Bitcoin is Still for Dictators: Part Deux (Two Years Later)

Transcript

foreign [Music] okay hey everybody thanks for coming to my talk good to see you tough act following vitalik but uh I'll do my best this is a totally different presentation much less technical should be fun um my name is Lane reddig I am a core developer former ethereum core developer focused today on a project called space mesh I'm not actually here to talk about space mesh in this talk but I will

mention that after five years of r d the space mesh Network launched four days ago on Bastille Day so that's very exciting um please do check it out go to spacemesh.io it's um designed around mining from home which is very exciting and there's a connection uh here which is basically democratization right so the reason that I got into um the blockchain space years ago is because I believe that these Technologies uh whether it's ethereum Bitcoin um space mesh some of the other stuff we'll talk about here um are really powerful tools to level the playing field in um Financial participation globally and so again that's what space mesh is

working on Via mining from home and I think the best place in the world to witness this stuff happening today is in the global South in places like El Salvador and the technologies that are the most mature today are Bitcoin and lightning Network which is what this talk is about um this may sound familiar to some folks in the room so I gave a longer version of this talk two years ago um if these topics are interesting to you please do consider watching the full video from two years ago if you just put my name in uh Google or or El Salvador and ecc4 you should find it quite quite quickly so it's good to be back um this was a fun tweet someone said the best talk uh at the last or two weeks

ago rather was not about Bitcoin uh it was about this topic um so yeah really really excited to be back and uh kind of fill in the gaps and some of what's happened over um the past couple years uh obviously just to be clear this is not a specifically ethereum focused talk but it's adjacent um let's see okay yeah so uh what I'm gonna spend the next 20 minutes doing is a very very brief Whirlwind recap of some of the things I covered in the last talk again I have a limited time today I'm going to move through it very quickly so please do watch that video if the stuff is interesting um I'll share so I've been to El Salvador twice since that talk so the main purpose of this talk is to kind of share some of what I've learned and saw

on the ground in El Salvador I'll briefly talk about what's going well and what's not going well in El Salvador and then just conclude with some some closing thoughts so let's start with the recap uh okay so we're going back to 2021 now this was I think June of 2021 when this Gentleman Jack Millers uh he is a Bitcoin developer and entrepreneur founder of a project called strike the strike app some of you may be familiar with it's uh designed for lightning payments um globally he gave a talk at Bitcoin 2021 in Miami where he announced that his project strike was launching in El Salvador and even more interestingly he had been collaborating with the El Salvador government uh and with Naya

bukele the president of El Salvador on something called a Bitcoin law and this really was unprecedented it really came out of the blue um because they spoke virtually at this event this is the president of El Salvador naibukele um youngest or second youngest uh world leader he's 41 so he's my age um interesting guy we'll talk about some reasons why um this is the actual Bitcoin law so it's just 16 articles there's an English version of it it's it's quite interesting quite straightforward um I recommend reading it because it is a global first uh in a nutshell it basically makes Bitcoin legal tender in El Salvador for paying government debts and um stipulates that companies that are

able to do so have to accept Bitcoin uh was there a date on this yeah so this tweet was on June 9th when it was introduced and then this is also in June 9th so things happened very quickly in El Salvador politics which is also part of the story um so the bill was sent to Congress and approved I guess within 24 hours um kind of a big deal uh there were headlines right so that's again jack mallers um and this just says that Bitcoin is now legal tender in El Salvador so this was uh June 2021 um crypto Twitter exploded as you can imagine with kind of positive and negative commentary uh talking about

some of the risks what was happening and and you know whether this is something that we as a global community of cryptocurrency enthusiasts blockchain people bitcoiners should be supporting or not um and yeah just a tiny bit of background on El Salvador it is a small country it quite literally like despite being American and it being kind of in our in our backyard so to speak or being next door I could not have found it on a map until 2021 uh it is the smallest country in Latin America it has about seven million people so it's also kind of it's small geographically it's also relatively small population it's a very poor country um it is well it's educated so they have near Universal literacy um but more than 70 of the adult

population of El Salvador is unbanked and it's uh just a difficult country for banks to service because it's very rural and the population is quite poor it's had an ongoing issue with gangs and violence uh so most people who have heard of El Salvador know it primarily as the country in the world that until quite recently had the highest per capita murder rate in the world um so a lot of crime issues it had its own Sovereign currency called the colon named after Christopher Columbus that in 2001 was was forcibly converted into Dollars uh this will come back into the story in a moment um there's been a lot of corruption and a lot of anger understandably against the corruption so three of the last

three presidents are in prison for corruption um and this explains a bit about his story and kind of how he came to power uh you know the way he describes it before him and before his new party that he launched the country had a corrupt left-wing party and a corrupt right-wing party and that was the choice that people had and he started a part a party called new ideas uh Nuevo sides that has become very very very popular uh he's been called the president who governs his country through Twitter so he's very active on Twitter and Tick Tock and just as a millennial um very active in social media and one of the first world leaders to really use it very effectively um

