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El Salvador to adopt Bitcoin as legal tender

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Re: El Salvador to adopt Bitcoin as legal tender

#61

Post by woah »

temp10298385 wrote: post #37
jerf wrote: post #19

Earlier quoted context omitted.

Accepting it as legal tender doesn't mean it is what the loans are denominated in. Nobody sane would denominate loans in BitCoin. (There are loans denominated in BitCoin. The obvious syllogism applies.)

Yes of course, I'm still assuming USD denominated loans. However repayments may be done in BTC still, unless I'm misunderstanding what legal tender actually is. Even if I, as a creditor, convert my payments from BTC to USD as soon as I can there will be a volatility, right? I wouldn't dare to predict the impact scale but certainly enough to warrant consideration?

An exchange order can go through in microseconds

Re: El Salvador to adopt Bitcoin as legal tender

#62

Post by CyberDildonics »

kragen wrote: post #11
emc3 wrote: post #6

Probably not unrelated: US report: Allies of El Salvador's president deemed corrupt (last month) https://apnews.com/article/latin-america-el-salvador-1d089ae...

It wouldn't be surprising if the US government were to take actions against governments that were moving away from the dollar, whether as legal tender, as foreign reserves, or for other purposes like pricing oil, but it doesn't seem likely that the USG knew about this move a month in advance. Are you suggesting that the Salvadorean president is attempting to retaliate for the report by dedollarizing?

You realize that a lot of countries actually don't use dollars and use their own currency right?

Re: El Salvador to adopt Bitcoin as legal tender

#63

Post by [deleted] »

smoldesu wrote: post #8

> Bukele said the country is partnering with digital wallet company, Strike, to build modern financial infrastructure using bitcoin technology. Wow, this seems like an incredibly shitty situation for the people of El Salvador. It looks like some lobbyists got hired by a wallet company stacked with angel investors willing to pour money into the idea of being integrated into the government at such a low level. I wouldn…

[deleted]

Re: El Salvador to adopt Bitcoin as legal tender

#64

Post by atweiden »

CyberDildonics wrote: post #56
rawtxapp wrote: post #44

Earlier quoted context omitted.

To add on to that, it's been used pretty nicely in the El Zonte beach town [1]. 1: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-...

When that article was written the transaction fees were around $1.50-$2.00 USD which is already a lot for meals and snacks. Now that the average transaction fees are anywhere from $7 - $60 I doubt people are buying much with bitcoin's dialup throughput. https://bitinfocharts.com/comparison/bitcoin-transactionfees...

Doesn’t the Lightning Network scale to millions of transactions per second, which is what El Salvador will be using? Fees are miniscule on LN, as well.

Re: El Salvador to adopt Bitcoin as legal tender

#65

Post by IG_Semmelweiss »

nly wrote: post #55
6foot4_82iq wrote: post #21

Earlier quoted context omitted.

America extorts other nations by virtue of the $US being the world's dominant reserve currency. The federal reserve can print money unimpeded, with foreigners bearing the brunt of inflation. The math is simple.

Foreigners only bare the brunt of the inflation if they own USD denominated debt or other fixed income assets. Americans suffer if the dollar inflates because imports get more expensive and rates demanded on USD debt purchased by foreigners will go up, making the loans more expensive in America.

>>>Foreigners only bare the brunt of the inflation if they own USD denominated debt or other fixed income assets

If the local latin currency floats freely, there is nothing stopping foreigners from buying currency ans buying up real estate.

The US exports inflation in droves.

Re: El Salvador to adopt Bitcoin as legal tender

#66

Post by SantalBlush »

JohnJamesRambo wrote: post #45
eloff wrote: post #40

My prediction. This won't be used hardly at all. Why use bitcoin when the USD is also legal tender and superior as a currency in nearly every way? About the only thing you can do more easily with bitcoin is buy other cryptos and send it across borders - sometimes. I would also predict that the failure here would finally get people to stop thinking it's a currency. But I doubt it.

USD has this little problem and it hasn’t even begun to manifest yet. https://fred.stlouisfed.org/series/M1SL

This chart only looks like a problem for those who don't understand what the Fed does.

Re: El Salvador to adopt Bitcoin as legal tender

#67

Post by rawtxapp »

CyberDildonics wrote: post #56
rawtxapp wrote: post #44

Earlier quoted context omitted.

To add on to that, it's been used pretty nicely in the El Zonte beach town [1]. 1: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-...

When that article was written the transaction fees were around $1.50-$2.00 USD which is already a lot for meals and snacks. Now that the average transaction fees are anywhere from $7 - $60 I doubt people are buying much with bitcoin's dialup throughput. https://bitinfocharts.com/comparison/bitcoin-transactionfees...

Strike is using lightning where the fees are barely a few satoshis (much smaller than cents) most of the time. This isn't the Bitcoin of 2015, there has been lots of new development, lightning is here and is being used with growing adoption (1ml.com), there are other changes coming to improve the base layer itself (taproot, eltoo, etc).

Re: El Salvador to adopt Bitcoin as legal tender

#68

Post by Geee »

auxym wrote: post #53
rawtxapp wrote: post #31

Earlier quoted context omitted.

Historically, Bitcoin appreciated 300% YoY whereas the dollar is in a constantly depreciating cycle, I know which one I'd prefer.

Deflation is not something desireable in macroeconomics. It incentivizes hoarding cash instead of spending it on productive things (hiring people, capital investments to improve productivity, etc). Slow and steady inflation is a stated goal for most governments and central banks.

Nah. When things are cheap, people will go shopping. When things are expensive, people will save. It's a naturally self-correcting mechanism.

Every deviation from the expected deflation would be an opportunity for arbitrage. Also, the deflation isn't guaranteed, so it carries a risk, which disincentivizes hoarding.

Re: El Salvador to adopt Bitcoin as legal tender

#69

Post by ipaddr »

kragen wrote: post #38
TimJRobinson wrote: post #33

Earlier quoted context omitted.

It's Sanctions. The USA can put sanctions on anyone as they've done with Russia, Iran, Venezuela. All banks that trade with the USA must comply, and those people/places are locked out of the global financial system. There's no effort of an invasion or coup involved. It's easy for the USA to do this to pressure people they don't like and that's why so many of these countries are moving away from USD.

Oh, I see. So reserves held in overseas banks might suddenly become inaccessible, even if not actually seized , and Bitcoin (unlike, say, the euro or yen) offers a way to reduce this risk?

If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.

Re: El Salvador to adopt Bitcoin as legal tender

#70

Post by CyberDildonics »

atweiden wrote: post #64
CyberDildonics wrote: post #56

Earlier quoted context omitted.

When that article was written the transaction fees were around $1.50-$2.00 USD which is already a lot for meals and snacks. Now that the average transaction fees are anywhere from $7 - $60 I doubt people are buying much with bitcoin's dialup throughput. https://bitinfocharts.com/comparison/bitcoin-transactionfees...

Doesn’t the Lightning Network scale to millions of transactions per second, which is what El Salvador will be using? Fees are miniscule on LN, as well.

That would mean people aren't actually using bitcoin, they are using this wallet's centralized lightning network balance.

If they want to actually send money to someone using bitcoin, they will have to get their balance on to the main chain, which means that they will have to take it off this wallet and then incur the transaction fees for getting to the bitcoin chain.

Then they will have to take the hit of the transaction fees again to get their actual bitcoin balance somewhere else. This is what happens when you use a purposely crippled cryptocurrency like bitcoin.

They could use litecoin, monero or bitcoin cash directly and not have any 'wallet app' that keeps their balance. Then they would be in control of their own money.

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