Episode VII. Block height: 787000. An inefficient banking system. A huge unbanked population. Bitcoin mining with cooking oil. A grassroots movement. All about Bitcoin adoption in Guatemala.
Original post: https://carlbmenger.substack.com/p/bitcoin-in-guatemala
As you all might know, the last Episode was about my Bitcoin journey in El Salvador (https://stacker.news/items/161607), where I stayed for quite a while. During that stay, I had numerous conversations with Bitcoin plebs, some of whom told me about advanced Bitcoin adoption in Guatemala. So, neighboring Guatemala contrasts state-led Bitcoin adoption with a promising grassroots model? I mean, 'Don't trust, verify' right? Sure, I needed to check it out myself and don’t be one of the many whiny Gold bitches who complain about Bitcoin adoption while sitting in their AC offices. Am I right, Peter?
The great curiosity that grips me after spending more than a month in El Salvador, and leaving it behind, is to try to understand why people adopt Bitcon on a broader scale without Bitcoin legal tender laws. What are the reasons and what drives this adoption. Just as I covered my events in El Salvador, I'll also try to share an honest first-hand experience about Bitcoin adoption in Guatemala. A lot to cover, so let’s dive in.
Right away, It’s very safe to travel in Guatemala, but you don't feel quite as warmly welcomed as in El Salvador, to be honest. I suspect that's because Guatemala has risen to a tourist hotspot in recent years, which increased the cost of living for citizens tremendously, and not all Guatemalans are in favor of this development. That’s what you feel, especially in the more touristy places like Antigua. Nuns are an exception, that’s the reason I am now stacking with God's help, orange-pilling people around the globe regardless of their heritage. Hallelujah: https://twitter.com/carlbmenger/status/1629339831359741953?s=46
Public transport is not quite as convenient as in neighboring El Salvador. A reason for this is that Guatemala is about 418% larger than its little neighbor. Because of the much longer travel distances, and the somewhat more unfriendly situation overall, it is very often easier to book a shared shuttle (1-2 days in advance) that takes you together with other travelers to your destination. From El Salvador (Santa Ana or El Zonte/El Tunco) for example, you can book a shuttle ($20-$30) directly to Guatemala City or Antigua, which takes about 4–5 hours.
The border crossing with El Salvador is fast and without bureaucratic effort, because your visa from El Salvador is also valid in Guatemala. According to the CA-4 Agreement between El-Salvador, Nicaragua, Guatemala, and Honduras, visa holders of these countries regardless of nationality can travel to each of these countries without obtaining a new visa. Hack: it makes more sense to enter El Salvador first, and then travel to Guatemala afterward, because then your visa will be valid for 180 days instead of 90.
With those organizational things said, we now dive into the heart of this episode: The Bitcoin adoption.
Guatemala has no Bitcoin legal tender law, thus no one is forced by the government to accept it as payment. It is all the more exciting to see how numerous companies decided to accept Bitcoin voluntarily and without government coercion. This is exactly the development that many Bitcoiners envision as the ideal path of Bitcoin acceptance. Bitcoin as a freely accessible, decentralized network that anyone can join, but no one has to. Where people use Bitcoin because they understand that it is superior to government-issued paper bills.
That said, no, you cannot pay with Bitcoin everywhere in Guatemala. Bitcoin adoption is still in its early stages, yet more developed than in many other countries. What are the reasons for this? Why does Bitcoin adoption seem to be working bottom-up in Guatemala?
In my humble opinion, one of the main reasons for the increased Bitcoin adoption is the very inefficient, slow and expensive banking system. It is important to know that in Guatemala, unlike many other countries, banking fees are up to 10% per transaction. These fees are usually passed on directly to the consumer, i.e. Thus, If you want to pay by card, between 5% and 10% are added to the price in form of fees.
