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As a former resident of Venezuela, Josef Dvoracek knows a thing or two about inflation, economic mismanagement, and the risks of fiat currencies.


That's why he's been among the most enthusiastic pioneers of a new bitcoin payments ecosystem that has sprung up in this lush southern region of Costa Rica known as the Costa Ballena (Whale Coast).


Dvoracek, a 71-year-old Czech national who sells artisan bread with his Venezuelan wife at local food markets, said he is now doing around 25% of his sales through the new Bitcoin Jungle wallet. Aside from giving him the option of earning bitcoin, he says the biggest advantage of using it has been saving the fees of up to 8% that he loses with credit card sales.


“It’s been amazing,” said Dvoracek, who lived in Venezuela for 20 years. “Most of us using bitcoin now leave the credit card machines at home," he added, referring to his fellow stall vendors.


The evolution of Bitcoin Jungle in this region means that El Salvador is no longer the only place in Central America where you can buy a coffee with bitcoin before hitting the beach. In fact, you can do a whole lot more with it these days in this corner of Costa Rica.


On a recent Friday in the surf town of Dominical, over a dozen vendors including Dvoracek were accepting bitcoin. A few minutes walk down the main street, the plastic orange bitcoin plaque was also on display at Mono Congo (Howler Monkey), a popular breakfast and lunch cafe. A pharmacy next door recently started taking bitcoin, as did a slew of restaurants and other tourist-oriented businesses in the town of Uvita, a 15-minute drive south of Dominical.


In total, around 50 roving market vendors and 20 brick-and-mortar businesses have signed up to the Bitcoin Jungle project since it was launched about six months ago. The wallet app has had about 1,500 downloads, and 1,000 monthly active users.


The project is a prime example of how the original Bitcoin Beach in El Salvador’s El Zonte — which presaged that country’s decision to make bitcoin legal tender last year — is spurring the organic growth of local bitcoin ecosystems elsewhere in the world. It’s also providing more evidence that bitcoin can be an effective and useful payments system — something that skeptics have long rejected because of its slow transaction speeds and relatively high costs.


Like the El Zonte project, Bitcoin Jungle’s wallet runs on the second layer Lightning Network, making transactions vastly faster and cheaper than they would be on the underlying bitcoin blockchain. It’s a fork of the original Bitcoin Beach wallet built with the open-source Bitcoin development platform Galoy, but has added features like a GPS map showing locations where bitcoin is accepted and contactless near field communication (NFC) payment capability.


Richard Scotford, a 50-year-old former Hong Kong resident who has been active in that region’s pro-democracy movement, came up with the idea for Bitcoin Jungle as he and his wife moved ahead with plans to launch a local middle school on the bitcoin standard.


“The more I deep-dived bitcoin, the more it was obvious to me that this area was primed to do it,” he said. “We just needed to start pulling people over to the bitcoin standard by giving them outlets to spend their bitcoin.”


Scotford says that Costa Rica’s economy and financial system demanded a different approach for Bitcoin Jungle. In contrast to impoverished El Salvador, Costa Rica has long had one of the most stable economies in Latin America, low levels of corruption, and a relatively good standard of living.


“El Salvador is about banking the unbanked. Costa Ricans have bank accounts and most of the time they aren’t questioning the financial system,” Scotford said.


So instead of relying on adoption by locals, Bitcoin Jungle is primarily aiming to penetrate the ranks of foreign tourists who flock here for Costa Rica’s unspoiled beaches, verdant rain forests and pristine waterfalls.


Given the option to pay seamlessly with bitcoin, tourists could leave their credit cards and debit cards at home, or at least back in the hotel. For their part, hotels, restaurants and retreat centers get an escape route from painfully high credit card fees and the chance to hold some bitcoin for the long term. The idea is that this will eventually lead to a circular bitcoin economy that will also draw in Costa Ricans.


Lee Salminen, a software developer who sold his business in the payments sector before moving to Uvita and partnering with Scotford on Bitcoin Jungle, said he’s optimistic that more locals will come on board, especially given that Costa Rica’s own currency has declined around 10% against the dollar in the past year.


The process of onboarding locals has been helped by one-to-one sessions in which Salminen and Scotford listen to people’s financial pain points and explain how bitcoin can solve them and, crucially, by giving them the option of quickly converting it into dollars.


After the first week of Bitcoin Jungle going live in the local markets, every vendor took the option to cash out. Now, very few are doing that, says Salminen.


“It’s been an incredible progression at the markets,” he said. “Every week they come in and have a next level of complex questions about bitcoin or the economy or inflation. Everyone has their reason — some have a healthy distrust of the government, some have family in far-off places and some like to speculate.”


Marking the next step in enhancing the ability to switch between bitcoin and fiat was the recent arrival of two shiny new bitcoin ATMs.


Costa Rica’s government has taken a restrained approach to cryptocurrencies, accepting them as legal to use but warning citizens that buying them can be risky. But a recent COVID-19-driven slump in tourist arrivals — compared with a 30% jump in El Salvador since it adopted bitcoin last September — could be a catalyst for a change in official attitudes, said Salminen.


“The tourism ministry wants to talk with us to form an angle of how bitcoin could be positive for tourism here and use that to drive legislation,” he said.


The Czech vendor Dvoracek said he thinks that more Costa Ricans will come around to bitcoin payments when they realize it gives them the opportunity to unbank themselves, cutting out the need to stand in long lines for services at banks and ATMs.


Fuad Yantani, a 43-year-old Chilean selling cold-pressed juices, said that Bitcoin Jungle payments made up a small but growing portion of his sales. He said bitcoin has been useful for making and receiving payments from other vendors too, but his longer-term goal was to treat it as an investment.


“My idea is to save more of it than spend,” he said.

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