VanEck strategy advisor Gabor Gurbacs expects a wave of new investment capital and immigration will push El Salvador’s economic growth in the coming years.
El Salvador Chivo Bitcoin Wallet Relaunch To Serve 4 Million Users
El Salvador, a country that has become infamous for being the first sovereign nation to accept bitcoin as a legal tender, continues its journey through uncharted waters. To make this move a reality, the country had launched its own government-approved bitcoin wallet, Chivo for carrying out crypto transactions in the country. Encouraging residents to accept the wallet by offering a $30 bonus on sign-up.
“Bitcoin Day” has since come and gone since then and El Salvadoran citizens are settling into using the cryptocurrency as a legal tender alongside the US dollar. However, there have been some kinks to work out with the bitcoin wallet, and one of those kinks being the ability to function properly for all of the residents of the country has led to the relaunch of the Chivo wallet.
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Chivo Wallet Relaunch
Since Chivo first launched last year, it has quickly grown in the number of active users. It eventually grew to 2.1 million users, a milestone that was celebrated by the president. However, this had started to present problems with stability and scalability. As with any good wallet, the Chivo wallet has to be able to expand to accommodate a large number of users, giving rise to the relaunch.
This new version of the app will allow more users to be able to access and use it seamlessly. It will eliminate the stability issues that arose with the first version. Thus making it a better fit for the expected more than 4 million users that will be using bitcoin as legal tender in the country. Users have been experiencing issues like missing funds, system issues, fradulent transfers, etc, which will be handled with the relaunch.
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The El Salvadorian government is said to have partnered with AlphaPoint, a white label infrastructure provider that will work on making sure the Chivo wallet is always running and stable, as well as handling issues regarding scalability and social impact. This relaunch will solve a variety of existing issues, as well as add new features to provide a better user experience.
“El Salvador and President Bukele are truly leading globally with this first major experiment in Bitcoin adoption at a country-wide level. We are honored to be involved in the process and provide the scalable and reliable solutions needed for this massive undertaking,” said Igor Telyantnikov, CEO/Founder of AlphaPoint.
El Salvador To Install 1,500 Bitcoin ATMs
In addition to the Chivo app relaunch, El Salvador has announced that it plans to deploy more ATMs to make bitcoin accessible to residents. The acceptance of bitcoin as legal tender had come with the installation of multiple bitcoin ATMs around the country to enable easy and swift payments. But the country is taking another step towards securing its title as bitcoin capital of the world.
BTC at $36K | Source: BTCUSD on TradingView.com
El Salvador will add another 1,500 Bitcoin ATMs around the country, to be deployed in different locations. The country is putting these ATMs in place “to more readily serve the population of El Salvador, the statement read.
Featured image from Reuters, chart from TradingView.com
El Salvador removes BTC price feed from Chivo app to crack down on arbitrage scalpers
Users of the Salvadoran government’s Chivo wallet will not be able to see frozen price quotes until the feature has been removed to deter arbitrage scalpers.
2.1 Million Salvadorans Actively Using Chivo Wallet, El Salvador’s President Claims
Nayib Bukele, El Salvador president, has claimed that 2.1 million citizens are using the new government-backed Chivo cryptocurrency wallet. In a tweet, he implied the apparent success of Bitcoin in the country.
El Salvador recently adopted bitcoin as a legal tender on September 7, 2021, being the first country to do so.
Related Reading | Just 10 Days After El Salvador’s “Bitcoin Day”, President Bukele Confirms 1.1 Million Citizens Have Chivo Wallet
On Saturday afternoon, president Nayib Bukele shared this update with his 2.9 million Twitter followers. He claimed that Chivo “now has more users than any bank in El Salvador” after just three weeks in operation. He also said that despite Chivo not being a bank, it already has more users than any bank in El Salvador and that it is only a matter of time before the wallet’s adoption surpasses all banks in El Salvador combined.
2.1 million Salvadorans are ACTIVELY USING @chivowallet (not downloads).
Chivo is not a bank, but in less than 3 weeks, it now has more users than any bank in El Salvador and is moving fast to have more users that ALL BANKS IN EL SALVADOR combined.
This is wild!#Bitcoin🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) September 25, 2021
El Salvador’s Chivo Wallet
The state-issued wallet launched in early September as El Salvador officially recognized Bitcoin as legal tender. Chivo enables individuals and businesses to send and receive payments in Bitcoin (BTC) or dollars (USD) from anywhere in the world. Merchants must offer the ability to use both currencies. However, some merchants saying they would rather lose sales than accept bitcoin payments.
