Topic: The beginning of the end of traditional payment processors? (Read 617 times)

It is too early to judge the positive experience of El Salvador, which has adopted bitcoin as an official means of payment. So far, only six months have passed and this is too little for financial payments. But it is unlikely that the example of El Salvador will be followed by other states that have their own currency and a healthy economy.
The traditional payment system of states, if it will undergo changes, will be insignificant. Banks will continue to implement blockchain technology in payments and issue their CBDCs. Most likely, we should expect some decrease in the volume of cash in circulation. But in general, the traditional payment system will remain.

Cross border payment has been a headache in some judiciary countries and crypto has been a headache paracetamol for some people but despite that, it's not match for the number of people out there. Visa till today still has more throughput and efficiency to effect large transactions for everyone, Bitcoin on the hand is still very low despite improvements. If everyone decides to come on board into cryptocurrency, many chain will collapse and have lots of down time.

We need to scale up the transaction throughput to match the number of demands in traditional ecosystem.

Regarding Bitcoin offers, it will be enough for all countries that want to use Bitcoin as a means of payment in the future. It should be borne in mind that each bitcoin contains one hundred million satoshi. The high price of bitcoin will allow you to pay with a certain amount of satosh.
The fact that El Salvador accepted bitcoin as a national means of payment, and even taking into account the fact that Bangladesh is already considering such an opportunity in its country, does not mean the beginning of the end to traditional payment systems. We see that weak backward states, where there was not even a national currency, are interested in bitcoin. The developed countries will not agree to this.

People start using crypto as they see many obvious advantages of it over fiat money. One of them is freedom. People can freely transfer any amounts of money with low fees (on Polygon, Tron, Binance Smart Chain). I don't think that government will let crypto replace traditional bank system in the nearest future as they can't not to regulate financial sphere of people life.

That's what people do not understand. People think that payment processors, banks and other places like stock market companies and such are "afraid" of bitcoin or crypto because it may takeover. What they do not realize is that if there is a dime to make from it then these places will jump on it. Binance and Coinbase are making so much money from it, it is only matter of time for Banks to get involved.

Your bank allowing you to buy/sell and hold bitcoin is not too far away, that will happen eventually and during that period you will realize how fragile crypto regulations are and how quickly it can change. Since, these places love to bribe politicians and politicians love to get bribes, they will just pay them to make a law like that and allow banks to do something similar. If exchanges are allowed, banks getting into it should not be too difficult to allow neither.

The things that make people leave traditional payment processors are complicated procedures, large transaction fees and of course a weak security system, crypto is the best solution to make all things related to assets and transactions easier, cheaper and of course high security, this is what will make traditional payment processors soon disappear on earth.

If Bitcoin continues to rise, there's a high probability payment processors will adopt it for their own benefit. After all, everyone wants a pie of the pie. I don't think payment processors will go anywhere since Fiat is too big to fail. Crypto may be faster and cheaper to use at times, but it's widely unstable in price. This makes Fiat a true winner for day-to-day payments.

We're going to have to see whenever El Salvador's decision to adopt Bitcoin as legal tender, will force payment processors to close up shop. I highly doubt that'll happen because of the reasons described before. It seems to me that crypto and payment processors will co-exist for generations. Just my thoughts

There are more and more cases of hacking and complaints from payment processor users, and now there are payment processor applications that replace if a loss occurs but as usual claims for replacement take a long time, poor security systems make us have to leave the payment processor and immediately switch to crypto.

Yes, the truth is that I did not know that it had such a large number of payment processors in free fall, obviously this is still a long way off, for example in Venezuela the payment processors are mostly dead, both Visa and Master Card credit cards are history , they do not generate any type of credit, now the payment processors that are used the most are with Zelle, and now they will have more restrictions, which means that it will no longer work.

The only payment processor that is enabled in some stores, such as the one called Traki, if they accept cryptocurrencies, both BTC, USDT, TRX, and it is the only store that I have seen that does not have any payment problems.

The crypto community that continues to increase and the daily transaction volume that reaches more than $150 billion certainly makes payment processors worried, if there is negative news about crypto then I'm sure most of it is from payment processor sources because since crypto has been shining, everything is done to stop it, and in fact crypto continue to succeed and will make the payment processor die soon.

