Early this month, El Salvador formally enacted its groundbreaking Bitcoin legislation, recognizing bitcoin (BTC) as legal money, requiring companies across the nation to accept bitcoin, and launching the Chivo bitcoin wallet, which the government of El Salvador supports. Bitcoin Magazine sponsored a Twitter Spaces conversation with many Bitcoiners with personal experience in El Salvador to provide a more detailed description of what this adoption means for the country’s citizens. Before we move on with our article, please register yourself on bitcoin rejoin and add a new tool in your collection to trade in bitcoin.
Following a ten-day stay at El Zonte, El Salvador’s famed Bitcoin Beach, before the bill’s formal implementation, Bitcoin Magazine’s Aaron van Wirdum expressed his admiration for the amount of real-world Bitcoin usage that he saw. “El Zone is an exciting effort, and these bottom-up initiatives are wonderful,” he remarked of the program. “It’s working…” says the author. “It’s a source of inspiration.”
The day passed on September 7, 2021, van Wirdum presented two perspectives on El Salvador’s effort to become the world’s first Bitcoin nation: one that saw the “glass half full” and another that saw it as “glass half empty.” however, after going to the country’s capital, San Salvador, he came away with a completely different perspective. “I noticed right away that there is a significant disparity between the two situations. Nevertheless, the remainder of the nation is still very far away from embracing Bitcoin on any significant scale, as was the case a year ago.
He pointed out that McDonald’s and Pizza Hut franchisees in the nation accepted Bitcoin, indicating the significant acceptance by worldwide companies as a direct consequence of the Bitcoin legislation.
According to van Wirdum, “the glass-half-empty view is that it hasn’t spread very far at this point.” And yet, a large number of individuals are completely unaware of what this is or how it works. Aside from that, there are many problems with apps such as the Chivo app. As previously said, some individuals could download it, but many others were unable to do so. It had a lot of bugs. If you attempted to use it, you would find that it worked sometimes and did not function at other times.
While Chivo provided everyone in El Salvador with $30 in bitcoin, the participants observed that this money could only be transferred to other Chivo apps, effectively establishing a custodial solution with many of the same issues as central-bank-controlled fiat currencies. Although Bitcoin is being utilized more actively in El Salvador than van Wirdum expected six weeks ago, he believes the situation is improving.
Sergej Kotliar, the CEO of Bitrefill, a bitcoin-for-gift-card retailer, highlighted many orders from El Salvador on the day the legislation went into effect, claiming that he received 40,000 orders in three hours – ten times the usual rate of sales that the platform gets.
As a result, he said, “the [Chivo] app created by four or five separate teams, which results in discrepancies in the app.” Many Bitcoiners have expressed dissatisfaction with the Chivo wallet, citing its custody and centralization and that you must provide your private information and restrict in functionality. But, to put things in perspective, I’m referring to a government-sponsored effort to develop a cryptocurrency wallet. As an aside, Kotliar said that his team is giving input on ways that the government may enhance Chivo and that he is optimistic that it will implement further changes.
In his words, “because of how the [Chivo] program designed to operate, it seems to be more of a centralized system, and it is when you interface with external wallets that it links to the main chain or the Lightning Network,” he said. “Whatever the government distributes is not a true Bitcoin in the traditional sense. It has the appearance of a centralized banking system.”
Gómez responded by saying that he had no specific issues with Chivo. “I believe that all of this lack of openness is portraying Bitcoin in a very negative light, and it eliminates any justification for us to place our confidence in these government wallets,” Gómez added. “How can I put my confidence in this program if they are not providing us with any information about how it works?”