Now, of course, you could decide that instead of paying with a card, you would simply exchange the fiat currency you brought with you into the local currency, Quetzales, and pay in cash. At least that was my plan for places that don't accept Bitcoin, which didn't work out quite as I had imagined, to say the least: I had a few euros with me, and I discovered a couple of banks that exchange euros for Quetzales. So I went to Bank Industrial, one of the largest financial institutions, and exchanged 200 euros "without fees". However, I paid for it with the exchange rate, which was a full 20% below the official rate. A real rip-off. Burn in hell, Fiat! https://twitter.com/carlbmenger/status/1627765146734022681?s=46
Approximately 60% of the adult population doesn't have access to formal financial services. Although the exact reasons for the large number of unbaked is unclear (probably the tremendous banking fees), one thing can be said with certainty: Bitcoin fixes this: As in El Salvador, almost everyone has a smartphone and internet availability is decent. Bitcoin is a monetary network that is accessible and open to anyone. When coupled with the Lightning Network, it is very cheap to send money around the globe, decentralized and in a blink of an eye.
A striking similarity to El Salvador is the high share of remittance payments on the GDP. Recent numbers show that almost 20% of GPD goes back to remittance payments, where Bitcoin is a strong alternative to the expensive fiat providers like Western Union, that charge very high fees. Although not many people are likely to receive their remittance payments in Bitcoin in Guatemala at present, this represents a great potential for growth in the future.
Another reason that contributes to Bitcoin adoption in Guatemala is the large number of expats from the West. Especially in and around Antigua, much of the businesses, as I perceived it, belonged to expats from Canada, US, Australia and/or Europe. Most of them are not interested in paying high fees, or see it as a service to their customers to provide alternatives. I noticed that many of those companies have resorted to Osmo Wallet for Bitcoin acceptance. As a result, I contacted Piero_coen on Twitter (https://twitter.com/piero_coen), and he explained to me that he supports interested companies with the integration. Reach out to him if you need help with accepting Bitcoin payments in Guatemala.
Of course, the huge influx of foreign investors and people who would like to emigrate from the West can have negative consequences, such as increased cost of living, displacement of the population from city centers, etc. For this reason, it is even more important to involve the local population in the progress. And what better technology to do that than Bitcoin? No matter where you're from or how much capital you have, you just need a wallet and you're ready to transact with others. Of course, for all of this, education is the fundament on which everything else is built. This is why Bitcoin non-profit organizations are so important.
As in many other countries, Bitcoin adoption in Guatemala is driven by voluntary, non-profit projects. Using Bitcoin Beach in El Salvador as an example, another grassroots movement has emerged in Guatemala, called Bitcoin Lake (https://twitter.com/LakeBitcoin/status/1555286508579557378), to substantially advance Bitcoin adoption. Located in Panajachel, Guatemala, Bitcoin Lake launched just over a year ago. The project aims to create a circular economy powered by Bitcoin. Supported by Bitcoin Lake, more and more companies are adopting Bitcoin around Lake Atitlán, which I noticed especially in the small lakeside community of San Marcos. In addition to numerous supermarkets, coffee shops and restaurants, there is also a Bitcoin ATM where you can exchange Quetzales for Bitcoin and/or vice versa, without any fees for buying Sats: https://twitter.com/carlbmenger/status/1629832337377710082?s=46
Another project at Lake Atitlán created a circular Bitcoin economy and is using resources that would otherwise be wasted to fuel a local Bitcoin mining operation, giving its resident financial autonomy and demonstrating a viable economic path outside the government-controlled economy. The cooking oil that is used to mine Bitcoin would otherwise be thrown out into the street or find its way to the landfill, which sits several hundred feet above the Lake. Thus, the Kaboom Bitcoin mining project is the result of a desire to help clean the lake while providing a source of continuous income to the community.
As I mentioned in my episode on El Salvador, Mi Primer Bitcoin (https://miprimerbitcoin.io/en/my-first-bitcoin/) is also active in Guatemala. The educational projects have been a great success. Centro Educativo Josué (https://twitter.com/centrojosue), Guatemala's first school to receive the Mi Primer Bitcoin course, has provided its students with an exceptional understanding of Bitcoin. At this local school, students learn about Bitcoin, its value, and its ability to solve problems like inflation. Students who take the course graduate with a Bitcoin diploma in which they must create a wallet, recover it on another device, perform an on-chain transaction, find the transaction in the blockchain explorer, and explain why the transactions can be considered final. So, after completing the Bitcoin Diploma, students will have a practical understanding of Bitcoin and how it works.
