This month, Bitcoin became legal tender in El Salvador. This is a historical landmark in the world of finance, and the reception has been unsurprisingly divided. On one hand, it marks a move towards an exciting future for Bitcoin, globally. It also presents an opportunity for bitcoin to deliver on its premise: to empower a community failed by the banking system. El Salvador is an ideal population for bitcoin, as the vast majority (70%) do not have a bank account, and a quarter live below the poverty line. Yet despite the potential positives, bitcoin has been introduced hurriedly, and to a community who have legitimate historical reasons for concern. There is much still to resolve to make sure this change works.
All social change is a process of negotiation, and it is normal to meet resistance and to encounter problems along the way. Stabilisation takes time and repeated iteration. This isn’t a negative thing – it is simply the nature of change, and bringing friction points to light is how we learn and develop improvements. If bitcoin is to place financial power firmly in the hands of El Salvador’s people, then this is a crucial time to listen to their experiences, and to learn from the bumps they encounter along the road.
Before joining Bittylicious, I worked as an academic in User Experience research. In this article, I share some of my thoughts about El Salvador from a user-centred perspective, positioning its people as users of a new socio-technological system. I highlight some of the possible pain points (specific problems) they may encounter as they interact with the system. Through this framing, I offer a starting point for thinking about the system’s design in context, to identify opportunities for improvement and to prepare us for some of the likely challenges we will face as bitcoin becomes more widely accepted on a global scale.
The User Context
Most people in El Salvador are facing a steep and sudden learning curve. Now that bitcoin has landed, they need to learn to interact with a new technology. Downloading a new app, figuring out how it works, and discovering ways in which it doesn’t behave quite as expected. Simultaneously, they will be working to incorporate a new way of managing their finances into their existing systems (however informal they may be), or even replacing them. More than this, they will also be trying to learn about bitcoin and how to make it work for them – a difficult task, given the breadth of information that exists on the topic, and how it can vary in quality and accuracy. Directly and immediately impacting their lives, this learning needs to happen promptly, and this will leave many users feeling pressured or overwhelmed.
Not everyone will approach bitcoin from the same starting point or perspective. This makes it helpful to differentiate between user groups: i.e., to categorise users according to the different contexts informing their interactions with bitcoin, and their different needs.
I will focus on two main user groups – ‘Business Users’ and ‘Citizen Users’ – and cover some of the different use cases (situations in which they will interact and transact with bitcoin) relevant to each group.
This user group includes business owners who now need to support bitcoin for business-related transactions. The category includes their staff, who may need to interact with the bitcoin system on behalf of the business (e.g. to accept customer payments). An owner and their staff will have different needs and priorities which will impact how they experience interacting with bitcoin. This means the grouping I am outlining is an over-simplification (for the purpose of this introductory article) which may need to be broken down further. The term ‘business’ is also broad and covers a huge range of different types of companies, many of which will operate very differently to each other. Here, I will focus on customer-facing businesses such as shops and cafes.
Bitcoin has become legal tender, but it does not replace dollars. The government have stated there is no obligation to download its wallet app, or to start using bitcoin. This means that many citizen users will choose not to transact with it significantly, or perhaps at all – at least for now. But for business users, despite some contradictory messages, there is an imperative to support bitcoin straight away.
That means that business users need to quickly adopt a whole new way to manage money, but with minimal clarity around expectations and with limited guidance.
One key pain point with the system interface for this group is that the government’s wallet app was designed with individuals in mind (i.e. citizen users), rather than businesses. As a workaround, staff in some businesses have reported using their own personal wallet. This introduces an overlap between personal and business use within the same interface. It is unlikely that the app currently supports easy switching between user profiles, but even if that happens, it could introduce new opportunities for human error (e.g. accidentally logging into the wrong profile), potentially across multiple staff members.
Another known pain point is that not all businesses or staff members can afford an internet data plan to support the app being used. It is likely that the business user group will need support in setting up the technology they need to cater for bitcoin transactions.
El Salvador is an Underbanked Community (i.e., a community in need of financial assistance who do not get this assistance from formal banking ). Resultantly, digital transactions are not as well supported as in some other countries, because cash has been the norm. When the government offered $30 dollars’ worth of bitcoin last week to all who registered for their wallet app, this would have been the first bitcoin payment that most people had ever received and for many, also their first digital financial transaction of any kind.
Recently in the UK, in response to Covid-19, it became increasingly common for businesses to refuse cash payments in favour of digital (banking) transactions as a safety measure. For many, it has been an easy enough transition, as people are used to speedy payments and digital finance management. But for some users it has been an accessibility barrier. Some smaller businesses used to rely on cash to avoid transaction fees and to keep tech costs down. Some customers (e.g. some more elderly citizens) are used to cash and are underprepared for adopting new method. For business users in El Salvador, it is likely that many will face similar challenges because it is such a big change for them.
As digital transactions are largely unfamiliar, this also means that business users will need to be prepared to support their customers who may have difficulties in making transactions. As anyone who has provided IT support can likely attest to – this is going to flag up a whole range of unexpected challenges that can be timely or frustrating to resolve, and that not all business users will be equipped to resolve.
The business user group is related to role. In reality, these users also fall into the category of citizen users when they are outside of the work context and managing their personal finances. The Citizen user group includes those who interact with bitcoin for personal use. They will typically interact with bitcoin for two (broad) use cases. Firstly, to manage their own personal finances, e.g. saving, making peer transfers, converting currency. Many of these interactions can potentially be managed from anywhere (e.g. home, café). Secondly, they will interact in the role of a customer, engaging with different businesses and interacting with however that business supports transactions (e.g. logging into their Wi-Fi, or converting payments into dollars for online purchases where the business will not accept bitcoin payments). For simplicity, I include users who are not officially citizens of El Salvador in this category, such as residents or visitors. As with the business user group, this category would benefit from being broken down further.