Expect Moneygram or Western Union to start accepting Bitcoin in their business just like PayPal did i am sure they will come up with something that could sustain their business. The reason why they have a billion market capital is obvious, not everyone is using Bitcoin and there are countries that relay on these payment processors for long distance money transactions .

Surely we must need some time before concluding anything about what is going to bitcoin do in terms of payments and how existing payment system will do against bitcoins. With the help of few mobile apps based wallets and BTC lightning based payment system, I guess they could enjoy bitcoin payment system and when they save in bitcoins for at least 4 years then they may get power to fight against inflation.

In my opinion, both bitcoin and traditional payment system are going to coexist in El Salvadar which might take time to have only one as both merchants and people must need time to experience and to decide like which is better and which they really need.

So far, we see that bitcoin and other cryptocurrencies are very rarely used as a means of payment. We can say that bitcoin, even after ten years, still does not fulfill its main function. Therefore, it is very interesting how effectively Bitcoin will act as a means of payment in El Salvador.
In addition, one state that previously did not have its own national currency and less than two months ago accepted bitcoin as a means of payment on its territory hardly already means the collapse of the payment system that has existed for centuries. To draw such a conclusion, it takes much more time and in any case, more than one state that will follow the example of El Salvador.

I think the traditional system can survive maybe if they start adopting the digital means of operations because customers can only patronise platforms that have diversify there operations. PayPal for example has started operation in bitcoin and other altcoins, money gram, banks Western Union need to do this too. Countries have started adoption of digital mode of transaction like Nigeria flagged off digital currency this week.

It is too early to draw any conclusions about the success of El Salvador in introducing bitcoin as a national means of payment. This requires at least several years, and so far it is only the second month. As long as the price of bitcoin rises, everything will be fine. However, we also need to see how the people and the economy of the country will react when it falls in price.
It is all the more premature to conclude that a successful experiment by El Salvador will have a devastating effect on the existing payment system. Cryptocurrency has a number of advantages, but it also has serious disadvantages.

The president of the central american country of el salvador has recently proposed the introduction of bitcoin as the second legal tender and if implemented, el salvador would make history as the world's first independent state to introduce the digital currency bitcoin. No country will be affected by the competition even if its business decreases it will rise again. Bitcoin transactions will be temporarily suspended if the value of bitcoin declines to minimize the effects of extreme volatility or price fluctuations the country became the first in the world to officially accept bitcoin as a legal tender.

With international payments bitcoin and other cryptocurrencies truly have a big place. It is highly advantageous over the traditional payment in terms of process as well as with the limits of transaction. It is quite hard to have an unified decision from the governments around. If that happens then we can see the rise in the universal adoption which at present is very minima, but tooking good phase after few countries participation.

El Salvador is under surveillance of every country. Once again it has made use of the dip buying 420 bitcoins. Now the country owns 1100 bitcoin. The success of El Salvador will make a big change in market adoption as it is the one to take a perfect decision at the right time even when there is group opposing the adoption.

Bitcoin takes way too long and is too expensive as a payment processor.  Other crypto's are suitable (i.e. Ripple, Stellar) but they are setup to profit in fiat from the use of their projects.  They are not structured as competition to fiat.  They are simply a cheaper way to settle large remittances in a shorter time to take advantage of fiat markets.  The technology is there but the motivation behind them is lacking a full vision.

Crypto may have certain benefits for international payments, but the limited transaction capacity and unstable prices is what "kills" it. It's this reason why traditional payment processors are still relevant even with crypto/Blockchain tech in play. I don't see crypto replacing traditional payment processors anytime soon, especially when Fiat is a dominant player in the world's economic system. Crypto will only serve as an alternative monetary system for those who need it the most.

One thing for sure is that El Salvador's decision to adopt Bitcoin as legal tender will greatly boost crypto's mainstream adoption. But it will not signal the end of traditional payment processors. I'm fine with that as long as crypto remains decentralized and censorship-resistant. Just my opinion

I'd be okay with crypto swapping out fiats, that's the end goal for most bitcoiners but I'd settle for Bitcoin acting as a hedge against irresponsible fiscal policy. In the end, Bitcoin most likely will act as a competitor currency which will force government to keep their spending in line. Granted, it'd be easier for government to flat out ban crypto as a currency or alternate payment processing system outright, but their enforcement wouldn't be successful.

