This article is part of a four-piece series exploring the transformative journey of El Salvador. For insights into Bitcoin City, check out the previous dispatch.
The Golden Sunset Over El Zonte
As the sun dipped below the horizon, I arrived in El Zonte, a picturesque surfing village on El Salvador’s coast. It was a late January afternoon, and the sky was awash in hues of pink and orange, while the ocean shimmered like liquid gold. Rays of sunlight filtered through the swaying coconut trees, and sun-kissed surfers made their way back from the beach, boards in hand, sharing laughter and stories. The air was alive with the calls of tropical birds, setting the scene for an extraordinary journey.
El Zonte is unlike any other destination, hosting the world’s first Bitcoin circular economy. Here, nearly every establishment—from cozy restaurants and coffee shops to surf stores and hotels—embraces Bitcoin (BTC) as a form of payment. Finding a business that doesn’t accept satoshis is a challenge in this vibrant community of roughly 3,000 residents. This small village has emerged as a hub for crypto enthusiasts, attracting visitors from across the globe eager to immerse themselves in life under the Bitcoin Standard.
A Pioneering Bitcoin Journey
El Zonte is not only a picturesque locale; it is the starting point of El Salvador’s Bitcoin odyssey. President Nayib Bukele has acknowledged the village as a key inspiration for his decision to make Bitcoin legal tender in 2021. My visit aimed to witness firsthand how this groundbreaking experiment was unfolding.
What I discovered was a community undergoing significant transformation—a place where locals and expatriates collaboratively drive the technological advancement of a nation.
Residents of El Zonte, once burdened by poverty, are now gaining access to educational opportunities and promising career paths. Their children are equipped with tools to foster prosperity right in their hometown. It became clear to me that understanding El Zonte is essential to grasping the broader implications of El Salvador’s Bitcoin project.
The Genesis of Bitcoin Beach
During my stay, I learned that conversations about Bitcoin often gravitated towards an American expatriate named Michael Peterson, a pivotal figure in the community. Without his influence, the village’s Bitcoin initiative might never have materialized.
Peterson first visited El Zonte in 2005 on a surfing trip and was instantly captivated by its charm. He returned with his wife, purchasing a house they envisioned as a winter retreat. However, as time passed, the couple felt increasingly compelled to address the challenges facing El Salvador.
“After attending a church in San Salvador, we observed many individuals working tirelessly in children’s homes and assisting victims of sex trafficking,” Peterson recounted. “We realized we wanted to be part of the solution, which prompted our move to El Zonte in 2014.”
The Petersons developed guest houses in El Zonte and Punta Mango, offering them for free to those in need of respite. They organized conferences uniting various churches and missionaries while providing psychological support to those grappling with trauma.
Given El Salvador’s alarming murder rate at the time, these efforts were significant. Many individuals hosted by the Petersons had witnessed violence firsthand, and some had endured harrowing experiences themselves.
Peterson engaged in youth outreach in Punta Mango and El Zonte, instilling hope and the belief in a brighter future. The first children he mentored, like Roman Martínez and Fredis Molina, have since become adults actively involved in Bitcoin Beach—an initiative that has catalyzed Bitcoin adoption in El Zonte.
“Mike opened our eyes to new possibilities, teaching us to dream,” Martínez expressed.
The Emergence of Bitcoin Beach
In 2019, the Bitcoin Beach initiative was born when an anonymous donor approached Peterson with a substantial Bitcoin contribution, provided it could not be exchanged for U.S. dollars. The donor believed that utilizing Bitcoin could fundamentally alter the community’s future.
Bitcoin Beach began modestly, offering small Bitcoin grants to local children for tasks like cleaning beaches and maintaining good academic performance. A handful of businesses began accepting Bitcoin, allowing the kids to spend what they earned.
The turning point came during the COVID-19 pandemic in 2020, which brought economic fallout to El Zonte. Bitcoin Beach used its funds to support struggling families, distributing Bitcoin to ensure no one faced hunger or lacked essential supplies. Local businesses, eager for revenue, began accepting cryptocurrency.
