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How Bitcoin Will Empower Those Trapped in Poverty

At 60 years old, Adrian Torres had lost all his teeth. Life has been hard on Torres. A construction worker in El Salvador, he has had to live paycheck to paycheck. He’d never had a bank account and couldn’t read or write. Last year, Torres got a job in the village of El Zonte. What he soon…
By Seth Barnes
By Seth Barnes

At 60 years old, Adrian Torres had lost all his teeth. Life has been hard on Torres. A construction worker in El Salvador, he has had to live paycheck to paycheck. He’d never had a bank account and couldn’t read or write.

Last year, Torres got a job in the village of El Zonte. What he soon learned was that El Zonte was the first community in the world to decide to use bitcoin as its main currency. When Torres received his first paycheck, he didn’t receive anything physical. He was paid in bitcoin.

To even access the funds, Torres had to borrow a neighbor’s phone. Once he had accessed it, he found he could use his bitcoin to buy food, rent a place to live, get a haircut and ride the bus. That is because some visionaries in El Zonte had worked hard to make the bitcoin economy in their community “circular.” They convinced businesses to accept the currency, so people like Torres could not only receive it but also spend it.

But by receiving his pay in bitcoin, for the first time, Torres was able to begin saving money. Within a few months, he had saved enough money to buy himself a phone. As a result, he began to get control of his life. He stopped drinking.

One of the things that had bothered Torres for years was that he had over time lost almost all his teeth. But after a few months of being paid in bitcoin, he had saved enough money to go to the dentist and get new ones.

Bitcoin began to change Torres’s mindset. He realized that he could save money for other dreams he’d had. Like the dream of owning a cow. After several more months, he’d saved enough money to buy a cow!

There is a reason that 1.7 billion people worldwide don’t have bank accounts. As Thank God for BitCoin clarifies, “Setting up a bank account requires a visit to the bank, multiple  forms of identification, and a source of funds. Maintaining a bank account can be even harder, with fees, account minimums, and overdraft penalties. Banks charge high fees for low-balance accounts because such accounts are not profitable.

As a result, many poor households opt to keep whatever savings they have in cash. And of course, cash is more liable to be stolen.

For poor households, saving money is often more trouble than it’s worth. Yet saving for the future is one of the only ways to get out of poverty. If we want to help the poor, we need to give them effective savings tools.

Bitcoin is a vehicle for long-term savings. Anyone with a phone or a computer can immediately set up a bitcoin wallet. No ID or bank is required, and the funds are secured digitally. Transactions that were difficult become much easier.”

God tells us that we need to care for the poor. He says that true religion is “caring for widows and orphans in their distress.”* As Adrian Torres learned, bitcoin is a powerful new tool in meeting that objective.

* James 1:27

Comments (19)

  • This is incredible Seth! Stories like this prove just how powerful decentralized finance can be to bring lift to those in poverty. Thank you for sharing this, especially for those of us new to the Bitcoin’s potential.

  • Thanks for letting me know the benefits of Bitcoin. I never realized this problem was a problem. It helps me to realize that many countries have so many problems that go beyond heath care and water and food. Thanks for the insight,

  • Seth,
    Thanks for sharing this. I am encouraged by the potential of decentralized finances yet never thought of how it might help someone in poverty. Love this.

  • The primary utility is as a currency where volatility is not an issue insofar as the cryptocurrency is only held for a split second.

    For those who want to save, there are stablecoins that eliminate the volatility.

  • Thx for sharing Seth. And love your heart, as always, to care for the voiceless.

    As Vern referenced, we also need to be careful about the inherent risk at play here. Have little doubt that crypto will play a massively transformative roll in the way the world transacts in years/decades to come, but we all need to aware of the extreme volatility that could make future purchases like Sr. Torres’ phone or cow (or maybe even a basic meal) cost thousands upon thousands of dollars, if even being possible at all in the future depending on how supply/demand fluctuate.

    Apologize for getting overly economic, and also severely cautious, but I’m getting a bit concerned about how a vast portion of the world’s population seems to be neglecting to do even a reasonable amount (if any) of deeper level homework on how savings/wealth can be reduced/lost/eroded, if we’re not careful.