On the note of fees - keep in mind, the fees associating with modern day payment processors are not exactly cheap. They're complicated, centralized, and rack up a cost themselves.

I think this may be a case of beware of what you wish for - we're slowly seeing companies like Paypal and Visa wake up to the realities of cryptocurrencies like Bitcoin. However they do see the threat you're talking about and are more than happy to try to capture the market. They also have huge marketing resources and historical advantages that allow them to shepherd money into cryptocurrency that they would be able to control to a degree. Paypal are getting lots of Bitcoin buyers hooked, however they are all contained within a small ecosystem controlled by one company - you must buy from them and sell back to them at a cost, while being unable to transfer out directly.

You are right in the sense that traditional remittance services took care of that aspect and the only thing people needed to do was to go to their installations and pick up their money, however taking into account how cheap smart phones are right now and that a great deal of the population around the world has one then it is not as if this is going to be a huge issue as now if someone does not have a smartphone with a social media application they are leaving a lot of money over the table if they have their own small business.

It is hard to see anyone that knows about Bitcoin and what they can do with it, still making use of MoneyGram and Western Union when they are doing transactions. I myself, since I discovered bitcoin, I can’t remember the last time I have had to go to the bank to carry out an international transaction, because people who I am doing the transactions to abroad are all making use of bitcoin and I can easily stay at home and send whatever amount of money they need to them instantly.

So, why would I have to make use of the bank, when I have enough bitcoin and altcoins in my wallet and I can do that same right from the comfort of my home? So, they lost a customer already.

I think the shift to a cryptocurrency-based payment is still far from a global-scale implementation.

Given the fact that majority of the countries are either third-world or underdeveloped, such implementation would heavily prejudice these countries due to forcing them into a position where payment method would require some sort of technology. Though I can see that the future transactions would heavily depend on the technology behind BTC (blockchain), fiat would still dominate.

These traditional businesses have to compete with bitcoin in terms of fees, and that can be done by reducing the fees. However, since El Salvador promotes bitcoin, I doubt MoneyGram and Western Union will be able to survive in this business competition, and you are right, it could be the beginning of their fall as some countries are also considering to legalize bitcoin and follow the path of what El Salvador has taken.

The good thing about bitcoin is that it is not only a payment processor but also a form of money, this means there is another way for bitcoin to deliver a knockout blow to payment processors and this is by becoming a widely adopted currency despite its high volatility, I have always thought that since people are so used to use their fiat and they do not see the need for something like bitcoin we will need a huge crisis to show them why bitcoin should be the king, and with how things are going I would not be surprised that such crisis could happen during our lifetimes.

I don't think this will be the end of traditional payment processors. Fiat is still "King" when it comes to making payments on a daily basis. Crypto is volatile, and at times, expensive to use, making it unsuitable as a currency you can use for day-to-day payments. Some may say that Bitcoin's Lightning Network could rival traditional payment processors, but you'd still have to deal with volatility issues. The day when crypto becomes stable, blazing-fast, and cheap to use, will be the day when traditional payment processors will come to an end.

At least, El Salvador's move has benefitted Bitcoin's mainstream adoption. It'll be up to other countries to do the same in order to challenge the very existence of payment processors like PayPal, Western Union, and MoneyGram. Just my thoughts

indeed later elsalvador will become a reference for other countries to legalize bitcoin, this depends on the success of elsalvador to answer doubts from other countries to legalize bitcoin. especially for countries that are experiencing a crisis, so this can be a solution. but what we hope is that developed countries will start to legalize it, so that it will have a broad impact

I think it is the opposite, El Salvador will be used as a point of reference to see how other countries decide to interact with bitcoin from now on, if the results of the experiment we are seeing at El Salvador are successful then I would not be surprised if we see some countries accelerating the process of making bitcoin legal tender or at least give to it a regulatory framework which is friendly to the industry as they will not like the idea of El Salvador monopolizing that source of income.

