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Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

foreignpolicy.com

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Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#191
post #107
post #26

I’m exhausted by cryptocurrency. There’s a kernel of neat tech innovation and a reasonable argument about monetary policy obliterated by an avalanche of greed, hype, fraud, and magical thinking.

I’m exhausted by the fiat money scam 2% annual inflation over a 40 year career amounts to 40% less earnings. Inflation is theft. Bitcoin fixes this. No one has ever explained a better solution to inflation than Bitcoin. Fiat money printing is a scam that lets politicians spend more money without directly raising taxes. Bitcoin is honest sound money with a fixed inflation policy forever that cannot be manipulated by a…

I’m always a bit surprised when people seem to imply that there’s a fundamental human right to perfectly stable stores of value (if you could even define such a quality), and that the absence of that—inflation, price fluctuation, etc—is somehow unfair.

Gold bugs like to say that “value” is what gold is worth, but if you look at the real value of gold over time—in terms of its ability to be exchanged for things that you might, you know, want—it’s anything but: https://www.macrotrends.net/1333/historical-gold-prices-100-.... Over a number of multi-decade ranges in the last century, a purchase of gold at the start of the period would leave the buyer the poorer at the end of it.

In reality, there just isn’t such a thing as a single “real” definition of “value.” Prices—of commodities, of securities, and, yes, of both fiat and cryptocurrencies fluctuate. A saver who wants to put money away to spend in the future must, unfortunately, make some sort of bet. (Even if such a magical instrument existed, savers who bought it would still be making a bet that the opportunity cost of avoiding growth investments does not outweigh the value of stability!)

Keeping all your savings in crypto—or in fiat, or in gold, or in your employer’s stock—isn’t a fantastic idea. But that’s not because someone is scamming you; it’s because there just isn’t such a thing as “the one true value”, and no asset that allows you to safely track it. That’s life.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#192

Earlier quoted context omitted.

Crypto is not necessary for micropayments and they have been tried several times already including by Google as well. It’s not a technical problem.

I'm curious about what Facebook/WhatsApp is doing in Guatemala, right next to El Salvador. They are integrating WhatsApp, the main messaging app, with a stable coin Pax Dollars and Zero fee remittances between U.S. and Guatemala. The countries are next to each other and are similar in many ways. But one difference is that Guatemala, has their own stable local currency (Quetzal/GTQ), and the exchange rate margins char…

What they're doing is not actually using the USDP in any manner. The USDP sits in Novi's account in Coinbase Custody. The USDP in the Novi app is just accounting entries in their system.

wrote this up here: https://davidgerard.co.uk/blockchain/2021/11/02/facebooks-no...

I'd be amazed if the new Novi-in-WhatsApp thing didn't work the same way.

It's the best possible way to use the blockchain: say "blockchain" in the press release, absolutely do not touch the thing with your system.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#193
post #164
post #89

Earlier quoted context omitted.

10c tip, $31 gas fee.

In some chains it is 1c

trouble is the interface to actual money - the only coins that have any depth of dollar liquidity are BTC and ETH, both of which are proof-of-work. Even if your low-fee shitcoin just happens to have a USD pair, it's startlingly unlikely to have enough depth not to have massive slippage on trades; so functionally, buyers have to go via BTC or ETH. This is also the fallacy of non-PoW NFT chains.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#194

Earlier quoted context omitted.

While David Gerard has been very critical of El Salvador ( and mostly Bukele), he is giving information/insights about it, that you won't see elsewhere. I wouldn't dismiss it as a hit piece. He's obviously spending a lot of time researching what's happening in El Salvador with the Chivo wallet. As far as i checked/found, all the information he gave, is factually correct. But yes, he is very critical of the usage of C…

> Eg. Mentioning that it's nuts to mine BTC while they could have used the geothermal energy to lower electricity costs in the country ( since they import 20%), makes more economic sense for it's citizens. I think the point is that crypto mining finances the building of power generation in areas where it was not profitable to do so due to lack of electricity transportation infrastructure. This is great for very poor…

Author here. What you describe would be nice, but it's literally not what's happening here.

