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Bitcoin The Almighty Buck

El Salvador's Bitcoin Rollout Marred by Technical Glitches in Digital Wallets (msn.com) 105

Posted by EditorDavid from the magic-money dept.
Slashdot has been following El Salvador's pioneering adoption of Bitcoin as legal tender last week.

But by Friday Reuters was reporting that "For a fourth day in a row technical glitches have beset the Salvadoran government's bitcoin digital wallet Chivo, a setback that could discourage residents from signing up to the app promoted by President Nayib Bukele. Problems accessing the wallet, withdrawing money from ATMs, and data verification, as well as the government not depositing the $30 (€25) bonus Bukele promised all Chivo users were the most frequent issues, according to interviews with at least 10 users and user complaints posted on Twitter and Facebook.

Melvin Vasquez, a 30-year-old tattoo artist, downloaded Chivo on Tuesday, when the Bitcoin law went into effect, but has since been unable to use it... User complaints were also stacking up in Apple's App Store and Alphabet's Google Play...

[M]any of the very people sending or receiving dollars to El Salvador are mistrustful of Bitcoin. Some expressed fears of losing money, given the high volatility of the cryptocurrency.
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El Salvador's Bitcoin Rollout Marred by Technical Glitches in Digital Wallets More

El Salvador's Bitcoin Rollout Marred by Technical Glitches in Digital Wallets

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  • Bitcoin can't handle it. (Score:5, Interesting)

    by peragrin ( 659227 ) on Monday September 13, 2021 @06:45AM (#61790873)

    Bitcoin can't handle what El Salvador is about to throw at it. Even when they get this technically working the volitity of bitcoins means those with little will lose their funds just transfering money to someone.

    Does it make sense in America to transfer funds to euros exchange money and the transfer back?

    That is how you use Bitcoin.

    Banks could kill Bitcoin by offering cheap readily accessible standard for digital fund transfers. No ACH doesn't count as it isn't always available.

    • In my country (UK) I can transfer up to £10,000 to someone else's account instantly with zero fees, even if they are with a different bank. For larger amounts or foreign transfers there is a negligible fee (£10-15).

      With Bitcoin and other cryptos, you often have to endure long confirmation times, crippling fees (ETH fees were over $300 for a low priority transaction last week), and the eternal risk of a typo or hack making all your funds go bye-bye.

      So can someone explain what problems crypto solv

      • Re: (Score:1)

        by thona ( 556334 )
        That is amazing how you call it neglegible to be raped, fee wise. In Europe or Germany to be more exact there is nofee of 10 to 15 POUNDS - transfers from my personal account are like 10 cents, REGARDLESS OF AMOUNT. Also, you are ignorant on the rest: > With Bitcoin and other cryptos, you often have to endure long confirmation times Hence the use of the Lightning network with seconds as confirmation time. > crippling fees Hence the use of the Lightning network - oh man. > So can someone expla

        • Liquidity costs money, lightning needs massive subsidies to have acceptable fees.

          • Liquidity costs money, lightning needs massive subsidies to have acceptable fees.

            I'm curious, who do you think would be paying these subsidies? Governments aren't going to pay them. There is no controlling organization to them. So, who is going to pay them?

        • The fee is negligible, at less than 0.1%. And it has to do with conforming with reporting requirements, etc. that large transfers have. Certainly 10 pounds is cheaper than a solicitor filling out the paperwork.

          Or did you fall into the "BTC allows you to avoid laws as its sole selling point" thing.

          Meanwhile, in addition to the filing, etc, you also get some anti-fraud guarantees.

      • If relying on Eth for small transactions, you're doing it wrong.

        • It's supposed to be currency. How exactly is using it to pay small amounts "wrong"?!

          • It's supposed to be currency. How exactly is using it to pay small amounts "wrong"?!

            While all currencies share certain properties (divisibility, immutability, portability, etc), not all currencies are identical. Transaction fees might make certain higher-value cryptocurrencies more suited for large SWIFT-like transactions, with lower-fee currencies being more appropriate for smaller transactions.

            It's not uncommon for societies to adopt multiple exchangeable and interchangeable currencies in order to solve this same problem historically. Gold, silver, and copper is one of the most common

            • I see. So what's the cryptocurrency du jour for day-to-day transactions then?

              • So what's the cryptocurrency du jour for day-to-day transactions then?

                Personally, Doge for coffee, tips, friendly wagers, and Craigslist purchases.

                BTC and Ether for large electronics purchases (via Newegg)

                Debit card loaded with BTC for legacy/visa purchases.

