Isn't the whole point of Bitcoin to bypass the entire concept of "legal tender"?
There is no centrally defined "point of Bitcoin".
Bitcoin becomes Legal Tender in El Salvador
11–20 of 145 posts
Re: Bitcoin becomes Legal Tender in El Salvador
#12It'll be interesting to see how they use BTC specifically for this use case. Looking at https://ycharts.com/indicators/bitcoin_average_transaction_f... the transaction fee for directly using BTC is $4.6 at the moment. That's obviously not workable for small transactions, so some kind of overlay where the transactions are batched before commit, would be needed.
Also the volatility piece will be hard to manage in anything other than instant transactions. If it's legal currency will people have to denominate larger assets (e.g. cars, houses) in BTC and commit to a price where there could be considerable shift before settlement? I know they mention that stability fund in the article but I could see this getting more complex than that.
What the policy will be where BTC appreciates before settlement will be interesting too, so in a bull run will a buyer have to hand over the number of coins they committed to, and will the gov. get the excess, or the merchant?
Re: Bitcoin becomes Legal Tender in El Salvador
#13It'll be interesting to see how they use BTC specifically for this use case. Looking at https://ycharts.com/indicators/bitcoin_average_transaction_f... the transaction fee for directly using BTC is $4.6 at the moment. That's obviously not workable for small transactions, so some kind of overlay where the transactions are batched before commit, would be needed. Also the volatility piece will be hard to manage in anyth…
This batching is called Lightning network.
Re: Bitcoin becomes Legal Tender in El Salvador
#14It'll be interesting to see how they use BTC specifically for this use case. Looking at https://ycharts.com/indicators/bitcoin_average_transaction_f... the transaction fee for directly using BTC is $4.6 at the moment. That's obviously not workable for small transactions, so some kind of overlay where the transactions are batched before commit, would be needed. Also the volatility piece will be hard to manage in anyth…
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Re: Bitcoin becomes Legal Tender in El Salvador
#15Isn't the whole point of Bitcoin to bypass the entire concept of "legal tender"?
no?
Re: Bitcoin becomes Legal Tender in El Salvador
#16I know you have the option to convert to USD, but haven't seen yet if there would be any fee to doing so. Also, it might be difficult to get every merchant in the country to be able to accept bitcoin. The other thought I had was if they would start accepting other crypto as well if this works out.
>Also, it might be difficult to get every merchant in the country to be able to accept bitcoin.
How's the Internet infrastructure in El Salvador?
Re: Bitcoin becomes Legal Tender in El Salvador
#17The strictly limited amount of BTC makes this into a land grab. First comers are entitled to the services of the real economy due to their virtue of being first(or lucky to be on the right place at the right tweet). Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21 Unlike fiat money, BTC is not an accounting tool for value exchange. Unlike actual land, it doesn’t have any intrins…
The intrinsic value argument is a funny one. What's the idea behind it? Assume you have asset X but then one key assmption fails. Now, is asset X still valuable considering the failed assumption? For land, you can say that even in the case that society collapses it is still valuable. Or is it? What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?
Land ownership is a totally abstract idea anyways it's just been a thing for longer.
Re: Bitcoin becomes Legal Tender in El Salvador
#18Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC.
BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to see how broadly 'bitcoin' is interpreted.
The CGT exemption will be of interest to crypto whales and entrepreneurs and may attract some, but organized crime is a concern given the nature of the asset.
Re: Bitcoin becomes Legal Tender in El Salvador
#19The strictly limited amount of BTC makes this into a land grab. First comers are entitled to the services of the real economy due to their virtue of being first(or lucky to be on the right place at the right tweet). Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21 Unlike fiat money, BTC is not an accounting tool for value exchange. Unlike actual land, it doesn’t have any intrins…
The intrinsic value argument is a funny one. What's the idea behind it? Assume you have asset X but then one key assmption fails. Now, is asset X still valuable considering the failed assumption? For land, you can say that even in the case that society collapses it is still valuable. Or is it? What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?
The idea behind it is that it is useful beyond the accounting.
Gold has a very little intrinsic value. Decorative and tool making value due to its physical properties are there but they are minor comparatively.
BTC has none. That doesn’t mean it doesn’t have a value, of course but it’s simply a value within a certain ecosystem.
Re: Bitcoin becomes Legal Tender in El Salvador
#20It'll be interesting to see how they use BTC specifically for this use case. Looking at https://ycharts.com/indicators/bitcoin_average_transaction_f... the transaction fee for directly using BTC is $4.6 at the moment. That's obviously not workable for small transactions, so some kind of overlay where the transactions are batched before commit, would be needed. Also the volatility piece will be hard to manage in anyth…
This batching is called Lightning network. https://en.wikipedia.org/wiki/Lightning_Network
Sure I'd guess there are multiple options for this, my point was that one (or more) would be needed for this to be practicable for small transactions.