The Great El Salvador Maximalist Cover-Up: Algorand, Chivo & The $1B Blockstream Bond

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The mainstream media and news, often misrepresent news, arguments and all the situations the appear in the crypto and blockchain world.

The truth will eventually prevail, though, no matter any coordinated attempts by misleading narratives.

The current BTC think tanks still consist of the same old admins and devs that took over control of Bitcoin in 2015, after most of the required infrastructure (code, user-base, brand, vision) was complete.

It is irrational to consider the rest of the market to be just “shitcoins”, or thinking they have no use, and producing nothing technologically superior or financially innovative.

BTC maximalists are using this deceptive technique to de-emphasize innovation in the crypto field and direct focus to Bitcoin-BTC.

The massive offense by BTC maximalists against other cryptocurrencies that work towards creating useful products for the world has the sole purpose of creating additional price “pumps” and pushing people into just one crypto asset, which is BTC.

Bitcoin influencers and popular figures like Snowden, Dorsey, Musk, and Saylor, are promoting this terrible approach of BTC maximalism. Yet this approach only limits innovation in the field and boosts speculation instead.

The latest reports from El Salvador raise questions on the Chivo Wallet infrastructure. Crypto analysts and researchers bring a new hypothesis that the Algorand blockchain is also utilized by El Salvador and provides additional payment rails to facilitate Chivo transactions.

However, there is no official announcement on the exact use of Algorand by the El Salvador government and Chivo wallet. All this speculation and incomplete information by crypto media, El Salvador, and Algorand create the impression that news are suppresed considering Algorand's use within Chivo App.

Yet, we still don't know how exactly or if Algorand is used to facilitate the Chivo Wallet, unless we somehow manage to validate these claims and find evidence, or offered an official explanation.

Blockstream And The Change of Bitcoin's History

Source: Wikimedia Commons (public domain)

The Bitcoin code required only small modifications to achieve much-desired scalability, yet strangely enough, a group of developers under the payroll of Blockstream (for-profit private company funded by AXA and Mastercard between others) started a crusade to keep the blocks small and hinder mass adoption.

Blockstream was founded in 2014, five years after Bitcoin was launched by Satoshi Nakamoto. Blockstream’s CEO, Adam Back, was only involved in Bitcoin since late 2013, with his first bitcointalk post, introducing himself as the founder of Hashcash, a technology used by Satoshi in Bitcoin. Satoshi did reference A. Back in the whitepaper for Hashcash.

Even more unusual was the solution to Bitcoin scaling issues Blockstream devs proposed. This solution was second layer networks, running on top of Bitcoin, such as the Lightning Network and Liquid Network, both funded and developed by Blockstream.

“Coincidentally” Blockstream also found support during the scaling debate by the main admins of all three Bitcoin media channels used to communicate with the public., Bitcointalk, and Reddit main Bitcoin subreddit r/Bitcoin. Three top Bitcoin media, all at the hands of one anonymous individual, with the nickname Theymos.

This centralization of media coverage was a threat and undesirable to any thinking person inside the community. Bitcointalk and r/bitcoin were weaponized during the scaling debate, censoring the voice of scaling supporters, and obstructing genuine progress in the discussion.

From that point on, the debate was not equal. Blockstream won, even though most of the community wanted Bitcoin to scale, although, had limited access to Blockstream's opposing view.

Theymos stance was difficult to understand, yet researchers found an interesting link between Theymos and Blockstream, on an event that is barely ever discussed and buried within the realms of bitcointalk (Follow the Stream (of moneY)Proof that Theymos's embezzled forum money).

Currently, any discussion or debate on bitcointalk or Reddit questioning the main narrative of digital gold (or "store of value") is met with furious remarks from a mob of angry BTC maximalists. The purpose is always clear, it is all about the "number go up".

Recent Revelation on El Salvador and the use of Algorand

Source: Wikimedia Commons (CC BY-SA 4.0 licence)

El Salvador uses LN for the custodial Chivo wallet and still doesn't implement the BTC blockchain for any blockchain infrastructure plans. It uses the Chivo App, created by Strike, yet there are various parties in the Chivo architecture, with Algorand perhaps also involved.

This is the suppressed news part we will explore. Not mentioned by the BTC narratives that instead express joy that LN is finally being (forcefully) used even as a test phase in El Salvador.

On numerous occasions news has been released explaining how the El Salvador government had partnered with Algorand, yet, even this fact has barely reached the mainstream media.

