In 2021, El Salvador made history by becoming the first country to recognize Bitcoin as legal tender. While some have praised this move as a bold step towards financial inclusion, others have raised concerns about the potential risks of using a volatile and relatively untested cryptocurrency in everyday transactions.
One of the main issues that has arisen is the high fees associated with using Bitcoin for everyday transactions. For instance, in El Salvador, cash withdrawals via Bitcoin can cost up to $20 in fees, a significant expense in a country where the average monthly salary is around $300-350.
I’m in El Salvador 🇸🇻 right now. Just witnessed a cash withdrawal via #btc
This individual now had to pay $20 in fees for getting $100 out in a country where the avg. salary is $300-350
I want you to think about this when enabling gambling on fkn jpegs or meme coins.
This is… pic.twitter.com/RTVLqG7DNn
— Marce Romero (@MarceMR19) May 8, 2023
High fees can make Bitcoin transactions less accessible and appealing to everyday users, especially those needing the most affordable and reliable financial services. This is a particular concern in El Salvador, where many households rely on remittances from overseas, and there is a large unbanked population.
To address this issue, some advocates have suggested the adoption of the Lightning Network, a second-layer protocol that enables faster, cheaper, and more private Bitcoin transactions. The Lightning Network creates a network of payment channels between users, allowing them to transact with each other without broadcasting every transaction to the blockchain.
The problem is Chivo, needs onchain for final settlement but I agree why not just use a lightning wallet maybe this will give everyone pause to think about their pay structure in the future
— Jason⚡Hanna (@Zanshinstunts) May 8, 2023
There are indications that the Lightning Network is gaining ground in El Salvador, with some businesses and individuals reportedly using it to transact with Bitcoin. However, much more work is needed to promote its adoption and ensure it is accessible and user-friendly for everyday users.
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Source: ethereum.today
