7 ms·

8 months after rolling out a brand new method of doing payments, ~70% of the country has tried it and ~11% of those are using it for remittances (3% in Bitcoin,

8 months after rolling out a brand new method of doing payments, ~70% of the country has tried it and ~11% of those are using it for remittances (3% in Bitcoin, 8% in dollars). For a government program rolling out new technology, that actually seems quite impressive.

bparsons 4y ago
Not if the technology is a currency. I think this finally ends the idea that bitcoin can be used for day-to-day transactions.
- thesausageking 4y ago
  The program started less than a year ago. I think it's way too early to say that. So far, it seems like people prefer still transacting in dollars, but that may change over time. I'm just impressed that a small, developing country could roll out a new technology so fast.
  - tablespoon 4y ago
    >>> 8 months after rolling out a brand new method of doing payments, ~70% of the country has tried it and ~11% of those are using it for remittances (3% in Bitcoin, 8% in dollars). >> Not if the technology is a currency. I think this finally ends the idea that bitcoin can be used for day-to-day transactions. > The program started less than a year ago. I think it's way too early to say that. So far, it seems like people prefer still transacting in dollars, but that may change over time. Isn't that a lot like saying "give Google+ time, it may catch on eventually"? Most users tried and rejected it.
    - bpodgursky 4y ago
      Most citizens aren't giving or receiving regular remittances...
  - deleted 4y ago
    [deleted]
- javert 4y ago
  That's like saying if the government had created its own version of PayPal in 1995 and it had failed, it would finally end the idea that dollars can be used for day-to-day transactions.
  - pessimizer 4y ago
    It's not the same thing as long as people have to pay US taxes and court judgments. There's nobody I meet regularly who won't need to pay taxes eventually, so they'll take my dollars.
- dreamcompiler 4y ago
  The idea that bitcoin is useless as a currency should not be controversial these days. It's a speculative investment whose value varies wildly every day. That makes it impossible to price a good or service in BTC. Add in transaction fees of several dollars each and the idea of buying a pizza with bitcoin becomes pure fantasy.
  - birdyrooster 4y ago
    The bigger problem is constrained liquidity and deflation aren’t helpful attributes for a currency
    - throwawaymaths 4y ago
      You say that as if there is a central bank of El Salvador that is able to print a native currency as a macroeconomic lever.
      - birdyrooster 4y ago
        Sure they can print money and buy more BTC, but at a cost. At some point that cost leads to economic failures.
        throwawaymaths 4y ago
        You understand the currency of El Salvador is the us dollar? If they are printing money I'd love to know how.
        birdyrooster 4y ago
        You keep talking about El Salvador but I am talking about the general problem with using deflationary currencies, especially when you cannot buy enough of the currency as a nation to compete with the rest of the world. Besides printing currency, nations can raise BTC by many other finite means.
  - 4y ago
marcinzm 4y ago
They gave people $30 for opening up the app in a country where the per capita GDP is $3800. So I'd be surprised if 70% didn't at least try to get their free money.
- notch656a 4y ago
  The formal GDP per capita is $3800. You have to be loony toons to believe that comes anywhere near the entire value of what happens inside the country, both for activity that simply isn't recorded and taxed and for activity that is explicitly illegal such as drug and gang activity. El Salvador is mostly an informal economy.
  - moralestapia 4y ago
    Lol, sure, everyone's secretly a millionaire because of drug dealing. You vastly over-estimate the extent and value of illegal activities in a country. It may be huge for an individual but it is always a small fraction of (what you call) "formal" GDP.
    - notch656a 4y ago
      You made the assumption I'm implying they're all drug dealers. Try to be more creative. I'm not making that assertion at all. Most of the economy is informal, it's estimated to exceed 60% of their economy. That includes things like sewing a blanket and selling it on the street unrecorded -- likely illegal (tax evasion), definitely 'informal', but not drug dealing. 60+% is not a 'small fraction'. You're factually incorrect.
      - peoplefromibiza 4y ago
        it only means that really rich people are hiding their wealth and all the others are slightly less poor than they declare. remember that GDP per capita is an average, meaning that a good amount of people in the country earn much less than that. People in Salvador are actually quite poor, regardless of how much "informal" economy is going on in the country. edit: I woould actually argue that an high volume of unofficial economy is a strong indicator that the country has a very weak economy in general. You can find the same conditions in all the poorer countries in the world, except maybe dictatorships such as North Korea ( we actually can't tell, because we don't have access to their economic indicators)
jollybean 4y ago
This is a national currency, the foundation of the economy. The project a giant expression of corruption, and also a complete disaster. The impetus for this was about as legit as the WeWork leadership wanting to 'end world hunger' etc. - and doing so at a very high cost and risk to the wellbeing of the nation. And of course, there's no upside. Digital banking would have been a great idea, Estonia is leading the way with some really cool government digitization etc.. But even then, it would not have changed material fundamentals. This is just economic chaos, it's sad, it's why they will remain poor. Edit: Burkele [1] It's odd how people do not recognize how institutional and foundational a sound financial system is, and how there are a lot of moving parts to it. [1] https://en.wikipedia.org/wiki/Nayib_Bukele https://en.wikipedia.org/wiki/Nayib_Bukele
uncomputation 4y ago
One lesson from Web 2.0 that needs to be heeded here: MAU matters. If you give someone in a poor country $30 just for signing up, of course they’re gonna take it. But the value in the bitcoin network is continued use. If every one claims their $30 and bolts (which seems to be what’s happening), it’s not impressive at all really.

