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> To warm up a skeptical public, Bukele has promised every citizen $30 in bitcoin if they sign up for a government digital wallet. Ahead of the launch, El Salva

by aazaa 5y ago

> To warm up a skeptical public, Bukele has promised every citizen $30 in bitcoin if they sign up for a government digital wallet. Ahead of the launch, El Salvador bought 400 bitcoins, Bukele said, helping drive the currency price above $52,000 for the first time since May. > In the early hours of Tuesday the wallet had not appeared on Apple Inc., Google and Huawei’s app download platforms, however, prompting a series of tweets from Bukele, including one with a red-faced “angry” emoticon. The involvement of a government-issued wallet gives this story an even stranger dimension. First, it's not clear how the government will identify those eligible to receive the $30 bitcoin deposit. Second, why would the government be involved at all in developing a wallet? There are plenty to choose from now, so what features exactly were missing in those? Finally, what government in its right mind would hitch its fortunes to the vagaries of a walled-garden App Store based in the US, a country clearly hostile to the Salvadoran experiment?

rgrieselhuber 5y ago
I’d be skeptical about using a government wallet as well, though it could potentially make initial disbursements easier.
- ridethebike 5y ago
  This probably eliminates this whole "bitcoin is privacy and independence from government" thing but I think for majority of bitcoin buyers it was not more than just a nice talking point anyway.
  - rgrieselhuber 5y ago
    The best argument for Bitcoin is that it’s not created out of thin air and then lent to people with interest, IMO.
    - okl 5y ago
      Sure, it's created out of hot air and instead of interest you have crazy transaction fees.
      - rgrieselhuber 5y ago
        Paid to whom? If it was created out of hot air, it would be a hell of a lot cheaper than it is now.
        HWR_14 5y ago
        BTC is quite literally made out of hot air. Burning coal to create hot air to spin turbines is the most common energy source for BTC mining. And "hot air" describes most of it's coals replacements as well.
        rgrieselhuber 5y ago
        And yet it still costs far less energy to mine Bitcoin than it does to sustain Petrodollars.
        okl 5y ago
        Do you have data for that comparison?
        ryan93 5y ago
        The entire world economy runs on fiat dollars.
        HWR_14 5y ago
        Yes, if in your analysis digging up fossil fuels to power the entire world infrastructure is just a side effect of sustaining the currency's core value. Good thing cars, airplanes and shipping have as much intrinsic value as waste heat.
      - BTCOG 5y ago
        100% BULLSHIT. The fees on Bitcoin, on chain, have been less than 75 cents the entire year of 2021. The average tx on chain the past 9 months has been about 10-15 cents. Unless you stand here trying to tell everyone that 10 cents is a crazy transaction fee. Quit lying, or better yet quit spreading FUD purposely.
    - lottin 5y ago
      Bitcoin is created out of thin air. Where do you think bitcoins come from?
  - FroshKiller 5y ago
    The majority of Bitcoin buyers don’t appear to be interested in its use as currency at all from what I’ve seen.
  - de_keyboard 5y ago
    Only when using the government wallet though. I imagine people will have multiple, just like how we already have multiple debit cards, credit cards, online payment apps...
  - danlugo92 5y ago
    > privacy From the original bitcoin white paper: > The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. Salvadorians can transfer their BTC to a tumbling service then to a an anonymous public key. > independence from government As soon as you transfer the BTC out of the wallet, you'll be independent from the government. You are not required to use the government provided wallet if you don't need the $30 handout.
    - ridethebike 5y ago
      Ok, good points
- tacostakohashi 5y ago
  I'd be even more skeptical about using a government wallet hosted on an Apple / Google app store.
kobieyc 5y ago
I've been watching this situation from 50K feet and I think the reason they built their own wallet is for the ability, for merchants, to cash out any bitcoin payment in USD instead of BTC using the government swap system
- deleted 5y ago
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- deleted 5y ago
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Godel_unicode 5y ago
The government is going to have to make an official recommendation for which wallet to use, and from their perspective the risk of promoting an existing wallet whose provenance they don't know is pretty high.
nomoreplease 5y ago
The most logical reason is that they want to connect the human identity to the wallet/address, thereby easily removing anonymity and ensuring the government can monitor their population effectively
- ClumsyPilot 5y ago
  Normal banks already do that
  - JumpCrisscross 5y ago
    > Normal banks already do that 70% of El Salvadorians don't have a bank account [1]. [1] https://datacatalog.worldbank.org/dataset/el-salvador-global-financial-inclusion-global-findex-database-2017 https://datacatalog.worldbank.org/dataset/el-salvador-global...
    - q-rews 5y ago
      What you said does not contradict the parent comment. Just because Bitcoin is now a thing in El Salvador it doesn't mean that that missing 70% will now starting using it.
      - JumpCrisscross 5y ago
        > What you said does not contradict the parent comment. Just because Bitcoin is now a thing in El Salvador it doesn't mean that that missing 70% will now starting using it. It was alleged this move would let percent "removing anonymity and ensur[e] the government can monitor their population effectively" [1]. Counterargument was that "normal banks already do that" [2]. That is true. But 70% of El Salvadorians don't use "normal banks." They use cash. Cash does not "ensur[e] the government can monitor its population." This Bitcoin rollout does. So yes, an El Salvadorean using a bank to do business and switching to Bitcoin gives up no privacy. But one using cash does. [1] https://news.ycombinator.com/item?id=28447197 https://news.ycombinator.com/item?id=28447197 [2] https://news.ycombinator.com/item?id=28447562 https://news.ycombinator.com/item?id=28447562
defgeneric 5y ago
You need a DUI (Documento Único de Identidad) or Passport number for the Chivo wallet.
val314159 5y ago
you think the government doesn't have a list of its citizens? I'm sure they have something like a social security number.
- el-salvador 5y ago
  There is a National ID Number for everyone with Salvadoran Nationality 18 and older. And also a Tax ID that anyone can apply for.
  - xtracto 5y ago
    As someone from Latin America, it's funny to read about Americans' struggle for a countrywide ID and the sense of government control/ freedom. Here in Mexico the government has our biometrics, there's a national election ID, SSN and a unique "clave de población " .
HWR_14 5y ago
> There are plenty to choose from now, so what features exactly were missing in those? IIRC, people using that wallet can opt into a government backed BTC to fiat conversion rate that allows all shopkeepers to cash out in fiat. It's to make people feel comfortable being forced to accept bitcoin. For obvious reasons, governments don't want to subsidize non-citizens or risk alternative wallet lending themselves to arbitrage.
deleted 5y ago
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by aazaa 5y ago

