Reality Of Bukele’s Bitcoin El Salvador – Bitcoin Magazine
This is an opinion piece by Shinobi, a self-taught Bitcoin educator and tech-savvy Bitcoin podcast host.
I recently spent a week in El Salvador attending Adopting Bitcoin and decided it might be worth summarizing my take on the things I’ve actually had the chance to visit the country for myself.
Since the announcement of the Bitcoin Legal Tender Act in 2021, the topic of El Salvador has been deeply divisive in this area. On one side you have people blindly rooting for President Nayib Bukele and treating all criticism as FUD and misinformation generated just to attack Bitcoin and its use. On the other hand, you have people who blindly condemn him as a dictator and human rights abuser and treat anything positive he achieves for his country as irrelevant in the face of his disregard for the law.
I am obviously not a Salvadoran. I have never lived in the country, and the short time I have now spent there is by no means enough to really gain a deep insight into what life is like in El Salvador, or to really appreciate the problems people face there. . Nevertheless, seeing things for that short time in person has given me a completely different perspective than what I had been informed about purely by reading things over the internet.
Adoption has been slow, but the seed has been planted
I was very skeptical of the Bitcoin Act when it was first proposed. My first article for Bitcoin Magazine was actually about my concerns about how the law could lead to negative consequences and effectively implode on itself if the use of Bitcoin took off too quickly early on. I saw the promise of conversion to USD by the government of El Salvador as something that could fail catastrophically if Bitcoin became a major vehicle for remittances, effectively bankrupting the trust established for conversion on the dollar side. Fortunately, that didn’t happen.
Adoption seems to be a very slow wave in the country, and according to many I spoke to when I was there, many businesses that used to accept bitcoin have actually stopped accepting it in the last year or so. Chivo is still dealing with issues, to the point that even today there are still problems with the ATMs when trying to sell, and horrible UX flows make paying at the few businesses that accept BTC an annoying experience. It is by no means “Bitcoin country”, as people keep calling it, in the sense of being able to use Bitcoin everywhere. But the opportunities to use it in El Salvador far exceed those of any other physical location I’ve ever traveled to myself. The plant has not fully sprouted yet, but the seed is clearly in the soil.
Bukele goes beyond Bitcoin
Beyond the debates about Bitcoin usage and adoption, Bukele has been doing quite a bit over the past year. I feel like people in this room pontificating on the internet are losing sight of this when arguing about the use of Bitcoin in El Salvador, but what is being done in the country goes beyond just Bitcoin. Bitcoin is part of the plan, yes, but this is a nation of more than six million people that President Bukele is responsible for. His concern is not, and should not be, solely for the benefit of Bitcoin with his actions in office. He has the citizens of El Salvador and their well-being to worry about. That is his primary concern.
When I was in El Salvador to adopt Bitcoin, I met someone who has lived in the country for the past 10 years, who only recently got into Bitcoin because of the Bitcoin Law passed by Bukele a year ago. He had almost a decade of experience living in El Salvador as it was before Bukele, and the reality of what he described was much more brutal than any statistics could paint: street vendors were murdered because they could not afford the 16 cent protection money, widespread extortion and robbery, corruption across the government. Gang members would commit a murder, get arrested, and be out on the streets within months because of how easy it was to bribe officials. He regularly dozed off and listened to gunshots from rival gangs fighting for territory down the block from his house. It was complete unrestrained anarchy.
I can’t even really imagine living in such an environment and I’ve lived my entire life in one of the most dangerous cities in the United States. All that changed this year with President Bukele’s declaration of martial law and an all-out war against the gangs in the country. Nearly 60,000 gang members have been arrested during the year, and the results are telling.
The homicide rate has plummeted, people are going out at night where most people before would not consider it a risk worth taking and tourism is growing. I’m no stranger to living in places where you have to keep your head on a swivel and pay attention to your surroundings, but not for a moment in my week there did I feel like there was even a slight chance of something bad happening. As an outsider, it felt completely safe to me, and the man I met who has lived there for a decade described El Salvador today as a completely different country compared to the one he moved to 10 years ago.
Have there been cases of false arrests? Yes. Is there an existential problem in sweeping aside due process to deal with the problem of violence in the country? Yes. But what would be the alternative solution someone else would offer?
It was a common occurrence for people to be murdered over sums of money so small that here in the US many would just ask a cashier to keep them because they don’t want to carry such small change in their pocket. Yes, due process is a core tenant of a stable society, but isn’t the ability to live without worrying about being murdered for pocket money more important? I think it is very easy for people far removed from a situation to lecture those who are not about how to handle them, to treat the situation as an intellectual exercise that should be approached with the goal of a perfect solution. But the real world doesn’t work like that. Life is messy, and perfect solutions are almost never attainable.
Removing the massive gang presence in the country is a prerequisite to actually enabling economic growth. You can’t have a growing economy if gangs are going to move in and extort money from people every day. No one from outside the country would rationally want to take their money and invest it in such an environment. No matter how imperfect the solution being implemented right now, it is a solution, and it is showing results. NOTUS Energy of Germany stated its intention to invest $100 million in energy infrastructure in the country, specifically citing improvements in safety in recent years as a factor. If Bukele and the current government continue on the path they are on, it is very likely that interest in similar investments will continue to grow.
Not an intellectual exercise
The Bitcoin law has not brought immediate prosperity to El Salvador, but it lays the groundwork for what is to come. Chivo still has its problems, but given time, they can be improved and private solutions can be built and tailored to meet the needs of the people of El Salvador. The use of Bitcoin has not exploded throughout the country, but the seeds for it have been planted. Likewise, the crackdown on gangs this year hasn’t magically turned the economy and the country around, but it has planted the seeds for something. Removing the gangs from the street has created room for economic growth to take place where it would otherwise not have had room. Things are going in the right direction.
People looking in from the outside have tried to paint Bukele and his efforts as either an unspeakable totalitarianism or an already complete process of sculpting a utopian dream. In my opinion, they are neither. He is a man who lays the foundations to give Salvadorans the space and freedom to create their own economic prosperity.
Will it happen overnight? No. Is it guaranteed a positive result? No. But he is trying his best to clean up the mess left after 30 years of corruption and violence after a brutal civil war. Bitcoiners need to step back and realize that this is a real country with real people and not an intellectual exercise to argue about on the internet.
Things seem to me to be moving in a positive direction and I hope they continue to do so.
This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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