#1084 – El Salvador’s Bitcoin Revolution: Legal Tender, Remittances, and Global Resistance

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now that I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started All right. Let's start off by talking about what's gonna happen in less than a week in El Salvador That's when Bitcoin becomes legal tender in a sovereign country for the first time in history Now I suppose some of you have been seeing news flashes lately of people

[00:45] Protesting in the street down in El Salvador about that Bitcoin law. What's that all about? We'll get to it in a second So the government's also created a hundred and fifty million dollar what they call a Bitcoin trust It's a setup to help facilitate the change or exchange between Bitcoin and US dollars as you might know The US dollar has been the legal tender currency in El Salvador for around 20 years now, by the way There's an app for El Salvador. It's called the Chivo app Chivo CHI VO That allows you to switch back and forth from dollars to Bitcoin without any cost at all It's free that Chivo app by the way in El Salvador Chivo means cool. So it's the cool app It allows anyone in the country to accept Bitcoin payments to with just a barcode scan on the phone

[01:31] So then how they're gonna get all the people in El Salvador to use Bitcoin when they're so used to just using the US dollar Well, they're given everyone 30 bucks in Bitcoin just to download and sign up for that app now The regular poor hard-working people in El Salvador. Don't give a rat's ass about Bitcoin Why should they but you have to remember that there are over two and a half million Salvadorians up in the states most of them illegals who love Joe Biden By the way who sent back US dollar remittances to the tune of around six to eight billion dollars a year That's one quarter of the entire Salvadorian GDP and all those billions in remittance money comes through services Like Western Union and MoneyGram who take around a ten percent commission for the privilege of doing the transaction So let's pick six billion on the conservative side

[02:19] That means Western Union MoneyGram and those other crooks skim six hundred million dollars a year from the poorest most undereducated Dispossessed people who have no say at all in the matter. They've got no other options The thing is with Bitcoin and using the Chivo app and the strike app will get to that in a second There'll be a commission for remittances, but it'll be under one percent not ten percent And you know because 70% of Salvadoranians don't even have a bank account that $30 in Bitcoin Teaser you get when you install that Chivo app brings a gigantic section of the undereducated Populous into the 21st century. Oh, and they don't have to upgrade their phones You know, they've all got basic smartphones In fact at last count Salvador has got 1.4 phones for every person in the country Oh and as far as El Salvador using the US dollar as their currency

[03:05] You know when that happens when a foreign country uses somebody else's currency They've got absolutely no control on the effect it has on their economy For example, if the US economy goes into massive inflation mode, which is bound to happen soon enough The same thing will happen in El Salvador if the Fed in the US tightens up the money supply and squeezes out investors Same thing will happen in El Salvador too. In the end You're so much better off having your monetary policy decided by Mathematics and crypto is nothing but mathematics better mathematics infinitely better mathematics Then a bunch of old corrupt gray-haired banker cronies otherwise known as the Fed making sweetheart deals for their big banker buddies and Irrational Keynesian modern monetary theory decisions behind closed doors But not everybody you know is happy about what El Salvador has been doing with Bitcoin

[03:55] Hey, you could see that coming crypto people predicted that from day one and lame stream media does nothing but spin it negatively, too There are plenty of examples of that If you've noticed when they show the Bitcoin protesters in the streets of El Salvador the headlines say there were hundreds of protesters Well, wouldn't you know it they use the usual suspect camera angles to make the crowds look bigger than they really were It's a simple tricky Just take your camera and start filming at head level down a narrow area of the street where people are mostly gathered It's the same technique biased news people used to try to manipulate the numbers during those Trump and Biden rallies and protests Believe me news photographers know the angles to get the desired effect So there weren't hundreds of people there only about 50 along with another 50 clueless bystanders who didn't know what the hell was going on

[04:44] They just happened to be walking or hanging around the area Yep 50 in a country of seven million that according to two gringo eyewitnesses I know who were actually there staying at a nearby hotel So do the math less than one out of a hundred thousand people in El Salvador Showed up to protest Bitcoin adoption. Yep. The president and Congress must have been shaken in their boots Oh, and if you look at the first world media and what the IMF and World Bank are saying about all this man You got to know they always hated Bitcoin and crypto from the start So they're totally biased against it because they know it's a huge threat to their own existence So then what do you get from the lame the street news? Nothing, but negative stories and pessimism completely expected though. Just check out the headlines like the following check this out Retirees in El Salvador protest against Bitcoin. How about this one?