Related Reading | El Salvador’s Chivo And Bitcoin Adoption In Mindblowing Facts And Stats
The wallet is available on both Android and Apple devices. Latin American cryptocurrency exchange Bitso is the core service provider for the Chivo wallet. There are now over 200 bitcoin ATMs in El Salvador, the third-largest number of ATMs after the U.S. and Canada.
President Bukele’s goal is 2.5 million Salvadorans, which is approximately 39% of the population. As an incentive, the government offers $30 in bitcoin when people download the wallet app.
Bitcoin Adoption In The Country
President Bukele’s latest update implies that the Bitcoin Law is being received positively by the citizens of El Salvador. However, many protestors have taken the streets to assert their disapproval.
As reported, some protesters even set fire to a brand-new Bitcoin machine, while others held signs reading “Bukele Dictator”. According to the protesters, the president is using authoritarian means to tighten his grip on power. They gathered in the capital San Salvador on the 200th anniversary of the country’s independence, with placards that read “No to Bitcoin” and “Respect the Constitution”.
BTC trading at $43.2K | Source: BTCUSD on TradingView.com
Apart from the protests, there were reported glitches during the initial rollout. In the first week, one machine completed only three successful transactions out of many. A lot of Salvadorans also do not trust bitcoin because of its volatility.
According to a recent survey from Sherlock Communications, an agency in Brazil, 54% of Salvadorans are not familiar with Bitcoin.
Featured image from Nairametrics, Chart from TradingView.com
El Salvador’s Chivo And Bitcoin Adoption In Mindblowing Facts And Stats
Why didn’t we thought of measuring Chivo and Bitcoin adoption this way? Cero anecdotal evidence. Only facts, numbers, and reports from wherever we can get them. What do we know about the Chivo Wallet’s Lightning node? What apps besides the government wallet are the Salvadorans using? Are they happy with them? Investor and blogger Kevin Rooke has a fresh take on El Salvador’s Bitcoin adoption and we’re here to summarize it.
“I wanted a deeper understanding of how real people in El Salvador are interacting with Bitcoin, so I went off in search of other success metrics.”
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However, since “the Lightning Network is private by design,” it’s hard to accurately measure “payment volumes and the flow of funds between various wallets and exchanges.” So, what did Kevin Rooke do? He looked everywhere else for hard data about Chivo and Bitcoin adoption. Let’s explore what he found.
BTC price chart for 09/24/2021 on Exmo | Source: BTC/USD on TradingView.com
The Chivo Ecosystem Is Growing Fast
To measure the Chivo wallet’s adoption, Rooke used the official information provided by President Bukele. Not ideal, but not uncommon either. It’s easier to get info about the Chivo Lightning node because you can check all the public info here. But wait, why is the Salvadorean government running a Lightning node?
“Just like every other participant on Bitcoin’s Lightning Network, Chivo runs a Lightning node. Since Chivo is a custodial wallet, all Lightning payments that Chivo users send to and from other Lightning wallets will transfer liquidity to and from Chivo’s node.”
Through those sources, what did the author find out about the Chivo ecosystem?
- At the moment, “Chivo’s node has 12.7 BTC of public capacity.” Which is 1,269,941,898 sats.
- The Chivo node “ranks 83rd among public Lightning nodes.”
- At the time of writing, it’s connected to 58 other channels, but this number changes daily.
- Back to the iOS App Store and Google Play Store, the Chivo wallet remains at the top of the popularity list, “beating all the most popular social media apps like WhatsApp, TikTok, and Instagram.”
- O bet you haven’t thought about this one, “By onboarding over 1.6 million users in just two weeks, Chivo is likely the most popular Lightning Network app in the world today.”
What About The Other Bitcoin Apps? Are They Popular In El Salvador?
Ok, granted. El Salvador’s government incentivizes the downloading of the Chivo wallet app with $30. That has to move the needle. However, when it comes to all the other Bitcoin apps, such an incentive doesn’t exist. How are they measuring up to other financial apps?
El Salvador’s most popular apps for September 2021 | Source: Kevin Rooke
This infographic says it all:
- “Salvadorans are already showing strong preference for Bitcoin apps over banking and remittance apps on a national scale,” as the graphic shows.
