El Salvador officially accepts Bitcoin now

As of today, you can pay for food, household items and much more with Bitcoin in El Salvador. Taxes can also be paid with it. El Salvador sees this as a great opportunity. According to one citizen in a street interview, “I think it’s good that the president wants to introduce Bitcoin. Especially in developed countries, in Europe, the currency already exists,” he says and is convinced: “In one or two years, it will change our economy.”

First country in the world

El Salvador is the first country to introduce digital currency as legal tender. The law for it was fast-tracked three months ago, pushed by President Nayib Bukele himself. Luciana Ramirez is unsettled. The 30-year-old works for the government. She prefers not to give her real name because criticism of Bitcoin is not welcome. “The law was passed much too quickly. There is not enough information at all,” she complains. “Many don’t know at all how this app you have to use for it works. It’s all very uncertain – especially for the small stores and businesses. And when we talk about Bitcoin, we think of San Salvador, the capital. But what happens to the rural areas?” she asks. Because there, she says, there is even a lack of electricity, not to mention Internet. Many wouldn’t even understand what’s in store for them. In addition, the cryptocurrency is considered volatile.

The majority is skeptical

The first vending machines have already been set up in the capital San Salvador. Anyone who downloads the digital wallet “Chivo” will receive a starting credit of $30, according to President Bukele’s promise. He is promoting the cryptocurrency – a means of payment that does not require a bank account.

Nearly 70 percent of Salvadorans oppose the bitcoin law, according to a nationwide poll by the Universidad Centroamericana. About the same number had inaccurate perceptions of Bitcoin, according to the survey, with only 4.8 percent correctly defining it as a cryptocurrency.

Critics temporarily detained

Marco Gómez is one of the harshest critics of the Bitcoin launch. He had pointed out to the press the risks involved. According to his lawyer, the bitcoin expert was taken by the police a few days ago without a warrant. “The police said that it was not an arrest. But the strange thing is that even the prosecutor’s office doesn’t know anything about it,” the lawyer reports.

“We have no clarity on what he is accused of. He was traveling with his mother in the car. He was stopped and just taken away. We don’t even know which unit is handling the case.” Although the bitcoin expert was released the same day, the case was not closed and the specific charge remains unclear.

These days, hundreds of Salvadorans have repeatedly taken to the streets to protest the introduction of Bitcoin. President Bukele responded on Twitter. He posted pictures of a protest, writing, “This is a demonstration of opposition. It is very clear who we are dealing with here.”

Why did they chose to have Bitcoin installed?

Bitcoin is an innovative payment network and a new kind of money. It is kind of open source.

There are definitely many aspects that could also be useful in everyday life. Countries like El Salvador generally expect two basic advantages from this:

• On the one hand, greater independence from the U.S. dollar.
• On the other hand, faster remittances from abroad, which are accompanied by lower transaction fees, since a lot of money currently flows into these countries from abroad, for example from family members.

The guiding principle behind Bitcoins and all other cryptocurrencies is to create a completely independent and forgery-proof payment system that is not dependent on the decisions of banks or governments. The great financial crisis of 2008 had a profound impact on the emergence of cryptocurrencies.

The effects of this financial crisis still reverberate today. This is because many people at the time lost all their savings or investments that were once planned as retirement savings. This led to an overwhelming loss of investor confidence in the established financial markets.

How to buy Bitcoin

Bitcoin works differently than classic currencies. While euros, US dollars or yen are printed and issued by the respective central banks, Bitcoin only exists digitally in the blockchain. Anyone who has the necessary key can access it. This key is stored in the Bitcoin wallet. Think of the blockchain as a glass safe. Everyone can see the money that is inside it. But only the person with the right code can dispose of the money.

One way to buy real Bitcoins is through Bitcoin exchanges. The most popular cryptocurrency trading exchanges include Bitfinex, CEX.IO, Kraken, Bitstamp and Paymium.

Anyone who wants to buy Bitcoin must first choose one of the online marketplaces and create an account there. With all reputable providers, new customers have to go through a verification process. This is mainly due to legal reasons. This is because all financial service providers that offer trading in cryptocurrencies are obliged to comply with money laundering guidelines.