Why was such a Huge partnership for Algorand remained hidden from the public?

The BTC maximalists refer to the rest of innovation in the crypto field as inferior to Bitcoin-BTC projects and "shitcoins". The partnership of El Salvador with Algorand is contradictory to this narrative.

The mainstream media will promote a certain agenda which currently supports BTC under Blockstream’s control.

A Nasdaq publication recently announced the Algorand deal after examining two Cointelegraph reports on the matter (source1source2).

Hellen Partz (Cointelegraph journalist) did not include in the title the most important part of the news reported on the Cointelegraph, which was Algorand. It took a while for researchers to find this piece of news and connect the dots. Yet, again, this is all represented loosely and without definite explanation on Algorand's role within the Chivo app.

Athena Bitcoin will provide some front-end services and Chivo’s ATM-related operations, while Algorand will act as the official blockchain provider.

Source: Cointelegraph

It is not clear how Algorand fits in this puzzle exactly, yet, from leaked documents explaining the Chivo Wallet Architecture, we observe that Athena Bitcoin is the ATM provider while also having a central position in the Chivo ecosystem.

Source: Twitter

Algorand is nowhere to be found in the above diagram, though.

In all the related articles I've found there was no clear explanation as to what kind of blockchain services Algorand is currently providing to El Salvador. There is an announcement of a partnership between the Bukele government and Algorand, and the explanation that Algorand will help Bukele build a national blockchain infrastructure. Yet, most of the researchers suspect that Algorand already provides the infrastructure to the Chivo-LN wallet.

Although, while the popular explanation is some vague payment rails that Algorand is supposedly providing, it is not exactly mentioned anywhere by an official source, how Algorand is used in the Chivo app and which part it has in the entire process. (source1source2)

The news mentioned in various publications as sources that provide evidence is just news that explains the partnership between El Salvador and Algorand that will create infrastructure. (i.e. Yahoo News: El Salvador to develop blockchain infrastructure using Algorand). There is no mention by a credible source that Algorand is using payment rails, but mere speculation on this fact.

However, an important fact is there is a partnership and El Salvador has plans in motion with a blockchain that BTC maximalists would claim to be yet another "shitcoin" like everything else.

There is another deal with El Salvador though, that is even more confusing on its actual intentions:

The 1 Billion Blockstream Bond!

Blockstream approached Bukele in June 2021, and lately we've learned it managed to negotiate a 1 Billion dollar contract dubbed the "Bitcoin Bond".

Of that amount, $500 million will be used to help construct needed energy and bitcoin mining infrastructure and $500 million to buy even more bitcoin.

Source: Coindesk

Let's find out what the model of this bond suggests, as Blockstream and El Salvador seem to be heavily involved in BTC price speculation with this deal.

Samson Mow, Blockstream’s chief strategy officer, told the audience that the $1 billion in tokenized bonds will be 10-year and U.S.-dollar denominated and pay 6.5% initially. Following a lock-up period of five years, El Salvador will start to sell its cryptocurrency holdings and pay an added dividend to bond holders, Mow said.

By the time 10 years have elapsed the annual percentage yield will be 146%, Mow said...

At this point, everyone wonders how El Salvador will pay this interest of 146%. Let's see:

...based on Blockstream models predicting the price of bitcoin will have hit $1 million within the next five years.

Indeed, by using $500 million of the proceeds to buy bitcoin and locking it up for five years, El Salvador is hoping that by taking so much of the cryptocurrency out of circulation for so long it helps contribute to bitcoin’s price appreciation, Mow said.

I have to extract and present again what Samson Mow said here in capital letters:


Summarizing what we read so far from this deal, according to Blockstream's CSO (Chief Strategy Officer) Samson Mow:

A-One Billion dollar bond will be issued by a government (Bukele - El Salvador), and THE SUCCESS OF THIS BOND IS BASED on Bitcoin-BTC reaching a price of one million dollars in the next five years.

This is not how macroeconomic works, it is just degenerate gambling and nonsense.

Although, it seems this financial fallacy was even noticed by Blockstream's CEO Adam Back that rushed to Twitter to ease the possible outburst by economically rational researchers:

Source: Twitter

So, the mistake by Samson Mow was in the Blockstream "models" he was using, and Back probably run more quantitative models and found that ten years for Bitcoin-BTC to reach $1 million probably fits best the narrative.

