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El Salvador abandons Bitcoin as legal tender

ticotimes.net

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Re: El Salvador abandons Bitcoin as legal tender

#701

Post by [deleted] »

bawolff wrote: post #126
georgeecollins wrote: post #105

Earlier quoted context omitted.

There seems to be two concepts that are getting conflated. One concept is that BTC is a good investment. Historically that is undeniable. The other concept is that it is a good medium of exchange. I think that is not so true because 1) its neither cheap nor easy to buy a lot of things with it 2) a thing that goes up in value is not a good medium of exchange because people don't want to spend it, they want to hoard it…

> One concept is that BTC is a good investment. Historically that is undeniable. I'll deny it. Bitcoin has seen large gains, that is undeniable. However, that is not the same thing as being a good investment.

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#702

Post by stevenwilkin »

jgord wrote: post #138
zmgsabst wrote: post #88

Earlier quoted context omitted.

Around the time of SegWit, the “digital gold” camp won over the “digital money” camp — who moved on to ETH, SOL, etc.

Many of us in the BC is digital money camp argued the case that more transactions and a lower transaction fee could be most easily implemented, within the spirit of the founders intent, if we simply increased the size of the transaction buffer, mitigating an obvious bottleneck. We argued against the complexity of SegWit and Lightning Network. I think greed and politics won rather than engineering or economics good se…

It currently costs https://bitcoinfees.net/

Re: El Salvador abandons Bitcoin as legal tender

#703

Post by neilwilson »

riffraff wrote: post #579
neilwilson wrote: post #486

Earlier quoted context omitted.

No country with its own money ever needs to get the IMF involved. Largely because the only place the IMF can get your money is from you. Currencies are public monopolies. The problems always arise when a state starts issuing state backed liabilities in other denominations - as there is no way for a state to absolve itself of that debt without paying it back. It becomes a debtors prison.

Even if you have your own money you need stable foreign currency to operate. It's not like you just choose to issue debt in foreign denomination cause it's fun.

You don't. There is no requirement for the state to get involved in other people's money.

That's for the private sector to sort out - largely because they can go bankrupt and wipe out the debt when things inevitably go wrong.

Re: El Salvador abandons Bitcoin as legal tender

#704

Post by ggm »

chowchowchow wrote: post #540
liontwist wrote: post #516

Earlier quoted context omitted.

> More than precious bitcoin? I’m advocating for stable currency. Not bitcoin. > you agree this will lead to reduced prosperity I agree that it will reduce the velocity of money and maybe “GDP”. But not prosperity, individuals being able to save wealth into the future is a better life outcome than more goods changing hands. > and a precious asset is an inefficient medium for commerce You are conflating liquidity with…

> You are conflating liquidity with deflation. To be a currency it has to be liquid, we agree. We also agree btc is not as liquid as cash. But deflation or stability is orthogonal from liquidity. I’m not; you have a limited view of what inefficiency means. The currency can be liquid and still inefficient for exchange due to other kinds of overhead such as opportunity cost of spending the currency itself. The economy…

Maybe it's improved but when i played with btc and made 3x and freaked out and bought a secondhand pixel with my $800 stake in milliBTC the friction was huge. I paid unpredictable vig getting $ and I had very indirect access to sell price which was being constantly fucked over by whales playing.

A true economy of low friction btc transactions for pizza has never existed at the scale banks do pay wave. Its hypothetical frictionless, not actual. I'm willing to bet even legalised state coins will be tracked, frictive and taxed.

Re: El Salvador abandons Bitcoin as legal tender

#705

Post by rsynnott »

the_sleaze_ wrote: post #394
acdha wrote: post #292

Earlier quoted context omitted.

And it was $92k just less than 24 hours ago. That’s why it’s bad for currencies because people can’t make meaningful plans more than a few hours out, and it’s terrible for the economy if you incentivize everyone to reduce spending in the hopes that speculators will make you rich later. Real currencies circulate so the same dollar is spent by many people, benefiting each of them while you’re still holding onto your Bi…

But gold fluctuates rapidly at times at well. Not the same volatility but it does fall

Yes; gold would also be a bad thing to use as a currency.

Re: El Salvador abandons Bitcoin as legal tender

#706

Post by rsynnott »

redundantly wrote: post #230
tapoxi wrote: post #229

Earlier quoted context omitted.

But you're not supposed to hold legal tender, by design you're supposed to spend it.

gestures at all of the billionaires

Billionaires do not literally have big rooms full of money, like a common Disney duck-plutocrat. In general, no-one much is holding large amounts of _cash_/cash-equivalent, except to some extent for the likes of insurance companies, who are obliged to do it for risk management reasons.

Re: El Salvador abandons Bitcoin as legal tender

#707

Post by tel »

hshshshshsh wrote: post #629
karlgkk wrote: post #247

Earlier quoted context omitted.

It’s being “used” as a speculative asset. That’s not a firm foundation to run a governmental monetary system on. Maybe there are other cryptocurrencies better suited to the task, but BTC isn’t

Everything is a speculative asset. Your marriage is a speculative asset that your wife doesn't cheat on you in future and actually loves you. S&P is a speculative asset that it will perform like it has been performing in last 30 years. USD is a speculative asset on US not going bankrupt. Your career is speculative asset that you don't get fired tomorrow and you can find another job if you do get fired. Bitcoin is a s…

Yeah, that’s true. We invest in a lot of things, hoping for future value. But I guess I still treat those differently. I only hold enough USD for upcoming purchases. And I struggle to understand how investing in my marriage is speculative. For a variety of reasons I can’t (or wouldn’t want to) manage that risk like I would in normal speculative investment. I can’t hedge, size up, size down.

So I think I’m missing something. I feel like you’re suggesting that we should be more comfortable speculating because we do it all the time, but I’m not seeing how those are all the same.

Re: El Salvador abandons Bitcoin as legal tender

#708

Post by rsynnott »

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.

It's no longer legal tender; merchants will no longer be forced to accept it. That's the key point; if the state wants to indulge in speculation, that's its business (though you'd question whether a state which needs to take IMF loans, which are kind of a last resort, should really be engaging in this...)

Re: El Salvador abandons Bitcoin as legal tender

#709

Post by rsynnott »

abduhl wrote: post #370
antihipocrat wrote: post #99

Earlier quoted context omitted.

Legal tender does not have to be a mandatory means of exchange.

That is actually the defining characteristic of legal tender: “money that is legally valid for the payment of debts and that must be accepted for that purpose when offered” https://www.merriam-webster.com/dictionary/legal%20tender

Its status in El Salvador was actually a bit more than _just_ legal tender; merchants were _required_ to accept it.

For instance, the euro is legal tender in the eurozone. I can pay a tax bill or a bank loan with 10cent coins, and technically they have to accept that (though note that some countries do have special rules around whether small change is legal tender). However, a merchant is not required to take my wheelbarrow full of 10cent coins in exchange for goods and services; no debt exists before the purchase.

El Salvador was forcing the merchant to take the wheelbarrow.

Re: El Salvador abandons Bitcoin as legal tender

#710

Post by rsynnott »

paulgb wrote: post #183
yalogin wrote: post #66

Earlier quoted context omitted.

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.

> The trouble is, it needs to be more than that if it is to survive.

But why is it necessary for it to survive? Like, I think even cryptocurrency true believers would acknowledge that there are better cryptocurrencies out there if you want a currency; bitcoin seems at this point of largely symbolic value.

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