[05:34] Skepticism in El Salvador runs rampant ahead of Bitcoin launch and this IMF warns El Salvador about risks of Bitcoin adoption And how about this one more the same World Bank expresses disapproval of El Salvador's crypto legislation Then there's this Moody's and Standard & Poor's hint at downgrading El Salvador's bond ratings ahead of Bitcoin launch Hmm. I mean really what did we expect the World Bank the Fed the IMF to praise the glories of Bitcoin get real They'll never get on board for banks and fiat currency Bitcoins like kryptonite to Superman though There are lone media voices saying things that are positive for example El Jazira their headline states Central American countries consider Bitcoin and cryptos as a method to drastically cut high remittance costs imposed by agencies like Western Union

[06:27] Yep, that is a positive article But you won't see many like that and what you almost never hear in the first world media is how practically all the other Latin American Countries have been looking to jump on to the Bitcoin bandwagon themselves In fact, it seems every time I pick up a Latin American newspaper There's always an article or two about adopting Bitcoin and blockchain solutions to their government and economies But oddly enough you rarely hear or read about that kind of stuff in the first world media Predictable so believe it or not Representatives from Paraguay Argentina Panama Ecuador and a dozen other Latin American countries have set up or are in the process of setting up Meetings with the very same people in the Salvadorian government who orchestrated the Bitcoin plan funny thing is though International mafia organizations like the IMF just keep dissing and wagging their finger at El Salvador saying it's totally

[07:16] Inadvisable and I'm thinking inadvisable compared to what when 70% of Salvadorians don't even have a bank account while the poorest of poor pump 800 million dollars a year into the coffers of Western Union and MoneyGram the IMF should talk they're a criminal organization They just continually screw over developing nations time and time again with revolving loans and strings attached So that countries can't even pay back the interest on those loans and they do nothing about all the money They loan that gets skimmed by the corrupt bureaucrats with only a fraction ever getting to the intended social or infrastructure Projects we all know that drill They just hate to see any country break away from dollar dominance which they can completely control. No one controls Bitcoin It's completely decentralized. Oh, and this is really strange in the first world articles been coming out all week

[08:05] Talking about how the US Embassy and State Department Website is suddenly warning travelers to avoid El Salvador because of dangerous conditions along the Pacific Coast beaches Coincidentally those coastal cities and beaches just happen to be the focus of the Bitcoin community. You've heard of Bitcoin Beach Funny though, it's not the US State Department saying you should look out for gangs muggings and crime instead They're warning people about something that's never been warned about before now I want you to hear more of that quote It goes like this strong under toes and currents make swimming at El Salvador's Pacific Coast beaches, etc Extremely dangerous even for experienced swimmers unquote. Yep. That's what the latest Embassy alert reads Oh and the US Embassy also says lifeguards aren't a mainstay on beaches in El Salvador and official search and rescue

[08:53] Capabilities are limited. The thing is and you've heard me say this before El Salvador's Pacific Coast beaches are on the world's best surf beach list It's a place all serious surfers want to hit at least once in their lives Don't you think it's quite an odd coincidence that the US State Department Warns against going there even to surf and that warning coming exactly one week before Salvador becomes the first sovereign country in the world to adopt Bitcoin as legal tender. Hmm Could it be maybe they're trying to discourage gringo and first world surfers from coming down to a place where they'll be exposed to Bitcoin Monetary freedom across the board, you know, according to Big Brother that undermines the value of the US dollar can't have that now Can we oh and did I tell you that thousands of crypto enthusiasts from around the world have headed down to El Salvador's beaches to see

