It’s been a month since El Salvador adopted Bitcoin as legal tender. The country was the first in history to have done so. Ever since the idea was introduced to the public, El Salvador has suffered an uproar of street protests and technological challenges that it’s struggling to address.
On the first day after the decision, the Salvadorans felt the debilitating blow of the subsequent market drop. During the initial hearings on the idea, nobody had really expected it to go smoothly. And now, a month after the decision, the country is still facing technical issues.
“I see Bitcoin as an opportunity for my business, to increase its sales and to give options to my clients to buy. Many people are scared of using this currency. I tell them to inform themselves. I think that over time it will bring in many benefits,” said a Salvadoran businesswoman in an interview with Arirang.
The new legal tender has exposed a number of technical challenges that the country doesn’t have immediate means to address.
“The Bitcoin system has had implementation problems, of course, there is distrust about Bitcoin, in the end, here we have dollars and people want to use the dollar, and Bitcoin does not bring anything better than the dollarization that already exists,” said another Salvadoran citizen.
El Salvador’s President Nayyib Bukele said roughly half of the country’s population, or three million people, have downloaded Chivo, the national Bitcoin wallet app.
Chivo itself is the source of the technical issues. When the big day came, the wallet, for some reason, wasn’t available on neither AppStore nor GooglePlay. After a while, the president had to turn to Twitter online shopping to speed up the process.
The reason turned out to be a glitch that rendered the app unable to cope with the overflow of new registrations. Later, the government solved this problem by connecting it to more servers rather than increasing their capacity.
Reuters reported that a 32-year-old man lost $220 by withdrawing cash from his wallet. There have also been reports of privacy violations and identity theft.
At the same time, Bukele said that the cause of the problems could be the high demand for Bitcoin.
But the Salvadorans’ biggest worry by far is, of course, the volatile nature of cryptocurrencies.
“The same day that El Salvador implemented Bitcoin as a national currency, it fell sharply and then reached 40,000 dollars. It has been recovering, but the Salvadoran people have lost confidence in Bitcoin because the volatility that was being talked about became a reality.”
A Central American University poll found that 9 out of 10 people surveyed said they did not have a clear idea about the benefits of Bitcoin, and 8 out of 10 did not feel confident about it.
In another survey by the Salvadoran Foundation for Social Development, 93% of companies surveyed responded that they’ve not yet received a Bitcoin payment.
In light of BTC adoption, El Salvador’s economical climate is certain to change for good. Let’s hope the country does its best to resolve the many issues it has faced and shows an example of BTC as tender done right.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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