{"id":19835,"date":"2021-06-29T22:37:05","date_gmt":"2021-06-29T22:37:05","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=19835"},"modified":"2021-07-11T21:44:11","modified_gmt":"2021-07-11T21:44:11","slug":"el-salvador-chivo-wallet-mallers-speaks-users-test-the-system-so-far","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2021\/06\/29\/el-salvador-chivo-wallet-mallers-speaks-users-test-the-system-so-far\/","title":{"rendered":"El Salvador: Chivo Wallet, Strike speaks, users test the Bitcoin system so far"},"content":{"rendered":"
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It’s like watching a clown car slowly racing towards a trash fire. More clowns keep jumping in making the tragic, ever approaching end ever more ridiculous.<\/p>\n

\u2014 domingroso, a Salvadoran, on the Bitcoin scheme [Reddit<\/i><\/a>]<\/p>\n<\/blockquote>\n

 <\/p>\n

There are three problems with trying to work out what\u2019s going on with Bitcoin in El Salvador<\/a>:<\/p>\n

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  1. There\u2019s almost no public information.<\/li>\n
  2. What public information there is doesn\u2019t make any coherent sense \u2014 to Salvadoran locals or to outsiders.<\/li>\n
  3. Even the small amount of detail we have keeps changing, as Salvadorans go “what on earth” at the previous bad idea.<\/li>\n<\/ol>\n

    We have to read frickin\u2019 tea leaves to work out what anyone involved was thinking. And President Bukele and his ministers keep making up new stuff for the plan as they go along.<\/p>\n

    So far it looks like I guessed right in the Foreign Policy piece<\/a> \u2014 Bukele wants to print \u201cdollars,\u201d and claim they\u2019re backed by bitcoins. But good luck trying to convert the “dollars” 1-1 to actual dollars.<\/p>\n

    I\u2019ve been continuing to ask local Salvadoran contacts if each stupid new detail is true. And it always is, and it’s always even stupider than it looks.<\/p>\n

    Any of the claims I cite below may change tomorrow. But here\u2019s the news as of this evening!<\/p>\n

    Jack Mallers speaks!<\/h3>\n

    Salvadoran media and locals have many<\/i> questions about how all of this could possibly work \u2014 and Strike, a US payment processor who are heavily involved in the scheme, haven\u2019t been willing to speak to any of them.<\/p>\n

    However, Zap\/Strike CEO Jack Mallers, who announced the El Salvador Bitcoin scheme at Bitcoin Miami<\/a> in early June,\u00a0 did a promotional podcast with What Bitcoin Did on 18 June. [What Bitcoin Did<\/i><\/a>]<\/p>\n

    Mallers\u2019 January blog post announcing Strike Global [Medium<\/i><\/a>], with a remittance path from the US to El Salvador based in bitcoins and tethers, and terminating at one of the two Bitcoin ATMs in the entire country,<\/a> seems to have been entirely hypothetical. It looks like nobody ever tested his planned route at all.<\/p>\n

    Mallers didn\u2019t even visit El Salvador himself until late February, when he went to have a look at Bitcoin Beach.<\/p>\n

    (If you want to know about Bitcoin Beach and its founder, Mike Peterson, read Amy Castor\u2019s article on Peterson.) [Amy Castor<\/i><\/a>]<\/p>\n

    Mallers stayed in El Salvador for a month, promoting Strike. Mallers says that Bukele\u2019s team contacted him to discuss a payment system, and he sold them on Bitcoin, meeting with them several times. He says that Bukele was completely into the idea of Bitcoin, including making Bitcoin legal tender.<\/p>\n

    Strike\u2019s original plan for El Salvador used tethers \u2014 extremely dubious dollar-substitute crypto-tokens that may be backed by thin air,<\/a> and are mainly used by the sort of crypto exchange that’s too dodgy to get a proper bank account.<\/p>\n

    Mallers says that tethers were a stop-gap solution to get Strike Global up and running; he says that Strike has local banking relationships now, and can use real dollars, so it doesn\u2019t need tethers any more.<\/p>\n

    (There are no checkable details on these alleged banking relationships \u2014 so nobody can, for instance, ask the banks to confirm Mallers’ claims.)<\/p>\n

    Strike apparently has no official contract with the El Salvador government concerning any of this. Mallers says he’s doing all of this for the good of Bitcoin and the world.<\/p>\n

    Mallers also throws some shade on Brock Pierce\u2019s recent visit to El Salvador, in a polite and nonspecific manner.<\/p>\n

    \u201cIf they’re forced to do it, they’ll learn, and they’ll learn quickly\u201d<\/h3>\n

    Peter McCormack, the host of What Bitcoin Did, was in on the El Salvador Bitcoin scheme before the June announcement. He says, talking to Mallers:<\/p>\n

    I thought the bravest thing they did, and I think is going to turn out to be one of the smartest things, is this part of the bill that says, “Every economic agent must accept Bitcoin”, but they will transfer it into dollars instantly if they need it. Now, there’s been a lot of questions about that part of the bill, “Are we ready?\u00a0 Can it happen in time?” etc, and the details have got to come, but I feel like that’s so important for driving Bitcoin into the country, raising the net wealth of the country, increasing prosperity for people.\u00a0 Also, I met with one guy and he said to me, “Listen, we can do this slowly, or we can just put it on the people and people will learn. If they’re forced to do it, they’ll learn and they’ll learn quickly”.<\/p><\/blockquote>\n

    That is: forcing the Bitcoin scheme onto the people of El Salvador, without consultation or consideration, was always the plan. Bitcoin is the money of freedom,<\/i> that you need to be forced onto for your own good.<\/p>\n

    A third Bitcoin ATM!<\/h3>\n

    Athena installed a new Bitcoin ATM in La Gran V\u00eda shopping centre last Thursday. Conveniently located in an upscale mall in front of its anchor, a regional department store. (To serve the unbanked.) [Twitter<\/i><\/a>]<\/p>\n

    Unfortunately, Bukele is feuding with the Sim\u00e1n family, the owners of the mall and the department store \u2014 so the ATM has been unplugged and correctly relocated next to the toilets on the other side of the shopping centre, so as not to attract people to his rival’s shops in the mall. [Twitter<\/i><\/a>]<\/p>\n

     <\/p>\n

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    Si quiere venir a la LVG solo para usar el cajero de BTC, le comento que lo movieron de lugar (por Papa Jhons) y no lo han conectado a\u00fan. Para que no venga de choto. pic.twitter.com\/PwSqPYwWze<\/a><\/p>\n

    — Miguel Avolevan (@avolevan81) June 27, 2021<\/a><\/p><\/blockquote>\n