When Bitcoin became legal tender in El Salvador, thousands of keen Salvadorans awaited to download the country’s government-furnished Bitcoin wallet, Chivo. However, within hours, it became clear that the hyperbitcoinization process would not be painless, as users experienced download delays, challenges in the identity verification process and problems transacting over the Lightning Network with Chivo.
Chivo’s challenges became even more pronounced as El Salvador held the Adopting Bitcoin and The Latin America Bitcoin & Blockchain conferences, and many international Bitcoiners attempted to transact with Chivo. Finally, due to several user complaints and bugs in the Chivo system, the Salvadoran government reached out to the U.S.-based company AlphaPoint to address the numerous reported pain points.
While there is no blueprint for a successful nation-state adoption of bitcoin as a legal currency, the reliability issues that have plagued Chivo users do not bode well for the mass adoption of Bitcoin.
How El Salvador Chose AlphaPoint To Fix Chivo
According to Igor Telyatnikov, cofounder and CEO of AlphaPoint, soon after El Salvador announced bitcoin would become legal tender, his company along with other vendors were asked by the Salvadoran goernment’s Bitcoin task force to bid for the technical backend contract.
AlphaPoint was not chosen initially, but stayed in contact with Salvadoran government officials. As the Chivo implementation challenges became apparent, the government of El Salvador approached AlphaPoint to address the Chivo stability issues.
Telyatnikov pointed out that the Salvadoran government entrusted the new contract to AlphaPoint based on its nine years of experience in the Bitcoin space and its track record of providing the backend infrastructure to numerous exchanges worldwide.
“We have a proven track record with setting up the backend to companies like NDAX, Bitvo, Banexcoin, Bitex, and so on, in countries like Canada, Brazil, Thailand, India and Australia,” said Telyatnikov. The company started as Bitcoin-only, but it presently supports altcoin backend development for various exchanges as well.
In mid-December, AlphaPoint migrated Chivo to its backend and began to try and make improvements to the platform. Telyatnikov described AlphaPoint as the heart of Chivo and said that the migration resulted in overall system stability, and also addressed well-known issues with the following components:
- Lightning integration
- Transaction support
- Transaction issue resolution times
- Login
- The KYC and ID verifications process
- Point-of-sale (PoS) systems
- Uptime
- Interfacing with local banks
Additionally, Telyatnikov said that there were numerous upgrades made to enhance the citizen and merchant user experiences that El Salvador’s government will announce in the coming months.
An Unpopular Solution
According to prominent Salvadoran Bitcoiner Ishi Kawa, most Salvadorans aren’t even aware that the Salvadoran government has entered into a new partnership with AlphaPoint, let alone that there have been improvements made to Chivo.
“People don’t read government press releases, so, for the average Salvadoran, all they remember is the sour taste that Chivo left in their mouth after their negative customer experience,” said Kawa.
According to Kawa, Bitcoin detractors and supporters alike have criticized the Salvadoran government for the missteps in the Chivo launch. By Kawa’s estimation, the bugs in the platform have resulted in only 100,000 of the four million Chivo downloads being active users.
“I am actively scanning the marketplace for merchants that accept bitcoin, and at best, I see 25% of them accepting it,” said Kawa. “When I ask those who accept it, they tell me that it’s rare that someone wants to pay in bitcoin. I attribute the lack of adoption to the loss of trust in the Chivo wallet. We should be further ahead in the adoption curve.”
From Kawa’s perspective, small- and medium-sized businesses will have difficulty re-engaging with Chivo, as many willingly set up their PoS platform only to have transactions disappear or become delayed.
“Many of these folks lost money, and they have either made different arrangements with other PoS solutions or abandoned Bitcoin altogether,” said Kawa.
When asked about persistent Chivo issues, Kawa expressed that many users remain locked out of their accounts due to PIN errors. However, despite the perceived challenges, he acknowledged that there are noticeable improvements as of late. From his assessment, Lightning integration is working, transactions are not getting stuck, there are faster and more reliable transfers with banks and the Chivo support team is more prompt in responding to transaction issues.
Kawa hopes for more communication from the government aimed at the Salvadoran population to increase usage and trust back to Chivo. However, he is pleased to see this new partnership with AlphaPoint and is relieved that Salvadorans may now know what company is behind the development and maintenance of Chivo. For Kawa, this represents an improvement in transparency and accountability that was initially missing from the project, and now makes it more consistent with the Bitcoin philosophy.
The Chivo Backend Is 100% Bitcoin
While most Salvadorans are likely not preoccupied with whether Chivo’s backend uses altcoins, many in the international Bitcoin community have been troubled by such rumors that it is.
When asked if Chivo is using an altcoin backend, Telyatnikov said, “that is categorically false.” He added that no aspect of Chivo occupies anything but Bitcoin, and that this is easily provable through on-chain transactions.
“Even with Lightning, it is 100% Bitcoin, and the AlphaPoint team personally reached out to Elizabeth Stark and the Lightning Labs team to make sure that our Lightning integration is using best practices,” said Telyatnikov.
While AlphaPoint develops and supports altcoin projects, Telyatnikov asserts that Chivo is 100% Bitcoin and that Salvadoran government officials are Bitcoin maximalists.
“We’re here for the long term and opened an office in El Salvador as our Latin American regional hub. We also have a dozen people on the ground, developing and supporting Chivo on an ongoing basis,” said Telyatnikov.
He added that he hopes to expand operations in El Salvador and hire local talent, as he sees a promising Bitcoin industry developing in the country.
Both Kawa and Telyatnikov agree that a significant challenge to Bitcoin adoption in El Salvador is to rebuild trust with users who may have had a bad experience early on. However, Telyatnikov said that he feels bullish “as a whole new set of users turn 18 years old every day, and they are onboarded to Chivo by receiving their $30 worth of bitcoin.”
This is a guest post by Jaime Garcia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
This news is republished from another source. You can check the original article here
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