[09:41] What it's all about. They're curious how it's working and they want to help and give a hand if they can Oh, and of course you've seen all over the net all that negative press about Bitcoin mining being a huge energy hog By the way, did you know the one industry that's the biggest polluter and the most unproductive energy hog of all own it wastes most of that Too well, it's the US Military let that sink in you ever hear lame Street media talking about that. No that said no doubt It takes a lot of energy to mine Bitcoin, but El Salvador has already allocated 95 megawatts of their 100% clean geothermal energy from volcanoes to be used for Bitcoin and crypto mining It's actually included in the Bitcoin bill that became law. So is this something new in crypto? Well, not quite

[10:26] Iceland's been doing it a long time since 2013 when Bitcoin mining on an international scale first started In fact, it's been estimated that 8% of all the bitcoins that have been ever mined were mined in Iceland utilizing 100% Geothermal and hydropower, but maybe you might think in the case of El Salvador It's wishful thinking or just the usual BS attached to every political promise Well, the thing is El Salvador has already got engineers on it and today they can produce about 200 megawatts of Geothermal power with a hundred and ten megawatts of additional geothermal power They can bring online with much of it earmarked for crypto mining Think about it for a second If any country starts to fiat printing presses rolling like the US it creates inflation eventually getting to a point where it undermines the whole financial system and with Salvador using the US dollar

[11:14] They can't print extra dollars only those ass wipes at the Fed can do that But tapping geo power and mining Bitcoin on a huge scale in your country is like Striking oil or discovering a giant vein of pure gold on your home soil It's real wealth creation without turning on the fiat printing presses and debasing your currency every debtor country with its own fiat currency Eventually prints its way into oblivion. The US Treasury is doing the same thing right now, but where were we? Oh, yeah, that Bitcoin remittance thing is just getting underway in El Salvador. And how's it working so far? Well, get this I mentioned that in Salvador people are using the strike app Strike that app can move Bitcoin around etc Internationally, whereas the chivo app is used internally to switch between dollars and Bitcoin

[12:02] Anyway, the data is in from March and according to chain analysis Bitcoin transfers to El Salvador under a thousand dollars each Hit two and a half million dollars already almost entirely through the strike app which allows Locals to cash out in their so-called native currency the US dollar There's something that sounds not so kosher about that when you hear a foreign third world country calling the US dollar its native currency Anyway, now the reason why the strike app works so quickly and easily is because it's on the lightning network Have you heard of it? Well, this is how it works as for the lightning network It's a separate blockchain from the Bitcoin blockchain that runs decentralized remote nodes all over the world And when they get to a certain amount of transactions, they record them on the main Bitcoin blockchain So it's not running on the Bitcoin blockchain, but ends up there in batched intervals

[12:49] I'm sure you've probably heard that the Bitcoin blockchain is pretty slow Sometimes it takes a minute or two or ten or twenty to have your transaction confirmed But transactions on the lightning network aren't nearly instantaneous and much cheaper Then you're playing everyday Bitcoin transactions on the Bitcoin blockchain So when people who aren't really in the know say that bitcoins slow and only accommodates so many Transactions per minute and you hear people say they don't want to pay three or five dollar Bitcoin Transaction fee when they go to McDonald's or buy a cup of coffee Those are all negatives for sure But people who don't have the complete picture will often say that Bitcoin is so impractical for small daily transactions It's just not worth it. They'll never get around to using it Well, the lightning network is the solution to all that and it's been around for a while now

[13:36] It solves bitcoins low transaction capacity problem as well as that confirmation delay problem and much more Just as an example, the lightning network can handle up to 25 million transactions per second Compared to a normal Bitcoin transaction on the Bitcoin blockchain of only seven Transactions per second. So what's that really mean? Well think of this visa Vis a we're talking about using a visa card now the visa card network averages around a thousand Transactions per second worldwide. Oh and by the way like them or not Jack Dorsey the founder of Twitter recently said it's only a matter of time until the lightning network is integrated into Twitter with its 330 million active users seems like everyone uses it except me