- To put it in numbers, “9 and 13 of the top 20 apps on the respective app stores” are Bitcoin apps. And Chivo is at number one.
- “Most of El Salvador’s banks and payment processors have user ratings of 2-4 stars,” that’s the traditional banking system for you.
- On the other hand, “Bitcoin related apps have user ratings of 3-5 stars.” Even though it’s still early, the facts are the facts. It should be noted that the Chivo app is at the lower end of that spectrum.
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Besides that, Kevin Rooke identified a truth that might be obvious to some, but has to be said:
“The millions of Salvadorans that have already been onboarded to the Lightning Network aren’t Silicon Valley nerds or early tech enthusiasts. They’re regular people that are making a conscious choice to use the Lightning Network because it saves them time and money.”
And they don’t have to use the Chivo ecosystem if they don’t want to. That’s a fact.
Featured Image by Ray Aucott on Unsplash – Charts by TradingView
Is Mexican Exchange Bitso Behind El Salvador’s Chivo Wallet?
The mystery of the Chivo wallet persists. And Bitso comes into the picture as part of a more credible report confirmed through official channels. It seems like NewsBTC was right to doubt Forbes’s article about BitGo being behind the Chivo wallet. This Reuters report, on the other hand, comes with specific information and quotes confirming the news. For example:
“We are looking forward to working with El Salvador in an initiative that will transform payment structures and increase financial inclusion in the country,” said Santiago Alvarado, vice-president of Bitso for Business.
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Even that could be considered evasive, it doesn’t refer to the Chivo wallet specifically. This chunky bit of information, on the other hand, leaves little to the imagination.
“Bitso said it will work with Silvergate Bank, a U.S. federally-regulated and California state-chartered bank, to facilitate transactions in U.S. dollars.”
The language suggests they’re talking business.
El Salvador made history by becoming the first country to make Bitcoin legal tender, and today, we’re proud to announce that Bitso is committed to building and developing El Salvador’s vision of Bitcoin by being the core crypto-service provider for Chivo.Let’s #MakeCryptoUseful https://t.co/2rrTNDdXab
— Bitso (@Bitso) September 7, 2021
If Bitso Is Behind The Wallet, What’s The Deal With BitGo?
On the other hand, in the BitGo report, the language suggested otherwise. The quote from BitGo’s CEO was non-comital and it all sounded like a paid press release. NewsBTC questioned:
“The most worrying sentence, however, is “Forbes has learned El Salvador appears to have tapped…” They’re not committing to anything here. It “appears” this way, but nothing is certain.”
However, could both companies be involved? Reuters says Bitso will be “the core service provider for Chivo.” Forbes said that BitGo would “provide Chivo’s wallet infrastructure and security platform.” Are both of these statements contradictory? Or are both of these giant companies behind the controversial Chivo wallet?
A funny detail is that Bitso’s name was present in the leak of the Chivo wallet’s architecture that our sister site Bitcoinist reported on. BitGo’s name wasn’t. And Athena was at the center of the whole operation. Still, it’s a funny detail.
One thing’s for sure, Strike seems to be completely out of the picture. In a recent Twitter thread, Strike’s CEO Jack Mallers clearly said “Strike has no business relationship with Chivo wallet or any of their ATMs.”
All that was needed was interoperability with the #Bitcoin network.
Strike has no business relationship with @chivowallet or any of their ATMs.
We simply both integrated and operate on top of the same, singular, payment standard that is #Bitcoin and the Lightning Network.
— Jack Mallers (@jackmallers) September 7, 2021
Mallers seems to be perfectly fine with the situation. “With the Bitcoin network, there is one singular, open standard for the world,” he says later on in the thread.
BTC price chart for 09/10/2021 on Bittrex | Source: BTC/USD on TradingView.com
Remittances Are The Key
In the days prior to the Bitcoin Law coming into effect, Bitcoinist quoted the executive president of the Central American Bank for Economic Integration, Dante Mossi. He said their eyes were on remittances and that:
“Guatemala, Honduras and El Salvador are the countries that would have the most to gain if the adoption of bitcoin lowered the cost of sending remittances.” All countries in his organization’s area of influence.