This is fantastic news.

But Moneygram and WU were downhill and unsustainable businesses from the get-go. Crypto was probably just a catalyst in doing this.

Honestly, I'm not even sure why WU stock is still around and why it has a $8.5bn market cap. It's quite clear that their business model is archaic even by normal banking standards in the 21st century and most of their customers are fraudsters.

So, when Bitcoin is in bull market, no one wants to pay with it because it will go higher, but when it's in bear market people either panic sell it for fiat or double down on hodling because now it's too low to spend it. This is why volatility is so harmful to Bitcoin's adoption as a currency.

How about those traditional payment processors will be adopting bitcoins and other cryptos as part of their payment options? In my opinion, this is what most probably going to happen as it will ease survival of those traditional payment processors in the new crypto era. Already we heard that visa and mastercards started working with bitcoins and in near future all payment processors may join them for some reasons.

Still, I agree that those traditional payment processors may not remain as successful as they were. This way some processors may stop their services after unable to compete against revolution of cryptos.

Well, I dislike the individual completely, he is at least half lying in his statements and when he can't lie he just tells parts of the story. If he would have had the numbers play in his favor he for sure would have made them public, but he is not, he isn't talking about how much hashrate he's got going, how many transactions a day are there, and many others. He doesn't really care about crypto, he cares about being in the spotlight.

But at the same time, it's understandable the numbers are low, who would use bitcoin to buy stuff in a bull run? It's damn normal, even I would do the same.
The poeple who don't care about BTC have long sold their 30$, the rest are keeping them or if they buy on top of that hold that also, so I assume that just as in other countries the percentage factual daily-weekly user would be around 1% of the ones holding coins.


Not surprisingly, in order to spend money, you need money...

Countries that don't have a standard expectation of economic growth will want to embrace bitcoin as a means of help to their economy with hope that it volatility will further increase their worth. This is possible to happen though but it won't be a reason the most industrialised countries will adopt. El Salvador adopted bitcoin maybe they want to hodl on volatility to help the lucky hodlers but other countries may still hold on to the traditional banking system for more time in the future. They may not totally exchange it for bitcoin but having an option will be the best to hang on to tradition and modern system.

plot twist it's true it might go up when it's like that.
because at this time, especially in a pandemic and in a country's economy that is below average then anyone will definitely receive $30 for free.
this is like an airdrop that is given without the need to do anything, just install the application, then $30 is obtained who will refuse it

El-Salvador is just a tiny bit of the whole world and the result there can not be use as a reference point here, it is a great news that El Salvador have embrace the use of btc as a legal means of payment but there are millions of people in different part of the world who are using the traditional payment system, majority are unaware of crypto, I think there is still a long way before we can say this.

You are not wrong, those services are on the decline as the technology that we have available has become too disruptive for their services to remain working in the same way, however bitcoin has the potential to be even more disruptive because the main users of those services were those without a bank account, people which could not send their money with a bank transference, and now they can send their money to their family members for a very cheap fee. with bitcoin

It may likely seen that many people are inquisitive of having a business transaction or any form of payment with cryptocurrency which note down by bitcoin, but it seems that while they are scared is due to lack of understanding or knowledge with cryptocurrency regulations and terms, so i believe from your explanation that while some prefer traditional system of payment is because they have acclimatized with such kind of payment patterns via local currency, on like me if any one devote out time to learn cryptocurrencies ways of transactions, i will make sure i have impact the knowledge to the person, provided that the person in question have an interest over it, definitely i will make out chance to educate the person in particular.

El Salvador has 6.5 million people, so they all have to have phones, install Chivo and do a bit below 100 transactions every day to reach that number  🤡🤡🤡

With every day Nayib Bukele looks more and more like an incompetent populist. I have a feeling that in the end it will only bring bad rep for Bitcoin.

It's ...something:
https://twitter.com/nayibbukele/status/1442624279028408321


Probably he doesn't know the answer himself.
Either way, even if a transaction would take 10 seconds so it would be 65,437 every 10 seconds it would mean 500 million transactions per day, which is just...common!

Not that I would trust any number coming from the 100MW/shaft guy anyhow.

