson said. He just has to convince the neighbors that the “B” is for Bitcoin, not “the Beast.”

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“Of the $ 20 I put in, they only gave me $ 13”: Youtuber Uncle Frank shared his experience buying Bitcoins

(VIDEO) The Salvadoran youtuber shared his experience when converting dollars to Bitcoins and vice versa, where he had to pay up to 10.5% commission plus a very high extra fixed charge to make use of the cryptocurrency.

The popular Salvadoran youtuber, Tío Frank, went to the beaches of El Zonte and El Tunco, in La Libertad, to see first-hand how transactions with Bitcoins work, the cryptocurrency that El Salvador recently adopted as legal tender .

In the images shared by the same youtuber, it is possible to observe how he and a companion arrive at one of the ATMs that have been installed in El Zonte, and which works to withdraw or deposit money directly into the virtual wallet.

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The first steps that Uncle Frank takes in his experience are to install the Bitcoin Beach Wallet application and register through a personal account, from there, a user of the place tells him how he can do to introduce money, something that is equivalent to to buy fractions of Bitcoin.

To do the test, the youtuber scans a QR code, then the account status appears on the screen, that is, how much money you have in your virtual wallet both in dollars and BTC (short for Bitcoin).

At this moment, the young man introduces a $ 20 bill that, once registered by the cashier, shows him on the screen how much it is equivalent in BTC, at the same time that he indicates that there is a fixed charge of $ 5 for converting that physical money into cryptocurrencies.

The ATM shows the fixed charge for each transaction when converting physical money to Bitcoins. Illustrative and non-commercial image / https://www.youtube.com/watch?v=AMpxrgLLb9E

Likewise, while the youtuber waits for the cashier to issue the receipt that proves his purchase, Uncle Frank clarifies that, despite the high value of Bitcoin in the market, it is possible to buy it in fractions, as in his case he acquired 0.0003399 BTC with $ 20.00

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However, and to the surprise of the young man, when obtaining his receipt, the real charge he received for the transaction and the conversion of dollars to BTC can be observed, in which it appears that, in addition to the $ 5.00, 10.5% has been discounted. commission for the procedure.

By making accounts and checking his virtual wallet, Uncle Frank checks that the actual amount he has obtained in BTC is equivalent to $ 13.56, that is, $ 6.44 less than the value he paid for Bitcoins.

Uncle Frank shows on a receipt that he was charged $ 6.44 in commission for buying $ 20 worth of BTC. Illustrative and non-commercial image / https://www.youtube.com/watch?v=AMpxrgLLb9E

However, both the youtuber and the person who explains how the ATM works mention that the high cost of the transaction could be due to the fact that the ATM is private and that, probably, it is the owner who charges an extra commission for converting dollars to BTC.

Likewise, Uncle Frank’s companion affirms that he prefers to use traditional ATMs, because they are more practical to use and “without much flow”.

In the same video, the youtuber decides to check the cost of transactions at the Athena ATMs, located in El Zonte, where, as you can see, the commission charge is lower, but the procedure is more cumbersome.

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For example, to be able to convert BTC to dollars, the user must scan a QR code, then they must wait five minutes to receive a code on the phone, then that code must be entered at the ATM, which will give them a ticket; Then, you must enter the phone number, to receive a second code that will be used to continue with the operation and, finally, you must enter another code that appears on the receipt before received and with this withdraw the money requested at the beginning of the operation.

Some of the users who commented on the video posted by Uncle Frank, stated that the commission charges are too high and that they will only generate losses in the population. Others added that if Tío Frank and his friend, who are “bugs”, find it difficult to understand the procedure, it will be more difficult with the majority of the Salvadoran population, especially merchants and entrepreneurs.

After several minutes, the youtuber was able to withdraw $ 10 from an ATM that converts BTC to dollars. Illustrative and non-commercial image / https://www.youtube.com/watch?v=AMpxrgLLb9E

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“Satoshi”, a bit of Bitcoin with which you buy pupusas and sodas on El Zonte beach

Bitcoin is divided into small fragments with which all kinds of products are sold in the La Libertad area.

Today everyone talks about Bitcoin and the new way in which pupusas and sodas are bought on the hot El Zonte beach, in La Libertad.

But how is it possible that a Bitcoin, whose unit is currently worth $ 34,000, can be traded from store to store? Are the people of El Zonte that millionaires?

The answer to this question is No. In El Zonte what is used as currency are the “satoshi”, or also known as “SATS”, which are a fragment of Bitcoin. This is the smallest fraction that a Bitcoin can be divided into.

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A Bitcoin is divisible in 100,000,000 of “cents” called satoshis allowing to reflect balances of up to eight decimal places. Therefore, the minimum fraction of a bitcoin would be 0.00000001.

This means that El Zonte, traders trade with “pennies of a Bitcoin” through an application installed on their phone called Bitcoin Beach.

Rosalina Franco, 54, who owns a store in El Zonte, narrates that at the end of 2019 some young people from Bitcoin Beach, a project to create an economy based on cryptocurrencies in the El Zonte area, came to her business and asked her the idea of ​​accepting that currency as a form of payment in your business.

After hearing the benefits of cryptocurrency, she ventured to be the first business owner in that area to accept Bitcoin. “I had never heard of that coin, but some boys came to eat here and explained to me about this coin,” said Franco.

Image of a transaction made through the Bitcoin Beach application in a business in El Zonte, La Libertad. Photo EDH / Oscar Omar Portillo

To date, some 35 businesses use this form of payment, which is beneficial for many tourists who visit the area because they do not need to exchange money or receive dollar coins as change.

According to Franco, during the COVID-19 pandemic, his business and that of many remained afloat after Bitcoin Beach delivered a bond in that currency to local people. Franco said that when he found out about it, he was enough of more products and being practically the only person who at that time accepted Bitcoin, his sales increased and thanks to this he was able to supply more his store and buy more labor inputs.

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They use it as a savings

But beyond being an innovative currency in the area, Franco says that this currency represents for her a saving that is activated when the price of the currency rises internationally. Because yes… Franco recognizes that this is a very volatile currency, that one day it has a price and the next, a different price.

“When the coin is held, one goes there, but when it rises, one manages to win. When it goes down, the only thing you should have is patience, “he says.

The trick is to wait for the currency to rise in price to have enough money and make it cash if you want, at one of the ATMs established in the area. That shows the preference for cash.

One of the best-selling products in this form of payment is the pupusas that will be prepared in the mornings and afternoons. Foreigners who come to surf at El Zonte and some locals find it easier to pay for that typical dish through Bitcoin.

Photo EDH / Oscar Omar Portillo

Like Franco, Maria Aguirre sells pupusas and pizzas in exchange for Bitcoins. She started her venture 8 months ago and in February she started accepting Bitcoin at the suggestion of the Bitcoin Beach project.

Aguirre comments that she began to accept this form of payment as a biosecurity measure to avoid contact with customers, since they only had to scan a QR code that is outside of her business and she received the payment that way.

“At first I did not imagine that you could pay through an application, but then they explained to me about Bitcoin and it has been a great advantage,” said the merchant.

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