- Bitcoin Core Developer Jon Atack noted that Bitcoin transactions in El Zonte fell dramatically even though Bitcoin was still accepted there.
- Bitcoin Experiment in El Salvador Continues with Cards Becoming More Common While Bitcoin Is Widely Handed Out.
Bitcoin Beach, the El Zonte village that inspired El Salvador’s Bitcoin venture, appears to be seeing fewer everyday Bitcoin transactions. According to WuBlockchain, Bitcoin Core contributor Jon Atack said a local restaurant told him his Bitcoin payment marked its first such transaction in a month. Staff reportedly said customers now prefer cards, while one worker had even forgotten how to use her Bitcoin application. However, another visitor reportedly made a Bitcoin payment nearby, suggesting that some Bitcoin usage continues despite the broader decline.
New Obstacles to Bitcoin Spending Emerged
The drop emphasizes the distinction between possessing Bitcoin and spending it on goods. Many people have started viewing BTC more as an investment, meaning they will not use their money when they anticipate a price increase. The Bitcoin reporter Juan Galt called such behavior “counter-economic,” pointing out that the Bitcoin economy requires spending.
Businesses also face difficulties accepting BTC. Bitcoin’s price fluctuations may lead to certain changes in value before converting to dollars. At the same time, traditional payments with cards are comfortable and familiar.
El Zonte Remains a Bitcoin Case Study
El Zonte got to feature in 2019 following an unnamed donor who started handing out Bitcoin in the region. This grassroots project is one of the factors that went into making the Bitcoin policy of El Salvador. The latter recognized Bitcoin as legal tender in September 2021, but it later allowed merchants to use discretion regarding the same following its IMF deal.
According to the IMF, the amount of Bitcoin that was held in El Salvador’s government did not change during the period covered by the loan program. The growth of holdings in the government was via wallet transactions and not new purchases. In spite of the lower payment activity, Atack still refers to El Salvador as a pioneer of Bitcoin adoption and regulation.
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