Bitcoin currency launch in El Salvador hindered by faulty wallet

El Salvador has been forced to temporarily disable the bitcoin wallet app used to support the groundbreaking rollout of the cryptocurrency as a form of legal tender in the country.

From today, people in El Salvador will be able to pay for goods and services with the cryptocurrency after president Nayib Bukele pushed through the Bitcoin Law earlier this year.

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But within hours of launch the Chivo wallet app used to support payments had already run into problems due to network capacity issues.

“For a few moments Chivo wallet won’t work, we have disconnected it while increasing the capacity of the servers,” President Bukele tweeted in Spanish.

“The installation problems that some people had were for that reason. We prefer to correct it before reconnecting.”

In a subsequent tweet he described the issue as a “relatively straightforward problem”, adding “but it cannot be fixed with the system connected”.

The official Twitter account for the Chivo wallet replied with a gif of the cartoon character Spongebob thinking, joking that the downtime was to give Salvadorans more time to think about how to spend the free $30 worth of bitcoin that each citizen receives when downloading the app.

The giveaway is part of the government’s attempts to encourage the nationwide adoption of bitcoin as a form of currency, which has faced resistance among some people in the country.

A recent survey by the Central American University found that only 4.8 per cent of those questioned actually had a comprehensive understanding of how bitcoin worked.

There have been protests in the capital, San Salvador, in recent days, with some worried about price volatility making the cryptocurrency an unstable store of value.

Bitcoin has risen in price five-fold over the past 12 months but crashed from an all-time high above $64,000 in April to below $30,000 by July. It has since recovered considerably and is currently trading around $51,000.

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