    Repeat: love you Seth. Best to you and your wonderful family.

  • Interesting. I’ve been on a similar track of thought here and had some Hondurans ask me about Bitcoin. I’ve been a bit reticent to give my opinion. This is not El Salvador. Still, it would appear that there is at least a window of opportunity and I’ve dabbled a tiny bit in Altcoins over the last couple of months with a 500% return.

    On the other hand, I used to trade precious metals on Forex. I was very successful until government intervention in the form of Dodd/Frank came along and shut small retail traders down. So I moved to a Latin American platform at the behest of a Christian brother broker. I was up 60% on the year when they absconded with the balance of everyone’s account. Blockchain is different but not always different enough as evidenced by exchange hacks in recent years. Still, I could kick myself as I almost bought a mining contract when Bitcoin was at $500. I’d be a billionaire today if I had.

    Jim Rodgers claims there is no way that governments will allow the transparency and decentralization of power that blockchain guarantees if it is allowed to continue as is. As Mayer Rothschild said, “I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls the British money supply controls the British Empire, and I control the British money supply.” Meanwhile, The World Economic Forum is very supportive of cryptocurrency. We just need to work out the bugs. Allowing the little people to do so in the interim just seems smart. One thing is certain whatever happens with cryptocurrency will bring much clarity to the future.

    Theologically speaking I think it comes down to eschatology. Preterists and Postmillennialists will likely see crypto as a tool for bringing about “on earth as it is in heaven”. It might be. Premillennialists tend to view it as a component in the required infrastructure for Rev 13 to manifest. It might be. In the context of risk versus reward, if the latter is wrong they may feel silly at having missed yet another opportunity and be mocked as tin foil hat dooms layers. If the former is wrong. Then they could find themselves in a snare. Ecc 9:12, 1Tim 6:9

  • Hey Lee – good to hear from you. Yes – this is going to be big. It will go around the world just as Elon Musk connects villages to the web with Starlink. It will put trillions of dollars into the hands of the poor.

  • Caution is always helpful as we prepare to take big jumps with what may be very limited resources. But there are already safety nets built under the early adopters in El Zonte. And as I said in my response to Vern, for those who want to save, there are stablecoins that eliminate the volatility. The key is lots of training. I envision WR teams going out and focusing on providing this training as a part of an overall effort to built a village’s micro-economy.

  • I always enjoy learning about the new layers of you, Brian! You go deep.

    Ultimately, we have to help people pivot from seeing crypto as an investment to crypto as a tool. A tool to do what? To disintermediate the trust brokers who are preventing the poor from gaining access to means of empowerment that would change their lives.

    I will be writing more about this…

  • Lol yeah, I’m like big old tough onion:-)
    Bitcoin is definitely a speculative instrument that requires a cool head and the ability to manage risk that 90% of people don’t have. That could be one reason why so many psychopaths excel at it.

    I’m thinking stablecoins, Altcoins, and tokens, etc like XRP? might have a more functional and therefore stable foundation. Don’t quote me on that as I’m just learning.

    My concern with Bitcoin in the third world looks like, the guy who sells his motorcycle for $1000 worth of BC to pay his bills and feed his family right before a “rug pull” where the price drops 90%. That will be the greatest opportunity ever for people like me. But devastating for the guys who only planned to hold it long enough to transfer it into a more stable commodity like rice and beans.

    Right now several BC veterans claim a rug pull is coming because price is ultimately driven by the hope that the next guy will pay more than I am about to. The richest guys in the world have been in for a while now. Historically speaking the next move is to sell, drive the price down and buy the dip. Another indicator I see is the overbought stock market and the bogus mainly paper precious metals market accompanied by what looks to me like a final push to get everyone they can on the moving train before driving off a cliff. Will people rush into Crypto when the long-overdue correction or crash comes or will they sell it off to cover their shorts? Granted it could be the biggest wealth exchange in history as some crypto enthusiasts think. But that could technically happen with the FOREX. Yet it never does.

    Still, it seems like crypto could work from a missions standpoint if we could alleviate or absorb some of the risk. Maybe some time type of insurance for a limited time frame while they transferred the BC to something more stable? I don’t know but it’s definitely worth exploring because what we are doing is now is barely making a dent.