After reopening, Bitcoin Beach initiated a re-employment program, hiring 120 locals for community projects, such as road repairs. The salaries were intentionally kept low to encourage self-sufficiency. However, Peterson emphasized the importance of caution when aiding communities, as well-intentioned assistance can inadvertently disrupt local economies.
Accelerated Transformation
The momentum continued to build. Before Bitcoin Beach, a staggering 90% of El Zonte’s residents lacked bank accounts or experience with digital transactions. Suddenly, the community was thriving with Bitcoin Lightning wallets, attracting attention from Forbes and local media. Word spread through the cryptocurrency community about the groundbreaking developments in this small Salvadoran village.
Jack Mallers, CEO of Zap and the bitcoin payments platform Strike, visited El Zonte and was inspired to launch Strike in El Salvador, spurred by his observations of the community. His social media posts about the village reached President Bukele, who subsequently implemented Bitcoin legislation in 2021.
“We demonstrated that Bitcoin could positively impact Salvadorans,” Martínez noted. “The challenges we faced in El Zonte mirrored those across the entire nation.”
A Village in Transition
While I stayed in a less-touristy area of El Zonte, characterized by unevenly paved streets and modest homes, it offered a glimpse into the village’s past. Nearby, a small store named El Milagro, adorned with a mural of Satoshi Nakamoto enjoying pupusas, casually asked customers whether they preferred to pay in cash or Bitcoin, reflecting the town’s evolving economy.
As I ventured closer to the beach, the landscape transformed dramatically. Well-maintained roads led to charming hotels offering Spanish and surfing lessons, alongside inviting coffee shops and vibrant bars. Conversations about cryptocurrency echoed through the restaurants, and I even crossed paths with early Bitcoin developer Peter Todd at a beachfront hotel. New construction projects were underway, hinting at the village’s rapid development.
Ivan, a 20-year-old staff member at a local surf shop, shared that nearly half of their clients paid in Bitcoin, expressing his enthusiasm for using the digital currency personally. Local police officer Agent León noted the positive impact of Bitcoin on El Zonte, fostering development and interactions between foreigners and Salvadorans. While some changes sparked tension within the community, he acknowledged that rapid evolution often breeds such challenges.
A local Bitcoiner praised Bitcoin Beach’s initiatives but stressed that the influx of capital had not equally benefited all residents. “We’ve transformed from a struggling surf town into a budding tourism destination, but we still face infrastructure challenges and many remain in poverty,” he lamented.
Martínez addressed these concerns during a panel discussion at Plan B on January 30, expressing gratitude for the community’s current challenges, which stem from success. “This is the best moment in our history,” he declared. “People often overlook the change in mindset among our residents. Now, many think, ‘Perhaps I don’t need to emigrate to the U.S. My dreams can come true here.’ Opportunities are emerging locally, and something incredible has happened in El Zonte.”
Looking Ahead: The Future of Bitcoin in El Zonte
With El Zonte nearly fully adopting Bitcoin, the focus of Bitcoin Beach has expanded. Martínez and other Salvadorans now take the lead in the initiative, with Peterson primarily serving an advisory role. Bitcoin enthusiasts from around the world visit El Zonte seeking guidance, including those from Berlín, home to El Salvador’s second Bitcoin circular economy.
For Martínez and Molina, nurturing El Zonte’s youth is a top priority. Approximately 50 children are receiving training in Bitcoin-related subjects, including basic finance, while being encouraged to dream big.
“The work Mike did with us is what we aim to replicate for the next generation,” Martínez explained. “It’s about sharing knowledge, offering guidance, and teaching them about spirituality.”
I later met with Peterson at the Plan B conference in San Salvador, where he was in high demand, as was Martínez, who drew crowds with his insights and leadership. Peterson expressed deep pride in Martínez and his peers. “Roman, Fredis, and the others—I’ve watched them grow since childhood,” he reflected. “They are now engaging with bankers in Switzerland, a testament to their journey.”
“They are doing an incredible job, far exceeding anything I could have accomplished.”