                • So, the joke crypto is used for day to day transactions. Gotcha. Makes a lot of sense.

                  • The largest fast food chains aren't the biggest because they have the best food, they are the biggest because they were the first ones to take advantage of a new paradigm. I see now your original question was not honest.

                    • I was legit intrigued as what the alternative everyone used. But sorry, no, i cannot take the reply seriously.

                      No matter how you slice it, (all) cryptocurrencies still have serious scalability issues.

                    • No matter how you slice it, (all) cryptocurrencies still have serious scalability issues.

                      True, but so did the Internet. Not many will remember the days when it was common for a small website to be 'Slashdotted' due to a news story or popular article being posted here.

      • Re: (Score:3, Funny)

        by timholman ( 71886 )

        So can someone explain what problems crypto solves exactly?

        How about the problem of ransomware gangs not having a safe and secure method of extracting ransom from their victims?

        Problem solved!

      • How much would it cost to take that £10,000, convert it to Euros, then transfer it to the South Sandwich Islands who use the British pound as currency, then convert it back from Euros to pounds?

        What happens with El Salvador and remittances is this:

        Salvadorians in the U.S. convert the U.S. dollars they earn into bitcoin. Then, they transfer the bitcoin someone (wife, cousin, parent) in El Salvador. That person now has bitcoin. But if they need dollars to buy something they then need to convert the bitcoin back into dollars because El Salvador uses the US dollar as it's currency. Now, let's assume the person wants to buy something with bitcoin. It requires that both the buyer and the seller have a bitcoin wallet (Chivo), that the wallet is working, have an internet connection, and that the internet connection is working. But, how do they negotiate the price of the sale as haggling is common in El Salvador? Do they do it in dollars or in fractions of a bitcoin? What if bitcoin is falling rapidly, will anyone want to accept it as payment? If it is shooting rapidly, will anyone want to spend it?

        By the way, seeing as the Lightning network transactions aren't approved by the nodes, if I were going to try to steal bitcoin, I would target the lightning network.

        • How much would it cost to take that £10,000, convert it to Euros, then transfer it to the South Sandwich Islands who use the British pound as currency, then convert it back from Euros to pounds?

          Currency conversion fee is typically 1% of the total, so £200 for conversion. And then another 2% for the credit card fee, (you are using a credit card, right?) so the total is £400

          Bitcoin miners are paid around $150-$200 USD per transaction right now, for BTC, the conversion fee is £0, but the transaction cost is £100.

          But this is all kind of irrelevant, because we aren't talking about transactions that large. If you want to buy a £2 watermelon, like a regular person, the tot

          • Bitcoin miners are paid around $150-$200 USD per transaction right now, for BTC, the conversion fee is £0, but the transaction cost is £100.

            Typical fees right now are at about $0.50 per transaction for a projected confirmation time of about one hour. I realize you're probably including the block reward, but that isn't a per-transaction cost; it's paid by holders of Bitcoin via inflation of the supply. In any case El Salvador is using the Lightning network, so most transfers can be settled instantly off-chain—without any reduction in decentralization or need to extend trust to third parties—and the average transaction fees are much l

        • Or, they could follow US laws and not use BTC at all. I have yet to see a use for BTC that's not "avoid the law".

        • Re: (Score:2)

          by Artemis3 ( 85734 )

          You are so wrong (and various people here) that is not funny.

          Chivo is optional, you don't need it. Use any other wallet like Electrum.

          The whole point is that people stop changing the remittance back unto USD, Chivo is acting as payment processor for the old fools who can't still use bitcoin, not unlike Bitpay.

          If you are already paying wages and bills in bitcoin, exchanging is pointless (and less waste in exchange fees).

          Your happy EUR utopia breaks down after you leave Europe. It is not a global currency, ba

      • If you're sending £200 every month, then £10-15 is super expensive.

      • Re: (Score:2)

        by mjwx ( 966435 )

        In my country (UK) I can transfer up to £10,000 to someone else's account instantly with zero fees, even if they are with a different bank. For larger amounts or foreign transfers there is a negligible fee (£10-15).

        With Bitcoin and other cryptos, you often have to endure long confirmation times, crippling fees (ETH fees were over $300 for a low priority transaction last week), and the eternal risk of a typo or hack making all your funds go bye-bye.

        So can someone explain what problems crypto solves exactly? It seems to me that shilling the 'advantages' of crypto is merely highlighting deficiencies in the retail banking system of many countries.

        inb4 "b-but safecumrocketcoin solves all the problems with Bitcoin and Eth!"

        This.

