I see several problems with this:
- It's not "giving away" money when it comes from taxes. People basically get a fraction of their own money back.
- They use $30 instead of 0.0009551 BTC or 95510 sat
- Citizens are required to install a wallet provided by the government
- Apart from the privacy concerns, it wouldn't surprise me if there are security concerns in their newly created wallet app
But what really worries me is this:
The catch is that the 30$ worth of bitcoin is given for those that download Chivo, an app provided by the Government to manage crypto (from September 2021 onwards). Fine it’s a way to kick-start things into motion, but I’d rather it be a wallet of free choice.
What if they actually plan to send the derivatives instead of actual bitcoin, and that's why they are making this Chivo app mandatory in order for people to get BTC? I mean, if they really have no ill intentions, they would just let people get their BTC in any wallet of their choice.
I expect some form of fractional reserve Bitcoin.
I can't find much about the wallet.
The app will be available on both Android and iOS. The wallet will also be compatible with other digital wallets on the market. It will be released later this year, with the bitcoin law coming into effect on Sept. 7.
Considering how high on-chain fees can get, I don't think they'll use on-chain transactions. The next best thing would be using the
Bitcoin Lightning Network. But I kinda expect they'll create their own centrally controlled "Bitcoin" that can only be used within their government approved app. So you can send it to other users with the same wallet, but you can't send it to any other wallet. That means you can't send it abroad, and it also means the government doesn't have to buy thousands of Bitcoins to distribute to their citizens. If they create a special permission to withdraw on-chain to another wallet, they'll only need a much smaller amount for those on-chain settlements.
The more I read about this, the more I think they only use the name Bitcoin, but not actual Bitcoins.