Reducing Bitcoin Transactions in El Salvador

[mr_ROBOTT]

Despite the government's emphasis on using bitcoin in daily transactions, people are reluctant to use bitcoin in their transactions (according to a US academic research study).
In September, Chivo was launched by El Salvador. The purpose of launching Chivo was to encourage people to use bitcoin and for every new sign-up, users would receive a $ 30 bitcoin giveaway. But many people stopped using Chivo after receiving the free bonus, and only 20% of users continued to use Chivo after receiving the free bonus.


What is the El Salvador government's strategy to increase the usage of bitcoin by the people?
Will El Salvador people use bitcoin for their daily transactions or not?

[1714483217]

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[1714483217]

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[jackg]

20% continuing to use it does sound quite high though (especially if those people are actively holding/using it). Crypto is still young and in its early stages, it's got far to go until it becomes more stable and less risky (especially for a poorer nation with less disposable income).

There government might try to do more on it or they might just hope some news stories come out about crypto being used there and get more acceptance that way.

[Despairo]

Why should force El Salvador's citizens to use Bitcoin? I don't see El Salvador's government is forcing their citizens to use Bitcoin for daily payment, they only force businesses to accept Bitcoin as payment option. I think it's a right move from Nayib Bukele, Bitcoin is freedom to choose unlike fiat you're forced to use that.

It will depends by each people to use Bitcoin for daily expense or not, as long as they're have or buy Bitcoin, it's enough to say they're trust/want to learn about Bitcoin.

[mk4]

If anything, I was actually expecting something in the ballpark of 5%; getting 20% retail usage is pretty big for usage of an asset that’s volatile as heck.

[worle1bm]

If anything, I was actually expecting something in the ballpark of 5%; getting 20% retail usage is pretty big for usage of an asset that’s volatile as heck.

Right if the 20% of the users are still continuing bitcoin transaction through Chivo wallet that's high because try distributing free money to people and how many will still continue to use it with their own money? So yes it's still good percentage depending on the conditions of people and volatility could affect them hard and making payments through LN will boost more transactions in future.

[Poker Player]

If anything, I was actually expecting something in the ballpark of 5%; getting 20% retail usage is pretty big for usage of an asset that’s volatile as heck.

I also see the bottle as half full. Also, one should not only take into account volatility, but Bitcoin is better than fiat currency, as it tends to appreciate in value as opposed to fiat which depreciates. Therefore, those who save will tend to do so in Bitcoin and spend fiat (USD, in this case). Let's give El Salvador time, and in a few years we will see if the trend has been increasing since that 20%.

[mr_ROBOTT]

20% continuing to use it does sound quite high though (especially if those people are actively holding/using it). Crypto is still young and in its early stages, it's got far to go until it becomes more stable and less risky (especially for a poorer nation with less disposable income).

Why should force El Salvador's citizens to use Bitcoin? I don't see El Salvador's government is forcing their citizens to use Bitcoin for daily payment, they only force businesses to accept Bitcoin as payment option. I think it's a right move from Nayib Bukele, Bitcoin is freedom to choose unlike fiat you're forced to use that.

If anything, I was actually expecting something in the ballpark of 5%; getting 20% retail usage is pretty big for usage of an asset that’s volatile as heck.

Right if the 20% of the users are still continuing bitcoin transaction through Chivo wallet that's high because try distributing free money to people and how many will still continue to use it with their own money?

Guys, it's true that 20% is acceptable!
But is there a way to turn this 20% into 50%? We all know that El Salvador is one of the leading countries in the Bitcoin world and there is definitely a way to increase bitcoin transactions by El Salvador's citizens!
After that, the number of daily bitcoin transactions will be much higher and we can definitely see the effects on the price of bitcoin!

[avikz]

Chivo roughly has four million users. So 20% of it is roughly 8,00,00 users. That means, 8,00,000 users are actively using bitcoin for their daily transaction needs. That is awesome! The president of El-Salvador didn't ban usage of dollar so it's upto the citizens on what mode of payment they want to use. So with this choice available, 8,00,000 users is an encouraging number I would say.

But the practical challenge of using bitcoin is the price volatility. A product that costs 0.01 btc today, might become 0.015 bitcoin tomorrow. That's the challenge and that is probably discouraging a lot of users from suing bitcoin for daily purchases. 

[Similificator]

The reason for this reluctance may be because the government has not created much learning system for the people before legalizing it. Or in simpler terms, they did not give a proper introduction like seminars. El Salvador would have been better off delaying the legalization and focusing on educating their people about this industry to rake in interest. While it may be a bit too late for this, they can still hold seminars having a few bucks as baits to make people show up or free courses. One way or another, some people joining these seminars/free courses will finally learn to love the innovation that the blockchain can offer specially when the speaker on these seminars are well versed when it comes to talking about crypto and speaking on seminars.

