The amount of Bitcoin in every wallet / account is public knowledge. If they lie about how much Bitcoin is present in one of their accounts, they will be proved wrong within minutes of saying it.
This is not true, though, right? All of these transactions go through Chivo, which is not transparent. It's allowing Bukele to make up wildly ridiculous stats about the success (https://twitter.com/nayibbukele/status/1442624279028408321), like there are more transactions in ES on Chivo than Visa handles worldwide. That seems rather unlikely.
To ChpBstrd's point, much of this is deeply suspicious. A lawyer prosecuted for falsifying a will helped create the company running Chivo Wallet. The notary who attested to the legality of Chivo SA de CV, created with public resources by the Government, was accused of documentary falsification in 2020 [1]. President Bukele’s Chief of Staff, Marta Carolina Recinos de Bernal, is on the US State Department’s Engel List of corrupt officials. She’s also a director of Chivo SA [2].
It really is depressing seeing a bunch of crypto enthusiasts—who claim to be wholly against corruption—cheer on this naked pillaging of some of the most impoverished people on Earth all because "number go up" on their pet Ponzi scheme.
[1] https://www.revistafactum.com/abogada-chivo/
[2] https://www.elsalvador.com/noticias/nacional/funcionaria-bukele-lista-engel-directora-empresa-detras-chivo/877437/2021/
Oh, no! You're quite right, thanks for the correction. I assumed they put accounts on the blockchain.
But they created a new wallet in a matter of months and put everyone's Bitcoin in that system. Was the launch their first large scale test?
The accounts can't be verified in some hidden system that does not use the blockchain. The wallets may or may not have Bitcoin in them, since there's no external way to verify it without moving Bitcoin out of the wallets (and paying a fee to get the transfer registered on Bitcoin's blockchain).
Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.
Here is the first thing I came across:
Is Chivo a lightning wallet?
“Just like every other participant on Bitcoin's Lightning Network, Chivo runs a Lightning node. Since Chivo is a custodial wallet, all Lightning payments that Chivo users send to and from other Lightning wallets will transfer liquidity to and from Chivo's node.” ... The Chivo node “ranks 83rd among public Lightning nodes.”Sep 24, 2021
OK, now that I've looked a little deeper. It looks like Chivo bypasses the lightning network
unless you specifically choose it under payment option in the Chivo wallet, they do provide the QR code for the lightning option in-app. Chivo seems to be a private network, a proprietary app using lightning. It will make it difficult to discover irregularities if there are any.
Either way, it is a private, closed system rather than open-sourced.
Three months for development was definitely ambitious but all in all, it appears to work well enough at this point. Whether the stats given by Bukele are spot on will be difficult to confirm without full transparency. Since when are government stats the absolute truth? All govts want to look good.
Inferring criminal intent is a big accusation and condemnation. The fact that you can use any bitcoin wallet like Moon (not just Chivo) and that you have the lightning network option right in your Chivo app speaks against it.
US$ transactions are still the norm and anyone who wants to avoid the volatility of bitcoin can immediately switch from bitcoin to US $.
But hey, for all we know this is a South/Central American Syndicate setting up the scam of the century. There were two Venezuelans and five different companies involved in the app creation. That makes it even more impressive, with hyper coordination and given a deadline of three months.
El Salvador is under such tight scrutiny at present, their every move is questioned. Not to mention the new loan discussions with the IMF.
After all, they are a sovereign government and if they choose to veer from the 'true path' of bitcoin (enthusiasts who want open source, no privacy, financial transactions) then they can. Maybe they are only concerned about the benefit for their own country.
Maybe they have developed more than we think and are already planning to integrate with other South and Central American countries.
I still think that is a very gutsy move made more difficult by the lack of tech, pressure from the IMF, poor odds of success, and the realities of a third-world country.
Nothing but a clever criminal bitcoin scam?
Or an opportunist with a vision who wants to build a better country?
Too much rumor, bias, and skewed perspective from all sides, not to mention harsh judgment or idealistic hopium.
Time will tell - gangster or hero?
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