El Salvador’s misguided critics got some new ammunition this week.

A recent survey revealed just 7.5% of Salvadorans use Bitcoin for transactions, and that 92% of Salvadorans do not. But while some (cue: Steve Hanke) may look at these numbers and think “Oh, well that experiment failed,” I disagree.

Even putting aside the increased tourism, business activity, and international notoriety, El Salvador’s Bitcoin legal tender law has been a success.

El Salvador currently has a population of around 6.3 million, meaning 475,000 (7.5%) people are now using Bitcoin for transactions. The fact that almost half a million citizens now use BTC in their daily life for transactions is pretty impressive, but the Lindy effect means we can expect this figure to increase with time.

Considering the history of El Salvador, it was obvious from the beginning that the entire country was not going to start using this new payments technology from day one. El Salvador has a history of failed currency regimes. It takes time for any new system to build trust.

As I pointed out three years ago, I believe Bitcoin needs to become a store of value first before it can become a medium of exchange. Bitcoin today, even with it being a $1.4 trillion dollar asset, is still just a drop in the ocean compared to vast global wealth.

There is still a common consensus in the general public that Bitcoin is risky to get into, and that will need to change before more people in more countries start using it on a daily basis.

Bitcoin is still a new asset class that is growing up. The more it grows up, the more credibility it earns, the more price increases, the more innovation happens that sprouts new transactional and custody solutions to meet non-technical people where they are.

This will take a long time, but it’s a process that is underway.

I see many Bitcoiners online who are so bullish that they believe that adoption as an everyday transaction method will happen suddenly over the next few years, but this discounts real-world data, like this survey, which shows the process is much slower.

All this is to say that if Bitcoin is going to see worldwide merchant adoption and use by everyday individuals, we’re going to need to see a much higher price, Bitcoin will need to be easier to use, and more trusted than it is today.

Exactly how long will it take? I don’t know for certain. But if you think of it as a loading bar, we’re already 7.5% complete on our way to 100% of Salvadorans transacting in Bitcoin.

Remember, this is progress. Nothing happens overnight.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The Ford Model T has been invented, the automobile has arrived and nothing else must be done! A hand crank start motor, rear wheel drive only, wooden wheels, and transmission based braking system with no wheel brakes. Why would anyone need anything else?

Who could need seatbelts? Proper wheel based braking systems? An automated ignition engine? Why would people need reinforced steel frames? Buckle zones? Navigation systems? Shatter-safe glass? Airbags?

The Model T is perfect, it is the peak of the automobile and contains all features anyone would ever need!

This is what Bitcoiners sound like when arguing vehemently and irrationally against any and all changes to Bitcoin. It is no longer a reasoned position of conservatism, it is pure dogmatic cultism. Bitcoin has very serious problems to address, both in terms of active flaws to shortcomings that put at risk its chance of success as a global monetary network.

As far as active flaws right now, OP_CODESEPARATOR allows the construction of blocks that could take up to thirty minutes for a node on high end consumer hardware to validate. This is a denial of service attack vector on network users. The timewarp attack, a method to artificially crank the difficulty of the network lower than it should go, can be accomplished by miners manipulating timestamps in their blocks. An especially small transaction can be used to trick SPV wallets into thinking it is an internal node in a merkle tree of the block, allowing a malicious miner to include entirely fake transactions inside a non-existent branch of the block’s merkle tree that doesn’t actually exist.

These are active design flaws right now, with an increasing incentive to take advantage of the more valuable Bitcoin grows. Some just allow a single malicious block to drastically degrade network performance, others allow the malicious miner to actively profit. The timewarp attack offers a way to force the entire network along with an indirect blocksize increase by lowering the difficulty and keeping it low in order to produce blocks at a much faster rate. If enough of the economy supported it to convince miners to enforce it, there would be no way to opt out of it except hardforking.

That’s not to mention the massive shortcomings in terms of scalability. Bitcoin is simply not capable of supporting even a significant fraction of the world population in a self custodial way. If Bitcoin were to appreciate in value financially, most of the world would be relegated to custodial and trusted ways to interact with Bitcoin.

Lightning is very limited in how many channels can be opened or closed to enforce things on-chain in a high fee environment. The higher the fees, the more limited it will become in this regard. Ark in an optimistic case can be another way to deal with this, but in the non-cooperative case it becomes even worse. There is also another issue, the only way to do Ark right now is require every user in an Ark to all be online at the same time to pre-sign the necessary transactions to create an Ark. The more people, the higher the chance someone isn’t online and forces a non-cooperative case.

These issues cannot be solved without fundamental improvements to the Bitcoin protocol itself. Full stop. The limitations of the protocol as it is now does not give us the tool kit to properly solve these shortcomings in a way that does not compromise on the goal of providing people with a trustless form of interacting with their money.

People arguing that Bitcoin is good enough are brain dead cultists. They are no different than the hypothetical person who would argue the Ford Model T is enough, and there is nothing we can do to improve on it. 

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.