but there's one interpretation of his actions which is that he's quite authoritarian and um is not pro-democracy and and a number of the kind of things that he's done could be interpreted in in that light uh and there's a lot of um uh pressure on him on the part of the United States and other countries uh to not slide further into you know the direction of authoritarianism and dictatorship and to promote democracy but as is usually the case in real world politics it's complicated so one example of this is um he actually marched the Army into Congress to uh course legislators into passing some legislation that was

favorable to his party in 2021 although the government has effectively apologized board and said that that was a mistake at the time but this is the kind of thing people are worried about um at the same time there's this very active Bitcoin community that got started in El Salvador um around four years ago or so so a year or two before kind of this whole uh Bitcoin law story starts and it's primarily centered in a small town called el Zante otherwise known as Bitcoin Beach uh it's a tiny Community it's a surfing Community uh with a few thousand people in it and I visited there so I'll show some some photos from that and uh starting with the work of just a couple of local bitcoiners and entrepreneurs um this kind of circular Bitcoin economy got bootstrap and got going and it's

quite unique in the world there's very few places where you can um I mean I've experienced this myself just kind of live on bitcoin use lightning wallets to kind of pay for everyday goods and services people are happy to be paid in Bitcoin because they know they can spend it in the circular economy um and then I think the final piece of the story just catching up this is still all stuff that happened prior to 2021 my previous talk is that um okay and the government introduced their own government wallet called chivo chivo means uh it's local slang for kind of cool and they introduced an incentive which was 30 in Bitcoin to any Salvadorian who downloaded the app um and we'll get back to this in a moment as well but this is kind of their strategy for onboarding people to

bitcoin uh this is just another version sorry a larger image of the same Bitcoin law um cool okay so part two I'll just share some personal kind of anecdotes and stories from my trips to El Salvador so this is kind of now moving into the update portion of the talk so I first visited in the end of August slash beginning of September of 2021 so that was a couple of months after the last talk and it was actually the same week that the Bitcoin law came into effect and I wanted to just be there on the ground and and talk to people you know because seeing Twitter headlines and seeing things in the news is one thing I wanted to actually meet people face to face and um hear their stories and hear kind of

how they feel about Bitcoin and so we did this kind of thing we wandered around the streets if this is still the capital this is San Salvador um buying hot dogs you know buying pupusas which is a local delicacy and just trying to pay with Bitcoin everywhere uh there's a little ten dollar I think immigration tax you have to pay when you land at the airport uh you can now pay that in Bitcoin so we kind of tried to do that in Bitcoin we tried to buy our coffee with Bitcoin we tried to buy things from Street vendors and Bitcoin and uh almost no one accepted it at that point in time outside of Bitcoin Beach um yeah I mean these are just some some more photos from the trip so this gentleman that we're interviewing here is a driver uh that's his profession and

you know uh I'll speak again more about this towards the end but we just asked people about their personal family stories um you know how they feel about the kind of economic situation and how they feel about Bitcoin and if it's like having a positive or negative impact on their lives uh the gentleman on the left is Alejandro Machado some of you may know who he is um co-founder of the open Money initiative close friend you know uh Native Spanish speaker he's Venezuelan and so he kind of like LED this particular research trip and it's a topic that he's been researching for a very long time um large vendors right so the Starbucks Wendy's McDonald's Etc uh do accept Bitcoin and we were able to use it successfully in a number of these uh kind of chain type locations and it's

pretty cool to see this all over the country and most of the time the point of sale system works well and you just scan a QR code using a lightning app if you have used lightning at all and first of all you haven't I encourage you to try it it's become quite mature and quite usable um but there are some Kinks that are still being worked out and one of them is that not every lightning app is compatible with every other lightning app yet so things work most of the time but not completely seamlessly uh I guess this is just I'm wearing the same shirt I I own more than one shirt I promise um but yeah shout out to Taoist uh so this is yeah just proof of having visited Bitcoin Beach um quite exciting uh this is the Mama Rosa's purpose so

this is the place where it all started um the one of the Bitcoin entrepreneurs that I mentioned earlier uh his mother runs uh just a small restaurant a small operation um you know in azonte serving the local population local food and it was a really wonderful experience to meet her I think I have a photo oh okay I don't include that photo unfortunately um interviewing her about her story and how this all happened um so there is a Bitcoin Beach Community uh a set of really incredible people um who are focused on education and so we traveled around the region with them they were kind enough to invite us along um and so this is a village maybe 30 45 minutes away from El zonte where we are