It turns out you can't just arbitrarily declare "we're setting up geothermal here", as Bukele did - it's complex and susceptible to dangerous screwups.

e.g. the LaGeo plant mentioned in the piece opened a new 95 megawatt well in June. That was the result of years of careful planning, and there's already concerns that it's screwing up the local groundwater - a serious concern, given a lot of the local villages around Berlin don't have running water and rely on the groundwater.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#195

Earlier quoted context omitted.

While David Gerard has been very critical of El Salvador ( and mostly Bukele), he is giving information/insights about it, that you won't see elsewhere. I wouldn't dismiss it as a hit piece. He's obviously spending a lot of time researching what's happening in El Salvador with the Chivo wallet. As far as i checked/found, all the information he gave, is factually correct. But yes, he is very critical of the usage of C…

His points, which are valid, would get a much broader audience if he was able to keep his normative judgments out of his reporting.

author here. This piece turns out to be doing the numbers big time as far as Foreign Policy articles go, so I'll accept my editors' judgement that I'm on the right track so far.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#196

So the key reason for btc adoption in El Salvador is cheaper remittance payments, I find it odd that an article that sets out to criticize btc in El Salvador doesn't even mention the original intended use case.

author here. It got dropped for space reasons (it's overlength already), but Chivo didn't get US money transmitter licenses in order as yet, so sending remittances over Chivo is attracting conversion fees from people's banks, even as Chivo doesn't charge them.

I mostly think of Chivo as a real wasted opportunity as a payments system. A government-backed electronic dollar system that worked well, and which subsidised remittances from the US, could have been excellent for El Salvador. Instead they came up with semifunctional rubbish with a massive fraud scandal.

I believe the previous Chivo developers have been fired and a new team is being hired (based on LinkedIn job ads). Trying to find out more about this.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#197

Bitcoin isn't the lone currency in the country and the dollar is still widely used there. Expect more of this as the president of El Salvador has invited the ire of the US government by exposing the US's involvement in corruption in his country: https://twitter.com/nayibbukele/status/1469045510442864642 The media is about to go full court press on this guy, BTC is just one angle they'll use.

This is pure deflection. The use of BTC in El Salvador is a joke. Comments about whatever US corruption don't change that.

So is Bank of America misinformed, or are you?

"El Salvador’s Bitcoin experiment has been a relative success to date – the country became the first in the world to adopt Bitcoin as legal tender; a larger proportion of the population has a Chivo digital asset wallet than a bank account"

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#198

Earlier quoted context omitted.

This is pure deflection. The use of BTC in El Salvador is a joke. Comments about whatever US corruption don't change that.

Many large retailers are accepting Bitcoin here in El Salvador using the Lightning Network or Chivo. What I've seen is that those who recently bought Bitcoin, didn't want to spend their Bitcoin if they had USD. At least last month, when Bitcoin price was going up, they preferred to spend USD instead of Bitcoin.

Ding ding ding.

Can't believe this is the issue that shows me the HN bubble I've heard so much about, but seemed impossible

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#199

Earlier quoted context omitted.

There is no defense of BTC inherent to my point, quite the contrary. BTC is largely irrelevant. What's relevant is that this leader in a South American country has thumbed his nose at the empire and the empire will seek to undermine him through all means at its disposal, media hit pieces included.

How is being a BTC bro thumbing one's nose at empire? The winners from any kind of successful BTC movement will overwhelmingly be just a slightly different set of private, unaccountable, economically (and hence politically) powerful people, who are even more ideologically predisposed to libertarian fairy tales. BTC success in El Salvador would be a defeat for the vast majority of the populace, and a non-event for emp…

You're missing pieces of the puzzle.

See: Leader of Libya, after discussing moving to a gold standard.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#200

Earlier quoted context omitted.

That’s a few ex-spies that get to spend retirement in relative luxury in return for occasionally and sternly looking into a camera and making some completely obvious point, but with a lot of authority. There are more military veterans at McDonald’s, maybe even in relative terms. That doesn’t mean the Marines are infiltrating the McNugget supply. But, yea, top politicians and “the mainstream media” sometimes have simi…

We're well beyond your cognitive capabilities in this discussion if you're suggesting that a comparison between powerful ex-directors of the US intelligence apparatus landing post-gig jobs as political commentators at media organizations and "Marines" at McDonalds is apt (or even relevant).

Have to agree.

Desperation to avoid "running in conspiracy (theory!) circles" has some forgoing critical thinking.

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