Bitcoin's big day
This week El Salvador became the first country to officially make Bitcoin legal tender, adding it to the US dollar — the currency El Salvador has predominantly used since adopting it in 2001.
El Salvador's economy is one of the most reliant in the world on remittances (assets or money sent home by migrant workers) — which account for about one-quarter of GDP according to data from the World Bank. El Salvador's president is hoping that Bitcoin makes it easier (and cheaper) for migrant Salvadorans to send money back to El Salvador, while reducing the country's dependence on the US dollar, and helping to reach the ~70% of Salvadorans that don't have a bank account.
Of course, just making something legal doesn't mean it will become widely adopted — and two obvious barriers spring to mind. The first is a hard technological barrier; a majority of the El Salvador population doesn't have access to the internet. The second will be convincing the significant portion of the population that are skeptical about Bitcoin and its future, some of whom turned out to protest the new law this week.
You get $30, and you get $30...
To encourage adoption of the cryptocurrency, El Salvador is giving people $30 worth of Bitcoin if they download a digital wallet called "Chivo" (which is reportedly local slang for "cool" in El Salvador).In true Bitcoin fashion, the cryptocurrency marked El Salvador's big day by falling more than 10% in value, reinforcing its tendency to be highly volatile.