  • Interesting Seth. It would be good if cryptocurrency becomes a way for the poor to rise from economic poverty. I’ve got to say I’ve had reason to take a closer look at crypto a few years ago, and I took a pass. I kept being told “no fees” and “a better way to bank”. On a deeper dive, I found the fine print of Crypto exchanges (online only, unregulated, “banks” where you keep your account) charging 2 to 2-1/2% of any crypto transaction (buy or sell any amount).
    (Ref: Coinbase. https://help.coinbase.com/en/coinbase/trading-and-funding/pricing-and-fees/fees.html ) The use of cryptocurrency in international money laundering also made me stay away.

    Your points on bringing banking to the unbanked are good.
    How is the virtual currency exchanged in El Salvador? Who runs the exchange and how is it funded? Will it still bring benefits to the poor when the asset value of a cryptocurrency against conventional government currencies and the US dollar declines?

    I find sorting hype and reality on this subject difficult. Thanks for sharing a potential benefit, if it brings wider access to the unbanked poor globally. Particularly if it is truly cheaper and easier.

  • When Seth and I were in El Zonte, we used an app called Strike. We found it to be super convenient and very fast. The way it works is you download the Strike app onto your phone, connect it to your U.S. bank account and fund it with a max of $1k. From there, you use it much as you would an app like Venmo. You get the merchant’s user name (most of them have a QR code to make it easier) and just shift the funds at the point of sale. In El Zonte, we bought multiple delicious Cappucinos and cafe food from one place, and a pizza, which was delivered to us, from another, all using Strike. When you pay, the money is converted from USD to BTC at the spot price, transferred, and received by the merchant. It takes about three seconds and there are no fees. The merchant can then convert instantly back to USD (which is the commonly used currency of El Savador) or keep the funds in BTC if they want to. So there is no forced currency exposure for either party. When we returned to the States, we “defunded” the Strike apps, transferring our leftover USDs back to the linked bank accounts. My funds re-appeared in my bank account in one day. Strike uses the Lightning network, which as I understand it is what makes it so fast and fee-free. Strike works just in the USA and El Salvador now, but they plan to expand. For real BTC fans, there are privacy concerns with Strike because of the Know Your Customer (KYC) protocols. But as a practical mechanism that makes fast, secure, convenient, fee-free and no-volatility transactions possible, Strike is, in our experience, far better than credit cards, cash, etc. Note that there are other apps you can use too. There are Chivo (an app released by the El Salvadoran government — possibly for ES nationals only), an app called the Bitcoin Beach App, and probably some others. Strike gets great reviews so we just went with it.

  • Some people reading this are already thinking about overseas remittances. This is the issue when a mom in El Salvador (or anywhere) sends her son to the USA to earn money for the family. The son then regularly sends the money home to help pay for food and supplies. Almost 25% of El Salvador’s GDP comes from remittances, according to the World Bank. The problem is how the money gets transferred. The son sends it bank-to-bank, or via Western Union. The mom then has to pay money to get on a bus to go to a city where there’s a WU office or a bank. She gets the money in cash, puts it in her purse and takes the bus back to her village. Everyone knows what’s going on, so the trip is dangerous. Plus fees can be exorbitant. I’ve seen articles saying the typical remittance gets cut to about 60 cents on the original dollar, after all the fees. Plus many people live hours from the nearest bank or WU office. But with BTC, you can make the exchange for nearly free, instantly. All you need to do is get the mom a phone and teach her how to use it.

  • “while they transferred the BC to something more stable”

    Stable is the word you used and stable coins do exist. USDT, Tether fluctuate with the US Dollar. Very easy to transfer between and no volitility while you go buy “rice and beans” Crypto has always been about the technology though the volitility is always what you hear about. And if they did want to invest, in general Bitcoin and eth, and others have been on a general upward slope and will continue, yes with great volatility. But every dip isnt has deep and every high is higher than the previous. For the long term, millions of people and investors think its a heck of an investment.

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Seth Barnes

I'm motivated to join God in his global reclamation project. He's on the move, setting his sons and daughters free from their places of captivity. And he's partnering with those of us who have been freed to go and free others.

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