Instead of focusing on how much Salvadorans are going to get back, a recent report about how much Western Union is going to lose with El Salvador’s Bitcoin move recently made the news. About it, Bitcoinist said:
“With bitcoin though, the middleman, in this case, Western Union and the likes, are completely removed from the process. The funds sent go directly to the recipient without the need for a processing fee to a third party. It is estimated that these remittance companies are set to lose about $400 million a year when remittances are routed through bitcoin instead.”
Related Reading | Bitso Raises Over US$1.85m to Boost Mexican Bitcoin Remittance
As it turns out, remittances are Bitso ’s specialty. The company processed “more than $1.2 billion in remittances between the United States and Mexico in 2020.” In the article, Reuters quotes Santiago Alvarado again:
“As the leading crypto exchange in the region, we are thrilled to bring our experience in remittances and in secure and low-friction financial services to Salvadorans.”
So, this all makes sense. Still, the mystery of the Chivo wallet continues.
Featured Image by Thomas Jarrand on Unsplash – Charts by TradingView
Is BitGo Behind El Salvador’s Chivo Wallet? This Old School Mag Thinks So
Where did BitGo come from? In all of this time covering El Salvador’s Bitcoin Law, the name wasn’t in the picture. Now, all of a sudden, Forbes claims that BitGo’s technology is behind the controversial Chivo wallet. How and when did this happen? Or, more importantly, is this real news or a paid piece to take advantage of the “historic moment for cryptocurrency adoption.”
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Not to be conspiratorial, but Forbes’ tone through this whole piece has a press-release-feel to it.
“For months, El Salvador has kept many of Chivo’s details under wraps with the nation’s 40-year-old president, Nayib Bukele, teasing the wallet’s launch on Twitter just last week. However, Forbes has learned El Salvador appears to have tapped cryptocurrency unicorn BitGo to provide Chivo’s wallet infrastructure and security platform, making the Palo Alto, Calif-based startup the nation’s exclusive hot-wallet provider in a historic moment for cryptocurrency adoption.”
What’s all this about “cryptocurrency unicorn BitGo” and “the nation’s exclusive hot-wallet provider in a historic moment”? Is this the appropriate vocabulary for a legacy media publication like this one? The most worrying sentence, however, is “Forbes has learned El Salvador appears to have tapped…” They’re not committing to anything here. It “appears” this way, but nothing is certain.
BTC price chart for 09/07/2021 on Bitstamp | Source: BTC/USD on TradingView.com
What Does BitGo Say About The Announcement?
Not El Salvador’s government, nor Strike commented on the Forbes piece. They did get a quote from Mike Belshe, CEO of BitGo, who said:
“Digital assets look so different from what we’ve seen with other types of money, and so people wonder about how [they] fit in, but this is an opportunity to build financial freedom for the people of El Salvador” says BitGo CEO Mike Belshe, speaking from his home in Silicon Valley on Saturday. “The ability to send money in a hurry on a Saturday night, when banks are closed, across the planet and at almost no fees, it’s hard to put into words how empowering that is, and what we’ll see in El Salvador is, people will start figuring it out.”
Did Belshe confirm the news? Is BitGo behind the Chivo App? He talks about “an opportunity to build financial freedom for the people of El Salvador.” So yeah, assuming Belshe was talking about this specific rumor, he seems to confirm the news. Indirectly. In a non-comital way.
To make things worse, the article ends presenting BitGo as their own marketing material would:
“Founded in 2013, BitGo has grown into one of the biggest cryptocurrency wallet companies in the world, raising more than $70 million in funding from investors including…”
Let’s Remember, What Did Strike Say About The Subject?
Strike’s Jack Mallers has met with the Bukeles, announced El Salvador’s Bitcoin adoption, and the company has an office at Bitcoin Beach. Everyone was assuming that the technology behind the Chivo wallet was going to be Strike’s. However, if we go back to the interview in which Mallers told the whole story, our sister site Bitcoinist quotes him saying:
“There’s no commercial agreement between Strike and the government of El Salvador.
“In fact, I advised and gave my opinion of the opposite. The economies of scale and network effects associated with open networks are so powerful. Just by plugging in to them you’re going to get the freemarket competition that every country would die for.”
Related Reading | Tomorrow, The Community Will Buy $30 In BTC To Support El Salvador’s Bitcoin Law
Did President Bukele take his advice and went with another company? Can we trust Forbes even if it sounds like a copy-and-pasted press release? Is BitGo’s technology behind the Chivo Wallet? We will know for sure very soon.
Featured Image by Chräcker Heller from Pixabay – Charts by TradingView