Five years is not the long-term horizon for the narrative to fulfill, so make it ten years instead. It is a reasonable time to "hodl" and then assess your investment according to Adam Back! Or perhaps this is the horizon for Blockstream to succeed of completely fail if BTC doesn't reach to $1 million.

Yet, Adam Back just verified the speculative (gambling) part of this bond and how it bases its success on Bitcoin-BTC reaching $1m. Not in 5 years according to him, but in 10 years instead! A moderate prediction than the one coming from Samson Mow!

Source: Twitter

So, after all this irresponsible gambling of El Salvadorian taxpayer money, Back's only concern was that Bitcoin-BTC will not reach $1 million in five years, since this is too soon! But in 10 years, who knows, it is highly likely, and then the bond will succeed.

I fail to find any professionalism or rational financial objective in this kind of financial tools created by Blockstream.

Reminds me of another Adam Back estimate on increasing the blocksize, reassuring Jeff Garzik that Blockstream is supporting progress and scalability of Bitcoin:

Source: Twitter

Adam Back was obviously stalling and misleading the Bitcoin devs and community on his real intentions. (read more).

Tether (of course) is involved in this bond as well, since it will be organized via iFinex (source).

It remains to find out how Tether will exactly be involved in this deal.

In Conclusion: El Salvador Taxpayers' Know About This Deal?

Adam Back is not anoter trader on YouTube, but the “Bitcoin Bond” is an actual deal between Blockstream and a government. A deal that involves taxpayers’ money of one of the poorest countries in Central and Latin America.

This “Bitcoin Bond” action is the ultimate expression of the maximum extent of irresponsibility and degenerate gambling addiction that overruns the whole Bitcoin-BTC community.

“The ends justify the means” is the core purpose of BTC today.

“Number goes up”. A Ponzi that, like any other, it has an end and will collapse, since the moment BTC losses control of the price action for the rest of cryptocurrencies will be the moment of liberation of innovation.

It is a brilliant question the El Salvador citizens have to ask themselves if they deserve a government gambling with their money.

The Bukele office is a government that has been accused of authoritarianism and various practices that will not add any leverage when it will have to deal with the real financial world. El Salvador will find issues ahead that will irreparably damage its economy, and Blockstream will not be held accountable by anyone.

Algorand is now destroying the BTC maximalist narrative, and while in technical terms it may not be the best blockchain decision, it still expands into a scope that BTC does not, which is smart contracts. A good question is about the decentralization model of Algorand that seems to lack the very fundamentals of immutability and tamper-resistance, while also having possible issues with censoring transactions.

Although, Algorand is only an example of the fallacy of the BTC narrative.

The philosophy of BTC set by Blockstream and the BTC maximalists was not to ever change anything and keep the blockchain crippled while favoring third parties and custodial services.

The same BTC maximalists that express this kind of position, are also siding with Blockstream, advertising and actively promoting this centralized private entity.

It remains to be seen what the position of BTC maximalists on innovation in the crypto field will be since until today, it was just about "pumping" the BTC price by any means possible.

The BTC "King" is struggling to keep his throne today. 12 years later, it is just some manipulative exchange mechanics that keep it there.

It is the time to end with laser-eyes and price focus in just one asset, and allow the real innovative projects in the field to flourish, uninterrupted by the whims of irresponsible speculators and manipulation.


Lead Image: Unsplash

References and Related Material:

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This post is highly inspiring me and it needs to be read once and again. However, it's open that bitcoin and its promoters have bought over the media and the media can not give real info they only give information that will only but present bitcoin as a saint coin and other cryptos as shitcoin just wants to be and that's it. End of story. no innovation, no idea building, no further use cause, no improving scalability and portability...and so on and so forth.

$ 0.00
2 years ago

As an initiator of the crypto movement, Bitcoin wants to rule the crypto world by keeping the highest investment inside its fund-bag. They forgot that the most crucial ruler of crypto is technology, not investment funds. Bitcoin Cash boarded into the innovation train, and naturally, success is slowly following them.

$ 0.05
2 years ago

I almost don't understand all of this because my experience in the crypto world is not that deep but this context changes my paradigm to know more about this issue. a very accurate description to learn from the regulations that are carried out..

$ 0.00
2 years ago

The more I read about the antics or "goings-on" of BTC and BTC maximalists, the more I think BTC loses it's "cause." In other words, it seems to me that what BTC really is, is a secretive organization comprised of a few "central" players, who are essentially manipulating their own market. Something, by the way, in the "real" financial world would be extremely illegal.

