10 months ago
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Based on the number of merchants that now accept bitcoin in Berlin you might think this article is about the German capital city. Instead, it’s about a small picturesque mountain town in El Salvador with a population of 20,000 people.
How it came to have over 100 merchants accepting bitcoin in a 6 month period is an interesting story of persistence, passion and belief about bitcoin. It also is the story of an area whose inhabitants were proud of their beautiful city. The town in Germany may have many more inhabitants, but the lesser known Berlin has far more bitcoiners descending upon it every day than its much better known counterpart.
Magic Internet Money
It all begins with Gerardo Linares and his girlfriend Evelyn Lemus who were working as digital nomads in El Salvador for US companies for 10 years before they discovered bitcoin. Both are natives of ES and first heard about bitcoin when the country designated bitcoin as legal tender back in June 2021.
Like many of their countrymen, they were curious about bitcoin after the announcement and began going to meetups in San Salvador and El Zonte to learn more about this magic internet money. Like many, they downloaded the Chivo wallet and collected their $30 worth of bitcoin in September 2021 when the law took effect. The more they learned about this new global digital monetary network that allows you to be your own “decentral bank” the more they liked it.
They noticed that having bitcoin as legal tender in their country attracted many outside visitors and tourists who were bitcoiners to their country, but very few natives were adopting bitcoin outside of El Zonte and San Salvador. They wanted to change that, so they quit their digital nomad jobs and began a journey that resulted in them settling in Berlin which is a small mountain town about 2 hours east of San Salvador.
Sharing The Bitcoin Gospel
After learning more about Bitcoin’s impact and the opportunities it afforded to local communities, they wanted other Salvadoran natives to understand Bitcoin too. In the early stages of their journey they traveled to many smaller towns and villages in El Salvador and never missed a chance to educate the students in the local schools who wanted to learn about Bitcoin. They eventually teamed up with Mi Primer Bitcoin which is a bitcoin education company that began in El Salvador. As Cory Klippsten, CEO of Swan Bitcoin, has been saying for years, “To educate people on bitcoin is to market bitcoin.”
When I asked how many towns they visited in the country Gerardo said “21.” I’m not sure he caught the irony of his answer to my question since many bitcoiners consider 21 to be a special number. One of the places where they gave classes on bitcoin was in Berlin. They eventually decided to start their effort to develop a circular economy in this mountain town because the town officials took great pride in their community and were eager to attract tourists to the area.
Any time you want people to adopt new technology it is the first few early adopters which are the hardest, and Berlin was no exception. In the beginning, the two of them were able to on board 17 merchants via many one-on-one conversations and tutoring. These first Berlin merchants were open to this new payment rail [lightning network] because they wanted more tourism. In addition, another advantage they had in Berlin was that most of the merchants and shopkeepers were so small that they didn’t have employees, which means they could speak directly to the decision maker on the spot. There were no employees standing in their way as “middle men.” They also had the added advantage of Bitcoin being legal tender in their country. After the initial wave of 17 merchants more locals got involved in recruiting their fellow shop keepers. Gerardo and Evelyn were quick to credit the locals for the increased adoption. This wasn’t a success solely because of Bitcoin, however. They organized community supported clean-up projects that transformed the area and made it more appealing for locals and tourists alike.
Many of the merchants and shopkeepers in Berlin had heard of Bitcoin and most knew of the success in attracting tourists to El Zonte, which was a small surfing town 30 minutes outside San Salvador and about 3 hours away from Berlin. Another advantage of the shops in Berlin was that they accepted only cash (El Salvador had stopped issuing its own currency in 2001 at which time they made the US dollar their legal tender) and had no method for accepting digital payments, which means tourists were less likely to visit.
Challenges and Solutions
Some even had the Chivo wallet from when Bitcoin was first launched because that wallet was required to receive your $30 in bitcoin from the government. However, they found out quickly that the Chivo wallet defaulted to generating a QR code for US dollars NOT bitcoin. There was a way to accept bitcoin on the merchant’s Chivo wallet but it was not the default setting and it was NOT user friendly.
They needed to do a work around to get the Chivo wallet to accept Bitcoin which made it less than ideal. Most shops are small and were not yet accepting ANY FORM of electronic payments. Gerardo and Evelyn refer to Bitcoin as “electronic money” or “dinero electronico”. Accepting Bitcoin became the method for these shopkeepers and merchants to enter the digital age for payments, instantly creating a tourist destination for the many bitcoiners descending on El Salvador after the law was passed in 2021.
At first success was slow and only one or two shop owners were willing to try it. And when they made a sale in bitcoin they would often call Gerardo and ask him to convert the Bitcoin into USD. However, many have watched the price of Bitcoin skyrocket in 2023 and are now much more inclined to keep hold on to their Bitcoin. Gerardo and Evelyn eventually showed them how to use the Blink wallet because it was much more user friendly than the Chivo wallet and Blink has a stable sats feature that lets the shopkeeper avoid the volatility of Bitcoin.
Getting shopkeepers to accept Bitcoin was only half the equation though because they needed customers and no one in Berlin was paying in Bitcoin. The couple began inviting bitcoiners from El Zonte and San Salvador to Berlin. As these groups of Bitcoin visitors grew in size and frequency they made a point of organizing lunches and dinners at the restaurants where Bitcoin was accepted. It didn’t take long before other shop keepers noticed these large groups going to their competitors who accepted Bitcoin.
Gradually, then suddenly…
Gerardo explained that once they reached a tipping point of about 50 shops the whole need to recruit owners flipped. At that point, the shopkeepers and owners started coming to them and asking how to accept Bitcoin. He added that “people here in Berlin are excited about Bitcoin.” Recently, Gerardo and Evelyn opened a small office in Berlin where they teach people about Bitcoin for free and they teach the locals who want to learn English for a modest fee.
There is no doubt that the success and buzz created from El Zonte played an important role in adoption but there are now over 100 shops and merchants that accept Bitcoin in Berlin which Gerardo estimated represents about one quarter of the shops and businesses in town.
It is not without irony that I suggested to Gerardo during the interview that Berlin is the “fastest growing bitcoin community in El Salvador.” He seemed reticent about making that claim, but those are the facts. He made it clear there is still much more to do in educating the locals and building out the circular economy. I was surprised to learn they have a 15 page strategic plan for developing their new hometown into a global tourist destination which they wrote before they began. Their ultimate goal is for the project to be self-sustaining.
They have been so effective in putting the town of Berlin on the map that if you’re a Bitcoiner who lands in San Salvador you have a decision to make: “Do I head 30 minutes south to El Zonte or do I go east 2 hours to Berlin?” Do I want the beach [El Zonte] or the mountains [Berlin]?
In either case, there will be many merchants and shopkeepers in both who will happily accept your Bitcoin. Meanwhile, tourism continues to grow in El Salvador and circular economies are popping up in the unlikeliest of places.
This is a guest post by Mark Maraia & Beren Sutton Cleaver. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
