El Salvador’s misguided critics got some new ammunition this week.
Modern reconnaissance It revealed that only 7.5% of Salvadorans use Bitcoin in transactions, and that 92% of Salvadorans do not use it. But while some (Steve Hanke) may look at these numbers and think “Oh, well, this experiment failed,” I disagree.
Even setting aside increased tourism, commercial activity and international notoriety, El Salvador’s Bitcoin legal tender law has been a success.
El Salvador currently has a population of approximately 6.3 million, meaning that 475,000 (7.5%) people now use Bitcoin for transactions. The fact that nearly half a million citizens now use Bitcoin in their daily lives to make transactions is impressive, but the Linde Effect means we can expect this number to increase over time.
Given El Salvador’s history, it was clear from the beginning that the entire country was not going to start using this new payments technology from day one. El Salvador has a history of failed currency systems. Any new system takes time to build trust.
As I noted three years ago, I believe Bitcoin needs to become a store of value first before it becomes a medium of exchange. Bitcoin today, despite being a $1.4 trillion asset, is still just a drop in the ocean compared to the vast global wealth.
There is still a common consensus among the general public that getting into Bitcoin is risky, and that needs to change before more people in more countries start using it on a daily basis.
Bitcoin is still a new and developing asset class. The bigger you get, the more credibility you gain, and the more you price, the more innovation that gives rise to new transaction and custody solutions to meet non-technical people where they are.
This will take a long time, but it is an ongoing process.
I see many Bitcoin users online who are so optimistic that they believe that its adoption as an everyday transaction method will suddenly happen within the next few years, but that underestimates real-world data, like this survey, which shows that the process is much slower.
All of this means that if Bitcoin is to see adoption by merchants around the world and used by ordinary individuals, we will need to see a much higher price, and Bitcoin will need to be easier to use and more trusted than it is today. .
Exactly how long will it take? I don’t know for sure. But if you think of it as a loading bar, we’re already 7.5% complete on our way to 100% of Salvadorans transacting with Bitcoin.
Remember, this is progress. Nothing happens overnight.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.