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

Post by lottin » Tue, Sep 07, 2021, 7:28 PM UTC

cwkoss wrote: post #292

lottin wrote: post #285

Earlier quoted context omitted.

Absolute rubbish. You talk like there's something magical about Bitcoin, when in fact every profit-maximising firm will always use the cheapest energy available. Seriously what kind of pathetic argument is this, or am I missing something?

You're missing that economic theory doesn't align with the practical realities: it's expensive and wasteful to move most energy consumption around, you can't easily move an aluminum foundry or a city to the other side of the world to rapidly respond to market discrepancies.

Post by rory » Tue, Sep 07, 2021, 7:33 PM UTC

quantumBerry wrote: post #286

rory wrote: post #277

Earlier quoted context omitted.

No, again that's simply not correct. We can empirically observe purchasing power and money supply, so there's no need to speculate. One-time changes to M2 of that magnitude have been shown to have small to no effect on inflation [0]. [0] https://www.commonfund.org/blog/chart-of-the-month-money-sup...

Your own article admits that the lack of inflation is due to other factors such as reduced lending and velocity of money. All else equal if there were 40 rubles in the economy yesterday and 80 tomorrow, your rubles have half the purchasing power they had before. The printing of the money prevented a deflationary effect that would have enrichened those who held onto dollars under a period of anemic lending and lowered…

Post by lottin » Tue, Sep 07, 2021, 7:38 PM UTC

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…

Post by rory » Tue, Sep 07, 2021, 7:45 PM UTC

dmichulke wrote: post #289

rory wrote: post #277

Earlier quoted context omitted.

No, again that's simply not correct. We can empirically observe purchasing power and money supply, so there's no need to speculate. One-time changes to M2 of that magnitude have been shown to have small to no effect on inflation [0]. [0] https://www.commonfund.org/blog/chart-of-the-month-money-sup...

The post talks about inflation but doesn't mention which measure it uses. Hmmm... Also, the correlation coefficient 0.15 and an R^2 of 0.02. It means it doesn't explain all variance in the inflation but it clearly influences it. Finally, your last comments sounds like we actually can have a free lunch.

Post by Karrot_Kream » Tue, Sep 07, 2021, 7:56 PM UTC

toomuchtodo wrote: post #137

azinman2 wrote: post #120

Earlier quoted context omitted.

On a very poor population where even a 1% swing in valuation can make a huge difference in someone’s life. There’s also no recourse for fraud here — the industry has all kinds of scrupulous players and isn’t as locked down as traditional banking. To me, it seems like El Salvador should have created a MoneyGram competitor and left it at that. They could remove/reduce commission without all the rest of the risks.

To your point, they could've partnered with TransferWise/Wise.com or OFX to build a white label app that allowed for frictionless remittance and fiat management for their citizens and "wallet management" (ie deposit accounts), and your usual fintech wallet accounts. This would be no different than the UK's Faster Payment's service being a managed service by Vocalink [1]. Some have proposed the US Fed issuing FedAccou…