However, despite initial enthusiasm, use of the wallet for Bitcoin transactions is minimal and restricted to a small number of demographics.
El Salvador’s Chivo purse, according to the Bureau of Economic Research, is a failure.
Despite initial enthusiasm, analysts believe that the use of the Chivo Wallet is low and limited to well-banked and educated young men who have access to credit cards. In addition, they claim that there will be “almost no downloads” in 2022.
Consequently, the “Bitcoin experiment” in El Salvador appears to be a failure at this point.
Isn’t the Chivo Bitcoin wallet a game-changer in terms of functionality?
El Salvador will become the first country in the world to recognize Bitcoin as a legal tender in September 2021, marking an important milestone for cryptocurrency.
The government-funded Chivo Wallet facilitates the seamless transfer of dollars and bitcoins. Each new user receives $30 of free Bitcoin as a way to encourage downloads.
“It’s simple and hassle-free, giving you all the capabilities you want for everyday use, consumption, remittances, and managing your basic personal funds.”
El Salvador’s president, Bukele, claimed a month after the country’s inauguration that Chivo wallets outnumber bank accounts by a two-to-one margin.
Several users have reported serious issues as a result of the vulnerabilities, including identity theft (to claim free Bitcoin) and privacy violations (name leak).
The researchers released the results of a face-to-face survey of 1,800 households nine months after the country’s Bitcoin Law came into effect. It is puzzling for Bitcoin advocates to learn of the results.
The banked, educated, youthful and masculine population is of little use
More than two-thirds (68%) of the people who participated in the survey were aware of the Chivo wallet.
“People who have a mobile phone with Internet access, who are banked, who have studies, who are young and who are men are more likely to know Chivo.”
The problem is compounded by the fact that only 65% of Salvadorans have Internet access through their mobile phones. By 2021, 85 percent of US adults will own a smartphone.
Chivo Wallet was only downloaded by half of the people who knew about it (and had the ability to download it). They came quickly after the debut of Chivo Wallet in September 2021.
Those who did download the malware cited the opportunity to earn $30 worth of Bitcoin as the main incentive.
Respondents stated that they did not trust the Chivo wallet or Bitcoin itself, preferring to conduct transactions in cash.
After spending the incentive bonus, only 20% of those who downloaded the Chivo Wallet continue to use it after the incentive has expired. In addition, the majority of those who continue to use the wallet does not “connect with the application in a meaningful way”.
“We also found no evidence that Chivo Wallet is used to pay taxes or send large amounts of money,” the researchers say.
According to experts, even though Bitcoin is legal tender, it is not widely used as a medium of exchange.
