Bitcoin won’t work in El Salvador: High Transaction Fees, Lack of Proper Infrastructure, and More.

El Salvador President Nayib Bukele recently announced in a recorded message played at a Bitcoin conference in Miami that he plans to send proposed legislation to the country’s congress that would make the cryptocurrency legal tender in the Central American nation.

While the bill hasn’t been sent to congress yet, it’s already made lots of headlines. Many websites have already falsely claimed that it’s actually become the law, which simply isn’t true as nothing has yet been confirmed.

If approved, this bill would be disastrous for the countries economy by forcing citizens to use Bitcoin, which if we are being honest, is expensive, slow, and unrealistic for a nation that lacks any proper infrastructure, and has extremely low wages.

In this article, I’ll go over some reasons why I believe Bitcoin will not be able to succeed in this country. They will likely be forced to ditch Bitcoin (assuming they accept it in the first place), and go for an altcoin that’s cheaper, inexpensive, and more realistic for payments.

Bitcoin is totally unreliable as a payment network. If we take a look at the BTC transaction fees over time, we can see how volatile it is.

Earlier this year, transaction fees surged to an average of $64. This means for every transaction someone decides to send using Bitcoin, they will be forced to pay a fee higher than the fees at any bank in the world.

The median wage of a waiter in El Salvador is $2,358, which is around $6.46 a day. This means even 1 Bitcoin transaction would cost 9.5 days’ worth of wages for a waiter in El Salvador.

While transaction fees have dropped in recent weeks because the entire BTC network has slowed due to China’s mining crackdown, this is definitely a big concern for poor nations using Bitcoin.

If Bitcoin were to ever make new highs again, its fees would be even higher, and make it an even more unrealistic payment method. If the price ever went to $100,000 or $1,000,000 for example, people would likely be forced to pay hundreds or thousands to transfer their coins. Not so efficient.

El Salvador is one of the poorest and most unstable countries on earth. With a physical cash economy, it’s estimated that roughly 70% of folks do not have bank or credit cards.

The term “Legal tender” means it’s required to be accepted by every business & individual. Even if this bill was passed, it would be very chaotic because nobody would be able to use it.

For a country that’s drowning in poverty, and crime, their attempt to escape inflation by wanting to accept Bitcoin, a very overvalued, speculative, and risky asset, is just another reason why they are one of the worst economies in the world.

No Internet Access for Majority of Country

One drawback to Bitcoin is that it requires an Internet connection. Before proposing this bill, the president may have forgotten that a huge chunk of El Salvador’s population doesn’t even have access to the internet.

In 2017, only 33.8 percent of the country’s population accessed the internet, which is far below Latin America’s average.

El Salvador’s president is trying to use Bitcoin to brand his country into one that promotes liberty, democracy, and freedom. This illusion has been easy to sell to some Bitcoin maximalists, as long as prices go up…

But what the crypto media fails to mention with this story is how Bukele is a brutally corrupt dictator. In 2020, he even sent heavily-armed police and soldiers into parliament and forced lawmakers to approve a $109M loan to better equip the police with new heavy assault rifles, armor, anti-protest devices, war-level tanks, ammunition, and much more.

Just recently, Human Rights Watch wrote an article about how the president was moving towards authoritarianism, and how the US should act to stop them from escalating down this dangerous path.

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Source: https://cryptowhalex.medium.com/bitcoin-wont-work-in-el-salvador-transaction-fees-lack-of-infrastructure-and-more-5209cc2b0967?source=rss——-8—————–cryptocurrency