That image says 14k transactions per day via ATM, but in the top right corner it says 65k transactions per second in dashboard, what does that mean? Is this like maximum theoretical capacity or something? Because not even Visa has 65k transactions per second globally.

They are not in the largest cities:


Of course, the number of installs is meaningless to usage.
If we add the downlaods of every bitcoin wallet available in google play we end up with more addresses than the blockchain holds, so...



So, it is 2 million but 14 000 transactions per day, so, a bit more than 0.5% doing a transaction a day.
Not really the best figures but I wasn't expecting more anyhow, in order for poeple to spend be it fiat or bitcoin people must have money in the first place, and that's not one Salvador strong points.

I only saw chaos from news in my phone when El Salvador adopted bitcoin as their main currency, a lot people confuse how to use it and instead exchange their free funds from bitcoin to USD. A lot people destroying Bitcoin ATM, a lot people only wants free money. It's hard when old people dont know what bitcoin it is, they only trust their old currency but I appreciate for EL Salvador to trying to make a change and make them role model to us.

I don't believe that traditional payment methods will be phased out because some people, including those who use cryptocurrencies in their daily life, still advocate for them. Traditional payments are still used in various scenarios, and all I can say is that they are more efficient and practical in particular transactions involving large sums of money or valuable assets. It is merely the beginning of another payment method; it is not the end of the conventional manner; even in other areas, traditional systems are still preferred because they create better results, despite the fact that technology is rather advanced right now.

It's still too early to say that this is the beginning of the end of traditional payment methods. The government of El Salvador is supporting the development of transitioning to digital payment using bitcoin as a legal tender. Hence, a lot of people are also supporting the implemented law by the government by installing the application and other things needed to be able to transact with btc. Aside from these people that use a lightning network, surely there are still people using the traditional payment methods. After all, not everyone is privileged enough to have the resources to attain such digital and contactless transactions. There are still people out there such as the less fortunate ones and the older generations that are still using traditional payment methods. Despite the surge of the rate of those people using digital options in El Salvador, in general, I still believe we are still far ahead from completely transtioning to the digital payment process all in all.

Now this is the real question. I am sick and tired of people talking about how bitcoin or crypto could replace fiat and that's not what it is all about,  crypto should not be replacing anything in the fiat world, it wasn't even created for that neither. However payment processors have been living a great life for a long time, without much competition and we should have been using crypto for that purpose to begin with.

Unfortunately the amount we are spending on each transaction is too much for most coins at the top, bitcoin and eth costs so much to spend and you can't have payment processors charging that much. However if we could lower that, and make it under 50 cents, then I am pretty sure it could replace most of the payment processors in the world.

I don't think traditional payment processors will disappear anytime soon just because BTC has been accepted by a small country and has been bullish in recent times. However, it is a possibility thanks to the negligible BTC fees in recent times.

If the fees stay in the 1 - 8 sat/vB range for a long period, I don't really see the need for LN to be honest. Also, more big countries need to accept and regulate BTC and other popular cryptocurrencies.

I still think that if 1.5-2 million people would be enough for it to be growing big and staying big. Yes, there will be some people leaving, but at the end of the day we are talking about something that is forever and not just for now, even the ones that left may rejoin later on and the number between 1.5-2 million will probably stay.

This is why I believe that we should probably not focus on anything else, just focus on "how much" they use, like instead of number of people, we should be checking the usage and if people are using it a lot then we could make a good profit.

The fact that 1.6-2 million people started using Bitcoin/Lightning Network in El Salvador doesn't necessarily mean that all those 2 million people will keep using Bitcoin/LN transactions forever.Some of them will quit,others will join later.I assume that many people joined Chivo,because of the incentives provided by the government of El Salvador.Once the incentives are over,many people will just leave Chivo.
I know that the traditional financial services and banks have low ratings in El Salvador,but as the Chivo network keeps growing,more and more people will also leave low ratings to Chivo.
Many of the low ratings are left by confused people,who got frustrated by a situation that was caused by their fault,but they blame the companies,because that's what people do.
I'm not advocating on the banks in El Salvador,but many people leave negative reviews just because they want to,not because the bank scammed them or something.The same thing can be applied for negative reviews left for the Chivo app.

