El Salvador’s President, Nayib Bukele, recently announced in a broadcast message recorded at the Bitcoin conference in Miami that he plans to submit a legislative proposal to Congress to make cryptocurrency payments legal in the Central American country. However, in my opinion, that El-Salvador is very not ready to adopt Bitcoin as a legitimate payment tool. Because there are still many shortcomings in the country. This is just an opinion that can be right and can also be wrong.
When it is finally approved, the bill will force citizens to use Bitcoin as an everyday means of payment. However, it would be catastrophic for the national economy. It would be expensive for a country that lacks proper infrastructure and has very low wages. Instead of longing for a life that turns out to be quick and easy. The country will run slowly and impractically because many sectors are not ready for these changes.
In this article, we will take a look at some of the reasons why I don’t think Bitcoin is successful in the country of El-Salvador. As a result, they may force to abandon Bitcoin (assuming they accepted it in the first place) in favour of an altcoin that is cheaper and more realistic to pay.
Corruption And Suffering
The President of El Salvador is trying to use Bitcoin to build his country into one that promotes democracy and freedom. But, unfortunately, as long as the price goes up, this illusion can easily sold to some Bitcoin extremists.
But the crypto media doesn’t call Buckler the brutal and corrupt dictator in this story. In 2020, he even sent heavily armed police and soldiers to parliament. He forced legislators to approve a $109 million loan to equip further new heavy assault rifles, armor, anti-protest equipment, war-grade tanks, aSo intuition, and police.
Recently, Human Rights Watch wrote an essay about how presidents are moving toward authoritarianism and how the United States must prevent them from embarking on this dangerous path.
Bitcoin Transaction Fee Are Too High
Bitcoin as a payment network is completely unreliable. If we look at changes in BTC transaction fees over time, we will see how volatile it is.
Earlier this year, transaction fees jumped to an average of $64. This means that for every transaction that someone decides to send using Bitcoin, they will force to pay more than any bank in the world.
The average salary for a waiter in El Salvador is US$2,358, which is about US$6.46 per day. This means that 1 Bitcoin transaction will cost 9.5 days of maid salary in El Salvador. It all tortures ordinary people to buy their daily needs. And will lead to many demonstrations of protest for the common good.
Therefore, even transaction fees have decreased in recent weeks as the entire BTC network has slowed down due to China’s mining crackdown. This is a big problem for developing countries using Bitcoin. One of them is El-Salvador who is felt not ready to continue this.
If Bitcoin hits a new high, the fees will increase and make it a more cumbersome payment method. For example, if the price of Bitcoin reaches 100,000 USD or 1,000,000 USD. People may force to pay hundreds or thousands of dollars to transfer their tokens. Low efficiency.
Lack of Infrastructure to Support the Running of Bitcoin
El Salvador is one of the poorest and most unstable countries on the planet. In a real cash economy, it estimates that about 70% of people do not have a bank or credit card.
What is meant by “statutory offer” every business and individual must accept? Therefore, even if this bill were passed, it would run in disarray because no one could use it.
For a country that is in an area that is thick with poverty and crime. They try to avoid inflation by accepting Bitcoin. Bitcoin is an overvalued, speculative and high-risk asset. It’s just that they have become one of the worst economies in the world.
Another reason is the absence of Internet access in most countries. One of the disadvantages of Bitcoin is that it requires an Internet connection. Before the bill was introduce, the President might forget that the big population of El Salvador cannot access the internet.
In 2017, only 33.8% of the country’s population had internet access. Although to find out more about Bitcoin the easiest way is through the internet. However, if the condition of El-Salvador is still like that, of course, they are not ready to continue using Bitcoin as their payment tool.
Strike Removes The Full Meaning of Bitcoin
The government will not allow users to access their Bitcoin. But will force people to use Bitcoins through a centralized guard and access everyone’s private keys.
Salvadorans abroad also send US$4 billion in domestic remittances each year. ThPresidentnt hopes to get the funds. How? The user will use Strike to convert USD to BTC, and once the BTC reaches the end-user, they will exchange it again into USD.
Government involvement is very important for Buckler. Bank accounts can be detained to be used as guarantees. But it’s not easy for El-Salvador to accept Bitcoin as their payment instrument with that not ready condition.
These transactions could prove to be cash cows for the Buckler regime and the lifeline to fund its dollar sanction without swaying large government.
This is a dramatic shift to total authoritarianism, but many Bitcoin extremists support it and will not speak out because they want the numbers to increase.
