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El Salvador to adopt Bitcoin as legal tender

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Re: El Salvador to adopt Bitcoin as legal tender

#311

Post by imtringued »

stickfigure wrote: post #233
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…

> Imagine what would happen if a government in a place like the Middle East or parts of Africa collapsed. The Zimbabweans that lost all of their savings to hyperinflation were literally counting the days until Mugabe's government collapsed.

Technically it collapsed the moment land was forcibly repossessed because from that day on Zimbabwe could no longer feed itself. The government merely managed to survive longer than it should.

Re: El Salvador to adopt Bitcoin as legal tender

#312

Post by incrudible »

lottin wrote: post #274
incrudible wrote: post #270

Earlier quoted context omitted.

> A few transactions like these every day... You don't do "a few of these" every day. It's for moving significant amounts of money, where security starts to matter. Lightning network is for small transactions. You don't need your daily purchase of a coffee to be on the Bitcoin blockchain for the rest of history. > Whereas you could use cash and pay no fees. Somebody still has to spend time and money managing all that…

> Lightning network is for small transactions. That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate. > Somebody still has to spend time and money managing all that cash. I don't know how you manage your cash, I manage it myself, and I certainly don't know anyone who pays $20 a month to have their cash "managed". Especially in a third-world country, it seems unim…

> That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate.

Lightning network has virtually no fees. You were replying to someone who managed to get a "real" Bitcoin blockchain transaction through for less than a dollar.

> I certainly don't know anyone who pays $20 a month to have their cash "managed"

I was thinking of the people managing cash registers.

Re: El Salvador to adopt Bitcoin as legal tender

#313

Post by jimsmart »

Black101 wrote: post #49
temp10298385 wrote: post #17

As someone who readily admits to not fully knowing what legal tender entails, I have a question for the optimists: As I understand it, legal tender status forces creditors to accept bitcoin as debt repayment. Given the volatility of bitcoin, wouldn't this impact risk assessment of loans? Being obligated to accept a high volatility asset as a repayment sounds like a nightmare for creditors. Wouldn't interest rates ris…

You can sell Bitcoin the second you receive it, I don't see it as a big risk.

It's no risk at all - providing one completely ignores the extreme volatility of Bitcoin here.

Quite a big ask really, no?

Re: El Salvador to adopt Bitcoin as legal tender

#314

Post by imtringued »

JohnJamesRambo wrote: post #45
eloff wrote: post #40

My prediction. This won't be used hardly at all. Why use bitcoin when the USD is also legal tender and superior as a currency in nearly every way? About the only thing you can do more easily with bitcoin is buy other cryptos and send it across borders - sometimes. I would also predict that the failure here would finally get people to stop thinking it's a currency. But I doubt it.

USD has this little problem and it hasn’t even begun to manifest yet. https://fred.stlouisfed.org/series/M1SL

It's two charts stitched together. You can't really read anything into it. Yes, the chart is useless for periods spanning over Feb 2020 to Jun 2020 and it should make you suspicious but not because because of the actual information being presented, rather you should be suspicious because messing with the charts makes it difficult to see what is being hidden.

Re: El Salvador to adopt Bitcoin as legal tender

#315

Post by imtringued »

Acrobatic_Road wrote: post #242
atq2119 wrote: post #237

Earlier quoted context omitted.

I seriously doubt that the money was printed . It's all electronic nowadays. There's so much confusion and cargo-culting around money, it would serve as well to use accurate language. The money was created , but not printed. This is significant because "printing" evokes a picture of the money being distributed to people who then spend it, which is not quite the case here.

It makes no difference whether the money was printed or "created".

It makes a huge difference because creating money follows regulations, "printing money" means you are ignoring those regulations.

Re: El Salvador to adopt Bitcoin as legal tender

#316

Post by imtringued »

rawtxapp wrote: post #175
eloff wrote: post #94

Earlier quoted context omitted.

Maybe, maybe not. Time will tell. This has been happening since 2008 with no serious repercussions.

My car's "check engine" light has been on for a while now, but it still runs with no serious repercussions, guess I can ignore it. You see how that logic would be flawed?

In this case the check engine light has been on because you have been running your engine on too little oil (inflation).

Re: El Salvador to adopt Bitcoin as legal tender

#317

Post by rawtxapp »

foepys wrote: post #277
rawtxapp wrote: post #67

Earlier quoted context omitted.

Strike is using lightning where the fees are barely a few satoshis (much smaller than cents) most of the time. This isn't the Bitcoin of 2015, there has been lots of new development, lightning is here and is being used with growing adoption (1ml.com), there are other changes coming to improve the base layer itself (taproot, eltoo, etc).

To open a LN channel you need an on-chain transaction. Same for closing a channel. Currently a Bitcoin transaction is around 7 USD. So you need 14 USD to participate, assuming the transaction cost does not change. 14 USD is more than a daily income for the average citizen, most will be below 10 USD.

Channel factories will be able to open and close many channels at once, so if you open 100 channels in a single transaction, well then you can divide the onchain cost by 100.

Re: El Salvador to adopt Bitcoin as legal tender

#318

Post by runeks »

pastech wrote: post #284
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…

Is it really "locking" when putting bitcoins on LN actually make them easily spendable with very little fees? Imo, all of those are outdated claims. For consumers, it's easy to open outbound channels (e.g. to well connected nodes). For merchants, it's becoming easier as well. Remember that it's a network, merchants can have outbound channels and "pay themselves" to get back inbound liquidity (can also be automated).…

> Is it really "locking" when putting bitcoins on LN actually make them easily spendable with very little fees?

Merchants don’t want to spend, they want to receive. Why should a merchant have to lock e.g. $100k worth of bitcoins at the beginning of the month (in a payment channel connected to a gateway) just in order to receive that amount from consumers during that month?

No other payment system in the world requires this.

Re: El Salvador to adopt Bitcoin as legal tender

#319

Post by runeks »

madacol wrote: post #308
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…

> 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.

What do you base this assumption on? Once there’s a gateway between a consumer and a merchant, then sending e.g. 0.001 BTC from the consumer to the merchant happens by the consumer sending it to the gateway in one payment channel, and the gateway sending the same amount to the merchant in a separate payment channel. It’s atomic, so the funds are guaranteed to arrive, but it requires locking the amount that the merchant expects to receive in a payment channel between it and the gateway. This is how the LN protocol works.

Re: El Salvador to adopt Bitcoin as legal tender

#320

Post by BenoitEssiambre »

narrator wrote: post #164
BenoitEssiambre wrote: post #97

Earlier quoted context omitted.

A deflationary coin cannot stabilize without destabilizing the economy that trades in it. https://benoitessiambre.com/specter.html

Nobel Prize winner F.A Hayek, who also famously predicted the denationalization of money in the 1970s[1], provided the excellent counterargument to this in the debate with the proto-Keynesians back in the 30s concerning stable supply money vs. inflationary money: https://mises.org/library/hayek-paradox-saving Hayek was later interviewed in the 70s and said he was mystified when Keynes was promoted to godhood upon his…

There's a reason the experts sided with Keynes as you mention (or others like Milton Friedman). Flaws were found in Hayek's reasoning that made his models simply fail to add up.
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