As much as BTC supposedly strives for a "decentralization" cause, it really seems like something highly CENTRALIZED. And not in a good way.

For all of the complaints of the current affairs of fiat, at least those affairs are mostly TRANSPARENT. We can see what is going on and we can make judgements on direction BASED on what's going on.

When I think of BTC I think of that masked face we see portraying the face of the dark web, with evil and nefarious intent, that in the end will ultimately serve no one but those who serve under the auspices of Bitcoin itself.

As well, I agree with you that calling all other tokens or coins "shitcoins" is contrary to what BTC seemed to want to accomplish in the first place, and quite a bit counterproductive to the whole movement.

What strikes me is that BTC maximalists don't seem to like competition much. And isn't competition good? I mean, essentially competition is what makes people think about how to make themselves better.

Which begs the question. Does BTC want to be the BEST alternative to fiat? Or does it simply want to be BTC? Who cares if it works? Who cares if it IS better? Who cares if it actually changes anything?

It just wants to be BTC and that's it. End of story. No innovation, no idea building, no further use cause, no improving scalability and portability...and so on and so forth.

...lots to digest here and to save a lengthier response than I already have I will just leave it at that, knowing full well I have only touched on and responded to probably about 10% what the entire article was all about.

$ 0.50
2 years ago

Thanks for the response!

As much as BTC supposedly strives for a "decentralization" cause, it really seems like something highly CENTRALIZED. And not in a good way.

The development part of BTC is highly centralized. This also leads to arrogance and aggressive behaviors. BTC is just following the whims of Adam Back at this point, and his followers worship him even more, thinking he is Satoshi. Back is the Craig of BTC. Both appeared right about the same time. Back always declined he was Satoshi, yet, didn't try to disprove the arguments in favor, like by giving examples of why it isn't him. He is enjoying that others think he is Satoshi.

$ 0.15
2 years ago

That's one of the other odd things I find about BTC. Why was Satoshi such a secreted guy? I mean, it seems we know mostly who the people are behind other coins. But this one has always been a closely guarded secret.

I guess that's part of what makes me think of that masked face I mentioned. If I don't know who Satoshi is, and it is important to keep his identity secret, what else do we not know? What else is being kept a secret?

There are days when the entire idea of BTC just seems more corrupt than any of the "corruption" fiat has been accused of, and the rich and powerful have been accused of. I could be off my rocker. Who knows? lol.

Something about the whole thing just seems "off" to me in so many ways.

I wonder some days why I actually do own Bitcoin at all? Because I usually trust things I invest in, and I don't feel like I trust Bitcoin much at all like I do other coins I own. When I think of some of the other coins, even, I see an air of positivity that surrounds them that I simply do not see with BTC.

Anyway, I can be a bit of a windbag. lol. If I did not say so before, VERY interesting and engaging article that's got my wheels turning in my head a bit.

But then, you always have a way of delivering the "goods," so to speak. 😎

$ 0.00
2 years ago

This article is highly inspiring and it needs to be read once and again. However, it's open that bitcoin and its promoters have bought over the media and the media can not give real info they only give information that will only but present bitcoin as a saint coin and other cryptos as shitcoin. If the financial muscles hyping BTC should allow for a fair play, and the information system decentralized, other currencies will fly higher over night.

$ 0.05
2 years ago

Thanks for taking the time to read. I'm sorry for some mistakes made and poor grammar in the beginning, I corrected most part now, but it certainly lowered the experience of reading this post. I was in hurry to publish and forgot to read again before doing that. I reviewed and polished it now, but I will read it once more to make sure it is readable. The best part begins with the Bitcoin Bond, by the way, make sure to read this!

$ 0.00
2 years ago

Apology accepted. Intelligent readers don't look for errors they read for the information sent . Therefore the errors didn't reduce the weight of the information passed.

$ 0.00
2 years ago

The established press and news, regularly distort the introduced contentions and circumstances.

Reality will ultimately win, however, regardless of any organized endeavors by misdirecting stories and elements in charge to mutilate it.

The current BTC think tanks actually comprise of the standard, worn out administrators and devs that took over control of Bitcoin later the majority of the necessary foundation (code, client base, brand, vision) was finished.

$ 0.00
2 years ago

The Great El Salvador Maximalist Cover-Up: Algorand, Chivo and The $1B Blockstream Bond

$ 0.00
2 years ago