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El Salvador to adopt Bitcoin as legal tender

cnbc.com

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Re: El Salvador to adopt Bitcoin as legal tender

#71

Post by CyberDildonics »

rawtxapp wrote: post #67
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...

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).

> This isn't the Bitcoin of 2015

I agree, because I used bitcoin in 2015 and it actually worked well instead of being crippled to a few transactions per second for the whole network.

How are they getting their balance on to the bitcoin chain? How much does that cost? Once they are in control of their money and actually have it on the real chain and not some wallet app maker's sub-chain they still have to eat more giant transaction fees.

This approach will only work for people using this app, which defeats the whole purpose.

Re: El Salvador to adopt Bitcoin as legal tender

#72

Post by bubersson »

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...

Transaction fees are 5 cents in the last couple days. The mempool is empty (see https://mempool.space/). If you are paying more, then that's an issue with the exchange or wallet that you are using.

Re: El Salvador to adopt Bitcoin as legal tender

#73

Post by splintercell »

MithrilTuxedo wrote: post #47
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 requires either a bank account or physical cash. This just needs a network connected device.

Not true. Strike requires KYC, just like a bank does.

Re: El Salvador to adopt Bitcoin as legal tender

#74

Post by AlexandrB »

MithrilTuxedo wrote: post #47
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 requires either a bank account or physical cash. This just needs a network connected device.

In practice, what potion of people store and manage their own wallet on their own hardware? Isn’t that usage pattern extremely rare? If so, what’s the difference between having a bank account and a Coinbase (or other exchange) account?

Re: El Salvador to adopt Bitcoin as legal tender

#75

Post by pochamago »

rawtxapp wrote: post #28

Even though the market hasn't really reacted to this news (which I suspect is due to the fact that it's proposed/didn't happen yet), this is one of the most bullish news in a very long time in my opinion (even more bullish than companies buying into it). I suspect this will start the domino effect of countries slowly, but surely adopting BTC. It'll probably be the smaller countries first where they don't have great c…

The smaller countries who don't want to be beholden to either the US or China's fiscal policy. We seem to be building up a second cold war, and I imagine for many countries being able to back your economy with a currency that isn't controlled by either of the two major players is tempting. China may well end up regretting discouraging its miners from holding the majority stake, given the Sino power that could project. This is all very heavily speculative, though, I'm just spitballing an interesting potential chain of events

Re: El Salvador to adopt Bitcoin as legal tender

#76

Post by ipaddr »

temp10298385 wrote: post #35
Beached wrote: post #24

Earlier quoted context omitted.

they would be forced to accept it, however they would likely instantly convert it to a more stable currency at the time of payment through some processor. there will likely be a small fee to them for the conversion of Bitcoin to say, USD, but I imagine it would be similar to accepting credit cards for payment? and so it would be worked into the prices.

Yes, I'd assume that creditors preferring USD would convert but that seems like a non trivial overhead for many creditors. The time between receiving payment and actually converting BTC to USD will surely result in a non-negligible balance difference?

Creditors pay, not debters to convert.

Re: El Salvador to adopt Bitcoin as legal tender

#77

Post by SantalBlush »

rawtxapp wrote: post #31
ineedasername wrote: post #30

I'm sure the people of El Salvador won't mind having 20% of their wealth wiped out every time Elon Musk tweets something that changes his mind in some way. Certainly if I was selling something I'd denominate it in something relative stable and then change Bitcoin asking price to match the exchange rate to that stable currency. Since the currency there is the USD... Yeah, I'd still be pricing my goods and services in…

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

>I know which one I'd prefer.

Yeah, the dollar. Because I can be confident that my $USD won't lose half its value in two months. That's what I need in a currency.

Re: El Salvador to adopt Bitcoin as legal tender

#78

Post by csomar »

CyberDildonics wrote: post #62
kragen wrote: post #11

Earlier quoted context omitted.

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?

They need access to a USD settlement network for imports/exports.

Re: El Salvador to adopt Bitcoin as legal tender

#79

Post by bpodgursky »

antihero wrote: post #60
Geee wrote: post #42

Earlier quoted context omitted.

Their work is open source and they are using standard Bitcoin protocols. Zap is their wallet https://zaphq.io Strike is a payment app that uses Bitcoin Lightning network internally to settle payments between financial institutions. It's useful for sending fiat currency denominated remittances instantly and without fees. https://strike.me When they released Strike in El Salvador, it was an instant success. The preside…

Yeah but imagine if you bought a beer for $4 and then next week the beer was actually worth $8 and the next it was worth $7 and then a few months later the beer was worth $50. The whole point of fiat is that it is stable and so you aren't fucking yourself by exchanging it for consumables.

This kind of fiat stability is very challenging for small and poor countries. In fact, El Salvador doesn't _have_ its own currency for this reason -- they switched to the US dollar decades ago!

Is it worse to peg your economy to a decentralized cryptocurrency, or a fiat currency controlled by a large powerful near-neighbor who only occasionally even remembers you exist? (and sure as hell will not modify their fiscal policy with the needs of your economy).

Having a backup official decentralized currency doesn't seem ridiculous to me. Maybe I'd use Eth or something that can scale better, but the point is the same.

Re: El Salvador to adopt Bitcoin as legal tender

#80

Post by vincentmarle »

Geee wrote: post #4

Here's the emotional announcement by Jack Mallers (founder of Strike) who worked with the president of El Salvador to make this happen: https://www.youtube.com/watch?v=2V8y_IV7XU8&t=76s It's worth a watch to understand the story.

Geez, I’ve never quite seen someone being so emotional about Bitcoin, it’s really a sight to be seen.
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