Considering that each bitcoin has one hundred million satoshis, I think this would be enough for all countries that would use it as a means of payment.
However, there is no need to triumph over the situation with El Salvador yet. Too little time has passed to draw any conclusions. In any case, one should hardly expect the transition of states to payments in bitcoins, they will always have their own digital currency closer.

Without quoting the whole OP, I think traditional money transfer businesses like Western Union and Moneygram are on the decline, but also they were on the decline prior to bitcoin.  They're being disrupted by other centralized payment processors like PayPal, Square, Venmo, etc.  The old wire transfer services were prime for disruption because they were expensive compared to alternatives.  But other centralized payment processors are fast and cheap and easier to use than bitcoin, so I don't anticipate them being disrupted by bitcoin.

Bitcoin and cryptocurrency services as a payment system are good and when the economy suffers, the details of all types of transactions that take place in the bitcoin network through transactions are stored through a huge general ledger called blockchain. This means that the user does not have to store all the details of his transaction separately it also allows cryptocurrencies to allow paypal customers to make payments to those sellers in virtual currency. Such currencies can be transacted through paypal digital wallet service.

Bitcoin and cryptocurrencies are of interest to people when inflation absorbs their economies that is a good sign for businesses to start including cryptocurrencies as a means of payments. I could perceive it when I shared with the owner of a business that I bought her construction materials to repair my roof. The owner of the business approached me and asked me to teach her how to use cryptocurrencies. I have not taught her yet because I have had very little time to dedicate to her but I will, but in addition to time I was stopped by the knowledge that the owner of the business is a usurer.

The big remittance processors aren't going to die but they'll have to think of another way of getting back those customers. What they can adopt is the technology and making their service ease and cheaper than the usual transfers. That goes the competition first but if they've done that and there's not that much sales from that action then the last is what you've said, they're going to adopt it but I can't think how they'll add it to their service if using bitcoin alone is the actual payment and processor already that can be done by any individual without going through a third party.

I think it's too early to talk about the end of traditional money transfer processors like VISA, Western Union, etc. Bitcoin was born 12 years ago and has definitely had a significant influence upon this economic industry. It is undeniable that over the past years most of the traditional payment systems have made less profit than expected, so they enlisted the aid of national governments and began to compete with cryptocurrencies.

From my understanding, El Salvador's banks provide poor quality services and therefore have low user ratings. Bitcoin has a highly developed infrastructure, so this country decided to use it to its full potential. In any case, they have not given up on fiat money, because it makes more sense to take advantage of the certain payment processor that is suitable for the task at hand.

I assume that cryptocurrencies and traditional payment systems will exist at the same time and will complement each other.

So when we are taking about the lightning network being used, are we moving towards a way safer network? Which was much needed for Bitcoins to become a good currency, not just an investment.

Plus even if people are actively registering, the amount of people using the network would be less as compared to the actual numbers hands down, so we have to consider this as an experiment perse for the time being, the economy will definitely grow stronger since the price of Bitcoins despite the Impact China had was really stable. Therefore having such a strong currency indirectly is a good idea anytime of the day.

I think we still have to wait to make any kind of conclusion , monitoring the situation is much needed since it's not just the country but all other countries as well looking at El Salvador and making judgements, if it's a good idea to do this or not. So I do think that they really doing an important job here.

Agreed, it seems too early to make any kind of conclusion about what it is happening at El Salvador, there are some good signs obviously but that is it, we know that just as things have been going on in a favorable direction it could as easily change if for example bitcoin crashed and then all of those people uninstall the app out of fear of the volatility of bitcoin, we need to give it more time before some conclusions can be made, probably a year will be enough to see more relevant long term tendencies we could analyze.

Western Union and MoneyGram will not go down, simply because one country shifted to another money transfer method.... they are much too dominant in other countries.

What did happen...was the following :

1. People in El Salvador were introduced to an alternative remittance payment option and they saw that it can be a viable alternative.
2. People sending money home from income that they have received from jobs in 1st world countries ..has seen the benefits of using the Lightning Network.

The eye opening experience is the disruption we (Bitcoin users) want to see happen in 3rd world countries.  

