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An Excerpt From Bitcoin Circular Economies: The Impact
It is difficult to quantify the multiple dimensions in which the community has been affected since the project began, just as it is also difficult to anticipate the various ways in which Bitcoin is changing the lives of its users around the world. However, there is one thing that Mike particularly points out: “It’s interesting to highlight how Bitcoin changed the time preference, specifically of young people in El Zonte.”
Time preference is the subjective value by which an individual discounts the value of the future. It is always preferable to have something in the present than to have to wait for something to come, since any future promise has a lower probability of occurring. One of the adverse effects of the paper money printed by governments, with no limit on its issuance, is that it generates great uncertainty due to the permanent increases in prices. This tends to increase people’s time preference, since it makes more sense to consume in the present than to save for the future, where that money may be worth much less. On the contrary, Bitcoin, being a scarce asset, which tends to appreciate over time by cyclically cutting its issuance until the maximum limit of 21 million, is proving to reduce the time preference. As it appreciates over time, small savings in the present can generate significant future benefits, thus increasing the propensity to save and plan for the future. This simple fact has profound implications at a social level, because it reflects in greater investment in education, deeper human relationships or greater care for the environment. “I see young people thinking about their future for the first time. This was not something we planned; it happened by surprise. We started to see them save. Kids who had never had more than five dollars in their lives now have a couple hundred dollars in Bitcoin, which they saved to make a repair to their parents’ house or buy a new cell phone. We started seeing this virtuous circle of people taking good decisions, saving for the first time, and making the future a real possibility,” Mike calmly explains , as someone who knows that important processes take time to mature.
Mabel also witnessed this change firsthand. “I grew up here, in El Zonte, I have never had access to banks in El Salvador like almost most of us who live here. “I have no credit cards or bank accounts. Before Bitcoin, cash was our only form of payment. It was very difficult to be able to save because you always find an excuse to spend cash. Today that has changed, and, thanks to Bitcoin, I am more conscious of saving for the future.”
“Meanwhile, Brayan argues that there is one variable missing from the equation of opportunities that we are trying to reconstruct: unemployment. “If you don’t know any better, you may have the wrong dreams. Bitcoin didn’t just change me, its positive impact can be seen throughout the community.” The desire to emigrate was something deeply rooted in the Salvadoran society. Others, sadly, wanted to become gang members and criminals. “That’s why the Bitcoin Beach employment support program was so important. There were many cases of people who, due to the lack of opportunities, were involved in illegal activities and now, thanks to Bitcoin, all of them decided to get their lives back on track. Today they have families and honourable jobs thanks to this first opportunity they received with Bitcoin and the community work of our team”. Along the same lines, Mike highlights that having a scarce currency, which appreciates over time, helped the young people to get back to having incentives and investing in their future and training. “They began to value education again as an opportunity for personal development. For the first time, we see many young people thinking about going to high school and then the possibility of going to college. But most importantly, they now want to invest more in their community. They stopped seeing El Zonte simply as the place with no opportunities from which to go to the United States. We are witnessing how, for the first time, they began to see their land as a place where they really want to build a future for themselves and their families.”
Living in exile is like chronic pain, it appears and disappears, but the suffering is always there. Returning becomes a possibility when major changes happen in the place of origin, especially in the circumstances that initially drove people to leave. “Of course, initially this happened within a small group,” Mike continues. “But then, when people from abroad started coming to El Zonte wanting to be part of what was happening here, it increased the sense of local pride and made people value it as a special place.” Today, very few people want to emigrate to the United “States. The whole community began to think about how to build a life in El Zonte. “That strengthened our kinship, it created a community safety net at the local level. When you think about the long term, the human and community bonds become fundamental,” Mike points out, resting his hand on his heart.
Bitcoin adoption generated multiple impacts on Bitcoin Beach. Some of them are intangible, but particularly mobilizing, such as the sense of belonging. “The connection, the hope of being part of something bigger. For the first time we were no longer an isolated city in a poor Latin American country, we were connected to a global, vibrant, innovative and revolutionary community. Before that, the general feeling was that opportunities were only for the rich, for North Americans or Europeans. Salvadorans didn’t have opportunities.” As the people of El Zonte began to participate in this global monetary system, they realized that all those opportunities were open to them as well. “Now they can work remotely, and they can become programmers, without having to leave their families and communities in El Salvador to participate in the global economy. That created a lot of pride and purpose, particularly in the young people,” Mike emphasizes.
The daily life at Hope House is vibrant and Jorge’s interview is interrupted by René, one of the young people involved in the activities of the center. It was the perfect opportunity for him to share in his own words what Hope House means to him: “It is a unique place that is dedicated to supporting children to develop as better people. We support each other to build a life together in the community.”
Learning the story of Hope House and Bitcoin Beach is so inspiring and exciting, that this social project has made the Bitcoin Circular Economy concept viral, encouraging other entrepreneurs to replicate this model of human development in other parts of the world. Passionate people, dedicated to helping others and bringing hope and opportunities to their communities. Leading by example, the founders of Bitcoin Beach never stopped dreaming. Unarguably, Bitcoin and its technology gave rise to economic and social development in El Zonte. However, they never imagined what impact would unroll to the rest of the country. Without trying to, with humility and low profile, they became key players in the transformation of El Salvador into a thriving and innovative country.
Discover more in Bitcoin Circular Economies
This excerpt is just the beginning. Dive deeper into how Bitcoin is transforming communities worldwide in Bitcoin Circular Economies. The e-book is available now, and the paperback is open for pre-order for only $21 for a limited time.
This post An Excerpt From Bitcoin Circular Economies: The Impact first appeared on Bitcoin Magazine and is written by Gabriel Kurman.
