{"id":20334,"date":"2021-08-24T21:29:20","date_gmt":"2021-08-24T21:29:20","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=20334"},"modified":"2021-08-24T23:47:42","modified_gmt":"2021-08-24T23:47:42","slug":"el-salvador-chivo-network-back-end-leaked-200-atms-bitcoin-trust-fund-law","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2021\/08\/24\/el-salvador-chivo-network-back-end-leaked-200-atms-bitcoin-trust-fund-law\/","title":{"rendered":"El Salvador: Chivo Network back end leaked; 200 Athena ATMs; Bitcoin Trust Fund law"},"content":{"rendered":"<p>Yesterday, the following diagram was leaked by El Tapudo \u2014 which is mostly a satirical publication, but generally in the sense of poking fun at real events, not just making stuff up: [<a href=\"https:\/\/twitter.com\/eltapudosv\/status\/1429870227899174912\"><i>Twitter<\/i><\/a>]<\/p>\n<p>&nbsp;<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"es\" dir=\"ltr\"><a href=\"https:\/\/twitter.com\/hashtag\/TapudoLeaks?src=hash&amp;ref_src=twsrc%5Etfw\">#TapudoLeaks<\/a>. Esta es la estructura con la que funcionar\u00e1 la <a href=\"https:\/\/twitter.com\/hashtag\/ChivoWallet?src=hash&amp;ref_src=twsrc%5Etfw\">#ChivoWallet<\/a>, y no es chiste. <a href=\"https:\/\/t.co\/N7YCovR3dJ\">pic.twitter.com\/N7YCovR3dJ<\/a><\/p>\n<p>&mdash; El Tapudo (@eltapudosv) <a href=\"https:\/\/twitter.com\/eltapudosv\/status\/1429870227899174912?ref_src=twsrc%5Etfw\">August 23, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>&nbsp;<\/p>\n<p>Shortly after, I was forwarded a copy of approximately the same diagram in English, which appears to be the original. From the provenance of the diagram, this seems to be a genuine leak.<\/p>\n<p>I\u2019ve put a redrawn version below, so as to reduce how traceable the leak is:<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/davidgerard.co.uk\/blockchain\/chivo-wallet-architecture-redrawn\/\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-20337\" src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-wallet-architecture-redrawn.png\" alt=\"\" width=\"1200\" height=\"673\" srcset=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-wallet-architecture-redrawn.png 1200w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-wallet-architecture-redrawn-300x168.png 300w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-wallet-architecture-redrawn-1024x574.png 1024w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-wallet-architecture-redrawn-768x431.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h3>The Chivo back end<\/h3>\n<p>Athena Bitcoin is a Bitcoin ATM company. [<a href=\"https:\/\/www.athenabitcoin.com\/\"><em>Athena<\/em><\/a>] Athena will run the back-end, interfacing Chivo to banks and the cryptocurrency system.<\/p>\n<p>Back-end Bitcoin exchanges include &#8230; Binance. They\u2019re also using Binance as the <i>custodian.<\/i> Yes, the exchange that has <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/07\/30\/news-el-salvador-binance-vs-malaysia-goldman-sachs-non-blockchain-etf-virgil-griffith\/\">regulators worldwide<\/a> howling for its blood.<\/p>\n<p>There\u2019s no way on earth that Binance would be up to the standards required of cryptocurrency custodians in the <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/08\/18\/el-salvador-bitcoin-law-draft-bank-regulations-released-for-consultation\/\">regulation for banks and Bitcoin<\/a>\u00a0\u2014 but I suppose the rules are different for the officially blessed service.<\/p>\n<p>The central Athena functionality runs entirely on Amazon Web Services \u2014 because cryptocurrency is decentralised?<\/p>\n<p>Athena also has the Bitcoin ATM contract \u2014 200 ATMs. They did the ATMs for Bitcoin Beach too. Total Athena Bitcoin ATMs worldwide was previously on the order of 100 or so. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-08-23\/el-salvador-readies-bitcoin-rollout-with-200-atms-for-conversion\"><i>Bloomberg<\/i><\/a>]<\/p>\n<h3>How do all these companies get paid?<\/h3>\n<p>President Bukele is quite clear: there will be <i>no commissions<\/i> on transactions:<\/p>\n<p>&nbsp;<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"es\" dir=\"ltr\">Tambi\u00e9n habr\u00e1n <a href=\"https:\/\/twitter.com\/hashtag\/CajerosChivo?src=hash&amp;ref_src=twsrc%5Etfw\">#CajerosChivo<\/a> en todas partes y podr\u00e1n retirar en EFECTIVO, las 24 horas del d\u00eda y SIN COMISIONES, por m\u00e1s que la oposici\u00f3n diga lo contrario.