Another reason that I can think of is because of the decline happening in terms of price in the market. Which is pretty natural in my opinion considering that most of the people that are not interested in crypto do not know much about it. Hence they take the $30 then bounce out. On good market conditions though, the numbers may change drastically.

[Doan9269]

What is the El Salvador government's strategy to increase the usage of bitcoin by the people?

The strategies were already in place which was the adoption at first as a legal tender, the launch of the proposed volcanic bond as well as the socio economic  tourist centre it has become for the entire world of bitcoin, in which this will serve as a home for bitcoin enthusiast and love to visit, and the citizens were quite alright using bitcoin in their economy runnings and businesses except for those with the challenges of accessible media for bitcoin transaction to be performed.

Will El Salvador people use bitcoin for their daily transactions or not?

They are quite alright using it, we don't have to feel geek by the news on the staged protest claiming anti bitcoin and the likes, if El-Savador has not been finding it suitable enough in using bitcoin then we might not have Central Africa Republic to follow the trail, while Panama as well is given a serious consideration on bitcoin adoption as well, payments in El-Savador were pretty made in bitcoin and over 90% of El-Savador's citizens have participated in bitcoin related transactions and are still making use of it.

[Reatim]

Despite the government's emphasis on using bitcoin in daily transactions, people are reluctant to use bitcoin in their transactions (according to a US academic research study).
In September, Chivo was launched by El Salvador. The purpose of launching Chivo was to encourage people to use bitcoin and for every new sign-up, users would receive a $ 30 bitcoin giveaway. But many people stopped using Chivo after receiving the free bonus, and only 20% of users continued to use Chivo after receiving the free bonus.


What is the El Salvador government's strategy to increase the usage of bitcoin by the people?
Will El Salvador people use bitcoin for their daily transactions or not?

You cannot push people about using Bitcoin and that is why this is happening , remember that Bitcoin is still not accepted by majority in EL Salvador and it is the government that pushes this to be used so the use or the transaction of Bitcoin is not increasing and yet decreasing till now.
maybe the government need to hear what their people says and have a dialogue to the against party so the case will be healed .

[kryptqnick]

It's sad that full-scale adoption failed despite significant governmental efforts. However, El Salvador was a difficult case for such adoption. Just look up the percentage of unbanked population and those who don't use online banking. On the one hand, one might think that unbanked population is an opportunity because there's no real competition with banks in this case. But on the other hand, how likely is a person to start using digital stuff when this person has always heavily relied on using cash? Cash is faster, simpler, more understandable. This can be a big challenge. But hey, does any other country have 20% Bitcoin users? Still sounds pretty good.

[franky1]

some corrections needed

A, el salv citizens do not get a bitcoin UTXO&privkey of ~$30 upfront. they get a centralised mysql balance of $30, which if they decide to, they can cash out to paper fiat or withdraw (at fees) to a bitcoin address. request a lock(with fee's) and have a chivo partnered(previously strike, now aplhapoint) LN node create a channel balance of msats for

B. the 20% is of people did not cash out their chivo balance
this could mean they signed up to claim their $30, but then after converting it to LN(pretend bitcoin)(which they had to do before using) just never bothered using it/cashing it out thus just still active balance that they play around with in the app

C. part of the 20% is not citizen balance on accounts set up being non-zero. but also 'some' merchant accounts/businesses using wallet to test their own methods to accept chivo/ln balance/bitcoin

D. many people responding to surveys will just say they use/have something just to seem socially normal. even if they dont actually have/use it

[aoluain]

The "reducing transactions" was always going to happen because not everyone was going
to continue using their Chivo wallet after cashing out their $30. Expecting everyone to continue
using Chivo and Bitcoin day to day was very optimistic.

Bitcoin in El Salvador for many was like home computers becoming accessible back in the
early 80's or like mobile phones becoming popular in the 90's, it takes time before the
infrastructure and services are in place and accepted by the majority but I feel it will
happen, its still early and the majority still have to fully embrace it.

[DdmrDdmr]

Going over the original survey again, I see that they themselves do reference the said (in the OP) 20% of people that continue to use Chivo after spending the initial 30$ bonus (pages 2, 18 and 26).

Nevertheless, I’d point out that:

- We’re not talking about "users" here, but rather the 20% references adults citicens, meaning general population (not just Chivo downloaders).

