Came across this video on El Salvador making Bitcoin legal tender which everyone is aware but what I like about the video is that it goes to the ground and ask the citizens of El Salvador on whether they prefer Bitcoin or cash and what has changed since Bitcoin became legal tender.
For construction worker, Milton Cabrera, he is now paid his salary in Bitcoin and it has changed his life. When asked why, he explains that if he receives his salary in cash, he tends to spend it and at a rapid pace. Whereas if he is paid in Bitcoin, he can just use what he needs and save the rest.
We might not be able to relate to that as the majority of the population in Singapore receives our salary digitally through the GIRO banking system but for people who receive their salary in cold hard cash, receiving it digitally in the form of Bitcoin helps them to stash the amount and save.
When asked if he was afraid of losing all his money due to Bitcoin's volatility, he replied that, "Maybe but the way we know Bitcoin, if you study it, sooner or later it will go down, sooner or later it will go up but if you have patience and keep waiting, it could go back up and make a profit." He goes on to say that he has made about $600 or $700 based on Bitcoin.
Next a street vendor also said that she accepts both Bitcoin and cash as payment where Bitcoin is used for saving and at times she prefers cash as payment. On the other hand for her, she has lost a bit on the Bitcoin that she has been saving, about $30.
El Salvador
El Salvador is a country in Central America. As of 2021, the country had a population of approximately 6,825,935. The country however struggle with high rates of poverty, inequality, and gang-related violent crime. El Salvador's economy has been affected by natural disasters and government policies that direct large economic subsidies including official corruption. Its own currency, Salvadoran colón which was used between 1892 to 2001 was replaced by US dollar in 2001. With this, the government formally limited the implementing of open market monetary policies to influence short-term variables in the economy as their currency is now the US dollar and with the adoption of the U.S. dollar, El Salvador lost control over monetary policy. And now, Bitcoin is accepted as a parallel legal tender alongside the US dollar. El Salvador relies heavily on remittence where it makes up 20% of it's country's gross domestic product and accepting Bitcoin would make it easier for Salvadoreans living abroad to send money home. This also puts El Salvador on the front page as it is major news and when travelling resumes, I am sure people will be looking to explore the area with their Bitcoins, haha.
Read more: Mid Year Review of Portfolio | Hitting $50,000
Bitcoin Beach (Wallet used)
The payment system or wallet being used in El Salvador is called Bitcoin Beach which works together with Strike, a payment app as well. Michael Peterson, a 47-year-old California native created Bitcoin Beach. Below is how he did it.
In early 2019, Peterson was introduced to an unidentified donor through a connection he made at the church. The proposition he heard seemed more like a scam: An anonymous donor in California had purchased a cache of Bitcoin that was presumably now worth a fortune. Through an adviser, the donor told Peterson he wanted to create a local economy that ran on Bitcoin, the only condition being that it wouldn’t be cashed out into a fiat currency. Peterson thought about it, grew intrigued, and decided to go for it. “It allows everybody from the poorest to the richest to participate on the same playing field,” he says. “I really felt like, ‘Man, this is something that can change El Zonte.” He says he still doesn’t know the donor’s identity and it was the pandemic that ultimately jump-started the project - Taken from Bloomberg
I would say that it is kinda crazy using Bitcoin as payments for our necessities and as a currency like El Salvador because the price fluctuations are still volatile. It is a huge step and the accepting of Bitcoin also seems to be going in a right direction for it's citizens as Bitcoin is seen as a store of value and they save in the form of Bitcoin. Accepting Bitcoin as payment also allows investments into the country for and using the cryptocurrencies. We have seen a huge amount of relief/donations being made in the form of cryptocurrencies and for the the countries who have received it, they do require infrastructures and procedure to liquidate out if they require the fiat for relief as of now. It's interesting and time will tell how this will all pan out in the future.
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