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> point of bitcoin for them is that there is now a bitcoin based money transfer system they can use with no fees

There is zero coïncidence in El Salvador and the Central African Republic, nos. 115 and 154 on the corruption perceptions index [1], having implemented Bitcoin as legal tender with zero transparency around the holding wallets.

Best case: it isn’t outright embezzlement but facilitating graft.

[1] https://en.m.wikipedia.org/wiki/Corruption_Perceptions_Index

> The reduction in fees should dwarf The losses from holding bitcoin.

The propaganda is strong. How much do you think it costs to send money from say USA to El Salvador?

> How much do you think it costs to send money from say USA to El Salvador?

It depends on the case

The cheapest way is depositing a check.

Depositing a U.S. check in a Salvadoran bank is free in some banks. The disadvantage is that it is slow

From anecdotes I've seen on multiple places on the internet: between 5-10%

Western Union [0] charges $8 to send $200-600 from the US.

So if you’re sending the minimum amount that’s 4%, but that goes down to 1.5% if you send $600.

So it’s not very expensive and in many situations the transaction fee is less than Bitcoin.

[0] https://www.westernunion.com/us/en/send-money-to-latin-ameri...

Much cheaper if using the Lightning network, which El Salvador is.

Giving an envelope of cash to your cousin that is visiting the family is also cheaper than Western Union.

We are talking about Bitcoin transaction cost, Lighting network has its own issues and tradeoffs.

How is the implementation of the lightning protocol used locally by El Salvador (if any) is of any help when transferring money from the US to El Salvador ?

Yes, 8 USD each time. Do you actually know how often people send remittances? Sometimes every day

Do you see the problem or not?

It's not as if bitcoin was free either … There's transaction fees, the exchange's margin, and the local broker's margin (because yes, many of these people can't just use an exchange by themselves to cash-out their bitcoins).

Also, I'd be curious if you had source about the “every day” part, because I find it pretty unlikely, since it's costly, time consuming (the cheapest way to send money is going in physical stores), and people aren't usually earning money every day …

> since it's costly, time consuming (the cheapest way to send money is going in physical stores)

DING DING DING we got a winner boys!

I don’t know anyone who sends remittances daily. Most send a portion of their paycheck so weekly or biweekly. And many people I know batch those payments to reduce fees so they send monthly.

The problem is that sending in Bitcoin is more expensive than WU.

Thats because its not economically viable not because they wouldnt want to....

Ever heard of the LN?

And because no one gets paid daily and wants to use it.

Yes, I’m familiar with LN.

Classic privileged american that cant see beyond his own backyard

"No one gets paid daily", srsly, you ever been to another country outisde US/Europe?

I see the problem with you just making stuff up.

The question is not whether there is a fee, but whether bitcoin represents a significant reduction of that fee.

This is what I’ve never understood about Bitcoin evangelists. Generally, I’m anti-crypto. But I’m very anti-BTC on the merits. It’s a bad crypto.

You've just posted an opinion about bitcoin without backing it up with facts. I'll happily engage if you post credible, verifiable facts that backup your claims about Bitcoin.

Western union starts at 10% for transactions below $100, but it can be as low as a $8 flat fee for a thousand bucks if you pay cash in store.

Bitcoin isn't cheaper than this, because not only there's blockchain fees, but also exchange's, and I'm pretty sure many people use a local broker for managing their bitcoins (at least it's how it works in Lebanon, from what I've read).

El Salvador is using the Lightning network where fees are much cheaper.

> Despite all the theoretical advantage for remittances, adoption for remittances is still very low, with 11% ever using the app for this.

An issue that Salvadorans in the U.S. face when they want to fund their Chivo Wallets to send to their family is that they charged a Foreign Transaction Fee by their U.S. banks. This happens because the Chivo card transaction is processed in El Salvador and most Salvadorans in the U.S. don't have debit/credit cards that refund Foreign Transaction fees. Depending on the bank they may be about 3% and they add up for larger transactions.

Btw Salvadoran banks don't charge foreign transaction for purchases abroad. So these fees are something we rarely think about, and came as a surprise to many :D

Or they would have to take a bus or drive to a Salvadoran consulate in the U.S. to use a US Chivo ATM. The time that would take plus transportation costs wouldnt make it a cheap option either.

> It may be in part because using the government app means the remittances are known to the government

This seems incorrect. El Salvador has very strict transaction reporting laws.

1. Every remittance is reported in El Salvador. Every one of them. In a very detailed way. To at least three government institutions. Central Bank, Financial Investigation Unit and Tax Office.

> and can be taxed as income,

2. Transfers between family members are not considered taxable income according to the Tax Code. It's on the first pages of the Income Tax Law: Article 3, Paragraph 3.

> whereas cash goes unreported.

El Salvador tracks cash transactions.

Even paying the $2.29 water bill in coins requires an ID.

Other commerces have a higher reporting thresholds, like +$100/$200 in supermarkets and clothing stores.

Many cashiers are trained to ask for an ID even for lower purchases to activate product warranty and loyalty programs.

BTC lost >50% of it's value from it's peak not too long ago.

In what world are transaction fees >50%?

It's fluctuated ridiculously over the last 18 months.

But if you bought before about Nov 2020, you've still at least doubled your money.

That’s not helpful for the remittance use case.

That's just your privilege talking. If you were a poor El Salvadoran, you'd be thankful to the tech gods to wait a year for your bitcoin purchase to recover its value in order to dodge an $8 Western Union fee (and pay a bitcoin transaction fee.)

Also EXTEMELY unfavorable when you can be margin called.