- Going over the charts to see where the 20% comes from, it looks like it may be originated roughly in this manner:

Page 11: 68% of the surveyed adults knew about Chivo.

Page 16: 47.79% downloaded Chivo (I’ll take "tried" means "managed" here) and 30,88% did so with the aid of someone.

They also state that 39,24% still used Chivo after spending the 30$ bonus.

That would mean that 68% * (47,79%+ 30,88%) * 39,34% = 21,05% of the people continues to use Chivo after spending the 30$ bonus (close, but I still did not derive the 20% they mention). The figure is therefore with regards to the general population.

- Bear in mind that the 20% (or 21%) is referring to those that continued to use Chivo. It does not state if they used it frequently or scarcely, for BTC or for USD TXs. To see the usage distribution after spending the 30$ bonus, we’d need to look and interpret table 3 on page 17.

[pooya87]

and only 20% of users continued to use Chivo after receiving the free bonus.

There is another topic about this which you may want to look at.
The 20% does not necessarily show the percentage of adoption in El Salvador because it is showing usage of Chivo not usage of bitcoin. For example a lot of them may be using Electrum and not Chivo!

What is the El Salvador government's strategy to increase the usage of bitcoin by the people?
Will El Salvador people use bitcoin for their daily transactions or not?

Only the El Salvador government can answer that
But I don't think you can force adoption of a currency that is still volatile. Just take a look at the rest of the world and how they are mostly ignoring bitcoin and the very small percentage (I think around 1% still) who have adopted bitcoin are mostly treating it as an investment.

But when we are talking about adoption (using bitcoin for daily payments) we should also look at the history. Historically bitcoin usage has been lower when price is either dropping or fluctuating under a strong resistance (like these days) but it is a lot higher when price is rising. For example during 2017 there were more payments using bitcoin than there were in 2018.

We all know that El Salvador is one of the leading countries in the Bitcoin world

El Salvador is the first country that adopted bitcoin as legal tender but it is not leading because many other countries adopted bitcoin as legal years ago.

[Lucius]

I'm starting to think that there is some El Salvador Bitcoin fever on the forum, because in the last week I've seen at least 4-5 threads with questions like this. I wrote part of my thoughts in the main thread about El Salvador (and I'm sorry that people don't use it but open new topics) so I won't repeat myself.

Maybe for the average inhabitant of that country, Bitcoin is not the solution, maybe it will take more time for them to understand - and maybe inflation in that country contributes to people spending less, or for some reason people believe in the US dollar more than in BTC?

I may be wrong to mention remittances from abroad, but are they included in these statistics under discussion? More than 2 million people from the ES live and work in the US, and Chivo ATMs have been set up in the largest cities - do these people send money home via the Chivo wallet or not?

[Leviathan.007]

What is the El Salvador government's strategy to increase the usage of bitcoin by the people?
Will El Salvador people use bitcoin for their daily transactions or not?

I'm not really familiar with their government, and political-economic decisions regarding their currency, but from what I can see on the news and different articles some people are unhappy because their governments prefer using bitcoin instead of the traditional fiat currency, regardless of being a good decision or not, If people are unhappy and even if there are some a few unhappy people the governments should not force them to use bitcoin. otherwise, this will have a negative effect on el Salvador and there will be many bitcoin haters there because no matter if bitcoin is good or bad for them, at the start of any adoption there are some people who do not agree with the decision.

[NeuroticFish]

Guys, it's true that 20% is acceptable!
But is there a way to turn this 20% into 50%?

I think that you are somewhat off reality. The vast majority of people don't understand nor trust Bitcoin. The vast majority of people find difficult to use bitcoin. The vast majority of the world is.. not bitcointalk; we're a minority.
This being said, expecting 50% is unrealistic. I'd guess that the pretty high 20% covers those who invest/use bitcoin, it covers the businesses that must accept bitcoin (although most will convert instantly to USD) and it also may cover those who have used the wallet only for the free money and didn't uninstall it yet (for laziness, for not knowing how to do that, or - very few - just in case, because they may need it someday). So yeah, 20% is still overly high.

How to get to 50%? Wait 10 more years, maybe. Maybe more. Some older people will die, some younger people will get to use money, worldwide acceptance will rise... all goes in that direction.

[livingfree]

That's still a good percentage after those claims for their airdrop.

Do not worry about it. It's like bitcoin there is on its infancy and many citizens are still not aware of it. Imagine just like the whole thing about bitcoin when it's on 2009-2016 when most people don't like bitcoin.

You cannot also see a good result at the beginning. It's always like a test run but still an impressive number then for El Salvador.