Brazils Bitcoin Beach Says Lightning Network Works Better Than Visa

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public note. The school houses a bitcoin server that allows all of these students and their teachers to pay for goods in bitcoin at participating merchants in this beach town in northeastern Brazil.Praia Bitcoin

A group of true bitcoin believers and cryptocurrency newcomers have gathered in Brazil for a bitcoin experience. It’s called Praia Bitcoinbitcoin, which simply means Bitcoin Beach in Portuguese. Here, in the idyllic tropical beach town in northeast Brazil called Jericoacoara, small donors and business owners are trying to shift the local economy from one dependent on the local currency, or dollar, to bitcoin. This is the Brazilian version of the Salvadoran bitcoin beach project that started on the shores of El Zonte around 2019.

The two-year-old Praia Bitcoin project set a world record for peer-to-peer transactions on the Lightning Network, Bitcoin Magazine reported in February. Participants were able to complete 71 transactions in just three minutes and 33 seconds, making it the highest number of peer-to-peer bitcoin transactions via Lightning to occur in the shortest possible time.

This was only possible because the Lightning Network is ready for the masses, Praia Bitcoins creator Fernando Motolese told me in an interview. Currently, no other option is as prepared for this type of market with a functional solution as Lightning. It is superior to Visa.

The essence of Praia Bitcoin is to create a so-called circular economy of small businesses that accept bitcoin as payment. Participants use (and accept) a bitcoin debit card, called Bolt Card, to make purchases at local stores. Throughout 2022, Praia Bitcoin received 1.23 BTC in donations from Bitcoin Beach, Galoy Money (creators of the Bitcoin Beach Wallet), the Brazilian YouTube channel Palavra de Satoshi, and over 400 anonymous donors. This Brazilian community project has come a long way since its beginnings a year and a half ago.

Jericoacoara. The waterfront merchant is part of Brazil’s Bitcoin Beach Project, which launched in 2021.Satoshi Channel Screengrab Bitcoin: A Life Saver

Motolese said the idea of ​​creating Praia Bitcoin came to him in 2020. During the pandemic, Motoleses’ daily bread as a businessman and musician evaporated and he quickly lost income. Then he remembered something, a bitcoin wallet.

He found the 12-word password. He didn’t have much in there, maybe a few fractions of BTC from a 2013 purchase, he tells me. But it saved me financially.

Lo and behold, a true bitcoin enthusiast was born.

So, on October 4, 2021, newly converted bitcoin, Motolese, announced its foray into what has become the biggest experiment in bitcoin utility in Latin America.

I asked Bitcoin Beach for help, but it didn’t come until a year later, he says. They were just an inspiration at first, but after the publication of their Bitcoin Beach whitepaper, they became a role model and an important partner.

Next, the Brazilian community spent their donated funds to create Brazil’s first public Lightning service provider, as well as developing many open-source tools shared in their GitHub repository to create small local bitcoin economies. You can be a street fruit vendor or a local parcel shop and accept bitcoin as payment in Jericoacoara if you wish. Ongoing donations are used to purchase equipment, including portable payment card readers (aka point-of-sale machines) and servers.

The Bitcoin Beach community in Brazil has even bigger aspirations, having only reached 22% of its fundraising goal, according to its donor website as of March 31.

Getting donations is very difficult, says Motolese. At each stage of our development, we update our crowdfunding campaign with new objectives and evidence of the work we have done with these donations. I started this by donating 0.02 BTC, which was around $1,000 at the time. We now have around 2.43 BTC. It’s around $67,000, or R$338,825.

The amount received in bitcoin includes revenue from Praia Beach selling the Bolt Card Genesis Block Edition, POS machines and sponsorships for its first-ever bitcoin conference held during Carnival this year.

creator of Satoshi’s Palavra channel on YouTube. The two have teamed up to create a circular economy based on bitcoin in a seaside village in the state of Ceara, northeast Brazil. Satoshi Palavra Canal

The creator of Palavra de Satoshi, Vinicius Kinczel, from Rio Grande do Sul, which is located in the opposite direction of the state of Ceara to the north, has joined the team to help create a range of products so that the project is less dependent on donations. To date, Jericoacoara tourists use bitcoin at more than 25 merchants. All transactions are made on the Lightning Network.

For the philanthropic side of Praia Bitcoin, some 370 students and 30 teachers at the local public school now have Bolt cards with wallets connected to a school server. About 100 residents do it too, and that number keeps growing. The city has about 20,000 inhabitants.