With the adoption not just in El Salvador, those old modes of payment will likely die unless they also adopt BTC like what PayPal had done. Paypal must have seen it coming too just like Visa and Mastercard.

Bukele bragged the news on his Twitter about how much Chivo users had spiked since the day he announced making BTC a legal tender in Miami. I thought from the start it was the Stripe app that he is going to introduce to El Salvadorans but it's his new Chivo with a $30 airdrop of BTC. $30 is enough of a reason to make people install an app and technology that they may try learning.

Indeed, if we only look at the graph once we will conclude that.  However, as a good analysis, moreover the variables being measured or compared are variables that have very many supporting factors, so it cannot be concluded that it is that simple.  It is true that the growth of BTC users has increased and one of the reasons is supported by the El Salvador government's decision, but it is not significant enough to support that the use of WU and MG has decreased due to this policy.  As other users have said that if you drag the graph further the reason is much different.  Because it is true that if the comparison period is as short as that, the results will be biased.

Isn't Chivo giving away $30 to anyone who registers? Of course a lot of people in a poor nation would want to claim free money. The article claims that millions of users were added to Lightning Network, while in reality millions of people just installed an app. Not a fact that they will use it in their daily lives. A lot of people will uninstall it once they claim the free $30 or will use it a few times per year. It's completely unrealistic to think that millions of people who a few weeks ago didn't care about Bitcoin are not "Bitcoin users" who conduct their purchases through LN.

El Salvador has been using the US dollar as its national currency for 20 years, so there is no room for some theories in this regard, especially considering that most of their emigrants live in a country whose currency is also identical. Sending money from the US in dollars to El Salvador using the same currency does not incur any additional costs due to the conversion.


From what can be seen so far, the Chivo wallet brings the best of both worlds, LN and automatic free conversion between BTC and USD. I am sure that this will not extend to countries such as the US, Japan, or the EU - but the countries of Central and South America will follow the development of the situation in El Salvador very closely.

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I agree that this will affect people’s decision to transfer BTC or USD, but in the case of El Salvador, we know that they have set up 50 Chivo ATMs in the largest US cities, which means you insert USD into ATM and automatically get BTC free of charge into your Chivo wallet, and then you send that same BTC for a minimal fee to any other Chivo wallet. Let someone correct me if I’m wrong, but I realized that the whole thing works that way.

For sure, it is definitely going to be a loss for most of the centralized platforms out there. Some of these centralized means of transactions are  fond of charging high fees when it comes to making transactions that are international, and that is unlike Bitcoin where you have to pay just a fraction of what you are going to be sending and sometimes the fees you are even paying to send Bitcoin is close to nothing at all. So, people are definitely going to be choosing Bitcoin over centralized means.

Western Union and MoneyGram are very expensive means when it comes to international transactions, and a lot of people have been avoiding them for years now. Bitcoin is not a legal tender in my country, but I have been using it for over five years now to be sending transactions to my family and friends that are living abroad and they can make use of exchanges to convert them immediately and have the money in their bank that same minute. So, tell me why Bitcoin wouldn’t take over?

This only tells the story of one country, and I'm pretty sure other countries with a pretty stable banking system and money remittance services would like to keep things how it is for quite some time. But what's happening in El Salvador might be a catalyst of what's to come in the future. Perhaps banks and money remittance services would adopt a similar structure to crypto, but them as an entity would still surely remain solid as they are right now. They'd need to adapt to the changes, and if copying how bitcoin and crypto does it is the only way to do it, they'd do so in a heartbeat.

I had a serious question from an economics student in my country, and he was intrigued by the news that El Salvador had adopted Bitcoin.

He said: Would it be enough with the current available supply, if all countries adopted Bitcoin as a legal payment like El Salvador did? if enough what is the reason?

As someone who has limited knowledge, of course, I can't answer it scientifically with strong references. So dealing with this exact topic would be invaluable for me to gain enlightenment from those of you who understand more than what I know.

thanks ...