rgrieselhuber 5y ago

I’d be skeptical about using a government wallet as well, though it could potentially make initial disbursements easier.

ridethebike 5y ago
This probably eliminates this whole "bitcoin is privacy and independence from government" thing but I think for majority of bitcoin buyers it was not more than just a nice talking point anyway.
- rgrieselhuber 5y ago
  The best argument for Bitcoin is that it’s not created out of thin air and then lent to people with interest, IMO.
  - okl 5y ago
    Sure, it's created out of hot air and instead of interest you have crazy transaction fees.
    - rgrieselhuber 5y ago
      Paid to whom? If it was created out of hot air, it would be a hell of a lot cheaper than it is now.
      - HWR_14 5y ago
        BTC is quite literally made out of hot air. Burning coal to create hot air to spin turbines is the most common energy source for BTC mining. And "hot air" describes most of it's coals replacements as well.
        rgrieselhuber 5y ago
        And yet it still costs far less energy to mine Bitcoin than it does to sustain Petrodollars.
        okl 5y ago
        Do you have data for that comparison?
        ryan93 5y ago
        The entire world economy runs on fiat dollars.
        HWR_14 5y ago
        Yes, if in your analysis digging up fossil fuels to power the entire world infrastructure is just a side effect of sustaining the currency's core value. Good thing cars, airplanes and shipping have as much intrinsic value as waste heat.
    - BTCOG 5y ago
      100% BULLSHIT. The fees on Bitcoin, on chain, have been less than 75 cents the entire year of 2021. The average tx on chain the past 9 months has been about 10-15 cents. Unless you stand here trying to tell everyone that 10 cents is a crazy transaction fee. Quit lying, or better yet quit spreading FUD purposely.
  - lottin 5y ago
    Bitcoin is created out of thin air. Where do you think bitcoins come from?
- FroshKiller 5y ago
  The majority of Bitcoin buyers don’t appear to be interested in its use as currency at all from what I’ve seen.
- de_keyboard 5y ago
  Only when using the government wallet though. I imagine people will have multiple, just like how we already have multiple debit cards, credit cards, online payment apps...
- danlugo92 5y ago
  > privacy From the original bitcoin white paper: > The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. Salvadorians can transfer their BTC to a tumbling service then to a an anonymous public key. > independence from government As soon as you transfer the BTC out of the wallet, you'll be independent from the government. You are not required to use the government provided wallet if you don't need the $30 handout.
  - ridethebike 5y ago
    Ok, good points
tacostakohashi 5y ago
I'd be even more skeptical about using a government wallet hosted on an Apple / Google app store.