meeting the local residents and onboarding them to the Bitcoin Beach wallet and making their first Bitcoin transaction this was I mean for someone who spends nearly all of my time in big Western wealthy countries it was really really exciting and eye-opening to experience this on the ground and for anyone who's interested in doing this sort of work um you know talk to me I can connect you to the Bitcoin Beach people it's really important work that they're doing and uh you know they've onboarded a lot of people in El Salvador and the community is growing so here's just a few more images of of working with the folks in that particular community and onboarding them um I wish I had more time to talk about the experience and the challenges like

the fact that uh they're running ancient Android phones and they have no data on their phones and we had to hotspot them and stuff so it was yeah um not just linguistic challenges but lots of other challenges but very rewarding and I learned a lot um this is Carla she works at a coffee shop in Zante in Bitcoin Beach and uh the coffee shop accepts Bitcoin but what she previously did not know how to do is number one moving Bitcoin into stable coins um to protect the value and number two how to just accept tips directly in Bitcoin and so here we're onboarding her to a couple of Bitcoin wallet apps and two the ability to move things back and

forth to stable coins um and a very fun thing happened we tweeted a QR code for her tip wallet and it got retweeted and passed around in the Bitcoin community and over the following days something like six or seven thousand US dollars worth of bitcoin uploaded her account and it's I mean that's a life-changing amount of money in a country where you know the average monthly salary is like a hundred dollars or something um and so we were showing her if you want to move a portion of this into something dollar denominated uh here's how you do that um again I wish I had more time to share more about that story but it's a really incredible story and I think it's included in a document country that was made about the Bitcoin story in El Salvador uh this was just a a shot from

my more recent trip so I was there again a few months ago uh I'm wearing an urban hat it was part of an urban event so shout out to Urban as well um and I'm here paying for entry to a uh National Park using Bitcoin and I thought that was cool because again I couldn't use Bitcoin everywhere um but anything that touches the government whether it's the immigration whether it's your taxes whether it's a national park uh it works and I mean I know it's not clear from this photo but I'm hours outside the capitol on a mountain here barely have any reception on my phone uh you know I barely speak Spanish this gentleman barely speaks English and yet the fact that we're able to kind of transact on the same network and both speaking Bitcoin I think is

pretty remarkable all right um a little short on time so I'll move through this pretty quickly uh what's going well in El Salvador well the biggest thing that's going well is a reduction in crime and there's a lot of headlines about this um that I mentioned earlier El Salvador had the highest murder rate the highest per capita murder rate in the world a few years ago that's come down substantially I mean to a great degree I don't know the exact number but it's 98 something something on that order um and so if you read these articles about El Salvador you'll see lines like this and I by the way again this is a newspaper but I was there recently and I spoke to people recently on the ground and they told me similar stories I met ladies who said that they would never have contemplated going out alone at

night to the market any of this stuff and they now feel safe in their own neighborhoods for the first time in their lives um and so that's that's huge right I mean that's a massive Improvement in the quality of life uh these are some slides from a survey that was done recently um and this says uh do you believe that crime is reduced increased or about the same under the current government and 88.2 percent believe that crime is reduced um this just says I mean I think most of you can figure this out right the the government represents positive change right 83.3 percent uh negative change very small number um and uh has the government uh do you believe the

government has um been able to control crime in the country and again like overwhelmingly positive feedback um but Kelly is very very very popular I believe his party took again something like 90 um of the vote in a recent election which uh which which is deemed free and fair and um so that just cannot be understated he has I believe the highest approval rating of any Head of State anywhere in the world right now and this is you have to understand this is the reason why this is a country where within recent living memory basically everyone I spoke to has family members who had been arrested who had been um sorry not been arrested who had been captured by gangs who had been held Ransom who had been kidnapped and who had been killed even tortured and that's really turned to bound completely in the

span of a few years um something else that's improved is the number of Bitcoin ATMs so I showed this slide two years ago at that point in time there were two Bitcoin ATMs in 2021 in El Salvador and the fees were very high this is what it looks like today there's 212. that's really remarkable change again for a period of two years and this is some of the best coverage in the world and keep in mind as well El Salvador is a very rural country once you get outside San Salvador so some of these places on this map are very remote villages um this is what the ATMs look like I mentioned chivo before so um so the government hired a foreign company I think it may be a French company I might be wrong about that called Athena atena to build the

software behind the chivo wallet and the chief of ATMs um and I used one when I was there recently I spent a grand total of two dollars to buy Bitcoin so I bought uh nine thousand SATs 9671 satoshi's um but it worked and it was it was a pretty cool experience it took about 60 seconds uh put the cash in put in a Bitcoin address or scan a QR code and get the um and get the the Bitcoin in the wallet uh with very low fees or basically no fees um so as because I says they've onboarded this is already old this is from uh more than a year ago but they had already onboarded more than four million out of 6.5 million people um it's it's very remarkable impressive

