Life with Bitcoin in El Salvador Through the Eyes of a Local By

Some Salvadorans responded to their country’s adoption of as legal tender by setting Bitcoin ATMs on fire and chanting “No to Bitcoin” and “Respect the Constitution” in the streets. Some were worried about the new digital currency’s instability and uncertainty around crypto, while other citizens viewed Bitcoin as a path to financial freedom.

This article shares the opinion of Diego Cerritos, a 25-year-old marketing specialist from San Salvador, the capital city, who has been observing the changes and people’s reactions to Bitcoin in his home country. During an exclusive interview with DailyCoin, Diego explained how Bitcoin has been adopted and used inside El Salvador in the last few months since its adoption.

Using Bitcoin for Daily Expenses

The Chivo app is the most used and probably the only wallet that works on a daily basis in El Salvador, since it has zero fees, and transactions are instant (although it doesn’t use blockchain).

There are Chivo ATMs all over the country, so it’s rather easy to convert USD to Bitcoin and vice versa. Many businesses also use Chivo POS (PIN Pad), which works the same way as a smartphone with a wallet, and is easy to use for businesses.

“I’ve been buying some groceries with Bitcoin, although it’s still more convenient to pay in cash. Store employees are still learning how to use a wallet or POS system. The overall process of paying with Bitcoin is faster than using a credit card but still slower than with cash,”
Diego added.

On the other hand, fees are an important variable to include, even for the lightning network. A $8 purchase at a supermarket might cost $10 due to fees. Also, a higher fee means a faster transaction, which is why the Chivo app (official wallet that uses USD and Bitcoin) became an essential tool for using Bitcoin as a currency.

As long as users make transactions between Chivo apps, they can avoid fees, and payments are instant. It doesn’t matter if they use USD or Bitcoin, and this means that the Chivo app doesn’t use blockchain at all. Problems start surfacing when users want to use the Chivo app with external wallets (Muun, Coinomi, etc), either by lightning network or layer-1.

Also, if users ever have a failed transaction from Chivo to an external wallet, they need to call Chivo customer support and wait for a reimbursement, since the money they send never enters the blockchain network, Diego explained.

Lack of Knowledge Is an Issue

Most people didn’t know about cryptocurrencies before, and it was difficult to convert Bitcoin to El Salvador’s currency (USD). Now with the Bitcoin law, cryptocurrency is more accessible; however, it will take time for most people to understand crypto and use it instead of holding.

“I think there are some opportunities for crypto to bloom in El Salvador, although it will require a proper fundamental plan, not just a random way to spend money,”
Diego…