Issue 2021 El Salvador Bitcoin Bill Review

The acquisition of Bitcoin in El Salvador is one of the biggest stories in the cryptocurrency industry in 2021.

At the "Bitcoin 2021: Miami Conference" held in June this year, Salvadoran President Nayb Bukele announced that he will soon accept Bitcoin as a fiat currency. The news was well received by attendees in Miami and well received by Bitcoin supporters such as Michael Sayler and Peter McCormack on Twitter. However, the situation causing global warming is not good, and some international organizations and businessmen, many of them in El Salvador, are very unhappy.

After months of controversy, Salvadoran Bitcoin law came into effect on September 7.

Bitcoin lands in El Salvador

Since its inception over a decade ago, Bitcoin has been widely viewed as a financial option for government overindulgence and privacy invasions by traditional financial firms.

However, in El Salvador, Bitcoin was never traded as a national fiat currency.

In a video sent to the Bitcoin 2021 conference, Buckler said:

While the move has not passed, Buckler's move actually borrowed from the "development" of Bitcoin and was intended as a defense against the nationwide rise in the price of El Salvador. El Salvador is one of the few countries to use the U.S. dollar as a fiat currency, and Buckler, like many Bitcoin proponents, laments that the U.S. dollar has an impact on inflation. More importantly, if the United States adheres to the rules of the financial economy, the Salvadoran people will have no choice but to see their economy collapse. Bitcoin became the new law for El Salvador because it was seen as a hedge against inflation.

In addition, many lives of many lives of Salvado's in the height and counting for 20% of the home trade (GDP). More than 2 million salvides resources outside the country, but they are in contact with their hometowns, and the cost of the country more than $ 400 million each year.

Diasporas typically send money home through a bank or other financial service provider, but these intermediaries may incur cross-border transfer fees. For example, if a person transfers $ 1,000 from the United States to El Salvador, the consumer has to pay on both sides of the bank, even under the banner of "zero value" at exchange rates.

One of the advantages of Bitcoin or cryptocurrencies is that they are not trusted by the average person. As a result, Bitcoin may be more attractive to poor countries in El Salvador and to individuals who wish to avoid these costs.

Crypto technology can facilitate large-scale financial integration and has been proven successful in El Salvador as well. Although less than 30% of Salvadorans have a bank account, in the weeks since the introduction of the Bitcoin Act and the launch of the Chivo wallet, more people have a Bitcoin wallet than a bank currency.

Strike, one of the world's leading Bitcoin wallet leaders and one of the early developers of the Lightning Network, thanked El Salvador for their contribution, and Buckler CEO Jack Mallers said on the same day that media coverage of Buckler: People have become more independent and responsible. . "

attract people all over the world

When Buckler first announced that he would support Bitcoin, it sparked controversy among Bitcoin supporters who were interested in the crypto community. However, other organizations are not happy with the business of using Bitcoin as a legal entity.

In June, the International Monetary Fund (IMF) announced that El Salvador's decision to adopt Bitcoin as its currency had caused "enormous economic, financial and legislative problems that must be carefully considered."

That same month, the World Bank refused to provide free money and services to the country, stating that it would not help El Salvador define Bitcoin as fiat due to the cryptocurrency's inability and has noted a concern.

JPMorgan Chase investor doesn't think the move is worth celebrating. "While this is clearly having a positive impact on the country, it is difficult to see the real economic benefits associated with using Bitcoin as a second form of competition law."

The widely used Strike wallet, introduced in El Salvador last March, is also problematic. Money transfer company is a word that has special value. However, Zap, the parent company's wallet, was unable to do so. According to the survey, Zap does not have a work permit in many states in the United States and only has foreign exchange permits in 17 states.

Last month, the Bank of England also raised concerns over El Salvador. Bank of England Governor Andrew Bailey said that "the greatest concern" with accepting Bitcoin in El Salvador is whether the public "understands the nature and volatility of Bitcoin".

However, based on their performance over the past seven months, the people of El Salvador understand Bitcoin, but don't want to force it to become profitable.

conflict at home

The introduction of the Bitcoin code and the Chivo wallet in El Salvador is not yet complete. With the adoption of Bitcoin, Buckler has placed his country at the center of a "global debate on the future of currency."

Cibo Wallet is a national digital wallet announced by the government of El Salvador on September 7 to regulate Bitcoin. . This decision allows the El Salvador wallet to legitimize more than 2 million users in a single month.

In a previous article titled "Hackers Target $ 30 Bitcoin Wool in El Salvador," Bai Ze reported that some hackers stole from people in El Salvador and opened personal wallets for $ 30.

"Hacker targets $ 30 of Bitcoin wool in El Salvador"

Baize Research Institute, Public Account: Baize Research Institute hacker targets $ 30 worth of Bitcoin wool in El Salvador

According to the description on the official Chibo Wallet website, to register for the wallet, you need to scan the front and back of the driver's license, then review the facial expressions to identify yourself. However, a YouTube user in El Salvador found the system to be flawed when he admitted on the spot that he had completed the list by fraudulently acknowledging the use of a "statement" or a glass of water. .

This month, a Twitter user by the name of El Comisonado said he had collected more than 50 instances of missing bitcoin in his Chivo wallet. “I don't think the Cibo wallet is safe because the number is not an open space so no one can identify it,” he said.

