The El-Salvador Experiment

[kotajikikox]

Does this mean btc can’t become money, or that the world just wasn’t ready?

Whatever happened in 2021 with El Salvador isn’t proof or indication that bitcoin can never be used as money. However it should also be noted that the world simply wasn’t at that stage. Since not much else was using bitcoin for daily transactions, those in El Salvador won’t either. And for a developing country, they will always prefer USD because it’s what they know.

Is the fault in btc, or the timing, infrastructure, and policy execution?

I believe the policy execution was what went wrong. They forced bitcoin upon the citizens without the citizens fully knowing or understanding what it was making a gap between the people and the citizens. But almost 5 years later, I believe people are a lot more aware now.

[free-bit.co.in]

Does this mean btc can’t become money, or that the world just wasn’t ready?

Whatever happened in 2021 with El Salvador isn’t proof or indication that bitcoin can never be used as money. However it should also be noted that the world simply wasn’t at that stage. Since not much else was using bitcoin for daily transactions, those in El Salvador won’t either. And for a developing country, they will always prefer USD because it’s what they know.

Is the fault in btc, or the timing, infrastructure, and policy execution?

I believe the policy execution was what went wrong. They forced bitcoin upon the citizens without the citizens fully knowing or understanding what it was making a gap between the people and the citizens. But almost 5 years later, I believe people are a lot more aware now.

Part of the blame lies with the government of El Salvador for implementing the wrong policies, but we cannot deny bitcoin is really not suitable for use as an everyday currency.

People in El Salvador do not use bitcoin not only because of ignorance but also because of its volatility. Or transaction fees and speed are also barriers that make people less interested in Bitcoin. Let's say you buy everyday essentials for just a few dollars or pay small bills. Are you happy to spend extra money to pay an extra $0.50-$1 per transaction (fee)?

El Salvador’s experiment has shown using Bitcoin as a daily currency comes with many problems and is not truly suitable.

[SquirrelJulietGarden]

Part of the blame lies with the government of El Salvador for implementing the wrong policies, but we cannot deny bitcoin is really not suitable for use as an everyday currency.

People in El Salvador do not use bitcoin not only because of ignorance but also because of its volatility. Or transaction fees and speed are also barriers that make people less interested in Bitcoin. Let's say you buy everyday essentials for just a few dollars or pay small bills. Are you happy to spend extra money to pay an extra $0.50-$1 per transaction (fee)?

El Salvador’s experiment has shown using Bitcoin as a daily currency comes with many problems and is not truly suitable.

They bravely did something, took action and it's a first Bitcoin legal tender experiment ever in Bitcoin history. Let's appreciate their effort for this, and it is truly a milestone in Bitcoin history. The first nation does it has big challenge but it is a foundation for some other nations doing it in the future, learning from El Salvador and making something better than that.

Bitcoin transaction fee in 2025 is much cheaper than previous years or a latest year in 2024. With Bitcoin side chain developments and more technical upgrades, I believe that transaction fee issue will be resolved in the future.

It's important to say that Bitcoin blockchain is a most secure blockchain and if you pay a little bit more fee compares to altcoin blockchain fees, I think it is worthy to spend for security of your transaction, fund and your trade too.
http://howmanyconfs.com/

[Helena Yu]

Bitcoin can become a currency, but it's not the most preferred currency for most people.

Using Bitcoin will not boost profit from the seller and the customer, unlike fiat the government can print more money and they don't find to give discount/additional interest to attract people to think it's cheaper/profitable.

That's why, even though someday many people are familiar with lightning network, I doubt they will use Bitcoin as currency.

[PrivacyG]

What El Salvador did was of course a big risk to their Economy particularly because they were the first country to adopt Bitcoin this way.  But let us all be serious for a moment.  Bitcoin is generally NOT used as a Currency by most of the Bitcoin owners and Bitcoin owners are not too many.  This means if any body expected Bitcoin to become largely used in El Salvador, they were expecting too much.

I did not have this expectation and I was curious to see how the experiment will work.  But one more thing to be expected was that people will immediately exit Bitcoin as soon as it shows any sign of NEGATIVE volatility.  If many of us Bitcoiners STILL struggle to sit still on the Market during bad years or months, I had no expectation for people completely new to Bitcoin to act better than us.

Does this mean Bitcoin has failed.  In my opinion no.

Bitcoin will in my opinion shine exactly when Economy becomes weak.  When Stocks and non safe haven Assets start dropping to the ground day after day, the volatility of Bitcoin will be nothing.  But it will probably and hopefully continue to protect against inflation.

The truth is.  These are all only experiments.  Bitcoin is still a baby when it comes to its experience in the real world.  It still has a lot of tests to go through.  Only time can tell if it can do what it is supposed and expected to do.  Which is not to protect us from volatility but to be a reliable Asset in the face of this evil Fiat.

