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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

#341

Post by rsj_hn »

nairboon wrote: post #217
PragmaticPulp wrote: post #131

Earlier quoted context omitted.

No, that graph only shows a discontinuity because the definition of M1 money supply was changed on that date. They explained it fully here: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec... Sharing the graph without the context is misleading.

But the money was still printed as you see in the M2 supply: https://fred.stlouisfed.org/series/M2SL

Table stakes for discussing monetary policy is knowing the defintion of things like M2 and understanding it has nothing to do with "printing" assets as M2 primarily measures deposit accounts which are created by bank lending and destroyed by either the repayment of loans or households shifting their portfolio away from demand accounts and towards longer term financial sector liabilities such as commercial paper or mortgage bonds. The shape of this curve does not reflect policy choices by the government but rather is controlled by household portfolio balance choices.

Re: El Salvador to adopt Bitcoin as legal tender

#342

Post by kragen »

acdha wrote: post #102
ipaddr wrote: post #69

Earlier quoted context omitted.

If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.

Kind of: Bitcoin doesn’t allow transactions without knowing the key but that isn’t true for exchanges and the public ledger makes it easy to block transactions using that address. If everyone subject to US jurisdiction or treaty agreements blocks transactions traceable back to tainted addresses, the value plummets.

So far no such attack on Bitcoin's fungibility has materialized; it's plausible that the outcome would be that Bitcoin would become useless to everyone subject to US jurisdiction or treaty agreements. So it seems unlikely to happen without a major war, because that plausible outcome would result in enormous capital losses for many people who are influential in the US. Another plausible result is countries withdrawing from treaty agreements with the US, even if they don't care that much about Bitcoin as such.

Re: El Salvador to adopt Bitcoin as legal tender

#343

Post by landemva »

foepys wrote: post #221
landemva wrote: post #199

Earlier quoted context omitted.

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.

So everybody stops working after saving a few years. And then who produces the food?

Do you want everyone to go back to the farms as laborers? Our food abundance is produced mechanically. Automation and technology brings deflation, which allows me and my children to not toil in the fields.

It appears some here believe in the labor theory of value. For me, if I cant do better than the machine, then I am not adding value and need to do something else.

Re: El Salvador to adopt Bitcoin as legal tender

#344

Post by landemva »

acdha wrote: post #305
landemva wrote: post #199

Earlier quoted context omitted.

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 g…

You didnt mention the role of capital, which is stored savings. Dig in to the role and benefits of stored monetary reserves, how bitcoin does this and cant be inflated, and you might get pissed off when you realize savers have a great escape mechanism from the huge government bailouts of failing industries (airlines, cruise ship lines).

If you can get out of debt, you may see the benefit of bitcoin as a store of value. If you are in debt slavery, you of course want easy money to make your debts easier to pay.

Re: El Salvador to adopt Bitcoin as legal tender

#345

Post by Black101 »

jimsmart wrote: post #313
Black101 wrote: post #49

Earlier quoted context omitted.

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?

The more real people use it (AKA not bots), the less volatile it will become...

Re: El Salvador to adopt Bitcoin as legal tender

#346

Post by SantalBlush »

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".

Actually, it makes an enormous difference. The supply of money that is created by banks can be increased and decreased through Fed operations. That means when inflation becomes a threat, the Fed can reduce the money supply, thereby reducing the money in circulation and reducing inflation risks.

Seriously, this is one of the Fed's primary tasks, to control inflation through monetary policy. It's sad how many people on HN fail to understand this.

Re: El Salvador to adopt Bitcoin as legal tender

#347

Post by runeks »

spiorf wrote: post #337
runeks wrote: post #332

Earlier quoted context omitted.

> Well if a merchant doesn't want to spend or lock anything, it doesn't have to. If the merchant wants to receive funds via the gateway then funds need to be locked in a payment channel between the gateway and the merchant. This is in addition to the funds locked in multiple payment channels between consumers and the gateway. Consider a super simple LN setup, consisting of (a) one thousand consumers, each with 0.001…

You have a wrong understanding of how LN works. You are conflating inbound and outbound liquidity. To receive 1 btc a merchant does not have to open a 1 btc channel. Another node has to open a channel with him. He can buy 1 btc of incoming liquidity for a few cents. Some nodes offer incoming liquidity for free (it costs them almost nothing to keep their btc in a channel for a while). And your super simple setup is co…

> He can buy 1 btc of incoming liquidity for a few cents.

I’m very interested. Where can I buy this?

Re: El Salvador to adopt Bitcoin as legal tender

#348

Post by louloulou »

imtringued wrote: post #309
louloulou wrote: post #228

Earlier quoted context omitted.

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 happen…

The world is much bigger than the US and Eurozone, maybe try travelling a bit once covid dies down.

Citizens of Turkey, Lebanon, Nigeria, Ethiopia, Zimbabwe, Argentina, Venezuela, Iran, Belarus, for example, all have their savings being stolen through inflation to greater or lesser extents.

Re: El Salvador to adopt Bitcoin as legal tender

#349

Post by arcticbull »

mambru wrote: post #336
arcticbull wrote: post #293

Earlier quoted context omitted.

The thing is, Strike doesn't open LN channels for people. In fact, they only use LN to move money between custodial accounts they themselves are beneficial owners of. I can't for the life of me figure out why they'd use LN - or crypto at all - for this and not just an entry in the centralized database they already have tracking balances. Avoid regulation, maybe? But like why ? I've listened to an hour long Maller pod…

Why are remittances so expensive if this is so simple? Maybe you are missing something here? The function of lightning and the Bitcoin base layer is settlement and clearing, those 2 things are non-trivial. Then there is also the legal aspect, which cannot be detached from those.

Generally the answer is regulation. So I suspect that is quite likely the answer here. Although since they are an MSB in at least the US they answer could just as easily be crypto fever.

For a centralized entity settlement and clearing aren’t hard. You have a money pile and a debt facility in both countries, then you wire money to net settle once in a while.

Re: El Salvador to adopt Bitcoin as legal tender

#350

Post by arcticbull »

gregwebs wrote: post #330
arcticbull wrote: post #291

Earlier quoted context omitted.

Why does the Strike app use LN or crypto at all? I just can't wrap my head around this. They're a custodial wallet for your fiat currency, right? You deposit fiat with them. You withdraw fiat from them. You move it between accounts on their service. They, or a designed entity must hold that fiat on deposit on behalf of users. When you 'send' that money (according to Jack Maller), they buy BTC for you, send it over th…

Remittances with little fees or hassle.

That’s the purpose of the app; that doesn’t explain the role of crypto in this. TransferWise offers that without crypto.
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