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Imagine you are super busy working all the time living in a country with a high amount of corruption. The government says "Here's some free """money""" just get this app and sign up".

Maybe you could take the time to research it but let's be honest, how the blockchain works is complicated to lay people. Also the history of coin is littered with scams, maybe different coins than btc but still.

You under estimate the fear the masses have of having the rug pulled from under them, especially when some are just trying to survive

> according to this article, 22% of el salvadorians knew about this app and didn't download it

Is it really surprising that Bitcoin isn't widely adopted in El Salvador in just 1 year?

Bitcoin has been in existence for just 13 years. Even very smart, technically minded people in economically prosperous nations who heard about Bitcoin over a decade ago barely understand the full implications of cryptocurrencies yet, to say nothing of poorer and often uneducated people in a country with some corruption and untrustworthy institutions.

Nobody can perfectly predict the future, but the story might be radically different down the road.

Bitcoin has failed. It doesn't scale as a currency and its not a store of value. The cost of mining is simply too expensive and as an ecosystem its hemorrhaging a billion dollars a month. What's the net present value of an asset that loses a billion dollars a month, forever?

Short it and gain free money if you’re that confident.

Shorting a manipulated market is a fool's game.

Example: https://www.theblock.co/post/156031/uprise-lost-99-of-client...

> However, the system could not prevent the firm from being liquidated out of its LUNA futures trading position and losing 26.7 billion won ($20 million) in the process. This happened during Luna's price crash. It was reportedly shorting Luna — while its price plummeted — but got caught out during sudden price pumps along the way.

> The lost funds represent about 99% of the funds that Uprise was managing on behalf of its customers. These clients are high-net-worth individuals and corporate entities, according to the report. Uprise also reportedly lost $3 million of its own funds short trading LUNA.

They were absolutely correct about LUNA, and still got wrecked. Bart (https://www.newsbtc.com/news/bitcoin-price-bart-simpson-char...) will murder you.

If "head and shoulders" wasnt enough, now theres a name for an asset that fluctuates in a stable horizontal pattern?

> Bitcoin has been in existence for just 13 years.

Yeah, imagine how small the adoption would be of some other mysterious newfangled tech thing after only 13 years...

https://www.theverge.com/2015/4/27/8504033/apple-iphone-sale...

Wireless communication was invented in like 1900 and it took til 2007 to make a desirable device everyone wanted to have, good point

Why stop by comparing it all wireless communication? Why don't you compare it to the act of speaking, or the act of making noise with a mouth? Then it took the iPhone millions of years to take off, so bitcoin has plenty of time.

Pretty sure radio and television were ubiquitous a few decades before that.

It would have been nice to see the prevalence of those reasons for not downloading the app. Regardless, the article indicates that 1/3 of residents didn't have the required technology (mobile phone with internet access):

> Residents didn’t need a bank account or a credit card to make transactions, only a mobile phone with internet access, something two-thirds of residents had.

Random banks in the USA offer way more than that (ranging from $200-$1500) to open checking accounts and credit cards, yet 300+ million people aren't jumping on the opportunity for free money. For most it just isn't worth the trouble, especially when you don't know what the hidden catch is.

You usually have to meet certain conditions (like maintaining certain balance) that most people don't want or can't do.

Assuming good intent on the part of Bukele, I tend to imagine that he wants to get the ball rolling on Bitcoin now so that his country can get ahead of the curve assuming bitcoin becomes more popular globally in the future.

Bukele is an autocrat and it is more likely he will use bitcoin's transferability to steal the funds. He's literally buying bitcoin with his cellphone.

> the top reason was a preference for using cash

With electronic transaction - and especially bitcoin - the government knows what goes in and out since every transaction is traceable. And with that info, they will be able to properly tax you ! The goal of El Salvador here is to fight rampant tax evasion by providing a fully traceable payment system. Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction and bartering.

> Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction

El Salvador tracks cash transactions.

Surely you mean _large_ cash transactions. If not, could you explain how this works?

> Surely you mean _large_ cash transactions. If not, could you explain how this works?

Originally, like everywhere, only large transactions were registered.

But in the mid 2010s some laws and regulations were updated then interpreted in a way that required businesses to start registering transactions in in a more detailed way.

So for some years every purchase over US$ 100 has required an ID. in practice the threshold is lower though.

For example in banking transactions even depositing a one cent coin is linked to an ID card. Previously the threshold was $500.

Utility companies do something similar too, like registering not only the account holder name, but also the ID and name of the person who pays the utility bill for any amount. So paying a $2 water bill with coins requires and ID.

A new reporting requirement was added last year, in which businesses and 'tax-contributors' are required to upload every month to the Tax Ministry a CSV containing all transactions with other tax-contributors.

So if Alice's Medical Supply Store sells $5.00 to Bob the Doctor, the Tax Ministry will expect Alice to report in an individualized way the sale to Bob, and to Bob to report the purchase to Alice. Including their IDs, amounts and invoice numbers.

It is still not required to report the ID of sales to 'final consumers', but the change is just one CSV column away from happening.