[fuguebtc]

The world just wasn't ready for Bitcoin as digital cash. El Salvador acted too early and failed miserably as a result. With mainstream media labeling Bitcoin the "next Digital Gold", most people will hoard it with the hopes of getting rich in the future. Besides, volatility and scaling issues are still at large. Bitcoin can't be used for micropayments because of the "high market prices" and often congested Blockchain network (which results in high fees). The Lightning Network is not even a viable solution at the moment. It's buggy and utterly-centralized.

At least, El Salvador tried to boost mainstream adoption for Bitcoin. Maybe someday, BTC will be used as a currency. Sometime within the distant future. Bitcoin often comes with its surprises, so anything's possible.

Is the world not ready, or is bitcoin not ready and not really suitable to be a currency, even though that was its original purpose? Because as you said, bitcoin is quite volatile and scalability is not yet solved. Meanwhile, the criteria for payment methods or currencies used on a daily basis are fast, free and stable. It is clear that with the current state of bitcoin, it is no longer suitable for use as a currency, especially for small daily value payments.

Many blame the government of El Salvador for acting hastily and lacking strategy, planning. But in my opinion, the reason why people in El Salvador are not interested in bitcoin as a payment method is because of bitcoin's problems.

[free-bit.co.in]

Bitcoin transaction fee in 2025 is much cheaper than previous years or a latest year in 2024. With Bitcoin side chain developments and more technical upgrades, I believe that transaction fee issue will be resolved in the future.

Transaction fees in 2025 are cheaper than in 2024 because there are not many transactions being done on the blockchain. Just think what would happen if BRC20 or RUNE was revived or something similar were created?

The fee problem is only solved sustainably when blocks are expanded but this will affect the security of the network. That's why it's still delayed and doesn't get much consensus from the community.

It's important to say that Bitcoin blockchain is a most secure blockchain and if you pay a little bit more fee compares to altcoin blockchain fees, I think it is worthy to spend for security of your transaction, fund and your trade too.
http://howmanyconfs.com/

When you buy 1kg of tomatoes, a loaf of bread or a cup of coffee for just 1-2 dollars, what do you need security or privacy for? Obviously that is not necessary. Instead, paying extra fees for each transaction is a waste.

[suzanne5223]

Questions I had to ask myself and ask us:
Does this mean btc can’t become money, or that the world just wasn’t ready?

Right from the its creation, Bitcoin is money and also an asset; it only depends on what you use it for.
I believe the world is not ready based on the percentage of people who hold and use Bitcoin worldwide, despite the government and institutions acknowledgment of it.

Is the fault in btc, or the timing, infrastructure, and policy execution?
If we reused this experiment with better tech maybe 'Lightning', can btc shine as both value store and payments medium?

BTC technically shines as a medium of payment and store of value. The fault is not BTC; the major problem is some merchants and store owners who accept BTC as payment but don't use the infrastructure that makes it flexible to be accepted as payment, and don't understand how to profit from the volatile aspect of it

[Scarlett_23]

I will say that El Salvador made some errors in their approach because they violated some of the norms of Bitcoin such as freedom of choice. Instead of mandating people to use Bitcoin, they would have made it an option or at best add some incentives to the use of Bitcoin, this way there will not be so much pressure of people and businesses and people would have willingly gone for 50% Bitcoin and 50% fiat. El Salvador indeed succeeded in holding but failed on the utility aspect and that shows that volatility will continue to be a big problem with Bitcoin.

In September 2021, El Salvador became the first country to legalize Bitcoin. It was a bold move, to be sure. But for some reason, it has not been widely adopted in El Salvador.

Fiat money has an external existence and has gained people's trust over the years, and it can be used by anyone, from rural to urban areas, at any time. On the other hand, Bitcoin will gain acceptance in any country if it can gain trust.

Moreover, if the internet is easily accessible and spreads to every corner of the world, its transactions will be easier.
However, if El Salvador had initially used Bitcoin on a small scale alongside fiat currency, it would have been somewhat fruitful.

[Alpha Marine]

I don't think we can use one country alone to determine it. For this El Salvador situation, I feel like we do not have all the facts to determine why Bitcoin wasn't widely used even after it was made a legal tender. There are other factors to consider why the use of Bitcoin as money was not as popular as people thought it would. One of them is the digital divide in the country. There is a huge gap between the parts of the country that have access to the internet and those that don't. There is also the matter of trust in the government and no adequate regulatory bodies.

