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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#181

Post by mindwok »

mikepurvis wrote: post #164
codethief wrote: post #152

Earlier quoted context omitted.

> Speculative asset class fails as non-speculative legal tender class. This. Bitcoin proponents often claim that eventually everyone will use Bitcoin for payments ("Finally no more governments or central banks!") and that's why it will increase in value, so everyone should invest in BTC. But this argument is fundamentally flawed: A currency, in order for it to work (in order for people to be able to trust it), needs…

And quite apart from that fundamental misalignment, sovereign states having some measure of control over their own monetary policy is arguably a pretty good thing .

And on top of that, consumers prefer institutions in the loop. That’s why people use Amex to pay for stuff, because if it goes wrong you’ve got a massive institution with a tonne of clout to help you out.

Re: El Salvador abandons Bitcoin as legal tender

#182

Post by throwaway4aday »

yreg wrote: post #84
the_af wrote: post #27

Earlier quoted context omitted.

From the article: > Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024. I would say this points to an actual failed experiment, if true.

8% is quite a lot though.

Doing better than Firefox

Re: El Salvador abandons Bitcoin as legal tender

#183

Post by paulgb »

yalogin wrote: post #66
ptero wrote: post #17

That's heavy editorializing: El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it. But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status. Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.

Looks like a fair take to me. They are not forcing people to accept it anymore because it didn’t work. It was never supposed to work. Bitcoin tried for 15-20 years to find a use case but now it’s just an asset class like gold and nothing else, it will never be more than that.

The trouble is, it needs to be more than that if it is to survive. Since inception, mining has mostly been subsidized by new bitcoin, which is capped by design (and about 95% distributed).

Satoshi’s paper assumed that transaction costs would make up for the exponentially declining subsidy, but that hasn’t really happened since it never lived up to his “digital cash” vision.

Re: El Salvador abandons Bitcoin as legal tender

#184

Post by fode »

I spent three months in El Salvador before the Bitcoin Legal Tender law passed, then another three months after it was enacted.

From day one, I knew it wasn’t going to work.

That’s when I flew back to Miami, went back to the drawing board, and stopped being a Bitcoin maxi.

Re: El Salvador abandons Bitcoin as legal tender

#185

Post by forgotoldacc »

sporkydistance wrote: post #58
ks2048 wrote: post #33

Do pro-bitcoin people still talk about goals of bitcoin being a currency that people use daily? I don't follow it closely, but that idea seems to have faded and now it's just an asset to buy and hold while it magically goes up forever.

Why would anyone spend a single BTC/sat. if they know it could be worth 10x more in a few weeks/years?

It used to be that buying a Bitcoin today would net you 10000x more if you waited a bit.

Then it was 100x more.

Now 10x more is the best people can dream of. The possibility of getting super rich from Bitcoin is now gone unless you're already rich to start with. Turning $100 into a million dollars made the whole world interested. Turning 100k into a million isn't anything interesting and it's out of reach of most normal people, and those who can throw 100k into something are already investing in other things with similar returns. As a normie, putting in $100 with the hopes of Bitcoin reaching a million would only get you $1000. That's not much different than a couple scratch off lottery tickets.

It'd be much smarter to find the new secret thing that costs $5 now and will net you a million dollars ten years down the road. There's loads of stuff out there that people aren't paying attention to yet. Crypto isn't one of those things.

Re: El Salvador abandons Bitcoin as legal tender

#186

Post by iforgot22 »

the_af wrote: post #27
Mengkudulangsat wrote: post #2

> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.

From the article: > Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024. I would say this points to an actual failed experiment, if true.

I'd be surprised if anyone really used it there, for technical reasons alone, and not even considering the risk part. BTC is still not easy to use.

Re: El Salvador abandons Bitcoin as legal tender

#187

Post by Torn »

readthenotes1 wrote: post #132
a1371 wrote: post #22

Earlier quoted context omitted.

Imagine you have 6,050 bitcoins but they didn't work out for you the way that you hoped. The most reasonable thing to do is to still advertise a bullish position because otherwise you are devaluing your own asset. There is a strong sentiment around bitcoin in El Salvador and it can make them money; but the experiment around it being a legal tender, well, failed.

They only doubled and tripled in value. Gotta wonder what you think they expected

It to be a viable currency? Not a speculative asset?

Re: El Salvador abandons Bitcoin as legal tender

#188

Post by portaouflop »

IMF gave them 1.4 billion to abandon the “experiment”:

> The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described.

—-

I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

Re: El Salvador abandons Bitcoin as legal tender

#189

Post by [deleted] »

ggm wrote: post #4

Speculative asset class fails as non-speculative legal tender class. If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems. Like a lot of people, I probabl…

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#190

Post by iforgot22 »

codethief wrote: post #152
ggm wrote: post #4

Speculative asset class fails as non-speculative legal tender class. If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems. Like a lot of people, I probabl…

> Speculative asset class fails as non-speculative legal tender class. This. Bitcoin proponents often claim that eventually everyone will use Bitcoin for payments ("Finally no more governments or central banks!") and that's why it will increase in value, so everyone should invest in BTC. But this argument is fundamentally flawed: A currency, in order for it to work (in order for people to be able to trust it), needs…

The argument is that it'll become more stable if it's adopted as a worldwide currency, kinda like gold.
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