Interested to know how other countries will react after learning about the development of bitcoin usage in El Salvador in the next 2-5 years. Being the first country to adopt bitcoin as a currency will make many other countries use El Salvador as a test example of how bitcoin can develop and be accepted in the wider community. Maybe El Salvador's move will have an impact on other countries in the next 2-5 years, I'm not sure it will spread so fast. Inflation and poor economic condition will accelerate its spread to other countries, but it seems unlikely for now. One fact that seems good is the increasing number of LN users since El Salvador adopted bitcoin.

I'm not sure whether this is due to people not liking El Salvador's native currency or if it's actually that they don't like their banks and money transmitting services.  It makes sense that their reviews are so negative for Banco Agricola and Tigo Money, since sending money through the traditional banking system takes way more time than sending bitcoin, in addition to the fact that you have to deal with middlemen.

However, that's El Salvador.  I'm not sure if the rest of the world is ready to give up using the banking system and money-sending services like Western Union or PayPal.  In the US, the dollar isn't inflating at a rate that people are desperate to switch to cryptocurrency, nor is sending money so cumbersome that they're looking for alternatives.  That could change in a heartbeat if inflation ramped up or some other economic disaster happened, but for now I'm not sure the bitcoin fever that's hit El Salvador is ready to spread.

El Salvador is indeed taking some unprecedented steps in Bitcoin adoption, and it's really great that they're making use of the Lightning network, the adoption of which wasn't going too well before this. It's also impressive that Bitcoin is valued more than Western Union there, but IMO the comparison should be between the number of international transfers (per month, per day) via Western Union and Bitcoin to really see if payment processors are going away there. That being said, El Salvador isn't saying goodbye to the USD, right? So it might be the end of payment processors, but not of fiat and probably also not of traditional banks in this country.

I personally wouldn't say this is the beginning of the end of traditional payment processors. It's happening in El-Salvador because the government is promoting the use of bitcoin over anything else. One of the arguments he made while making bitcoin legal is that El-Salvador will save a huge sum of money from remittances. But that's a concentrated use case. The rest of the world may not follow the same pattern here.

The payment processors need to be smarter and cheaper to beat cryptos in this space, buy that might not be possible unless government supports them. I would say, changes will happen and the remittance market will become more competitive, but that's not the end of it. At least not anytime soon.

If you spread the graph to one year it tells a different story for both cases
In the case of WU it has been declining since April, and if we look at MG is up 20% since that date.

And for WU, the fall in the last month is from 21.09 to 20.89, at this rate, it's going to be a long way to really come down, it could be at most the beginning of the start of the beginning,  at this point, it's more the virus and restrictions killing the remittance sector than cheaper transfers.
The main point of resistance in this is that for poeple to completely avoid WU and MG it needs that the other part in the US or in other countries to be just as friendly with bitcoin purchases, the sender must get those as cheap as possible without paying extra for the exchange. That will be the turning point, till then, no, only one part of the bridge has been built.

El Salvador became the first country where bitcoin was accepted as a means of payment. How has this affected centralized payment systems and what will be the trend in the future as more countries follow the path of El Salvador?

I recently came across an article https://www.kevinrooke.blog/el-salvador-and-bitcoin-two-weeks-in/. It talked about how bitcoin adoption proceeds in El Salvador, and there I discovered interesting facts.

Thanks to El Salvador, the Lightning Network received a powerful impetus in development. This happened thanks to the popularization of the Chivo wallet and the incentives that the government of El Salvador guaranteed when it was installed. In total, the Lightning Network gained about 2 million new users:


Many users began to actively use bitcoin payments and money transfer using the Chivo wallet and support for the Lightning Network. Consequently, the Salvadorans increasingly began to use bitcoin services instead of the usual banking or payment processors:


The use of the Lightning Network has exploded, creating a powerful network effect with the infusion of several million new users into the ecosystem. People see the benefits and potential of fast, low-cost transfers and are choosing to use the Lightning Network over the usual centralized transfer methods. This is evidenced by the official data of the stock market.


As we can see, since July (when El Salvador's plans to accept bitcoin were announced), Western Union and MoneyGram began to fall, and continue their downward trend. While bitcoin is growing and gaining strength.

The era of traditional money transfers is coming to an end and this business, if it does not disappear completely, will significantly reduce its influence in the world. Other countries will follow in the wake of El Salvador, and millions of new users will join the ecosystem. What do you think about this?