Brazil’s economic difficulties aren’t quite on par with those of troubled neighbors Venezuela and Argentina, however, it isn’t that far behind. According to data from the country’s national statistics office (IBGE), consumer price inflation in Brazil has hit record high of 9.57 percent, as measured by Brazil’s IPCA index.
These high inflation rates greatly decrease the purchasing power of the Brazilian currency, the Real.
Brave New Coin spoke with Fábio Anjos, co-founder of Brazilian Bitcoin Education startup Rexbit, who anticipates the economic situation in Brazil to worsen over the next 12 months.
A true believer in Bitcoin, Anjos believes that people will use it to protect their money only when the national currency is being devalued on a more frequent basis, such as daily.
“People will discover Bitcoin when the situation becomes critical,” said Anjos, comparing his nation’s economic fate to that of his neighbors. “Countries like Argentina and Venezuela are living in a real economic chaos and they are using Bitcoin as an emergency solution.”
Indeed, Argentinians living in Buenos Aires have done an incredible job of spreading bitcoin around their city. There are now more than 140 merchants showing across the greater Buenos Aires region on Coinmap.
However, for the most part, their efforts have been contained to the capital city and the rest of Argentina is nearly devoid of merchants who accept cryptocurrency. Not so in Brazil.
As you can see on the Brazil-specific version of Coinmap, MAPA Bitcoin, which happens to be run by Anjos, bitcoin-accepting merchants are spread far and wide around the populated parts of the country.
The country’s largest City, São Paulo, has a couple dozen merchants accepting bitcoin, but nowhere else in the country can compete with Aracaju, a much smaller city on the coast in the northeast, currently showing 54 merchants that all accept bitcoin.
Aracaju, pronounced Araka-zjoo, is the capital of the state of Sergipe, Brazil, and is located in the northeastern part of the country on the east coast, at the mouth of the Sergipe river. It has an estimated population of 632,744, and can now be known as the Bitcoin capital of Brazil for having the highest number of bitcoin-accepting merchants in the entire nation, making it the second highest (behind Buenos Aires) in the entire western hemisphere.
The city has many unspoiled beaches and several world-renowned hostels, as it has recently focused on becoming an affordable tourist destination. With its low cost of living, great public safety record and transportation options, healthy lifestyles, and low inequality, Aracaju has a lot to offer anyone. And now they have a thriving bitcoin economy too.
Aracaju isn’t the only city in Brazil with bitcoin businesses popping up. According to the same map, Rio de Janeiro, Porto Alegre, Curitiba, and the most populous city in the Americas, São Paulo, all appear to be breaking out with bitcoin fever, and another two dozen or so cities across the country have more than a couple of merchants accepting bitcoin in them as well.
Given the small size of Aracaju, with only 1/20th of the population of Buenos Aires, the density of bitcoin-accepting merchants there may be higher than any other city on Earth, saving only the “Bitcoincity” of Arnhem, Netherlands.
Aracaju’s high concentration is due in no small part to Anjos himself, his office is located right in the middle of town. His business, Rexbit, offers bitcoin education directly to merchants and other professionals. An introductory course costs 29 Real, which is worth about US$7.30.
In February of this year, Anjos and his co-founder Edson Neto had the idea to offer Bitcoin classroom courses, both in their office and online. They also added consulting to the product line and went out looking for customers.
“We realized that the Bitcoin Market was really small in Brazil and understand that Bitcoin was not an easy task for people in general. So, we decided to develop the Market with education.”
— – Fábio Anjos, Rexbit Co-Founder
In its first four months of operation, Rexbit filled more than ten classroom courses, converting more than 200 people into bitcoin users, and convinced more than 50 locations in Aracaju to accept Bitcoin as payment, which you can see on the map above. His website is full of happy customer testimonials.
“There is not a ‘secret formula’ to convert so many places, but the tip is to try to understand the type of business you are dealing with.”
— – Anjos
Finding customers was the hardest part, according to Anjos, but not impossible. He went door to door visiting businesses initially, and also used social networks to attract clients. When approaching a store’s management, Anjos pointed out, many things need to be considered, such as the owner’s level of knowledge in IT, their age, cultural background, and their number of employees. “It’s important to help the owner to decide what he is gonna do with the bitcoins,” as well as giving training to their employees.
Anjos revealed that approximately 80% of people taking the courses actually adopt bitcoin afterward. Businesses have a lot to gain by accepting bitcoin there, including no initial investment, no monthly fees, and no transaction costs like the common credit card fee. Further, it is possible to receive payments from out of the country for international orders without excess paperwork.
For any businesses wanting to learn from the success of Rexbit, and earn a living while successfully converting local merchants to accept Bitcoin, Anjos offered some more advice.
“You need to be a real Bitcoin enthusiast. The work is hard, you need to be patient and persistent.” He said, and also elaborated “always use simple language in every speech. Being too technical will generate a huge problem for communication.”
Equally important is client maintenance, meaning that after introducing a merchant to bitcoin, you must be available for the client to help with answering questions and update their training.
“If the person really understands what is Bitcoin and how it works, it’s easy to convince them to accept it as payment in their store or job.”
— – Anjos
Although most of their clients are in Aracaju so far, Anjos says that some of their customers are from around the rest of the country, and that’s a large part of where he is focusing on growth going forward. The company’s current goal, he says, is to train one million new bitcoin users by December 2016.
“We can say that Rexbit is starting to be profitable after the creation of the online course.”
— – Anjos
Currently, the courses are offered in Portuguese, but the company plans to expand and produce courses in up to five other languages too. “We will be crowdfunding to raise money for this,” explained Anjos.
The rest of Brazil is clearly growing in bitcoin adoption as well, with or without Rexbit’s help. It would appear that the conditions are great for Bitcoin in Brazil, and all that it takes now is human action to get adoption started in a meaningful way.
The same was the case in the Dutch “Bitcoincity,” located a mile outside of Amsterdam. Although their inflation rate wasn’t nearly as bad, the conditions were more than welcoming in the suburban city of Arnhem, which is even smaller than Aracaju.
With only 151,000 residents, but over 80 bitcoin-accepting merchants, Arnhem is in a class of its’ own as the most densely converted, bitcoin-friendly city in the world. However, in both cases, the conditions and infrastructure were accommodating to bitcoin use, but the knowledge would not likely have spread on its own. It took a few dedicated people visiting businesses in person, talking to the owners one-on-one, answering questions and spreading their enthusiasm for Bitcoin before adoption would flourish.
Will this strategy work everywhere? Probably not, admits Anjos. However, once Bitcoin enthusiasts realize that wide-scale merchant adoption requires pounding the pavement, more cities like Arnhem and Aracaju will surely follow.