[14:23] So as far as leading the charge for small transactions, it's being led by the strike app right now Oh, and by the way, all the places you can buy Bitcoin and the other cryptos like coinbase by bit kraken Binance the usual suspects, of course, they charge a fee for buying and trading But they also charge a fee for transferring your Bitcoin aetherium or other cryptos out of your wallet to another exchange Or to your hard wallet like a nano or trezor But if you check it out You'll find the fees to buy Bitcoin on the strike app are the lowest pretty much anywhere and they don't charge you to transfer your Bitcoin out of your wallet Oh, and by the way, you know, you should never keep your Bitcoin or other crypto on an exchange In other words, you should never just let it sit there Of course, you have to go to an exchange to buy seller moving around so you have to spend a little time there

[15:11] but you should always Redeposit your Bitcoin or whatever crypto you have into your hard wallet like your nano or trezor because you know when you hear all these Stories about people getting their crypto ripped off or lost stolen or hacked It just can't happen with crypto you've got stored in your hardware wallet Otherwise known as a cold wallet because you see in a hardware wallet your keys are in there The keys are in your personal possession whereas online wallets like the ones you set up with coinbase kraken binance Whatever they're in possession of your keys not you and there's that old saying in crypto Well, not really that old but old for crypto not your keys not your crypto So the only way you could be a hundred percent sure that you own your own crypto and no one could get in and hack It from you is to put it in a hardware wallet or cold wallet

[15:58] And that's why I always recommend for those of you who are dipping your toes in the crypto game that you take Captain mango's crypto course he goes through all the pertinent stuff and walks you through it. Hold your hand Better yet. He does some test movements of very small amounts of crypto in and out of your wallets So you get hands-on experience and see exactly how it's done more importantly He tells you what not to do too So if you're interested in Captain mango's course and he'll also very safely buy sell and transfer crypto for you to just shoot me An email they expect files at gmail.com or look down the page at my show notes that come out every week along with the show There you'll find Captain mango's direct contact info now speaking about being scammed and ripped off In the crypto biz, you know almost all early adopters have lost misplaced or been scammed out of some crypto

[16:45] And in the early days before 2015 when there were no other shit coins There was only Bitcoin and people got scammed and screwed out of their Bitcoin on a regular basis It was all new people were just learning and making a lot of mistakes, too. By the way That's why in around 2014 and 15 those hardware wallets like nano and treasure were invented out of necessity now You long-time listeners know that way back in around 2014 I guess I was talking about Bitcoin when it was around two or three hundred bucks and for the last seven years or so every single Expat insider seminar I've ever had I had at least two expert crypto Lecturers at the seminar and as a consequence a certain number of my expat insider seminar attendees are now Bitcoin and crypto millionaires funny thing though since around 2014 when I first started mentioning Bitcoin as it kept ramping its way up

[17:32] And of course it fell back quite a few times, too But always ended up with higher lows and in an upwards trajectory well every time it would drop back a bit I'd get emails from people saying Johnny It looks like the end should I sell out and the truth is some people don't have the temperament to get into crypto Some just can't take the extreme swings the highs and lows though I always say you should take a chance buy some and stick it in a hardware wallet Wait a few years and if history tells us anything it'll be like winning the lottery So if you look at the history of crypto Especially Bitcoin the people who have lost money in the game are ones that sold when there was a big dip and had they just left It alone and not panic. They'd be rolling in the dough right now But the fact is until those hardware wallets came along a lot of us Including me and Bitcoin Dan and my seminar lawyer Jose got scammed or even swindled out of a certain amount of Bitcoin

[18:18] So I have to laugh when I get emails from people saying things like Johnny. I'm so disappointed I bought a Bitcoin at whatever price and it dropped and now I'm down two grand or ten grand You know why I laugh because all those guys and gals right now if they didn't panic sell are Rolling in the dough, but they never send me an email telling me they're up 30 40 50 or a hundred grand it's often right after they've bought some and it's going down a bit in the next couple days Or weeks they say Johnny. This is terrible what happened? And then a few weeks or months later when it heads for the sky suddenly everyone's happy again Alright this calls for a personal story I never thought I'd be telling on the air in the early days when there was only Bitcoin Bitcoin Dan started a company that was Financed by Bitcoin. It was a great plan and a great company ground-floor Bitcoin enterprise