> paying a $2 water bill with coins requires and ID

Well, that's pretty terrible.

Thank you for the detailed explanation. This program sounds pretty dystopian.

It would have been interesting if the journalist went a little deeper and researched why the adoption rate was so poor.

How hard was it for a middle aged farmer to actually download and set up the app to get $30 out of it?

And to your point, how many citizens are using cash primarily because its untraceable? When people say they prefer cash, The journo should have followed up with 'why'?

I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.

> I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.

The government sponsored bitcoin wallet is easier to use than the banking apps.

For a normal Salvadoran most of the day to day transactions are micro transactions.

$0.25 loaf of read, $0.21 bus ticket, $1.00 groceries. For those amounts, handing a coin is faster than scanning a QR code.

It's "free money" like cash back on your credit card is "free money". It's only free if you ignore the implicit hidden costs and risks.

Another reason could be the dependence of these Bitcoin transactions on an Internet connection. I'm not sure how Chivo works but if you need a smartphone readily connected to the Internet just to proceed with simple payments, then that's already a significant friction for most users.

It's a similar scenario here in my home country which is also considered as having a developing economy. Not a lot of people here have Bitcoin wallets but digital wallets (which are not stored in immutable ledgers) are already gaining some popularity. More than half of young adults here probably have at least one digital wallet. However, it's still not a viable substitute for cash transactions because of that Internet connection requirement barrier. And since prepaid is more popular than postpaid mobile data plans, a lot of users see it as just an unnecessary additional cost. Actually, some might even see it as less convenient as digital wallet transactions are usually riddled with QR code scan failures and sometimes, sluggish loading times.

> Another reason could be the dependence of these Bitcoin transactions on an Internet connection. I'm not sure how Chivo works but if you need a smartphone readily connected to the Internet just to proceed with simple payments, then that's already a significant friction for most users.

This is an important factor. The Chivo app was initially zero-rated (requiring no data plan to use) but this lasted only some months. Now it won't work without wi-fi or data.

> 1) free conversion from btc to usd 2) large discounts for purchases of gasoline using btc 3) no bank account or a credit card needed

I mean... if I'm paying for my gas, I'd rather just put my card in the chip reader instead of getting out my phone/hardware wallet, preparing a transaction with the proper amount of Bitcoin, introducing the transaction to the gas pump, waiting for the transaction to register with the ledger and then leaving. Even if we're talking about a 20% discount here, I'd probably just stick with the debit card. Playing with a crypto wallet was fun for larping as a hacker when I was in middle school, but nowadays I don't think it's worth the trouble (much less the shitshow that is L2 chains).

From the article

> In theory, developing nations like El Salvador are ideal candidates for cryptocurrency adoption. More than half its citizens rely exclusively on cash, rather than credit or debit cards. Some 70 percent of households have no bank account and nearly 90 percent do not use mobile banking. A digital payment platform could be a way to make the economy more inclusive and accessible.

That makes no sense. People are already "in" the economy. The economy has worked so far and will continue to do so without bitcoin.

That's because you have the privilege to not care. There are people who spend their days scraping parks for bottles and cans to make $0.05 at a time.

Apparently even people without privledge don't really care either, though. Given the option to use cryptocurrency for lower-priced goods, the majority of their country is sticking with traditional payment methods, probably for convenience/familiarity purposes.

Why do you say "probably," do you know? I would guess that it has more to do with technological literacy.

People put effort into saving small amounts all the time, like cutting coupons or going to the cheaper store further down the road. But these things are understandable; using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.

> I would guess that it has more to do with technological literacy.

Which is why I added the "familiarity" qualifier. Pretty much anyone can barter with cash, and I've watched 7-year-olds buy ice cream with a Visa card. Initiating a Bitcoin transaction though? That requires some setup, even moreso if you have a 'proper' self-custody wallet that you manage yourself.

> using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.

I agree, I'm afraid you may have misread my sentiment. It's not that there's no motivation to use Bitcoin, the government subsidies are a pretty clear and obvious shot at luring less-fortunate citizens into the world of crypto. My larger point is that the low adoption among their population makes perfect sense to me. Even in a country with maximum digital literacy, I doubt most people would feel motivated to use crypto either.

> Even in a country with maximum digital literacy, I doubt most people would feel motivated to use crypto either.

Not sure we understand each other with this part. I'm arguing that it's about literacy, you're saying people just aren't interested. I think we just disagree.

Here we are talking about people that do not have bank accounts never mind cards though.

I think there is a deeper issue for not even trying it/getting free money -- which of course are used to acquire users here pretty aggressively.

Maybe because cryptocurrency doesn't solve the more pressing issues in the country?

Because it's hard to scam poor people - they are guarding their money like offspring.

To them, that pocket change gift probably seems like more of a loan, they are expected to pay back with loyalty to the platform.

Here in Japan you can get a free 20K JPY in your cashless payment method of choice, pretty much just by registering your details. Most people aren't bothering.

So zero people in the town used it, but your gut blames the older folks. Is that town only made of older folks?