Quote from: Ratimov on April 27, 2022, 04:58:03 PM

Definitely the most significant event of 2021 was the adoption of bitcoin as a means of payment in El Salvador. Personally, I was initially skeptical about all this. Don't get me wrong, I'm not a bitcoin hater and I'm a supporter of bitcoin adoption because it develops the bitcoin ecosystem itself and opens up new uses for it. My skepticism was rather based on the very approach of the El Salvadorian authorities to this responsible step.

Even on the threshold of adoption, a wave of indignation swept over the country and people came out with pickets against bitcoin. It was at the end of August, right before the adoption:

https://i.ibb.co/XJ45B43/image.png

The people of El Salvador are protesting against Bitcoin bill

But the president said that everything will be fine, bitcoin will be optional, the state will not punish those who refuse to accept bitcoin with sanctions, and the introduction of bitcoin will significantly save money on commissions, and payments, thanks to LN, will be fast.

Nayib Bukele has consistently demonstrated the success of Bitcoin on Twitter through the number of Chivo wallet downloads. But was it really a success? It's all about the initiative from the government of $30, which was received by anyone who downloaded and installed the Chivo wallet. This was the real reason that users downloaded the wallet so often. Just for $30.

Subsequently, there was the idea of introducing bitcoin bonds, the terms of which were constantly postponed. The real reason for this was that investors were not interested in bitcoin bonds, as the former head of the central bank of El Salvador said:

Economistas dan por muertos acuerdo con FMI y los Bonos Bitcoin

The country is in a very bad state of affairs. The IMF refused to issue a loan of 1.3 billion dollars, in 7 months the country became even closer to default, and the project of bitcoin bonds for a billion dollars did not find due interest among investors, especially at a time when bitcoin is considered as a risky asset.

Most recently, a report was released where a survey of residents of El Salvador was conducted. And judging by this survey, bitcoin adoption in El Salvador failed.

Full report here: https://www.nber.org/system/files/working_papers/w29968/w29968.pdf?utm_campaign=PANTHEON_STRIPPED&amp%3Butm_medium=PANTHEON_STRIPPED&amp%3Butm_source=PANTHEON_STRIPPED

It reflects the real state of affairs and it is, to put it mildly, deplorable. Here are some of the indicators:

https://i.ibb.co/KbhCR59/Opera-2022-04-27-184843-www-nber-org.png

Judging by this chart, the number of regular users of Chivo is much less than the number of people who learned about it or tried to use it, most likely to extract those 30 dollars of initiative from the state.

https://i.ibb.co/HGpT3Vq/Opera-2022-04-27-185114-www-nber-org.png

Of course, there is no need to talk about such functions as paying taxes or receiving money transfers through Chivo. Almost no one used these functions.

https://i.ibb.co/Msmqrvf/Opera-2022-04-27-184813-www-nber-org.png

The number of downloads of the wallet was high on the wave of hype and of course thanks to the airdrop. Over time, interest in this wallet has constantly dried up.

https://i.ibb.co/zFWSdYS/Opera-2022-04-27-184738-www-nber-org.png

Despite strong support from the state, in the country, after 7 months, every 3 people do not know anything about the Chivo wallet.

https://i.ibb.co/b7BpsQ7/Opera-2022-04-27-185738-www-nber-org.png

Businesses in El Salvador are not interested in bitcoin, although it is a prerequisite from the state that they add bitcoin, but the rate of addition is only 20%, and this is 7 months after the launch:

https://i.ibb.co/BjKDj6t/Opera-2022-04-27-185657-www-nber-org.png

Well, as I said earlier, there are a lot of those who downloaded the wallet just for the sake of receiving airdrop money. The graph confirms this, most of the users have never added money to the wallet.

What do we end up with? Bitcoin adoption in El Salvador failed. Why did this happen? Its not about bitcoin, its about the approach, of course. Since this is still uncharted territory and this was the first time that bitcoin was recognized as legal tender by an entire state, I believe that the El Salvadorian government was very hasty in passing this law. The point is that you can't force people to voluntarily use bitcoin, especially when they're new to it. People themselves should want to use bitcoin, and the state should create an infrastructure around this desire to make using bitcoin even more comfortable at any level, as a transfer of money, paying taxes, etc.

I think that this case will be indicative for other states that also sought, following El Salvador, to accept bitcoin as legal tender. And that in order to implement this, everything will need to be very well checked and considered. The most optimal would be to first create a separate bitcoin zone in a single city or region and, based on its data, already make a decision on the introduction of bitcoin throughout the country. Need research and infrastructure, and then the adoption of a law. El Salvador did the exact opposite.

As long as the government is involved, it goes against the essence of the real Bitcoin - decentralization, and you don't need to think too much about other things. Without decentralized operations, there will be no Bitcoin. Where does success come from?