The past week the crypto community nearly took the streets dancing: El Salvador, as the first country in the world will allow BTC as legal tender! People were shouting: mass adaptation is here! BTC will replace fiat money!
Now as much as I want BTC adaptation to happen, I think we should be a bit careful declaring El Salvador as the event in which it happens.
I voiced my rather unpopular opinion in short on Reddit, but I would like to give a bit more explanation about why I think we should view this event with some caution
1. El Salvador currently is in shambles
The Salvadorian economy is currently so bad that they had to abandon their own currency in favor for the American Dollar due to inflation. The current GDP of the whole nation is currently only $27 Billion (https://www.coindesk.com/el-salvador-bitcoin-legal-tender-markets-ignore) and most people don't own a bank account (50% of population) or internet (30% of population). Why is this a problem to the BTC hype?
As most citizens have no means of sending or even purchasing crypto they would also have little chance of increasing their economic opportunities. On top of that, those who would have the means to do so would have to pay the BTC fees, which for a country that already has little to spend means a bit ledge to start. It would have been more sensible to have adopted a fee-less instant crypto like Nano or BCH in my opinion...
2. The idea to draw investors is not very viable
The idea of the president of El Salvador is to offer citizenship to all those who invest at least 3BTC in the economy of El Salvador. Great, you think, let me pack my bags! But wait....
Crime rates are really high in El Salvador. I mean this is not really the country you would want to bring your family to live during your crypto adventure. Read more about it here: (https://www.osac.gov/Country/ElSalvador/Content/Detail/Report/b4884604-977e-49c7-9e4a-1855725d032e)
If you wanted citizenship you don't need to bring the crypto. El Salvador is one of those countries country where you can just purchase citizenship. And still the beaches of El Salvador are not teeming with people, because ehm yes it's unsafe and the economy is pretty bad
3. The president is getting praise he shouldn't
Before we all erect statues in our backyard for the man that made BTC legal tender in his country let's please remember:
He is turning El Salvador into a dictatorship which has arrested and interned over 16.000 people and who is trying to change the presidential and justice systems to make himself immune to justice. Read more about it here: (https://english.elpais.com/usa/2021-03-02/profile-nayib-bukele-and-absolute-power.html)
- He has no interest in the average El Salvatorian. He is called the cell-phone president, he never visits his population and cares more about how many followers he has on twitter.
My point being: this man has no interest in bettering his country with real solutions and real-life crypto adaptations. He wants to up his popularity by talking about projects that will give him fame but will help his people very little.
Does that mean it's all negative? No, maybe this will be a first step for adaptation. But let's get excited when crypto gets adopted to actually help people or by a country that makes these decisions because they help them to advance, not just to get more twitter followers. Please people, always be critical as well!