        I moved from Australia to the UK and found the UK's Faster Payments system to be a godsend. In Australia you had to wait 24 hours for an interbank transfer to clear where as they are practically instant here in the UK. However even Australia's woeful banking system that was faster than crypto. For international transfers I use a service like Currencyfair or OFX.

        Cryptocurrencies are not a replacement for a government failing to enforce a common standard of interbank transfers.

        The main advantage

    • Does anyone have any technical information on what is really going on? It really seems like El Salvador is trying to set up a government-run bitcoin *exchange*. i.e. the government holds the bitcoins while individuals have an "account" that says that they own a certain number of bitcoins. However, individuals do not actually have the private key to the bitcoin wallet that holds the bitcoin that they supposedly "own". i.e. Bitcoins are not being used as currency in the way bitcoin is supposed to work. S

    • What a crock of horseshit. First, their wallet is using a lightning channel for typical transaction, but even if it wasn't, you can still confidently get in the next block for 4sat/byte. And while volatile, Bitcoin isn't the PRIMARY currency of El Salvador. Most using it right now are just using the $30 worth they got when this all started up... and all of these dumbass posts scream "volatile = lost money!" when in reality it can go up just as much as it goes down. This comment is nothing more than a quick
    • Do we know if El Salvador is actually throwing the traffic at bitcoin that their announcement suggests but does not rigorously imply?

      All the reports I've read of the legal-tender adoption mention that they've also rolled out a pet wallet app; and bitcoin(and cryptocurrency ecosystems generally) seem to have a lot of history with apps and 'exchanges' that are denominated in bitcoin; but have all the keys held by the operator and just move IOUs around between users with some relatively boring database back
    • El Salvador should have issued their own cryptocurrency - BananaRepublicoin.

  • $30 (Score:4, Insightful)

    by Joce640k ( 829181 ) on Monday September 13, 2021 @07:24AM (#61790921) Homepage

    If they were given $30 last week it will be worth $25 by now. Now take away a transaction fee if they try to spend it and it's worth $20.

    Who wouldn't want their wages paid like that every week? It's awesome!

    • Iâ(TM)ve bought $250 a week in Bitcoin since 2016.

      Yes, the amount varies. Can you figure out the difference between variance and trend?

      This week my wallet is varying in amount more than you likely earn in a year. Do you think this upsets me?

      If you donâ(TM)t understand Bitcoin, thatâ(TM)s ok. But itâ(TM)s not going away.

      • Isn't basically every crypto up year-over-year?

        • The ordinary stock market us up about 40% on the investment portfolio I opened last October. So far I could have lived on what it's earning monthly (if I'd needed to).

          • Unless you're looking at 4+ year time horizons, comparing the stock market to Bitcoin is bound to get you some misleading numbers.

          • The ordinary stock market us up about 40% on the investment portfolio I opened last October. So far I could have lived on what it's earning monthly (if I'd needed to).

            That's an aberration, not the normal stock market performance which averages a very good, but modest 7-9% a year if you do dollar-cost- averaging (a bit more if you invest more into mid-cap industries instead of relying on the SP500 index.)

            I don't mind the aberration. I'm getting about 35% gains. But I know that's going to level off (and some holdings will dive) back to normal. In fact, this aberration is to be expected. With a pandemic, it's just TINA (there is no alternative ... but to go up.) There wi

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        And you declare the gains and pay taxes on them, right?

        No? I'm shocked that someone would use cryptocurrency to break the law.

        • Everyone I know making lots of money on Bitcoin is paying taxes. Unless you're dealing with millions of dollars of invested money, you're going to have a tough time hiding the transactions from the IRS unless you're willing to expose yourself to exchange risk using a sketchy foreign exchange.

      • Re: (Score:2)

        by fedos ( 150319 )

        This week my wallet is varying in amount more than you likely earn in a year.

        It's telling that you see this as a good thing and not as an inherit problem with cryptocurrency.

        • This week my wallet is varying in amount more than you likely earn in a year.

          It's telling that you see this as a good thing and not as an inherit problem with cryptocurrency.

          It is a good thing if you view Bitcoin as a gambling mechanism. If you care about the currency part of cryptocurrency, not so much.

      • This week my wallet is varying in amount more than you likely earn in a year. Do you think this upsets me?

        I won the lottery. What's your excuse for still being poor. Everyone could be rich if only they would recklessly gamble!

        For the record there's a specific logical error named after your post: https://en.wikipedia.org/wiki/... [wikipedia.org]

      • Let's clarify something

        I've bought $250 a week in Bitcoin since 2016.

