When El Salvador’s president Nayib Bukele announced a $ 30 in Bitcoin (BTC) grant to adults in the country recently, it indirectly brought about a 3% jump in the price of the asset.
However, there are also problems that link the $ 30 grant to the Bitcoin ecosystem.
Blockchair founder Nikimata Zhavoronkov in his tweet on June 25 described the El Salvador government's initiative as one of the biggest scams in the history of crypto.
Clearly, the Bitcoin network is only able to accommodate 250,000 transactions a day and the average transaction cost costs more than $ 30. At the same time El Salvador has a population of 7 million. This means, Bitcoin is not able to handle a large number of transactions that are carried out later.
This is one of the biggest scams in cryptocurrency history. There are 7 million citizens, but Bitcoin is limited to 250k transactions per day, and the average transaction fee was more than $ 30 just recently. Bitcoin is not technically capable of handling this. A thread (1/3) https://t.co/HRstVa4Nem
- Nikita Zhavoronkov (@nikzh) June 25, 2021
Zhavoronkov believes it could be the people of El Salvador will not accept bitcoin instead of IOUs because through the Strike wallet built on top of the Lightning Network some user data is needed for each step and the occurrence of fractional banking in the end.
The blockchain tutor’s statement is backed up with a $ 20 Bitcoin purchase fee charge that could result in a wallet-to-wallet transfer charge of up to $ 15.
"Receiving a Lightning IOU is like receiving a gold -backed 'banknote, not real gold. It may look like Bitcoin at first but not Bitcoin. ” he said.
Not sure to what extent that is true but recently Bukele has brushed aside some misconceptions regarding the introduced wallet, Chivo.
One of them: "Chivo is one of the most usable wallets and will be fully compatible with other wallets." The use of Chivo will also not involve any costs including for the activities of sending, receiving, paying or converting bitcoin to dollars and vice versa.