With bitcoin, it doesn't need to be forced down the throats of people for it to be used as money. It has to happen organically. People need to see how its good for money instead of just passing a law and making it legal tender overnight.

https://www.americasquarterly.org/article/in-el-salvador-bitcoins-retreat-left-valuable-lessons/
El Salvador’s case shows that the use of cryptocurrency for payments should not be legally mandated; instead, it must arise from societal trust

We need to remember that Bitcoin is still relatively young. If it were a human being, it would still have been a minor. It will take time to get to a level where people can comfortably use it as money. We don't expect these things to change in just 24 hours or to be forced.

[BALIK]

Questions I had to ask myself and ask us:
Does this mean btc can’t become money, or that the world just wasn’t ready?

Right from the its creation, Bitcoin is money and also an asset; it only depends on what you use it for.
I believe the world is not ready based on the percentage of people who hold and use Bitcoin worldwide, despite the government and institutions acknowledgment of it.

Is the fault in btc, or the timing, infrastructure, and policy execution?
If we reused this experiment with better tech maybe 'Lightning', can btc shine as both value store and payments medium?

BTC technically shines as a medium of payment and store of value. The fault is not BTC; the major problem is some merchants and store owners who accept BTC as payment but don't use the infrastructure that makes it flexible to be accepted as payment, and don't understand how to profit from the volatile aspect of it

It is true that the world is not ready to use bitcoin as a currency yet because it is still quite new compared to traditional payment methods. Changing habits is not easy, especially those that are ingrained in our subconscious like fiat or gold.

But we cannot deny bitcoin itself also has some disadvantages that make it difficult for it to become a popular currency. Its volatility and scalability are real issues because the payment method people need is fast, cheap or even free. It is clear that bitcoin does not meet those criteria yet.

[Catenaccio]

It is true that the world is not ready to use bitcoin as a currency yet because it is still quite new compared to traditional payment methods. Changing habits is not easy, especially those that are ingrained in our subconscious like fiat or gold.

But we cannot deny bitcoin itself also has some disadvantages that make it difficult for it to become a popular currency. Its volatility and scalability are real issues because the payment method people need is fast, cheap or even free. It is clear that bitcoin does not meet those criteria yet.

It's not because Bitcoin is too new, but mainly because governments don't want to lose their power and control on financial system in their nations. You can see that Bitcoin blockchain is decentralized and transactions on it are censorship-resistant and also irreversible. If governments accept Bitcoin as currency, they will lose control on their citizen financial flows that goverments never want to face with.

They want to use the blockchain technology after witnessing mass success of Bitcoin, and aim at developing and launching CBDCs, that's it. Bitcoin will be used globally but not as a legal tender currency.

[john_egbert]

It is true that the world is not ready to use bitcoin as a currency yet because it is still quite new compared to traditional payment methods. Changing habits is not easy, especially those that are ingrained in our subconscious like fiat or gold.

But we cannot deny bitcoin itself also has some disadvantages that make it difficult for it to become a popular currency. Its volatility and scalability are real issues because the payment method people need is fast, cheap or even free. It is clear that bitcoin does not meet those criteria yet.

It's not because Bitcoin is too new, but mainly because governments don't want to lose their power and control on financial system in their nations. You can see that Bitcoin blockchain is decentralized and transactions on it are censorship-resistant and also irreversible. If governments accept Bitcoin as currency, they will lose control on their citizen financial flows that goverments never want to face with.

They want to use the blockchain technology after witnessing mass success of Bitcoin, and aim at developing and launching CBDCs, that's it. Bitcoin will be used globally but not as a legal tender currency.

I would say that even if such entities would - push - for BTC - how much of the people would use it more than fiat?

It's not as established as fiat so there would be nothing to fear for them, imo.

[minairia3]

It's not because Bitcoin is too new, but mainly because governments don't want to lose their power and control on financial system in their nations. You can see that Bitcoin blockchain is decentralized and transactions on it are censorship-resistant and also irreversible. If governments accept Bitcoin as currency, they will lose control on their citizen financial flows that goverments never want to face with.

They want to use the blockchain technology after witnessing mass success of Bitcoin, and aim at developing and launching CBDCs, that's it. Bitcoin will be used globally but not as a legal tender currency.

If we compare bitcoin with traditional payment methods, fiat currencies or assets like gold then bitcoin is really new and young. It is like a child when compared to fiat and gold.

I somewhat agree with what BALIK said, because look at what is happening in El Salvador. The government legalized bitcoin as a legal tender, and then introduced friendly policies to encourage and promote people to use bitcoin instead of fiat. But you see, 92% of people don't want to use bitcoin as a currency instead of fiat. Obviously, this is not the government's fault.

[Dunamisx]

The El-Salvador kind of experience is what many of other countries should try and be able to learn something from, because they took the risk, to fit bitcoin and never regret on any of their decisions any longer, even when IMF thought that things could go wrong the more for them, they later see the positive results than shame from Bitcoin adoption.

[Luzin]

El Salvador’s experiment has shown using Bitcoin as a daily currency comes with many problems and is not truly suitable.

