The timing is almost too convenient for large parties that are afraid of defi.
Bitcoin’s first day as El Salvador’s legal tender
41–50 of 103 posts
Re: Bitcoin’s first day as El Salvador’s legal tender
#42One argument critics bring in I don't understand is that Bitcoin is too volatile to be a currency. If a zoned market solely accept Bitcoin and a good costs say 1 BTC, why does it matter if the BTC-to-USD price is increasing or decreasing? For the zoned market it's still 1 BTC for said good.
Here's one. If you have 1 BTC and it pays for a sandwich, but that same BTC is worth a thousand sandwiches elsewhere, why would you spend it in the zoned market? Likewise, why would the sandwich shop put the btc back into the local economy?
Re: Bitcoin’s first day as El Salvador’s legal tender
#43Earlier quoted context omitted.
Stable coins are not "crypto" currencies. They have black lists (similar to your bank's fraud department) and they are backed by deposited money (so there is trusted issuer who promises to redeem them for actual cash). So 2 key features of a crypto-currency are lacking in stablecoins: censorship-resistance and absence of centralized trusted parties. That you can move them on a blockchain (as long as permitted) with y…
What about algorithmic stable coins like Dai, Terra, Fei, USDN, or cUSD? You still move them using your private key, but at least there's no centralized blocklist.
The trusted party there are price oracles. Plus, matters are muddied by the "governance" usually built-in which adds another trusted parties who are supposed to do emergency interventions (like Fed does ;-)
I don't mean to be mean, but if you have a fundamental security issue, "solving" it with a complicated protocol that still has the same security issues deep at the core, sounds like "scam" to me. Venmo, PayPal and Bitcoin are fair in their offerings: you know who you trust with what and that's the security model without any sugarcoating.
Re: Bitcoin’s first day as El Salvador’s legal tender
#44Unfortunate wording in the title. The price of Bitcoin "crashed" as in plummeted, and the Chivo wallet system they're trying to use in El Salvador "crashed" as in went offline. The Bitcoin network, of course, chugged merrily along, at its usual 4 or so txns/second.
4 transactions a second!? I heard it was bad but that is absolutely pathetic, my local strip mall likely averages out to more then 4 transactions a second.
Re: Bitcoin’s first day as El Salvador’s legal tender
#45It's normal BTC behavior, BTC spikes up and goes down all the time. 10-15% per day moves happen regularly. Open the price chart and look at it.
That’s just another reason (along with all the others) it should never be imposed as a currency, particularly in a country with lots of people living near the poverty line. Imagine leaving home not sure if you can afford the bus ride to work or food to eat because of volatility.
But if your rent is X BTC/mo how does the BTC relation to USD change your rent or make you go hungry? A 0.0001BTC sandwitch will be 0.0001BTC tomorrow as well. What we have here is people using bitcoin as proxy for other currencies.
Re: Bitcoin’s first day as El Salvador’s legal tender
#46I appreciate this has been debated extensively already - but while crypto currency (especially stable coins) can be a worthwhile alternative to fiat money, bitcoin really isn't. A significant crash or surge happens every couple of weeks.
Stable coins are not "crypto" currencies. They have black lists (similar to your bank's fraud department) and they are backed by deposited money (so there is trusted issuer who promises to redeem them for actual cash). So 2 key features of a crypto-currency are lacking in stablecoins: censorship-resistance and absence of centralized trusted parties. That you can move them on a blockchain (as long as permitted) with y…
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Re: Bitcoin’s first day as El Salvador’s legal tender
#47When the majority of the country doesn't have internet access, a "currency" that you can only transact in via the internet seems like a poor choice. It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet, which I'm sure is convenient for them.
My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
Re: Bitcoin’s first day as El Salvador’s legal tender
#48Earlier quoted context omitted.
Which is why BTC is an asset and not a currency. Currencies need stability of value so that everyone doesn't have to update their prices ever few hours: https://simplicable.com/new/money But maybe in the new world, all prices can be in digital and thus ever changing?
Would pricing in another unit cause more issues or solve issues? If customers paid a conversion to some unit each time, and conversion is determined at point of sale. One customer may pay 100pBTC for a loaf of bread, and another may pay 101pBTC. Does that help, or make things worse?
You want stability. There are many ways to achieve that.
Your example above shows a 1% swing -- which is nothing. Yesterday BTC dropped by 14-18% depending on how you define it.
Imaging buying a Tesla and you budgeted for $40K but today it jumped $45K. That would throw off your plans and you wouldn't probably buy it, hoping for things to change. This means that the thing you are using for the transaction is actually preventing commerce because now timing matters. This is a hinderance to commerce and those using it will not have the liquidity/dynamic economy as compared to those using a stable currency.
This is a sign you are not using a currency for the transaction but rather an asset.
Now USD is stable in parts because it is accepted widely and everything is denominated in it. If everything was denominated in BTC, then it would have similar stability. Basically the more things are denominated in a particular currency/asset, the more stable it becomes.
Re: Bitcoin’s first day as El Salvador’s legal tender
#49One argument critics bring in I don't understand is that Bitcoin is too volatile to be a currency. If a zoned market solely accept Bitcoin and a good costs say 1 BTC, why does it matter if the BTC-to-USD price is increasing or decreasing? For the zoned market it's still 1 BTC for said good.
I think, the main issue is, that the BTC price is affected by the outside world AND that the country has to import things from the outside world.
What you said would probably work if you had a token that was only minted and traded in only one country.
Re: Bitcoin’s first day as El Salvador’s legal tender
#50It will be interesting to see how they go along.
The only valid argument I have seen for a wide adoption of crypto is in countries where the local currency is unusable: corrupt central bank, hyperinflation, high rates of counterfeits, low access to banks. I actually see that then some form of crypto is preferred.
So yes, watching that closely!