[19:05] I'll highly simplify this here by saying that he put in 2,000 Bitcoin and I put in something like 50 Guess what the company was solid and golden fine All right, but the CEO that Dan hired a Canadian guy stole 2,000 of Dan's Bitcoin and 50 of mine and the guy just packed up and disappeared now Remember, this is when Bitcoin was around three or four hundred bucks But really if you think about it if I really wanted to cry myself to sleep every night for the rest of my life I could torture myself and calculate today's price of 50 Bitcoin that I lost which works out to two and a half Million dollars Let me ask you this how many people in your life? Do you know who've been scammed out of two and a half million dollars, but you know what I don't cry about it I don't even think about well I am today because I'm talking about it on the show the thing is neither

[19:51] Bitcoin Dan or I allocated our full stash to this guy So we're still in the game, but think of Bitcoin Dan 2,000 Bitcoin at today's price a hundred million dollars and to think on the south side of Chicago They'll bump you off for a pair of Nikes and Dan doesn't whine or cry about it either cuz like I said We're still in the game. Oh and by the way Bitcoin Dan's smarter brother. That's what he always tells me He's got a brother who's smarter than he is man. How could that be possible anyway? His brother lost the equivalent of a million or so bucks to in the same scam Oh, and if you think these are oddball cases take our expat seminar Lawyer Jose in the early days before hardware wallets like Trezor and nano He had his Bitcoin on Mount Gox exchange you crypto people in a know

[20:36] Remember Mount Gox was an early exchange that went bankrupt So our seminar lawyer Jose lost 30 Bitcoin today's value 1.5 million dollars and he's not whining and losing sleep over it either because He didn't have all his Bitcoin on just that exchange the moral of that story Don't whine and cry too much when when your crypto is Bitcoin or whatever takes a big dive That's the nature of crypto. They do it all the time. Just look at it historically you'll find and let's take the case of Bitcoin It's increased on average over two hundred percent a year in the last ten years And really there is no common investment vehicle that has ever performed like that In fact, it's the best performing asset in history But you have to fashion your seat belts when you get in the game because it's got wild swings

[21:22] And I'm always telling people don't put a Bitcoin or crypto app on your phone because you'll be checking it a hundred times A day for some it's an obsession my advice buy some stick it in a cold wallet and in five years There's a very good chance. You'll be on easy Street Who knows you could fire up your wallet and find you're a millionaire and then walk across the street and get hit by a chicken Bus hey shit happens now speaking of getting swindled and robbed that happens to the best of us For example three or more years ago me and my latin lawyer friend Jose got scammed once again And this time it had nothing to do with crypto The reason why I'm bringing this up once again is because I've got lots and lots of new listeners Especially since the last year and a half with kovat new listeners have been really piling on and I'm doing an unprecedented Number of phone consults to people are just itching to get the hell out of Dodge

[22:10] I mean a thousand reasons why and man are the procrastinators coming out of the woodwork anyway about me and my attorney friend getting Swindled and scammed a couple years back. This is for you newer listeners who've just recently come on board I told the story about three years ago. So you longtime listeners heard it already Here's how attorney Jose and I got scammed out of over $20,000 about six years ago. I hired a female employee named Jen bird by RD And about three years ago in 2018 I discovered she'd stolen more than 20 grand from me and my partner as mentioned Jen bird stole slowly and cautiously bit by bit by creating her own website and siphoning off funds and misdirecting seminar clients to deposit money in her PayPal account instead of the official Seminar PayPal account and who is Jen bird? She's an American who I later found out had worked at HP

