As President Nayib Bukele and the government of El Salvador begin to purchase hundreds of Bitcoin today, people around the world will be watching. Some will analyze the price action, hoping to make a smart trade and profit. Others will focus on how the people of El Salvador embrace or reject Bitcoin, and if the Lightning Network handles an increase in users without fault. Later today, the government will begin to distribute $30 of Bitcoin to every citizen who chooses to downloaded a free government-sponsored mobile wallet app, Chivo.
El Salvador is the first nation to add Bitcoin to their balance sheet and legislate Bitcoin as legal tender. Their young president is hopeful that Bitcoin will be a positive direction for the country, enabling more citizens access to banking services. For example, remittances, in this case money sent from family members in foreign countries, makes up around 21% of GDP of El Salvador. Lowering the cost to send this money from abroad is an important factor. Since Bitcoin can be sent to and from anywhere in the world for a fraction of a percent, it has become ideal for situations like this.
Some have complained that many Bitcoin ATMs are charging up to 5% withdrawal fees. The Bitcoin Protocol's extremely low cost per transaction is a huge selling point of the protocol, and additional fees will surely deter people from adopting it in everyday use. Other citizens feel that they have received little explanation of how the new laws will affect their lives and businesses, and what compliance may or may not look like. In the coming weeks and months, the world will find out if Bitcoin is as anti-fragile as many believe.
To support the people of El Salvador, Bitcoiners from around the world are going to make a $30 purchase of Bitcoin as the first satoshis are distributed to mobile wallets across the country. Prominent Bitcoin supporters such as Michael Saylor has supported the display of solidarity. At the end of the day, buying Bitcoin is always a good idea. Regardless of what happens in El Salvador, we encourage anyone who is able to participate to add $30 of Bitcoin to their wallets with them to do so. Bitcoin will prove itself, and improve itself if necessary, and the world will be a better place because of it.
In the coming weeks, we will provide updates on the status of the El Salvador Bitcoin adoption.
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