El Salvador to adopt Bitcoin as legal tender • Hacker News Board

Re: El Salvador to adopt Bitcoin as legal tender

#301

Post by imtringued » Sun, Jun 06, 2021, 12:50 PM UTC

acdha wrote: post #140

Geee wrote: post #136

Earlier quoted context omitted.

That argument isn't true. Deflationary currency can destabilize governments, not the economy. Econonomies fail because they're run by incompetent governments, who spend more than they can afford. Bitcoin is not guaranteed to be deflationary. It's deflationary when the economy is growing. It's inflationary when the economy is shrinking. Deflation will slow down economy, and inflation will accelerate economy. It's a st…

Bitcoin is guaranteed to be deflationary as long as there’s a finite limit – if nothing else, lost keys would reduce the total over time. More importantly, the people hawking it _really_ want it to be deflationary because that effectively makes them landed gentry getting richer without any effort on their part. After a decade of that being integral to the sales pitch I would be extremely surprised to see any major ho…

>More importantly, the people hawking it _really_ want it to be deflationary because that effectively makes them landed gentry getting richer without any effort on their part.

Yeah it is basically people getting screwed by increased wealth inequality and then as a response they don't think of a way to build a system without losers, instead they join a system where the old dynamic makes them the winners. The only difference is that you start from a clean slate from 2008 onwards.

Re: El Salvador to adopt Bitcoin as legal tender

#302

Post by celticninja » Sun, Jun 06, 2021, 12:51 PM UTC

imtringued wrote: post #280

PragmaticPulp wrote: post #115

Earlier quoted context omitted.

According to the article, someone donated "six-figure" amounts of Bitcoin to the town each year on the condition that they learn how to use Bitcoin: > Beneficiaries of the digital currency had to learn how to use the Bitcoin itself, creating a Bitcoin economy. If you give a relatively poor town the option to take free money as long as they learn how to use Bitcoin, of course they're going to learn how to use Bitcoin.…

Apparently there is a blockchain based hearth stone clone. Someone listed a card for 3.6 ETH two years ago [0]. In USD: $324 at $90 per ETH. Of course today the price of ETH has risen but the value of the card did not. It's not worth $10k. It's still worth $324 assuming the initial price was correct to begin with. The real price therefore is 0.12 ETH and those 0.12 ETH would be the salary of the creator of the NFT if…

Hasn't that been the best course of action with any cryptocurrency at any time?

HODL anyone?

Re: El Salvador to adopt Bitcoin as legal tender

#303

Post by imtringued » Sun, Jun 06, 2021, 12:53 PM UTC

lottin wrote: post #300

acdha wrote: post #296

Earlier quoted context omitted.

The fixed currency supply guarantees it: unless the economy is shrinking at the same rate, each BTC becomes more valuable over time and that’d cause purchase prices for goods to trend lower. This has been a key part of the sales pitch for a decade: buy now and it’ll be worth more later, guaranteed, but that’s not good for an economy since it heavily incentivizes holding onto anything you aren’t forced to spend. Since…

> The fixed currency supply guarantees it No, it doesn't. Bitcoin can lose 50% of its value in a matter of hours, as recent experience shows, despite being in a limited supply.

You're right a fixed supply isn't enough to guarantee it, you still need productivity growth and technological progress, something we've had for a long time. Given enough growth a 50% crash is nothing.

Re: El Salvador to adopt Bitcoin as legal tender

#304

Post by krishnadevi » Sun, Jun 06, 2021, 12:55 PM UTC

Hello , Bitcoin is great The payment system mentioned in the Fine Article is built on top of Bitcoin, using Lightning Network. There's nothing stopping them from putting various consumer protections and rewards programs on top of that, and plenty of motive to do so.

It's definitely a wait-and-see sort of thing, but I don't see as to how betting against it is the obvious move.

Re: El Salvador to adopt Bitcoin as legal tender

#305

Post by acdha » Sun, Jun 06, 2021, 12:59 PM UTC

landemva wrote: post #199

auxym wrote: post #53

Earlier quoted context omitted.

Deflation is not something desireable in macroeconomics. It incentivizes hoarding cash instead of spending it on productive things (hiring people, capital investments to improve productivity, etc). Slow and steady inflation is a stated goal for most governments and central banks.

Deflation means I can buy more stuff for less money. This allows me to work less and have more leisure time. Therefore, deflation is desirable.

Okay, try how it’d actually work:

… then your boss says sales are down and your salary is being cut. “Don’t worry, your purchasing power hasn’t changed!”

… then you need to go to each creditor and try to renegotiate your balance so you’re not overpaying at the current value rather than what it was when you bought your house or car.

… meanwhile the economy slowly grinds to a halt as people and businesses hesitate to get loans for the same reason. That’s when the layoffs start ramping up, which does not improve the state of the economy.

This used to happen periodically and it was ruinous — it’s why systems like the Federal Reserve were created and almost all serious economists target consistent low inflation levels since that has the opposite effect of incentivizing economic activity.

