The popular localization project is a model to replicate for areas looking to seize the opportunities offered by Bitcoin.
As a former resident of Venezuela, Josef Dvoracek knows a thing or two about inflation, economic mismanagement, and the risks of fiat currencies.
That’s why he was among the most enthusiastic pioneers of a new bitcoin payments ecosystem that has sprung up in that lush region of southern Costa Rica known as Costa Ballena (Whale Coast).
Dvoracek, a 71-year-old Czech national who sells artisan bread with his Venezuelan wife at local food markets, said he now makes around 25% of his sales through the new Bitcoin Jungle wallet. Besides giving him the opportunity to earn bitcoin, he says the biggest benefit of using it has been saving up to 8% of the fees he loses with credit card sales.
“It was amazing,” said Dvoracek, who has lived in Venezuela for 20 years. “Most of us who use bitcoin now leave the credit card machines at home,” he added, referring to his fellow stall vendors.
The evolution of Bitcoin Jungle in this region means that El Salvador is no longer the only place in Central America where you can buy a coffee with bitcoin before hitting the beach. In fact, you can do so much more these days in this corner of Costa Rica.
On a recent Friday in the surf town of Dominical, more than a dozen vendors, including Dvoracek, were accepting bitcoin. A few minutes walk from the main street, the orange bitcoin plastic plate was also on display at Mono Congo (Howler Monkey), a popular cafe for breakfast and lunch. A nearby pharmacy recently started taking bitcoin, as did a host of restaurants and other tourist businesses in the town of Uvita, a 15-minute drive south of Dominical.
In total, about 50 mobile market vendors and 20 brick-and-mortar businesses have signed up for the Bitcoin Jungle project since its launch about six months ago. The wallet app had around 1,500 downloads and 1,000 active users per month.
The project is a prime example of how the original bitcoin beach in El Zonte, El Salvador – which presaged that country’s decision to make bitcoin legal tender last year – is stimulating the organic growth of local bitcoin ecosystems elsewhere in the world. the world. It also provides more evidence that bitcoin can be an efficient and useful payment system – something skeptics have long dismissed due to its slow transaction speeds and relatively high costs.
Like the El Zonte project, Bitcoin Jungle’s wallet operates on the second Lightning Network layer, which makes transactions much faster and cheaper than they would be on the underlying bitcoin blockchain. It is a fork of the original Bitcoin Beach wallet built with the open-source bitcoin development platform Galoy, but added features like a GPS map showing locations where bitcoin is accepted and the ability to pay without near field contact (NFC).
Richard Scotford, a 50-year-old former Hong Kong resident who has been active in that region’s pro-democracy movement, came up with the idea for Bitcoin Jungle as he and his wife forged ahead with plans to start a local college on the bitcoin standard.
“The deeper I got into bitcoin, the more obvious it was to me that this field was ready to do that,” he said. “We just needed to start attracting people to the bitcoin standard by giving them outlets to spend their bitcoin.”
Scotford says Costa Rica’s economy and financial system demanded a different approach for Bitcoin Jungle. Unlike impoverished El Salvador, Costa Rica has long had one of the most stable economies in Latin America, low levels of corruption, and a relatively good standard of living.
“El Salvador is the bank for unbanked people. Costa Ricans have bank accounts and most of the time they don’t question the financial system,” Scotford said.
So, instead of relying on adoption by locals, Bitcoin Jungle is primarily aimed at penetrating the ranks of foreign tourists who flock here for Costa Rica’s unspoilt beaches, verdant rainforests, and pristine waterfalls.
Given the ability to pay seamlessly with bitcoin, tourists might leave their credit and debit cards at home, or at least at the hotel. For their part, hotels, restaurants, and retirement centers get an escape from sky-high credit card fees and the ability to hold bitcoins long-term. The idea is that this will eventually lead to a circular bitcoin economy that will also appeal to Costa Ricans.
Lee Salminen, a software developer who sold his business in the payments industry before moving to Uvita and partnering with Scotford on Bitcoin Jungle, said he was optimistic more locals would join him, d especially since Costa Rica’s own currency has fallen about 10% against the dollar over the past year.
The onboarding process for the locals was facilitated by one-on-one sessions where Salminen and Scotford listen to people’s financial problems and explain how bitcoin can solve them and, most importantly, giving them the opportunity to quickly convert it into dollars.
After the first week of Bitcoin Jungle going live in local markets, every seller took the option to cash out. Now very few do, says Salminen.
“It’s been an incredible progression in the markets,” he said. “Every week they come in and have a higher level of complex questions about bitcoin, the economy or inflation. Everyone has their reason – some have a healthy distrust of government, some have family in distant places and some like to speculate.
The next step in improving the ability to switch between bitcoin and fiat has been the recent arrival of two shiny new bitcoin ATMs.
The Costa Rican government has taken a restricted approach to cryptocurrencies, accepting them as legal to use but warning citizens that buying them can be risky. But a recent drop in tourist arrivals due to COVID-19 – compared to a 30% jump in El Salvador since it adopted bitcoin last September – could be a catalyst for a change in official attitude, said said Salminen.
“The Ministry of Tourism wants to talk with us to understand how bitcoin could be positive for tourism here and use it to push legislation forward,” he said.
Czech provider Dvoracek said he believes more Costa Ricans will turn to bitcoin payments when they realize it will give them the option to disconnect, saving them from queuing for services in banks and ATMs.
Fuad Yantani, a 43-year-old Chilean who sells cold-pressed juice, said Bitcoin Jungle payments accounted for a small but growing share of his sales. He said bitcoin was also useful for making and receiving payments from other providers, but his longer-term goal was to treat it like an investment.
“My idea is to save more than to spend,” he said.
This is a guest post by Stuart Grudgings. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.