        That's real nice for you. The average Salvadoran makes less than $350 a month. The disposable income you sink into bitcoin in two weeks is more than most Salvadorans make in a month.

        This week my wallet is varying in amount more than you likely earn in a year. Do you think this upsets me?

        You miss the point, probably deliberately. In El Salvador, most of the money in bitcoin is supposedly to be remittances for Salvadorans living and working abroad. Now, say your son is sending you $100 a month in bitcoin to pay for the medicine your grandchild needs to live. But, by the time you can get to

    • I pay $30 for a wire transfer plus a 2% forex hit. I'd have to think about if I'd prefer btc, it's certainly not as convenient because there's no btc atms where I am.

      • Jeez, don't they have anything like Bizum where you are?

      • Re: (Score:2)

        by bn-7bc ( 909819 )
        Ouch that is steep, I pay USD 7/ transfer +2% forex for anything USD 56K (actually the limit is SEK 500K but I converted for the sake of simplifying the discussion) which in my case that means 100% of all transactions I'm ever lightly to make unless I decide to move
    • The transaction fee is pennies right now and has been since the beginning of July. Ignoring that however, since the wallet they are using is doing Lightning network transactions by default.

      This site has become an echo chamber of oldheads screaming to get off their lawn, spreading the same wrong information like it was a political subreddit or facebook group.
  • This wouldn't have happened if they adopted the original Bitcoin (BSV).. limitless scaling on level 1, instant transactions, etc.

  • Bitcoin in a 3rd world country; I wonder how usable Bitcoin will be as El Salvador does not have the Internet infrastructure for convenience and expediency. They'll still need a tangible, hard currency for buying and selling in unwired towns, villages, and hamlets. The gold old fiat currency of the American dollar might become the shadow currency of Bitcoin--if the American dollar is not already so in El Salvador

    Perhaps using Bitcoin will spur Internet infrastructure development?

    It would be interesting that

    • Re: (Score:2)

      by Ronin441 ( 89631 )

      Yes, the US dollar is already the currency of El Salvador. They discontinued their own currency in 2001 according to Wikipedia [wikipedia.org].

      I believe the problem they're trying to solve is that current international transfer methods such as Western Union take a huge slice and are hugely inconvenient. So it's possible that if Bitcoin takes a moderate slice and is only moderately inconvenient, it might be an improvement.

    • Bitcoin in a 3rd world country; I wonder how usable Bitcoin will be as El Salvador does not have the Internet infrastructure for convenience and expediency.

      Where the hell do you get the idea there's no reliable internet infrastructure in El Salvador. Bro, Indiana Jones movies aren't a documentary. Countries are poor, but they aren't in the stone age. In fact, Central America as a whole is very well wired (because it is cheap to throw communication towers.)

      Honest to God, some of you really need to travel and learn about the world.

  • If you really handle bitcoin, them your transfer is going to take minutes and the fee will be several/many dollars.

    Otherwise, you are not using bitcoin. You are using a third-party service, similar to PayPal, but denoted in bitcoins instead of dollars. And you will lose all of your wallet money when the service is "hacked", as it has already happened in many bitcoin wallet services before.

    • Let me introduce you to the Lightning Network. It's built on Bitcoin, has near-zero fees and nearly instant transactions.

      • Yeah, if you happen not to care about most of Bitcoin's selling points, such as decentralization, privacy, and resiliency to attacks.

        Seriously, if the solution to Bitcoin's terrible transaction volume is to hack something that looks like banks clearing with each other on top of it... just use a bank.

        • The Lightning network is still a decentralized protocol, has even better privacy since you only need to publish the opening and closing transactions for the payment channel and not the individual payments, and is pretty resilient against attack (though you do need to monitor the network to guard against obsolete transactions being broadcast, or arrange for someone else to do that for you).

          The indirect payment option where you make use of others' established payment channels rather than opening new ones is o

          • Please. LN generates a massive attack surface, and any exploited vulnerability means your precious BTC are gone forever. On top of that, it requires packet routing which in effect requires knowledge of the network topology, meaning you can explore channels capacity, users and even node balances with ease.

            There is no free lunch when you build your own little transaction network on top of BTC's.

  • The populist aspect aside, what is the point of this BTC rollout?
    Why did the government not simply come up with a super simple electronic wallet/bank account (like m-Pesa in parts of Africa) for everybody, and maybe open a state bank in the USA to make international transfers super cheap?
    Many countries have done at least the first part with great success. Here in Costa Rica, they implemented a laughibly simple (and insecure) system for sending small amounts of money "via SMS", and it's taken off like wild

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