Re: El Salvador to adopt Bitcoin as legal tender

#306

Post by imtringued » Sun, Jun 06, 2021, 1:00 PM UTC

atweiden wrote: post #179

noahadavis wrote: post #154

Earlier quoted context omitted.

Does making governments less stable really not make economies less stable?

It would seem so, yes. But I disagree with the GP’s premise: claiming economies rise and fall based on monetary policy alone is like claiming the Roman empire fell because they debased their currency. It’s a contributory factor, but certainly not the only one. We’d need to assess the merit of anarcho-capitalism vs collectivist democracy to understand whether disempowering governments would in fact decrease economic s…

Yes there is a hole in the article. He didn't mention that Germany lost WW1. Every other nation suffered the same problems but they could get away from them without hyperinflation, Germany couldn't because increasing the monetary supply does not repair an economy.

If one were to completely oversimplify everything the roman empire fell into the "war + debasement" bucket though but it also had a lot of other problems. They were actively fighting a war which meant they couldn't control the influx of barbarian refugees (huns drove them out) at their border. They then committed a grave mistake. They deported all barbarians and killed those who stayed. Some barbarians gathered near the border and formed a big army which then proceeded to plunder Rome. The problems didn't start with money, they got worse because of money.

Re: El Salvador to adopt Bitcoin as legal tender

#307

Post by bidirectional » Sun, Jun 06, 2021, 1:01 PM UTC

rawtxapp wrote: post #195

milchek wrote: post #178

Earlier quoted context omitted.

The market did react. BTC was down and then turned around on the hourly that this was announced? Or am I missing something?

That's typical volatility, imo, a reaction would have been 10+% in either direction and it was well known throughout the day well before the actual announcement itself.

Or maybe the value of this news is just deemed as <10%? That's a completely arbitrary number which is ultimately only based on the number of fingers humans tend to have.

Re: El Salvador to adopt Bitcoin as legal tender

#308

Post by madacol » Sun, Jun 06, 2021, 1:04 PM UTC

runeks wrote: post #238

Why is no one pointing out that, in order to receive bitcoins on the Lightning Network (LN), you need to lock bitcoins in a payment channel? So, if a consumer wants to send bitcoins to a merchant, either the consumer needs to lock up bitcoins in a payment channel which can only send bitcoins to that given merchant , or the consumer needs to lock up bitcoins in a payment channel to an intermediate gateway, and the mer…

> Why is no one pointing out that, in order to receive bitcoins on the Lightning Network (LN), you need to lock bitcoins in a payment channel?

I think lightning needs economy of scales in order to minimize the bitcoins "locked" perception, because once you can pay lots of your needs with lightning then those bitcoins are not "locked" anymore.

Though that's assuming consumers run lightning nodes too, which need to be online 24/7, and have routing connections, which is unrealistic for average users.

My guess is that average consumers will use some kind of (semi-)custodial lightning wallet

Re: El Salvador to adopt Bitcoin as legal tender

#309

Post by imtringued » Sun, Jun 06, 2021, 1:07 PM UTC

louloulou wrote: post #228

noahadavis wrote: post #204

Earlier quoted context omitted.

You don't see the side-effects of destabilizing a government as potentially disastrous for an economy? Governments and economies can have many different forms, but there are clear cases where destabilizing one will destabilize the other and ultimately lead to mass suffering for a period of time. Imagine what would happen if a government in a place like the Middle East or parts of Africa collapsed. History has shown t…

Allowing corrupt governments continue to steal the wealth of their citizens through printing money isn't a great alternative. At the end of the day people will use the money that works best for them if they have a choice.

>Allowing corrupt governments continue to steal the wealth of their citizens through printing money isn't a great alternative.

How many times does this get repeated? No money is being printed right now. No MMT is happening. No helicopter money is happening. Barely any Keynesian fiscal stimulus is happening (the US has stimulus checks but the EU doesn't and it's suffering for it) and the fiscal stimulus that is happening is financed via debt. No money is being printed right now.

The majority of money that the Fed creates is primarily issued via debt. The part that isn't is used to buy assets that are being put on a balance sheet and the sale of the assets will often remove more money from the economy than it added. QE does nothing but fill bank reserves so that banks lend out more money.

Re: El Salvador to adopt Bitcoin as legal tender

#310

Post by karatinversion » Sun, Jun 06, 2021, 1:08 PM UTC

rawtxapp wrote: post #142

pochamago wrote: post #75

Earlier quoted context omitted.

The smaller countries who don't want to be beholden to either the US or China's fiscal policy. We seem to be building up a second cold war, and I imagine for many countries being able to back your economy with a currency that isn't controlled by either of the two major players is tempting. China may well end up regretting discouraging its miners from holding the majority stake, given the Sino power that could project…

I think if Bitcoin price turns around and keeps increasing (big if), we are going to see a large scale game theory at play. The countries that have opted in will be in a much better place so that would create a race to get in. The next 5-10 years will be very interesting times to live through, especially after record USD printing.

Why would they benefit? Large scale deflation would be quite destabilising for a country.