<\/p>\n<p>El problema para ellos es que podr\u00e1n convencer a algunas personas de que s\u00ed habr\u00e1n comisiones, pero solo hasta el 7 \ud83d\ude18 <a href=\"https:\/\/t.co\/H8gkYTEucc\">pic.twitter.com\/H8gkYTEucc<\/a><\/p>\n<p>&mdash; Nayib Bukele \ud83c\uddf8\ud83c\uddfb (@nayibbukele) <a href=\"https:\/\/twitter.com\/nayibbukele\/status\/1429614146031661061?ref_src=twsrc%5Etfw\">August 23, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>&nbsp;<\/p>\n<p>Quipu GmbH is a real-world company \u2014 they do integration and IT for banks and credit unions in Germany, and also have a presence in Latin America. They\u2019re the card processor for Banco Hipotecario.<\/p>\n<p>Ciphertrace and\/or Elliptic are doing \u201cKnow Your Transaction\u201d for anti-money-laundering. (A function like this is required in the regulations for banks handling Bitcoin.)<\/p>\n<p>None of Quipu, Ciphertrace, Elliptic, Twillo, AWS, Coinbase, Binance or Bitso do what they do for free.<\/p>\n<p>The money to pay the private companies has to come from somewhere. So it\u2019ll be exchange rate spreads between buying and selling prices. Or maybe interest on the float, the way shadow banks make their money.<\/p>\n<p>It is possible that the leaked diagram is just a preliminary sketch, and that the named companies have yet to be contracted to do these jobs \u2014 so it might not be Binance in particular, and so on.<\/p>\n<p>(For any other national payment system two weeks from launch, you could be reasonably sure that the companies named in a slide were actually the companies that would be involved \u2014 but the Bitcoin Law project has been incompetent slapdash nonsense from the start, so we can\u2019t be certain.)<\/p>\n<p>It\u2019s not clear how Strike fits into Chivo at this stage \u2014 or if it does at all. As I noted previously, Strike has been <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/08\/15\/el-salvador-and-bitcoin-news-gossip-rumours-and-reading-the-tea-leaves\/\">marketing Bitcoin terminals to merchants<\/a> quite hard, though those will presumably run on Strike&#8217;s own network.<\/p>\n<h3>The Bitcoin Trust at BANDESAL<\/h3>\n<p>In other news, the President has only just put the law required to create the <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/06\/11\/el-salvador-passes-its-bitcoin-law-and-its-a-tether-scam\/\">$150 million Bitcoin trust at BANDESAL<\/a> \u2014 the buffer between bitcoins and dollars for merchants \u2014 to Congress. [<em><a href=\"https:\/\/derechoynegocios.net\/presidencia-presenta-solicitud-para-crear-fideicomiso-bitcoin\/\">Derecho y Negocios<\/a>, in Spanish<\/em>]<\/p>\n<p>This is being called a trust fund \u2014 but it works more like a <a href=\"https:\/\/en.wikipedia.org\/wiki\/Currency_board\">currency board,<\/a> which countries use to maintain a local currency pegged against a foreign currency. The trust fund can increase its size by itself, and manage where the money is invested. It can also issue debt as bonds! [<em><a href=\"https:\/\/www.asamblea.gob.sv\/sites\/default\/files\/documents\/correspondencia\/C0164510-0C27-4E6E-A178-9B1764AD0CAE.pdf\">Asamblea Legislativa<\/a>, PDF, in Spanish<\/em>]<\/p>\n<p>You can see why BCR, the reserve bank, wanted this thing over there on BANDESAL&#8217;s balance sheet, not their own &mdash; even as the diagram lists BCR as administering it.<\/p>\n<p>Just two weeks to Bitcoin Day, 7 September! I&#8217;m sure it&#8217;s all going <i>just fine<\/i>.<\/p>\n<p>&nbsp;<\/p>\n<br><br><div align=\"center\"><p><a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\"><img src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/10\/become_a_patron_button.svg\" alt=\"Become a Patron!\" title=\"Become a Patron!\" width=217 height=51><\/a><br><p style=\"align:center;\" class=\"patreon-badge\"><i>Your subscriptions keep this site going. <a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\">Sign up today!<\/a><\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>Yesterday: a leaked diagram of the back end for the Chivo network. Today: the law to set up the Bitcoin trust fund.<\/p>\n","protected":false},"author":1,"featured_media":20339,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[2419,568,21,2366,1917,2305,2420,2421],"class_list":["post-20334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-athena","tag-binance","tag-bitcoin","tag-chivo","tag-ciphertrace","tag-el-salvador","tag-el-tapudo","tag-elliptic"],"jetpack_featured_media_url":"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/chivo-atms.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=20334"}],"version-history":[{"count":29,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20334\/revisions"}],"predecessor-version":[{"id":20367,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20334\/revisions\/20367"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media\/20339"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=20334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=20334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=20334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}