bparsons 4y ago

Not if the technology is a currency. I think this finally ends the idea that bitcoin can be used for day-to-day transactions.

thesausageking 4y ago
The program started less than a year ago. I think it's way too early to say that. So far, it seems like people prefer still transacting in dollars, but that may change over time. I'm just impressed that a small, developing country could roll out a new technology so fast.
- tablespoon 4y ago
  >>> 8 months after rolling out a brand new method of doing payments, ~70% of the country has tried it and ~11% of those are using it for remittances (3% in Bitcoin, 8% in dollars). >> Not if the technology is a currency. I think this finally ends the idea that bitcoin can be used for day-to-day transactions. > The program started less than a year ago. I think it's way too early to say that. So far, it seems like people prefer still transacting in dollars, but that may change over time. Isn't that a lot like saying "give Google+ time, it may catch on eventually"? Most users tried and rejected it.
  - bpodgursky 4y ago
    Most citizens aren't giving or receiving regular remittances...
- deleted 4y ago
  [deleted]
javert 4y ago
That's like saying if the government had created its own version of PayPal in 1995 and it had failed, it would finally end the idea that dollars can be used for day-to-day transactions.
- pessimizer 4y ago
  It's not the same thing as long as people have to pay US taxes and court judgments. There's nobody I meet regularly who won't need to pay taxes eventually, so they'll take my dollars.
dreamcompiler 4y ago
The idea that bitcoin is useless as a currency should not be controversial these days. It's a speculative investment whose value varies wildly every day. That makes it impossible to price a good or service in BTC. Add in transaction fees of several dollars each and the idea of buying a pizza with bitcoin becomes pure fantasy.
- birdyrooster 4y ago
  The bigger problem is constrained liquidity and deflation aren’t helpful attributes for a currency
  - throwawaymaths 4y ago
    You say that as if there is a central bank of El Salvador that is able to print a native currency as a macroeconomic lever.
    - birdyrooster 4y ago
      Sure they can print money and buy more BTC, but at a cost. At some point that cost leads to economic failures.
      - throwawaymaths 4y ago
        You understand the currency of El Salvador is the us dollar? If they are printing money I'd love to know how.
        birdyrooster 4y ago
        You keep talking about El Salvador but I am talking about the general problem with using deflationary currencies, especially when you cannot buy enough of the currency as a nation to compete with the rest of the world. Besides printing currency, nations can raise BTC by many other finite means.
- 4y ago

marcinzm 4y ago

They gave people $30 for opening up the app in a country where the per capita GDP is $3800. So I'd be surprised if 70% didn't at least try to get their free money.

notch656a 4y ago
The formal GDP per capita is $3800. You have to be loony toons to believe that comes anywhere near the entire value of what happens inside the country, both for activity that simply isn't recorded and taxed and for activity that is explicitly illegal such as drug and gang activity. El Salvador is mostly an informal economy.
- moralestapia 4y ago
  Lol, sure, everyone's secretly a millionaire because of drug dealing. You vastly over-estimate the extent and value of illegal activities in a country. It may be huge for an individual but it is always a small fraction of (what you call) "formal" GDP.
  - notch656a 4y ago
    You made the assumption I'm implying they're all drug dealers. Try to be more creative. I'm not making that assertion at all. Most of the economy is informal, it's estimated to exceed 60% of their economy. That includes things like sewing a blanket and selling it on the street unrecorded -- likely illegal (tax evasion), definitely 'informal', but not drug dealing. 60+% is not a 'small fraction'. You're factually incorrect.
    - peoplefromibiza 4y ago
      it only means that really rich people are hiding their wealth and all the others are slightly less poor than they declare. remember that GDP per capita is an average, meaning that a good amount of people in the country earn much less than that. People in Salvador are actually quite poor, regardless of how much "informal" economy is going on in the country. edit: I woould actually argue that an high volume of unofficial economy is a strong indicator that the country has a very weak economy in general. You can find the same conditions in all the poorer countries in the world, except maybe dictatorships such as North Korea ( we actually can't tell, because we don't have access to their economic indicators)

jollybean 4y ago

This is a national currency, the foundation of the economy. The project a giant expression of corruption, and also a complete disaster. The impetus for this was about as legit as the WeWork leadership wanting to 'end world hunger' etc. - and doing so at a very high cost and risk to the wellbeing of the nation. And of course, there's no upside. Digital banking would have been a great idea, Estonia is leading the way with some really cool government digitization etc.. But even then, it would not have changed material fundamentals. This is just economic chaos, it's sad, it's why they will remain poor. Edit: Burkele [1] It's odd how people do not recognize how institutional and foundational a sound financial system is, and how there are a lot of moving parts to it. [1] https://en.wikipedia.org/wiki/Nayib_Bukele https://en.wikipedia.org/wiki/Nayib_Bukele

uncomputation 4y ago

One lesson from Web 2.0 that needs to be heeded here: MAU matters. If you give someone in a poor country $30 just for signing up, of course they’re gonna take it. But the value in the bitcoin network is continued use. If every one claims their $30 and bolts (which seems to be what’s happening), it’s not impressive at all really.