Why Salvadorans don't trust Bukele's BTC as legal tender project? What other countries need to take into consideration before adopting any crypto as legal tender? (From Salvadorans perspective, this time including other compatriots opinions)

Hi guys, as you know last week was the second anniversary of Bitcoin as Legal Tender, I had the chance to have some talks with some Journalist, including one of the most popular journalist in El Salvador, thanks to his investigative journalism job. We discuss some personal experience from what are the people perceptions about the whole bitcoin project.NOTE: This is a 5 minutes read (I tried to brief as much as I could)

Bitcoin City still a thing?

Earlier this year, government officials painted a forest with yellow letters and numbers, sending government officials to the eastearn part of El Salvador mango and banana's farms,. The government officials told the residents of the area those marks were spots earmarked for a massive development project called "Bitcoin City," backed by Nayib Bukele. The farmers and others like him, who depend on nature for their livelihoods, suddenly found themselves facing an uncertain future. So the problem here, the government left this citizens without their main income source without offering alternative options.

The Bitcoin President

Bukele, a 41-year-old former PR executive with a massive Twitter following, announced plans to transform Conchagua(The name of the municipality, located in the eastern side of El Salvador), a poverty-stricken region, into a futuristic metropolis dubbed "Bitcoin City," vowing to rival Dubai. While El Salvador's budget could barely cover a single skyscraper, Bukele believed Bitcoin could provide the funds by harnessing the power of a nearby volcano for Bitcoin mining. Construction was set to kick off next year, and the project even encroaches on the community of Flor de Mangle.

Bitcoin Mania and Missteps

We always heard of someone who invested their retirement savings or stimulus checks in cryptocurrencies. Well, Bukele did something even peculiar – he used the country's treasury. In September 2021, El Salvador became the first country to make Bitcoin legal tender. Bukele handed out $30 worth of Bitcoin to every citizen, installed Bitcoin ATMs in public squares, and urged businesses to accept it as payment. He even publicly boasted about buying Bitcoin with public funds when the price was high, and declared, "#Bitcoin is FU money!" when the country faced a looming debt crisis.https://nitter.net/nayibbukele/status/1506823849060577293?lang=en

However, a year later in 2022, it was clear that this gamble was falling flat. Very few people in the country are actually using Bitcoin (less than 8% by 2023), and those who bought in during the initial excitement have seen their investments plummet. For a nation where many live on less than $10 a day, Bukele spent hundreds of millions to become a crypto influencer just as the market was crashing.

Bukele's Advisors (THIS IS A KEYPOINT,most of people hate them in El Salvador)

Meet Stacy Herbert, a former TV producer with pink hair, and Max Keiser, who run a podcast and YouTube show celebrating Bitcoin. They're the most famous unofficial advisors to Bukele on all things crypto. While they don't hold official positions in the government, they've gone from producing conspiracy theory-laden news shows to dining in the finest restaurants in El Salvador and traveling in military helicopters to inspect state crypto projects.https://elsalvadorgram.com/2022/01/gobierno-ofrece-tour-en-helicoptero-hacia-bitcoin-city-a-los-bitcoiners-max-keiser-y-stacy-herbert/

Bukele's Bitcoin Visionaries

To justify El Salvador's Bitcoin adoption, Bukele and his advisors blame Western bankers for exploiting the country (Which is true). But critics say it's a diversion from more pressing issues. When the country adopted Bitcoin, it was in talks with the IMF for a low-cost loan to cover its budget gap. However, the IMF's conditions would have been painful, so Bukele invited Jack Mallers, to announce El Salvador's Bitcoin adoption at a Miami Bitcoin conference in English. Mallers, who had been helping the poor in El Salvador use Bitcoin, soon found himself advising the government on how to use the cryptocurrency to help the 70% of Salvadorans without bank accounts (The initial idea was good).

Surfing on Crypto Dreams

Mallers' heartfelt pitch about Bitcoin helping Salvadorans send money home for free and reducing crime and immigration won hearts. But ten months later in 2022, as Bitcoin plummeted further, Mallers gave another talk in Miami, this time showing a video of himself buying beer with Bitcoin in Chicago. When asked about his last visit to El Salvador, he couldn't even remember (What a joke right?). "It's essential to know that it's not my project," he said.

Reality Check in "Bitcoin Beach": El Zonte

Crypto enthusiasts were excited about having a place to spend Bitcoin in the real world. But as we visited El Zonte last week for the second aniversary activities, the epicenter of the Bitcoin revolution, I noticed that locals weren't as thrilled with slow and complicated payment methods in comparison with last year. Many businesses refused to accept Bitcoin, and even in luxury restaurants for tourists, cashiers reluctantly accepted it. (This is quite scary, in my previous post I didnt mention about this, because I had over a year without going to Bitcoin beach, and was surprisingly that many places that before accepted bitcoin, already change their mind and avoid using it,mainly for the point below, the "magic" Chivo wallet, why magic? because suddenly the funds dissapear from users)

The Troubled Chivo App

El Salvador's Bitcoin project revolved around a government-run mobile app called Chivo. While it promised free transfers from abroad, few were using it for that purpose. In fact, it represented only 2% of remittances in the country during the first six months of 2023. Many Salvadorans found the app unreliable, with frequent crashes, payment delays, and security issues. Some couldn't even connect because they owned basic cellphones without internet access (Normal in a 3rd world country).

The Volcano That Never Erupted

Bukele's promise of using volcanic energy to mine Bitcoin also hit a snag. The LaGeo geothermal plant was supposed to provide the cheap and green energy needed for mining. However, environmental concerns, protests, and the delay in obtaining mining equipment led to a slow start. To make matters worse, Bitcoin's energy consumption became a global concern, putting El Salvador's green mining vision in a bad light.

The Bottom Line: The Crypto Dream Fizzles

In conclusion, El Salvador's bold experiment with Bitcoin has so far been a rollercoaster ride of highs and lows. President Bukele's vision of a crypto utopia in El Salvador is struggling to take root in the real world. While the crypto community cheered the country's adoption of Bitcoin, the reality on the ground has been far from ideal. Many Salvadorans remain skeptical, and the country's economic struggles continue.

Special thanks to NR for the time to have a conversation during the second anniversary of BTC in El Salvador, he is a well recognized journalist in El Salvador, working for El Faro and other newspaper in Latin America, was a pleasure to have a conversation with him and be able to bring this community a brief of the ideas we shared.

What do you think about El Salvador's Bitcoin project? Do you think it's enough to make the project alive again with the new education programs (Cubo+ and Bitcoin courses for public schools starting from 2024)?

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