[23:00] Hewlett Packard computers in the States and was fired for unknown reasons I have to assume she pulled the fast one there, too Unfortunately lawyer Jose and I didn't know her full past until she'd already embezzled the dough Anyway, she had the computer skills on her resume and her job was to create and manage my seminar website and my expat essentials Course website so naturally when I found out she'd stolen and committed fraud through PayPal immediately fired her There was no chance getting the dough back, but it didn't end there lawyer Jose a Guatemalan lawyer suitor But before he could get her in court in Guatemala She skipped the country went back to the states and then a few months later a fake Expat files website appeared on the net so Jose and I knew instantly whose hand was behind that the age-old reason revenge

[23:45] Of course revenge of course for exposing her and cutting off her gravy train now anyone who uses the net knows with minimum WordPress Skills and a $15 GoDaddy domain name you can create any kind of website There are many YouTube videos that can teach you how to do it in 30 minutes And of course people who listen to this show are way above average they get it They can look up the internet references to me lawyer Jose and my expat file show There are hundreds of positive reviews on websites social media and blogs everywhere But oddly enough one odd fake website appears in all the mix by the way It's been a while, but authorities are on her trail PayPal frauds a serious offense in the end though I'm certain the 20 grand will never be recovered though It is a lesson in trust for all you gringos out there now of course none of the seminar attendees lost their money in fact

[24:32] most of them didn't even know about it too long after the seminar was over and I Recounted the story for and I only did that to warn them not to answer any emails from her because I heard she was Calling people and asking them to loan her some money right before she skipped the country and went to the states Turns out she was hitting up people for money on my email list so the moral of that story Sociopaths and scammers can creep into anyone's life and background checks don't always cut it by the way you long-term listeners Have heard me say many times practically every gringo and expat I know who relocated to Costa Rica has been ripped off Mostly by other gringos and expats go figure, huh? We're all susceptible especially when we drop our guards Oh, and I forgot to mention she took good old captain mango Who's as honest as they come for a decent amount of dough to she stopped answering his phone calls

[25:21] So that's my cautionary tale conniving gringo ripoff story of the month Though in this case the sociopathic star of the story was a gringa Jen bird Byrd so beware if you're the trusting sort if it happened to me it could happen to you and that little story Was mostly for the edification of all you new listeners who've come on board in the last couple years Alright enough of the dirty laundry as we get to the end of the show today I have to admit I kind of had a loss I've been getting emails left and right from people up in the states in Canada saying that their employer generally their state or health services employer is Mandating that they get the Vax or get fired and I'm at a loss as to what kind of advice I could give you except to say all you guys up in the first world knew bad things were coming

[26:08] I've been personally talking about it on this show for 11 years now Why do you think I got the hell out of dodge in the first place 30 years ago? Yeah? Yeah back then everyone laughed at me I was chicken little the sky is falling well the sky is falling now isn't it and I'm not trying to make you feel better All I'm saying is it's not as if you haven't been warned a hundred times at something or another economic social political environmental a number of Patastrophes were in the works and you better get ready to get the hell out of dodge or at least Get some boots on the ground preferably in Latin America and make some good contacts like a good lawyer get a bank account Phone internet service etc so you can have a soft landing when the time came to get the hell out of dodge But now with the looks of all these emails you guys who are sitting on the fence are panicking The good news is there's still time to get the hell out of dodge without getting vexed

[26:54] But sooner or later it's gonna be mandated by all the airlines and most every country We can all see that coming, right? But then again like expat Eddie says once you land in the third world country of your choice No one can force you to take the facts after all this is Latin America I mean look when you've got nurses in Mexico going door-to-door Asking you if you'd like to get faxed for 30 bucks most people go for it thing is though It's been discovered that a great many faxes delivered in that manner and in other ways the ampoules contain nothing But sterile water and if you don't believe me I've got articles and news reports to prove it What can you say but welcome to Latin America? You gotta love it You've been listening to the expat files living in Latin America If you need some help with your own plan be we can schedule a one-on-one phone or Skype consult

[27:41] Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week-long expat insider seminar in Central America Where you're guaranteed to get a two to five year head start on your plan B Send me an email the expat files at gmail.com