numbers um again I wish I had more time to go into this in detail but they've also recently passed a digital asset law which is also known as a doubt law so they've uh now have a legal structure on the ground if you want to create a dow with um with a connection you know with with legal protection and legal recognition under the government El Salvador is a place you can consider doing that right now this is a huge step forward I know folks who have gone down there to do that a lot of Bitcoin entrepreneurs are pouring money into the country to do things like mining so those are all positives the negatives um El Salvador has obviously cracked down on crime in a big way but uh there's been a cost associated with it so this is a New York Times headline from

um a couple months ago uh one of the ways they've done that is by building a one of the largest prisons in the world and bucale is famous for regularly tweeting photos and videos of this sort of thing like thousands and thousands of prisoners you know stripped down um piled together like this here's an image of the prison forty thousand person prison uh this figure really struck me when I read it so nearly two percent of the entire adult population of El Salvador it's not um just men like male population this is the entire adult population is now in prison uh which is you know on par with the United States and it's not something that we're proud of not something we should be proud of um but it's among the highest in the

world and uh there's been a lot of pushback against the way that detentions have worked um with uh you know no habeas corpus um very little accountability and the authorities saying things like we can arrest anyone we want to um which is which is quite sad and quite scary there's also this is a report from the United States government uh sanctions actually which has sanctioned the El Salvador government saying that the bucale administration actually bribed I mean provided Financial incentives that's translated as bribes um The Gangs to reduce the violence and so there's some collusion going on there as well potentially um and there have been you know some

quite critical negative headlines as well about the Bitcoin rollout I don't have time to read through all of these um but like a key point is that less than two percent of remittances are flowing through Bitcoin and the whole goal of chivo they they developed that sorry they deployed chivo ATMs across the United States as well which has a large migrant Salvadorian population sending money home only two percent are flowing through that Network today using Bitcoin uh it's just another headline this is a guest essay by a Salvadorian um you know most people don't feel that the Bitcoin is beneficial for them um it's largely not an accepted medium Exchange in El Salvador in spite of uh the promotion on the part of the government created a measly 111 jobs uh like like

crypto startups and El Salvador to date this is so real research is beginning to be done on this topic and this is a research paper that talks about how the usage of digital payments in Bitcoin is low and concentrated and it's been decreasing over time so while it's true that 4 million salvadorians may have claimed their 30 bonus very few of them are actually using Bitcoin on a day-to-day basis and this was also what I found in my research and interviews um again this question of democracy versus authoritarianism so uh Andrew bouquet the Supreme Court dropped uh the presidential term limit law and so there's a chance that he may stick around longer than he would have otherwise so we'll see what happens in the next election cycle

um yeah and I'll just conclude now very briefly with with a couple thoughts a couple clothing thoughts closing thoughts so this is another slide from the same survey that I shared earlier and what this one says is um the government passed the Bitcoin law uh the previous year um to what extent has it benefited your your family economic situation in other words it's good for you and the people close to you and as you can see 71 say zero not at all and a a pretty small percentage of people feel that Bitcoin is benefiting them um and there have been a lot of protests against Bitcoin uh literally we saw this when we were there as well fire in the

streets and some of those ATMs I showed you got lit on fire as well and just going back to a slide I showed earlier when we speak to Everyday salvadorians the message that came across is that look money is about trust Okay the reason that pieces of paper in our pockets our credit cards are eth our BTC our usdc you know your die whatever your currency of choices right the reason that those things have value and the reason we can spend them and hold them and know they'll keep value is because of trust trusting each other trust in the government um and El salvadorians don't have trust in their government and this is particularly true because of the forced dollarization that happened in 2001 and they're very skeptical that this is not just a plot on the part of

the government to take money from everyday people and benefit the wealthy and so I think a lot of work remains to be done to show people that Bitcoin is different and cryptocurrency is different and can benefit Everyday People I showed this quote last time I'm showing it again right creating money is easy you know we it takes literally 60 seconds to create a new rc20 coin um but to convince people to trust it and use it again a lot of work remains to be done there um yeah again this is just the cologne this is the previous currency and if you're from El Salvador if you're from Argentina if you're from Venezuela Zimbabwe um North Korea you know many of these countries it's easy to abuse the money system and yeah we have I guess the key message I'd like you to take home is

that as people building these networks and these systems technical social we have a lot of work to do to show people how and why they're trusted and and you know it comes back to things like credible neutrality um yeah I showed this last time as well always have to have some some memes in there so yeah I think um El Salvador has an interesting exciting future ahead of it I think my closing thought is that as I said last time we should be skeptical and Vigilant and we should make sure that Democratic Norms are not ignored in the process but we should remain hopeful and optimistic I think that what else Salvador's doing is exciting and we should all be paying attention to it hopefully it's a good deal thank you so much [Applause] we don't we don't have time for

questions right okay foreign