This is true, but currently scalability makes Bitcoin a challenge for fast transactions and the fees can possibly be expensive. So I recall that they have revised that legitimate payments there have several options that can be used. But I am glad they have tried; this can serve as an example for other countries to learn from. They have started, and other countries can understand the issues and reconsider how to implement better policies. At least El Salvador has become a global pioneer; they are bold with the IMF and brave enough to take the risks.

[Minor Miner]

The El-Salvador kind of experience is what many of other countries should try and be able to learn something from, because they took the risk, to fit bitcoin and never regret on any of their decisions any longer, even when IMF thought that things could go wrong the more for them, they later see the positive results than shame from Bitcoin adoption.

I don't think countries are afraid to adopt bitcoin because of fear of embarrassment. What they care about is how adopting bitcoin as a currency will benefit their economy. Can you list some benefits of using bitcoin as a national currency? Because in my opinion, it will have more negative effects than positive ones.

First, the volatility of bitcoin prices makes it difficult to price goods, making it difficult for people to spend and save money. Or to put it bluntly, volatility will cause stagnation and chaos in the economy. Meanwhile, using bitcoin as currency will make the government lose its ability to regulate the economy and economic collapse is inevitable.

Using decentralized currency will bring many disadvantages to the national economy, it is not as good as we imagine.

[abaeze]

Whatever people say, I take this experience of El Salvador positively. And I think other countries should try from this experience. Every country should use the opportunity to learn something from the practical experience that El Salvador has gained through various adverse conditions. Because they took the risk to fit Bitcoin into their country's economy and they will never regret any of their decisions. Some people regret not buying when Bitcoin was worth one dollar, and some people still regret the price drop and in the future there will be people who will regret when the price is worth a million. The IMF thought that due to their pressure, they might change their decision and regret but nothing happened as expected by the IMF and they will not regret because there will be many ways out of failure in the future when the younger generation will understand Bitcoin.

[suzanne5223]

Questions I had to ask myself and ask us:
Does this mean btc can’t become money, or that the world just wasn’t ready?

Right from the its creation, Bitcoin is money and also an asset; it only depends on what you use it for.
I believe the world is not ready based on the percentage of people who hold and use Bitcoin worldwide, despite the government and institutions acknowledgment of it.

Is the fault in btc, or the timing, infrastructure, and policy execution?
If we reused this experiment with better tech maybe 'Lightning', can btc shine as both value store and payments medium?

BTC technically shines as a medium of payment and store of value. The fault is not BTC; the major problem is some merchants and store owners who accept BTC as payment but don't use the infrastructure that makes it flexible to be accepted as payment, and don't understand how to profit from the volatile aspect of it

It is true that the world is not ready to use bitcoin as a currency yet because it is still quite new compared to traditional payment methods. Changing habits is not easy, especially those that are ingrained in our subconscious like fiat or gold.

Glad you understand that people of the world slowly acknowledge or make use of innovative technology, which is also something we saw happen when the internet was introduced years ago, and we see a situation where some people see things as something evil.
Bitcoin has passed the phase of negative and hate speech, but it is currently at the phase of worldwide usage/adoption, and after this phase is when Bitcoin will be used just like people use traditional payment.

But we cannot deny bitcoin itself also has some disadvantages that make it difficult for it to become a popular currency. Its volatility and scalability are real issues because the payment method people need is fast, cheap or even free. It is clear that bitcoin does not meet those criteria yet.

Every currency and asset has a disadvantage. Even the USD and other fiat currencies lose value, but the major problem is that the BTC downtrend is easily visible and understandable to us.
Meanwhile, these disadvantages are also a good thing for the chance of getting more profit.
After all the concepts put together by lightning network team, the crypto card creator, and more, anyone who still sees BTC volatility, scalability, and transaction confirmation time span as an issue to use BTC as currency is not yet ready for this innovative

[PrivacyG]

First, the volatility of bitcoin prices makes it difficult to price goods, making it difficult for people to spend and save money. Or to put it bluntly, volatility will cause stagnation and chaos in the economy. Meanwhile, using bitcoin as currency will make the government lose its ability to regulate the economy and economic collapse is inevitable.

Volatility would not be a big problem if the business owners want to support BITCOIN and are not only using Bitcoin to attract new customers.  Most business owners are not even receiving Bitcoin directly.  They are using payment processors that automatically convert the Bitcoin spent by customer into Dollars or other Fiat currencies.  If they wanted Bitcoin instead, they would know that a 5 Dollar payment could be worth more or less in a matter of minutes.  It is a risk any of us who are holding Bitcoin take.

From Bitcoin adoption to economic collapse is a long way.  The main key point, which was Bitcoin adoption, was not even accomplished.  The experiment has simply failed and it is what it is.