Cryptocurrency : How does the Bitcoin community bank work in El Salvador?

El Salvador is currently the center of attention within the bitcoiner universe. However, before the Nayib Bukele government legalized the first cryptocurrency, multiple initiatives were already taking shape to massify the use of bitcoin (BTC).

A community banking project, based on the Lightning network, began to be deployed in September in Bitcoin Beach, on El Zonte beach. The habitants coexist in a circular economy based on BTC and use the Bitcoin Beach wallet app to carry out daily transactions for their payments, as reported by CriptoNoticias.

Although residents began interacting with the network through the Wallet of Satoshi portfolio, since September last year they have been using their own custom development tailored to local needs, according to developer Nicolas Burtey. The Bitcoin Beach wallet is a shared custody wallet, that is, the private keys are distributed among the members of the community.

“There is a Lightning node, but there is also a cold storage where the keys are shared among the members of the community. There are about a thousand people who use the wallet every day in El Zonte ”, explained Burtey. Only in this region there are 40 commercial establishments that process payments with bitcoin.

Bitcoin as a safe haven for merchants

In a thread shared on Twitter, the programmer and head of the development company Galoy, explained that it is called community bank because it is multi-signature and the keys are shared, which would ensure the safety of community funds. On this point, Burtey indicated that Galoy is working with the Specter portfolio for the configuration of the multi-signatures.

Specter is a desktop wallet interface for the Bitcon Core client focused on privacy, control of cryptocurrencies, and settings for single and multi-signature signatures. The wallet is non-custodial and works with all major hardware wallets.

Michael Peterson, co-founder and director of the Bitcoin Beach project in El Salvador, explained that, at the moment, merchants accept payments in the custodial wallet, but once a week they accept funds are moved to cold storage protected by keys.

“So it’s not one way or the other, it’s, ‘hey’, we’re going to use these products together at the times that make the most sense, but always with the long-term goal of people going to the non-custodial », Highlighted Peterson, who argued that it has been done in this way so that the adoption of bitcoin is completing stages and that people understand how BTC and wallets work.

The Legislative Assembly of El Salvador approved, during the night of this Tuesday, June 8, the so-called Bitcoin Law. It is a legislation that gives legal tender to the first cryptocurrency in the Central American country.

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