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$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

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Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#451

Post by el-salvador »

datadata wrote: post #354
snovv_crash wrote: post #189

Earlier quoted context omitted.

Actually paper fiat currency is accepted by a government to pay property tax. In this way you need it to keep possession of land, so the entire land value of the linked country, and all the infrastructure built on it, is the backing for 'fiat' currency.

Accepting some form of unbacked currency does not give the currency intrinsic value and therefore make it backed. El Salvador made bitcoin legal tender, which means that USD or Bitcoin could be used to pay property taxes there, that doesn't mean that suddenly Bitcoin is backed by El Salvador property.

> Bitcoin could be used to pay property taxes there

There are no annual property taxes in El Salvador :)

But this may be a technicality, based on the Salvadoran legal definition of the term. So it really depends on what is understood as tax in each jurisdiction.

El Salvador law differentiates between taxes and fees. Taxes are born from an "generating action", like selling a computer generates sales tax. While Fees are born from a "service provided" .

So there are monthly fees payable to the local city/town/village hall based on property size and location for services they provide in that area Some common ones are garbage collection, CCTV, city lighting, road maintenance and the contribution for each City/Town annual Festival. A monthly fee for each town's annual party :O Does that exist in other countries?

So once you get your city hall invoice, and wanted to pay in bitcoin, you'd have to visit the city hall to pay in their bitcoin terminal.

At least four city halls are connected to BitRefill which allows online invoice payments using Bitcoin/Lightning. BitRefill connects to a local payment network, then the user types or scans the Invoice barcode, and makes the bitcoin payment for the fees bill.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#452

Post by xbar »

Algorithmic trading against other cryptocurrencies turned out to be less stable than backing UST with a fiat currency.

The veritable tautology in that statement would be amusing except for the sad fact that a great many ignorant investors were fleeced in this process.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#453

Post by filoleg »

Strom wrote: post #383
nradov wrote: post #363

Earlier quoted context omitted.

El Salvador is a failed state about to default on its national debt. It's not a real "government" in the way that most of us would define the term.

What criteria of the definition doesn't El Salvador fulfill?

> What criteria of the definition doesn't El Salvador fulfill?

The one that is actually important when it comes to currencies, having something valuable (whether it is a resource, power, political influence, military, finances, etc.) to back the currency up with.

But on the most technical level, you are correct, El Salvador has the ability to back up BTC in the same capacity as a country like Zimbabwe can back up Z$.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#454

Post by trompetenaccoun »

wallacoloo wrote: post #408
matheusmoreira wrote: post #102

Earlier quoted context omitted.

> Too many people falsely equate "Bitcoin === Crypto".. or "a fan of bitcoin is a fan of all crypto". It pretty much is. I can open the price graph for any coin and assume the bitcoin movements are similar. Small dip in bitcoin price? Alts get destroyed. Even ethereum gets destroyed.

Eth fell by about 10% relative to BTC pretty much immediately as the Terra/Luna stuff went south. yeah, there's absolutely connections between all the different currencies out there, but they're not equal strength. it's hard to draw good conclusions from price data just because there's so little of it. the last year's been stable with Eth:BTC confined to within 0.06 - 0.08. but zoom out just one more year and the ran…

It's true, when you zoom out it becomes even more apparent that they move independently: https://i.imgur.com/5rZm5Ds.png

tick tock...

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#455

Post by el-salvador »

nradov wrote: post #363
Strom wrote: post #335

Earlier quoted context omitted.

Bitcoin also has the backing of a government - El Salvador. I would rather argue though that even government backed currencies are fully dependant on trust, not government usage of it. Just check out any government currency hyperinflation event.

El Salvador is a failed state about to default on its national debt. It's not a real "government" in the way that most of us would define the term.

> El Salvador is a failed state about to default on its national debt. It's not a real "government" in the way that most of us would define the term.

At least for now, El Salvador has enough cash on hand to pay the $800 million bond payable in February 2023. Current cash foreign reserves are about $3000 million.

I'd like to clarify though, that I'm not an economist, and that the processes required and implications of using those funds to pay the upcoming bonds due are outside my scope of knowledge.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#456

Post by efficax »

sakopov wrote: post #194

What's everyone's thoughts on Gemini dollar? Gemini claims [1] that GUSD is FDIC insured up to $250K and audited [2] by a third party called BMP [3]. I also remember reading that Gemini is used by a number of IRA custodians, so I'd assume that they're pretty heavily regulated. [1] https://www.gemini.com/dollar [2] https://assets.ctfassets.net/jg6lo9a2ukvr/VOtyB4tBb0G4FVt6Eq... [3] https://www.bpm.com/

They claim that GUSD holders may be eligible for FDIC “passthrough” insurance, that’s a big maybe, and a lot of depends on whether or not they really do hold a dollar in an FDIC insured account for every Gemini dollar. Who knows?

I do know of one way to be sure your money is FDIC insured. By putting your dollars in a bank.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#457

Post by jakupovic »

JKCalhoun wrote: post #381
GaylordTuring wrote: post #373

Earlier quoted context omitted.

Quoted post unavailable.

I think some of us just thought it was amusing.

I thought it was funny. I had to do a double take to figure out the distance.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#458

Post by JumpCrisscross »

jpmattia wrote: post #446
vkou wrote: post #444

Earlier quoted context omitted.

The FSL crisis was caused by wild-west deregulation, accounting practices which have since been banned, and resulted in a thousand convictions. The crypto space is repeating all the same bullet points, except with more outright fraud, with less accounting, and without any convictions.

> The FSL crisis was caused by wild-west deregulation, accounting practices which have since been banned, and resulted in a thousand convictions. I'm guessing you did not live through it: Like 2008, there were many causes. See eg the wiki: https://en.wikipedia.org/wiki/Savings_and_loan_crisis#Causes But you also missed the heart of the matter: Money that was lost in the US, despite it having a regulated banking syste…

> was lost in the US, despite it having a regulated banking system

This is a straw man. Nobody claimed nobody in a regulated system ever loses money.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#459

Post by zagfai »

jabits wrote: post #366
Ancapistani wrote: post #272

Earlier quoted context omitted.

It will be, on a long enough time scale. I have USD sitting in an account waiting for that to happen, in fact.

Agree. Unfortunately your USD (and mine) are currently losing about 8% of their value (annualized)…

Also you would losing 8% if holding cash, or you "invest" something like treasuries, stocks ... but their values would also "fluctuating".

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#460

Post by Spivak »

ipython wrote: post #402
mrb wrote: post #344

Earlier quoted context omitted.

"costs so much to transfer btc" That's not true. The typical credit card processing fee ranges from about 1.3% to 3.5%. Average international remittance fees are about 7%. For comparison the average Bitcoin fee is about $1 right now, so 1% on a $100 transaction. So Bitcoin compares favorably to its competitors.

So for that bitcoin fee, I get fraud protection too? So as a consumer I can challenge a fraudulent charge? And the money, it doesn’t leave my account until I say so? Oh wait no? I get none of those guarantees? Just a “good luck! Buyer beware!” No thank you. I’ll stick with my credit card. If I want to pay for something semi anonymously I’ll use cash.

No and you know that. Bitcoin is semi-anonymous cash and it and it’s ilk are basically the only cash you can send digitally.

You should stick with your credit card, that was literally always allowed.

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