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El Salvador adopts Bitcoin as official currency, first country to do so

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Re: El Salvador adopts Bitcoin as official currency, first country to do so

#171

Post by imtringued »

thehappypm wrote: post #157
JumpCrisscross wrote: post #89

Earlier quoted context omitted.

Gresham’s law [1] would (EDIT: loosely) predict Bitcoin gets hoarded while U.S. dollars trade. [1] https://en.m.wikipedia.org/wiki/Gresham%27s_law

You're joking right? The "bad currency" here is clearly Bitcoin, which cannot actually be used to buy things in 99.999% of global market situations. If El Salvadorian businesses want to buy computers, trucks, fertilizer, food, whatever, BTC is meaningless and will need to get converted to USD.

Salvadorians in USA convert their USD in BTC and Salvadorians in El Salvador convert it back to USD. They aren't trying to invest or hold onto Bitcoin.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#172

Post by Geee »

skizm wrote: post #29

How are they getting around the very long wait times and large fees for transaction confirmations? I'm guessing the "government digital wallet" is just an account on a government service that changes values in a (centralized) database while holding a bunch of btc under the hood? Or maybe there are private bank options that do the same?

Lightning Network. [0]

[0] https://lightning.network

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#173

Post by im_down_w_otp »

melenaboija wrote: post #153

Could someone explain me the intuition behind the BTC drop? Why changing the owners of a small fraction of an asset that is not affected by any policy should reflect this? Is it just the feeling from some investors that BTC can not be taken seriously? It is hard for me to understand the logic of it and the only reason that could come to my mind is that some investors don't understand what they are buying.

Insofar as I can tell I think it's the opposite. They know exactly what they're investing in, and acting accordingly. Investment activity around cryptocurrency doesn't look at all like the incredibly boring world of currency swaps.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#174

Post by 99_00 »

washedup wrote: post #6

As a country where remittances make up roughly 20% of the GDP, and with remittance fees as high as 20% or more, this could boost GDP by 4-5%. Not surprising to see them be the first to do this. Others will likely follow.

Do people actually use high fee and slow regulated remittance services? Or do they use low fee unregulated traditional informal systems?

https://en.wikipedia.org/wiki/Informal_value_transfer_system

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#175

Post by rgrieselhuber »

okl wrote: post #156
rgrieselhuber wrote: post #135

Earlier quoted context omitted.

The best argument for Bitcoin is that it’s not created out of thin air and then lent to people with interest, IMO.

Sure, it's created out of hot air and instead of interest you have crazy transaction fees.

Paid to whom? If it was created out of hot air, it would be a hell of a lot cheaper than it is now.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#176

Post by dragonwriter »

colinmhayes wrote: post #160
arcticbull wrote: post #113

Earlier quoted context omitted.

... by looking the other way while the cartels operate with impunity. My understanding was there was a handshake deal with the narcos that if they stopped murdering they'd stop checking in on them. [1] So yes, if you allow the state to become an arm of the cartels then I suppose you can call it a job well done that they're not murdering as many people. [1] https://www.bbc.com/news/world-latin-america-54192736

Seems like a reasonable decision to me. I don't see how else the government could control the cartels. Plus it's got to be decent for their economy.

> I don't see how else the government could control the cartels.

The use of “else” implies that this surrender constitutes the “government” controlling the cartels rather than vice versa. In fact, the cartels are the government, they’ve just outsourced the boring and less-profitable aspects of governing to the entity that calls itself the “government”, as long as it stays in line.

(Which, to be fair, hardly makes El Salvador unique.)

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#177

Post by kleer001 »

Devasta wrote: post #165

Let's ignore that Bitcoin is climate arson, and that its only used for money laundering and buying drugs. Bitcoin has a max throughput of 7 transactions per second. It's utter lunacy to suggest that it could function as a currency for a country. This will only end in tears.

Energy use is not energy source. There's been no full accounting of the carbon footprint of bitcoin mining, only its use. Much of it is done using geothermal or other renewable sources. (edit, incorrect)

That El Salvador is adopting it refutes your second claim.

Then there's the lightning network which increases the transaction throughput.

Everything is going to be okay.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#178

Post by imtringued »

OscarCunningham wrote: post #100
liuliu wrote: post #70

Because they have both Dollar and Bitcoin as legal tender, the result is unclear. In theory, because USD is still cheaper (if Bitcoin is supplied constrained as it is promised), people will trade with USD and hoard Bitcoin. However, when crossing borders, USD is more cumbersome to move around, that may deter people to import products with "cheap" USD. It would be very interesting to observe, whether they will eventua…

In what sense do you mean that the dollar is cheaper than bitcoin? Surely it doesn't mean anything to say that one currency is cheaper than another, since the exchange rate is what it is. I would predict that people prefer dollars to bitcoins, since they are less volatile.

The dollar is getting cheaper every year through inflation. Hoarding USD is impossible over the long term. Meanwhile Bitcoin has an entire community centered around hoarding. The price they charge you keeps going up. The amount they spend keeps going down.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#179

Post by val314159 »

aazaa wrote: post #22

> To warm up a skeptical public, Bukele has promised every citizen $30 in bitcoin if they sign up for a government digital wallet. Ahead of the launch, El Salvador bought 400 bitcoins, Bukele said, helping drive the currency price above $52,000 for the first time since May. > In the early hours of Tuesday the wallet had not appeared on Apple Inc., Google and Huawei’s app download platforms, however, prompting a serie…

you think the government doesn't have a list of its citizens? I'm sure they have something like a social security number.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#180

Post by eyeball »

Devasta wrote: post #165

Let's ignore that Bitcoin is climate arson, and that its only used for money laundering and buying drugs. Bitcoin has a max throughput of 7 transactions per second. It's utter lunacy to suggest that it could function as a currency for a country. This will only end in tears.

They’re using the 2nd layer lightning network which has more tps.

https://en.wikipedia.org/wiki/Lightning_Network#2021_adoptio...

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