However, many of Salvador's grievances have nothing to do with the use of the technology, but depend on where the state regulates the use of Bitcoin. Buckler said in August that there was no need to use Bitcoin if Salvadorans refused. "What if someone doesn't want to use Bitcoin? Well, don't shoot the [Chivo] wallet and go about your normal life."

But this is not the case. In effect, this violates Article 7 of the Bitcoin Law, which states that "when a person receives goods or services paid to a Bitcoin merchant, every business (merchants) must accept Bitcoin currency as a means of payment". Bitcoin is rarely an option for local traders.

In these contexts, some representatives of workers, businesses and students have returned to the streets, demanding the withdrawal of the Bitcoin bill. Some held up a sign saying, “We don't need Bitcoin. Protesters even set Bitcoin ATMs on fire.

Additionally, several studies have shown that the majority of Salvadorans think Bitcoin policy is a bad idea. According to a study by the Center for Citizen Research (CEC) at the University of Francisco Gavidia (UFG), each term (77%) of students in the city of El Salvador are "not quite" about the adoption of Bitcoin by Buckler. Only 12.9% of those questioned say they are "confident" or "ignorant" and 6.5% say they are "very intelligent".

So far, these efforts have had little impact. Buckler's Bitcoin wave flag does not change.

"Bitcoin City" loan

Last month, Buckler announced that El Salvador would create "Bitcoin City". He compares "Bitcoin City" to a city created by Alexander the Great of Macedon, exempt from income taxes, property taxes, and capital taxes.

The world's first "Bitcoin City" will be located in a circle similar to that between the two cities of El Salvador-La Union and Conchagua, the capital of the state of La Union.

Conchagua has a volcano of the same name, both of which have active volcanoes at their peak, but there is no historical evidence of an eruption. According to Buckler, the government plans to build a "Bitcoin City" and a power station next to the volcano to provide electricity for Bitcoin mining. It is only expensive, difficult and requires a lot of energy.

The city will become a large city with residential areas, shops, restaurants, airports, ports and railroads, and the cost of public construction is estimated at 300,000 BTC (around $ 17.7 billion). The city is exempt from other taxes such as income taxes and property taxes, and only 10% VAT is paid. Part of the VAT is used to finance the city's public markets, and the rest is used for urban development and services.

El Salvador also plans to announce “volcanic bonds,” the world's first Bitcoin government bond, starting in 2022.

Samson Mow, managing director of blockchain technology provider Blockstream, said the first 10-year "volcanic bonds" will be worth up to $ 1 billion and will be backed by Bitcoin at a 6.5% coupon price. After a five-year hiatus, El Salvador will begin selling some of the bitcoin used to pay for its contracts, offering investors "extra coupons," which could lead to the conclusion that bitcoin prices will rise. At the same time, Samson believes that this plan will make El Salvador a "world financial center" and "Singapore of Latin America" ​​and other countries to follow.

Are the police opaque and problematic?

In September, Salvadoran police arrested notorious bitcoin hacker Mario Gomez (Mario Gomez) without warning.

Gomez was the founder of tech incubator Hackerspace and one of the Salvadorians who opposed the public use of the Bitcoin law. Gomez has participated in several conferences and video conferences, highlighting what he thinks are the dangers and risks of El Salvador's Bitcoin policy. Gomez is also known for disclosing key features of Chibo wallets and points out that he is concerned about the various design features of Chibo wallets, such as the cost of the paid “no-charge service”.

According to local newspaper La Prensa Grafica, officers from Salvador's Combat Tactics Division (Special Forces equivalent) attempted to seize Gomez's computer when they were apprehended. Shortly after his arrest, Gomez was referred to the Special Bureau of Criminal Investigations by the National Bureau of Investigations. Police said Gomez had been investigated for "sending bogus emails to users who stole multiple bank accounts." Salvador police try to access Gomez's cell phones and computers.

Police released him several hours later, according to Gomez's lawyer Otto Flores. “He was arrested” without a court order and it is not known why he was arrested. "

Another reviewer, Jose Miguel Vivanco, tweeted: “What more? Using Venezuelan history as a spectacle, censoring the media, banning human rights violations in society is illegal for human rights violations, arrests of protesters and fraud electoral.

Buy Bitcoin in bulk, but not transparent.

As of this writing, Buckler has purchased over 1,100 BTC.

What's President Bitcoin Buying Idea? It's more than once with the "buy of dips" in response to the fall in Bitcoin prices. For example, Buckler will buy 150 BTC, 420 BTC, and 100 BTC in September, October, and November.

However, this is another area that raises questions about transparency. So far, Buckler has not disclosed who controls the private key to the government's Bitcoin wallet. Since El Salvador bitcoin has been added to the bank, this could be a big deal.

“There are a lot of things that haven't been made public, for example, who has the private key to these bitcoins?

concludes

For the government of El Salvador and its partners in the local market, testing Bitcoin is no easy task, and there are still many issues to be resolved. The success of Bitcoin in El Salvador remains to be seen. At the same time, other Latin American countries have paid close attention to the situation in El Salvador and governments are starting to promote their own Bitcoin / crypto policies. After all, they all have something in common. He was far from God and close to America.

However, El Salvador's adoption of Bitcoin as a payment method marked the start of a huge journey for blockchain and encryption technology, reducing restrictions on use and recognizing practical problems. The increasing frequency of residents of El Salvador using the Lightning Network also recognizes the current size of the Lightning Network based on its size. Looking to the future, Lightning Network technology is expected to take a further step forward in areas such as real-time communication, financial security and privacy, and bring events to the fore.