kobieyc 5y ago

I've been watching this situation from 50K feet and I think the reason they built their own wallet is for the ability, for merchants, to cash out any bitcoin payment in USD instead of BTC using the government swap system

deleted 5y ago
[deleted]
deleted 5y ago
[deleted]

Godel_unicode 5y ago

The government is going to have to make an official recommendation for which wallet to use, and from their perspective the risk of promoting an existing wallet whose provenance they don't know is pretty high.

nomoreplease 5y ago

The most logical reason is that they want to connect the human identity to the wallet/address, thereby easily removing anonymity and ensuring the government can monitor their population effectively

ClumsyPilot 5y ago
Normal banks already do that
- JumpCrisscross 5y ago
  > Normal banks already do that 70% of El Salvadorians don't have a bank account [1]. [1] https://datacatalog.worldbank.org/dataset/el-salvador-global-financial-inclusion-global-findex-database-2017 https://datacatalog.worldbank.org/dataset/el-salvador-global...
  - q-rews 5y ago
    What you said does not contradict the parent comment. Just because Bitcoin is now a thing in El Salvador it doesn't mean that that missing 70% will now starting using it.
    - JumpCrisscross 5y ago
      > What you said does not contradict the parent comment. Just because Bitcoin is now a thing in El Salvador it doesn't mean that that missing 70% will now starting using it. It was alleged this move would let percent "removing anonymity and ensur[e] the government can monitor their population effectively" [1]. Counterargument was that "normal banks already do that" [2]. That is true. But 70% of El Salvadorians don't use "normal banks." They use cash. Cash does not "ensur[e] the government can monitor its population." This Bitcoin rollout does. So yes, an El Salvadorean using a bank to do business and switching to Bitcoin gives up no privacy. But one using cash does. [1] https://news.ycombinator.com/item?id=28447197 https://news.ycombinator.com/item?id=28447197 [2] https://news.ycombinator.com/item?id=28447562 https://news.ycombinator.com/item?id=28447562

defgeneric 5y ago

You need a DUI (Documento Único de Identidad) or Passport number for the Chivo wallet.

val314159 5y ago

you think the government doesn't have a list of its citizens? I'm sure they have something like a social security number.

el-salvador 5y ago
There is a National ID Number for everyone with Salvadoran Nationality 18 and older. And also a Tax ID that anyone can apply for.
- xtracto 5y ago
  As someone from Latin America, it's funny to read about Americans' struggle for a countrywide ID and the sense of government control/ freedom. Here in Mexico the government has our biometrics, there's a national election ID, SSN and a unique "clave de población " .

HWR_14 5y ago

> There are plenty to choose from now, so what features exactly were missing in those? IIRC, people using that wallet can opt into a government backed BTC to fiat conversion rate that allows all shopkeepers to cash out in fiat. It's to make people feel comfortable being forced to accept bitcoin. For obvious reasons, governments don't want to subsidize non-citizens or risk alternative wallet lending themselves to arbitrage.

deleted 5y ago

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