What's your opinion on El Salvador and its relation with crypto?

Chat / Discussion
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El Salvador is the first country to adopt BTC as its legal tender currency.

The main reasons behind Nayib Bukele’s choice to invest in BTC are:

1, The president wants the people of El Salvador to have more access to technology and financing because many of them don’t have bank accounts, and he didn’t want them to only rely on cash. However, what has been seen is that these people are less likely to be using bitcoin.
2. He thought that investing in BTC would have revived the economy of the country, because at the moment that he started with this plan last year, bitcoin and other cryptos were really booming

Nevertheless, there is some criticism:

  • lack of transparency
  • people struggling to adapt to this new system

What’s your opinion on this? Do you think in the next years more and more governments will follow El Salvador’s example?

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Blockquote

I think for their country and others like point one is a great reason to do this, its what btc was made for. In regards to point 2, well we got to have a big picture and use facts, lets go ahead 20 years and then see if this was a good investment , thing about this BTC is the BEST preforming assets by far over the last 10 years, the dollar is one of the works preforming assets, which is wise to invest in ?

There will always be teething problems, I think they will learn and when next bull run comes there are going to be alot of poor people who become rich, then word will spread about how cool this is. Alot of countries have actually banned crypto. But most are dictatorships, Bolivia probably next and one of the African countries , its just a matter of time.

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Well, it was absolutely a great breakthrough that finally a country introduced BTC. No doubt, there is also a “revolutionary” factor: they wanted to be the first and wanted everyone to talk about them, which succeeded. The problem is that if peoply only use cash, they will less likely to adapt to a newer technology, this is basically what happened there.

I personally like the idea, since it means, that we have adoption. They should keep it, and try to give lectures about it to people, to make them understand what is it.

I also anticipate more smaller countries to follow in the coming months.

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Short answer yes!
But I think it will still take time since probably countries which are interested in this possibility want first to observe how it works out for El Salvador.
El Salvador is definitely a big experiment which will hopefully build the road for more countries to make BTC a legal tender

I doubt though that this will happen during a bear market…I think first it has to financially be proven that BTC as a legal tender is working and that won’t happen when BTC dumps around 70% in 2 months

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I also see that big volatility (in any direction) will make the adaption as a legal tender a bit harder. People will freak out if their assets can worth 50% more / less in a short period of time. They will compare it to USD for the beginning, that is just inevitable.

I also see small countries adaption more likely to happen now, because they can gain a lot of wealth from it since the price is down. That is a great opportunity for them grow their country.

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@Shrimp agree, other countries are just waiting around the corner. I see El Salvador adoption of Bitcoin as a creative attempt to avoid a default. If they will succeed, I’m pretty sure other countries will start thinking about it, too.

@TamasH The main criticism about El Salvador’s BTC adoption is that the default will come from failure to repay and the unreliability of the BTC investment. This is thought to cause issues due to the nature of leveraging and loans. However, as you said, they are not afraid, because they’re aware of the potential of the investment, and assuming the title of “first country to fix the economy thanks to BTC” could be a great signal not only for El Salvador, but for all of us.

@Ratty Yeah, it is never easy to handle with dictatorship/closed mentality countries. Let’s see in the next 10/20 years if BTC will knock to their doors, too.

PS. There’s apparently a tracker on El Salvador BTC purchases.

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i don’t like what El Salvador is doing.
it has a high volatility and as you can see now people are losing their money.

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I was wondering, how do people / shops in El Salvador price stuff? in Bitcoin or US dollar? What if the value start fluctuating hard? do they keep changing their prices dynamically in line with the dollar price?

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i saw a documentation on youtube. they can chose in their wallet if the want to receive BTC or USD.

El Salvador has also an own wallet, called Chivo Wallet:

https://chivowallet.com/

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Well no it just means that a shop has to take btc at the current price, so if you buy something for 5 dollars , you give 5 dollars worth of btc at the current price, ofc if the price has gone down alot you pay more, So i think its up to the buyer

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For sure but for that it first needs to stand the test of time. I am very curious to see who the next country is going to be! Since another adoption of a country will also get bitcoin and crypto some more publicity and trust

Thats pretty cool, so now for exemple you could use this tracker to wallet watch if you believe that Nayib will make good decision which he so far in the short term didn’t do just referring to your wallet watching discussion

As far as I know this wallet is actually build on Algorand and what is a bit sad that only el salvadorians can use it so foreigner have to use another wallet

I think it is quite good that they have the choice of USD or Btc but still they are using blockchain technology

I think they are using the lightning network or?

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Yes, they are using Lightning Network. But mostly they have problems with the connection.
here are some good reports on youtube about El Salvador and Bitcoin:

German:

Englisch:

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Cool! I also recommend you to give a look at this interesting video. It is from an italian YouTuber, and he tried to report what’s going on in El Salvador right now.

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This is such a cool video. Seems like quite a good look into the situation.

That apparently 90% of the monetary system in el salvador is cash thats crazy…seems like a huge potential and fruitfull ground for BTC

The biggest problem is that the locals seem to not yet have a good enough understanding of the technology or better said how to use it.

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Exactly, the main problem with such a new innovation is adoption. In the shoes of locals, it is evident that is not easy to bring them outside their “comfort zone”. It would be hard for every one of us to just wake up one day and change all our habits only in the name of an “unknown innovation”.

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But if this slow shift of comfort zones work out and the locals get familiar with that would be great.
Imagine if it works well for them and than they also start to spread it to their family members outside of el salvador…that could push adoption for new people

And for me the best thing really is that BTC really is used like this

I am really looking forward to see how this will develop!

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