It wouldn’t be a stretch to say that El Salvador’s Bitcoin Beach project changed the whole world. An anonymous donor, a former surfer, two local community leaders and a team of volunteers have built something majestic that humanity will remember forever. One of the first contributors was Galoy, the company that created the Bitcoin Beach Wallet. They recently published “Bitcoin Banking for Communities: Lessons Learned from Bitcoin BeachAnd we’re here to distill it and summarize it.
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As an introduction to the Bitcoin Beach project, read this:
“Jorge Valenzuela, Roman“ Chimbera ”Martinez and Mike Peterson started organizing youth programs around 2009 to give the children of El Zonte the opportunity to play, learn and dream. From “para todos” (surf for all) surfing to computer lessons and paid community service projects, the programs have breathed new life into a place that once felt like a dead end. “
The gift that fueled the revolution came with conditions. The project was to “challenge preconceptions about Bitcoin”. The first was: “Bitcoin is a speculative asset for the rich”. The second and most prevalent, “Bitcoin is a store of value, not a medium of exchange.” It’s fair to say that the Bitcoin Beach project broke the two and helped many financially excluded people along the way. In the introduction to the article, Mike Peterson wrote:
“In El Salvador, Bitcoin is the money of the poor and the financially excluded. For Salvadorians living in poverty, the debates between the digital gold and digital silver camps seem irrelevant and irrelevant in practice. For those who need Bitcoin the most, it’s both how they buy their daily bread and how they save for the future. They don’t see the need to choose one or the other.
Galoy and the Bitcoin Beach Wallet
At Bitcoinist, we covered the Bitcoin Beach project from the get-go. However, we never discussed, or even reviewed, the wallet they use there. The subject is more interesting than we thought. The Bitcoin Beach wallet has unique features that meet the specific needs of El Zonte. The people of Galoy describe it as:
“The Bitcoin Beach Wallet is an open source Bitcoin community banking solution. One that has been designed to meet the needs of traders and members of the community of El Zonte. It uses a multisig shared custody model that provides an alternative to the standard custody and custody solutions that are most widely available today.
What is this “multisig shared custody model” about? Well, the “capital is pooled and managed by the community.” Not only that, there is no charge for opening and closing Lightning channels within the community. It also offers advantages to traders, who do not have to manage servers. “Efficient use of online servers means lower costs per user. “
How does multisig shared custody work?
“The custodial model we landed on for Bitcoin Beach is what Galoy calls ‘community custody’. It is a multi-signature solution where the keys to the funds in the cold store are held by established members of the local community. This model reduces dependence on centralized businesses outside the community, while reducing the friction associated with integrating members into the network. “
According to Galoy, this is a bridge to the auto-guard. Power users tend to move away from the Bitcoin Beach Wallet as they get comfortable and find other solutions.
BTC price chart for 12/14/2021 on Bitstamp | Source: BTC/USD on TradingView.com
Six lessons for future projects
All this is well explained in the original article, which everyone should read. However, the titles are self-explanatory and convey the overall message.
- Education is paramount
- Lightning is an accelerator for Bitcoin as money
- The integration of traders is necessary to promote a local circular economy
- User experience must be developed in the context of the community
- Community Guard is a Bridge to Self-Guard
- Start small and build momentum before you grow
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Let’s end with a quote from Mike Peterson. “We invite you to come visit El Zonte and help us spread this vision of the Bitcoin Banking community that enables financial inclusion around the world.”
Featured Image: The Bitcoin Beach community in action. Taken from the article. | Charts by TradingView