El Salvador's $1 Billion Bitcoin Experiment: A Failed Odyssey Comes to an End

Tl;dr: President Nayib Bukele spent over 1 Billion dollars over the couse of two years to use Bitcoin as legal tender, but nobody uses it daily.

Two years ago, Bitcoin officially became legal tender in El Salvador thanks to the Bitcoin Law, which was approved by the salvadoran congress in less than 3 hours. In order to get people on board, the Bukele Administration provided a state-owned Bitcoin with a USD $30 dollars worth of Bitcoin airdrop. As expected, salvadorans rushed to get the wallet, called Chivo Wallet, and cash out the airdrop. After that, the usage of Chivo dropped considerably to the point that Nayib Bukele stopped sharing usage data:

https://i.imgur.com/hl36yuZ.jpeg

How much money was spent on this experiment?

1 Billion dollars.

Really? Yep. Was it worth it? Nope. You see, one of the main selling points of the Bitcoin Law was comission-free remittances. Unfortunatelly, salvadorans are still using traditional methods, such as Western Union, to send money from abroad to El Salvador. Even with zero fees, crypto remittances are at its lowest point since the Bitcoin Law was enacted:

https://i.imgur.com/hzEt8DL.jpeg

Btw, Nayib Bukele promised to us that salvadorans living abroad were gonna save around 100 million dollars per year in fees. However at this rate, it will take a few decades to get even near that amount.

But that was not the only promised Nayib Bukele made on national television to salvadorans, he also promised that "one Bitcoin was going to be worth 31 million dollars" by the end of 2022:

https://i.imgur.com/xEh8tbi.jpeg

What happened to our famous mining facility "powered by volcanoes"?

Well, it has been shut down for the past 6 months. I went to Berlín, Usulutan back in December 2022 to find out what was going on with our "mining farm", and guess what? It had constant power outages, heating issues, and you are not gonna believe this: Floodings. It turned out that LaGeo did not build a roof on top of the container, and the paint that was used on the container was for interiors and rust and water, uh, found its way.

President Nayib Bukele used taxpayers' money to purchase a 12.3 million dollars container full of bitcoin mining equipment, which as of today is just sitting there doing nothing:

https://imgur.com/gallery/jqYxchq

What about Chivo Pets? The famous pet hospital funded by Bitcoin earnings?

Well, that was a lie by President Bukele. Chivo Pets was built with money borrowed from a regional bank, not Bitcoin:

https://i.imgur.com/v7ZAOLT.png

(The salvadoran government is spending100k monthly on Chivo Pets for salaries and treatments)

What happened to the Volcano Bonds?

Dead on arrival. President Bukele wanted to use CEL (A state-owned company) to issue the bonds. That didnt land well with potential investors, since they hoped that those bonds were going to be backed by the Government of El Salvador, not some small state company.

What about Bitcoin City?

Boy, if you ever believed this I have a bridge to sell you. It was vaporware, a ploy to get people hyped by our Bitcoin experiment. Official documentation shows that there are no plans to build Bitcoin City:

https://i.imgur.com/KWAGTYv.jpeg

What about our Bitcoin Reserves?

Well, we are in the red. Bleeding money everyday since President Bukele announced that El Salvador was going to acquire 1 Bitcoin daily. By the way, no one knows if we really have Bitcoin reserves, or who has the keys. We only know that over 300 million dollars have been used to purchase Bitcoin.

Hey, at least we have Bitcoin ATMs right? Right?

Yeah, no one uses it. El Salvador spent over 50 million dollars setting up 200 Chivo Points and 50 ATMS. Wait, thats too high. You see, Chivo Points are small huts built across the country which has one ATM, a lobby, and a tiny "office desk". Thats why the bill is too high and I am not including salaries of the people that work at those Chivo Points:

https://i.imgur.com/yIrDUTA.jpeg

No one uses Bitcoin to shop in El Salvador. Sure if you go to Mizata or El Zonte, you will be able to use Bitcoin. However, thats pretty much it. The rest of the country uses fiat dollars. Go to places like Santa Rosa de Lima in La Unión (El Salvador), like I did, and no one accepts Bitcoin:

https://imgur.com/gallery/F9aKYsZ