You may be wondering how to find businesses that accept Bitcoin in Guatemala. Of course, you can recognize them in the classic way by a Bitcoin sign on the outside of the stores. In addition, some non-profit organizations have created their own Bitcoin Maps, which simply show you all the businesses that accept Bitcoin on an interactive map. My two favorite maps are the ones from Bitcoin Lake (https://bit.ly/40WyqX6) and from Bitcoin Beach (https://www.bbw.sv), which are integrated into their Lightning Wallet.
This also brings me to my last point, and I raised it already in my article about El Salvador. Yes, ‘HODL’ is important and right, but to drive Bitcoin adoption, we have to start spending Bitcoin at some point. Why should people accept Bitcoin when no one is paying with it anyway? So my new principle is SPEND and REPLACE. After a while of hodling, spending Bitcoin may feel a bit unusual at first, but trust me, it's fucking nice after a while, thinking of transacting without a centralized intermediary and without coercion of the state. I mean, Bitcoin was created to be used and not to be stored in some (virtual) vault until you are dead, like gold. Fix the adoption dilemma: SPEND and REPLACE Bitcoin.
That's it for this episode. Hopefully, you could gain some valuable knowledge about Guatemala and the current Bitcoin situation. If you are planning to visit El Salvador, definitely check out Guatemala as well. It has made tremendous strides in promoting a circular Bitcoin economy. I encourage anyone interested in supporting adoption and experiencing the beautiful views, culture and hospitality to visit Guatemala. Get some sun and spend some sats, so what are you waiting for?
I see you hopefully in the next one. Until then, remember: Education matters. ₿ critical, ₿ informed, ₿ prepared.
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It's not called Bitcoin Lake, it's called Atitlán, and its a sacred place. Its name comes from the native language and its heavy with local culture and traditions. As an outsider, you can keep your marketing and respect the history, it's not your place to rebrand.
Thank you for your response. It’s not my rebrand though, because I am not the one who is initiating the NPO ‘Bitcoin Lake’.
I know it's not your term, but you are participating in it by using it. It's fine you're an outsider, and might not have known. But stepping into a place like that it's good to pay some respect to the local energies and spirits rather than calling it the way that some marketers want to call it. Atitlán is a perfectly fine name and the place is magical, as are the local histories and mythologies.
Jus because people want to use better money does not mean that they are not respecting the history of the lake.
I think it’s. great project and hell yea I will support it as good as I can.
I love the initiative, except for the part where the name of the place is not said and a new one is given.
THIS is the content I came here for ! Not bullshit crap chatGPT text and meaningless links to crap articles.
Thanks Mate, truly appreciate your feedback.
As a US person how to handle the tax implications? My biggest impediment to spend and replace🙏.
You are missing the point. And that's why US people will be the last ones on the whole planet that will fully adopt bitcoin.
Bitcoin is money. Freedom money. Taxation is theft, in any form or shape. Taxing money is the most moronic thing ever existed in the human history. Just by worrying about taxes, your mind is trapped into the statist propaganda. Bitcoin is your tool to get out of the system and be the true sovereign individual.
Learn more how to use the system in your advantage. Only slaves pay taxes, because they are fooled to believe they have to. https://www.losthorizons.com/BulletinBoard.htm https://livingintheprivate.blogspot.com
Thank you! 🧡
Always have been and will continue being a spend and replace advocate, and the visual you provided regarding this just sums it up perfectly.
I feel the Hodling mindset can be rather closeminded at times because it seems tied to the pricing of bitcoin in fiat currencies in times of big swings.
This was a great read, thank you!!
Thanks for your feedback Mate. Fully agree.
I was away from my computer and just spotted this post. Fantastic!
Glad you liked it!
Just in time for the conference there this week! Thanks!
This is fantastic! Can you share more on how many people know about bitcoin and how many merchants accept? Just from your experience...
It’s still very early and I do not have any numbers. Probably Lago di Bitcoin has some numbers for you: https://twitter.com/lakebitcoin?s=21
Awesome write up 🍻👊
Thanks for the report, this is great content. I think we shouldn't forget that you came to Guatemala looking for Bitcoin which might be a bias on the adoption rate seen. Maybe normies that come for empty beaches and Instagrammable photos or nature photography have a wildly different experience. Or maybe ordinary Guatemalans in their daily lives far away from Expats and Bitcoin Non-profits etc.