Citizen users do not typically have access to banking, however they will have developed their own specific, and often sophisticated (even if not technologically so) means of managing their finances. Bitcoin threatens to disrupt the status quo, and this will be challenging for many people. But for others it will be a welcome change which makes it much easier to manage their money. Recent interviews  suggested that most citizens are not against bitcoin per se (more wary of some of the rationale behind the change), and some who tried it last week were delighted by its simplicity.
A known barrier to adopting cryptocurrency interfaces such as wallets in general is that users apply mental models (expectations of how a system works, based on prior experience and understanding) learned from how systems such as digital banking behave. This means they can often either misinterpret or incorrectly use the new technology, based on inaccurate perceptions of how it works and why. For example, users may be accustomed to having account numbers that can be shared with other entities and may not fully understand the need to keep information such as seed phrases private and secure.
In El Salvador, using the technology like the government’s Chivo wallet app will require users to build new mental models. But the problem of inaccurate expectations may well prove to be lesser in comparison to users from other, banked countries, as they may not have prior experience of digital transactions to apply to the new context. This presents a strong learning opportunity, and I would advise involving citizen users in participatory design to see how any gaps between their mental models and the bitcoin system may be bridged.
Practical Tech Challenges for Users
Bitcoin is well timed in El Salvador, as mobile phone access in the country is at an all-time high following a surge in adoption since 2016. Nominally, a majority have the potential to access a mobile phone for bitcoin transactions, although this may be a little below (at 50.5% of people) Latin America’s average (59%).
Although they may have phone access, however, the country’s internet connectivity levels may prove challenging. It is thought that around a third of users have fixed broadband connections. Figures on mobile internet connections are less forthcoming – most have a contract, but do they have internet data?
Some sources suggest that many users have insufficient data plans to support regular digital transactions [e.g. 16]. Access to wifi hotspots in cafes and retail outlets is commonplace, which would be suitable for some use cases, but not all (e.g. transactions with a business on their premises, if they cannot afford to provide Wi-Fi).
The ‘bitcoin beach’ project in El Zonte highlighted that many citizens have older mobile handsets, which can be another barrier to using the apps. Version support, for example, may be problematic (particularly if internet access to download updates is intermittent). Other pain points such as struggles to detect QR codes with low-resolution phone cameras were also experienced. Perhaps relatedly, reports from over the last week have seen people encounter various glitches in the Chivo app (e.g. it not recognising face ID or pin codes). Teething problems are normal in any new tech, but for a nervous new user it could be off-putting enough that they avoid using it again, particularly if it was costly to connect to the internet during the failure.
As a community predominantly living below the poverty line, there may also be potential financial limitations to people being able to access additional hardware to store their bitcoin securely outside of the centralised government Chivo app (e.g. cold storage). Current fear about the government’s intentions with their app may make alternative storage feel safer in other ways too.
As most El Salvador residents do not have access to a bank account, most will be unable to purchase bitcoin through digital bank transfer. To accommodate this gap, the government plans to install 200 new bitcoin-activated ATMs across the country. This means that, at least initially, many users will need to collect in person. This poses complications such as travel time, the risk of machines being out of order, and other accessibility issues. It also exposes them to ATM transaction fees, which are currently 5%. That said, reliance on ATMs is not new to El Salvador, and on balance, problems like travel should be gradually lowered once bitcoin becomes the primary system. The Chivo app supports lightning payments, which keeps transaction fees low. But this can only work if their handsets and internet connection can support the technology, and if it is convenient.
Interfaces that rely on textual information and input, as wallets often do, can be a barrier to use for many. For the uninitiated, a lot of the terminology used in cryptocurrency tech may be new to a user (e.g. seed phrase), mismatch their mental models (e.g. ‘send’ instead of ‘pay’), or be considered jargon.
To encourage adoption, it is important that the tech offers strong learning support. I cannot comment on the design of El Salvador’s Chivo wallet app as I have not seen it in action. However, I have tried out some of the most popular and wallet apps on the market, and I have found some of their features surprisingly unintuitive, even as a usability professional. User research has backed up that the user experience in cryptocurrency technology can often be poor, in comparison to other services.
Past research has found that features such as graphical and voice-annotation support have been particularly effective in supporting underbanked communities to adopt new financial systems. A participatory design process with citizen users could help identify what would best support communities in El Salvador, and the ways they are accustomed to learning and sharing knowledge.
One thing that the bitcoin beach project showed is that adoption spread through word of mouth, as people help each other to learn and grow. It would be wise to consider how a support system can be designed which builds on the strengths of El Salvador’s community support network, to help them take proper ownership of the system (and to feel empowered as a result).
Supporting the Future User Experience
Just a few weeks from ‘Bitcoin Day,’ it is still too early to predict quite how things will work out for El Salvador. The government have not released figures about the uptake. An informal source from banking suggested that only a small number of bitcoin transactions have been made so far, but it isn’t clear how accurate this claim may be.
What is clear is that as El Salvador settles into the new normal, there will be challenges along the way. Yet it seems highly likely that adoption will grow over time. With other countries now already considering bitcoin as legal tender, properly managing and designing user experience touchpoints is going to become increasingly important. Different countries and communities will encounter different, localised frictions. The key to supporting people is therefore to talk to them and find out their needs, their struggles and their joys, and to better understand their context.
Implementing a system first and then fixing later can be frustrating for new users, and importantly it can also become far more costly for those developing the tech. El Salvador’s bitcoin project presents a perfect and exciting opportunity to listen and learn – to help its people and use their experiences to help us prepare for the rest of the world following suit, through creative innovation.