We are an exception, but other cities will follow in our footsteps, says Motolese, mentioning South Africa’s Bitcoin Ekasi project, which is another Bitcoin Beach model using Lightning Network and Bolt cards.

Regulatory landscape of bitcoin in Brazil

The newly appointed Brazilian government is working to create more rules for the crypto industry, all designed to protect investors.

A better understanding of regulations will ignite a fire under demand from Brazilian investors for bitcoin, because today there is a lot of coldness regarding cryptocurrency, Foxbit CEO Ricardo Dantas told me in a interview.

Foxbit is the second largest cryptocurrency exchange in Brazil by volume, according to CoinTraderMonitor. Brazil has seven well-known exchanges: Foxbit, Mercado Bitcoin, NovaDax, Coinext, BitcoinTrade, and BitPreco.

There is a feeling that bitcoin technology is relatively complex and has no rules, which gives people the impression that it is totally anarchic. We’re working hard to change that perception even though it’s not something people see, and it’s not something everyone in crypto will follow. But with better rules, there will be more adoption, more investor confidence, says Dantas.

He expects the upcoming bitcoin halving next year will bring investors back to bitcoin. In short, the halving reduces the rate at which new bitcoins are created. He thinks a new boom is likely, much like the 2020-2021 bull market.

Dantas’ main competitor, MercadoBitcoin, is the leading exchange in all of Latin America with 3.7 million customers. Bitcoin is the top crypto trade on their platform, followed by Ethereum, Ripple, Chiliz, and Circles US dollar stablecoin, USDC.

Praia Beach wants to create an economy out of bitcoin, but Foxbit and MercadoBitcoin will tell you that most people interested in it are speculators.

The main utility of cryptocurrencies in Brazil is for investments, says Fabricio Tota, Director of New Business at MercadoBitcoin. Brazilian investors like the idea of ​​investing in stocks related to innovative new technologies, but there are very few opportunities to buy that here. For this reason, cryptocurrencies have become an important alternative to this market, says Tota.

Bitcoins Brazil Future: Lightning fast? a local school to make split bitcoin payments to see how quickly they could clog up the Lightning Network with one-time transactions. They set a record.Screenshot Praia Bitcoin

For Motolese, discovering his old bitcoin wallet got him thinking about the potential of this new currency to help people. It’s volatile. Its risky business. But most emerging market entrepreneurs are used to managing risk. Bitcoin won’t replace the Brazilian real anytime soon.

However, providers large and small must pay fees to Visa and Mastercard for using their payment systems. It’s like an additional business tax. This alternative Lightning Network system has gained traction in some Brazilian neighborhoods where small businesses already feel burdened with taxes.

Lightning allows you to send and receive bitcoins without waiting for blocking confirmation. You transact in milliseconds, says Motolese. There is no other payment network comparable to Lightning. It decentralizes the delivery of financial services and puts the power back in the hands of individuals, he says. We are building the financial services of the next decade and using bitcoin as a medium of exchange.

There are enough people who like the concept of disconnecting from the network, when it comes to dealing with corporate banks and the Brazilian government, that the Lightning Network can provide an alternative payment option.

The thesis of an alternative financial system has gained popularity in recent years in Brazil, especially after the failure of the big banks and their subsequent bailout by the United States, explains Tota. That’s when bitcoin was born. This idea of ​​a financial system controlled by a few institutions, where critical decisions are concentrated in the hands of a small group of people seems of little importance in our everyday life, but look again at the bank failures in the States States (Silicon Valley Bank) and Switzerland (Credit Suisse). This enlightens those who want to build alternatives, like bitcoin, which is a viable option in this context.

A small handful of bitcoin-based circular economies are popping up around the world, beyond Brazil and El Salvador. Demand comes mainly from emerging markets. However, people can use Bolt Cards in Finland and Taiwan just as easily as in Jericoacoara.

Bitcoin and Lightning allow you to participate in a faster, cheaper, and more efficient monetary system, says Motolese. Maybe Americans don’t see bitcoin as money yet. But if there is a decline in the petrodollar and you have hyperinflation, that perception will change quickly.

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I write about global business trends, big business dramas, and investing, primarily in emerging markets. I’m also a retail investor with interests in cryptocurrencies, so I tend to write about investment ideas that I’m considering on my own. Ex-WSJ in Brazil. China analyst at the Coalition for a Prosperous America.

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