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El Salvador seeing influx of Bitcoiners and Bitcoins, but some predict disaster
Coinhead
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British podcaster Peter McCormack has declared that El Salvador’s adoption of Bitcoin is the “real deal” after meeting with President Nayib Bukele in the presidential palace.
McCormack tweeted that he discussed Bitcoin, volcano mining “and the opportunity for the people of this great country” during his meeting with the head of state.
LMAO @PeterMcCormack is hanging out with the President of a country while the economists and academics are writing opinion pieces on their blogs.
We’re winning.
— Pomp 🌪 (@APompliano) June 15, 2021
McCormack was able to buy a coffee in El Salvador using Bitcoin transmitted over the Lightning Network, a scaling solution for BTC.
“The lighting network is fast, cheap and works,” the “What Bitcoin Did” podcaster tweeeted.
Salaries paid in Bitcoin?
El Salvador is also considering whether salaries should be paid in Bitcoin, the country’s ministry of labor, Rolando Castro, told a local radio station.
Castro said he’s discussed it with officials from the ministry of finance and the ministry of economy.
The Bitcoin law passed last week is set to go into effect in September.
There’s also been a big jump in Bitcoin remittances sent from El Salvadorans working abroad to their families back home, Reuters reported, although they remain a small portion of such payments.
Monthly Bitcoin transfers of under US$1,000 totalled $1.7 million in May compared to $424,000 a year earlier, US crypto researcher Chainalysis found, according to Reuters.
But in 2019, El Salvadorans sent back US$6 billion in remittances using traditional payment networks, Reuters reported.
Influx of Bitcoiners
Meanwhile, the Twitter account of Bitcoin Beach, a coastal village in El Salvador where the cryptocurrency is used on an everyday basis, posted that there’d been an influx of Bitcoiners in recent days.
If you just randomly showed up in #ElSalvador this week you would definitely think there was a huge #Bitcoin conference going on. Non-stop flow through the airport of company leaders looking to support this moment and bring jobs to El Salvador
— Bitcoin Beach (@Bitcoinbeach) June 16, 2021
30 foreign business leaders coming to visit Bitcoin Beach tomorrow -to see how they can invest in El Salvador. Just this morning had 2 companies tell us they already have lawyers setting up their legal business entities. @nayibbukele has opened the jobs floodgates #Bitcoin
— Bitcoin Beach (@Bitcoinbeach) June 16, 2021
‘Likely to be a disaster’
But crypto critic David Gerard, the author of “Attack of the 50-Foot Blockchain,” is alleging that this is a “barely planned smash-and-grab” and a blisteringly obvious scam.
“This is likely to be a disaster for the country – but it’s typical of Bukele’s erratic style of government,” the Unix system administrator wrote in a scathing essay in Foreign Policy.
“It’s also typical of Bitcoin fantasies; a project completely unsuited to daily life in El Salvador, set up largely to boost the image of the cryptocurrency itself.”
Bukele, Gerard alleged, appears to be setting El Salvador up to inject the Bitcoins into the economy, calling them “dollars” to make up for his deficit, while draining El Salvador’s $2.5 billion US dollar reserve to pay foreign debts.
“For Salvadorans, the plan feels like an attempted de-dollarization by stealth,” he alleged.
Gerard predicts that the plan will end with the “Bitcoin bros” losing both their money and their bitcoins, and “the people of El Salvador will be even more screwed over.”
