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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

#361

Post by narrator »

fladrif wrote: post #245
narrator wrote: post #164

Earlier quoted context omitted.

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…

The linked article doesn't address the effects of deflationary currency at all, it describes the notion of including capital in the description of economies.

It criticizes the statement by Keynes that savings leads to depression due to underconsumption and thus there must be regularly monetary stimulus, meaning expansion of government borrowing and hence, the money supply. Hayek was a proponent of the gold standard and fixed money supply at this time and the Keynesians promoted fiat money and a flexible money supply and monetary policy.

Re: El Salvador to adopt Bitcoin as legal tender

#362

Post by rafaelero »

arcticbull wrote: post #350
gregwebs wrote: post #330

Earlier quoted context omitted.

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.

It takes too long, it has significant fees, it can be censored and, as far as I know, requires a bank account, something 70% of the population in El Salvador don't have.

Re: El Salvador to adopt Bitcoin as legal tender

#363

Post by gregwebs »

arcticbull wrote: post #350
gregwebs wrote: post #330

Earlier quoted context omitted.

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.

Wise charges $8 for $1000 transfer. Some of that is an ACH fee that is probably difficult to reduce.

Strike claims no fees are charged.

Re: El Salvador to adopt Bitcoin as legal tender

#364

Post by arcticbull »

gregwebs wrote: post #363
arcticbull wrote: post #350

Earlier quoted context omitted.

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

Wise charges $8 for $1000 transfer. Some of that is an ACH fee that is probably difficult to reduce. Strike claims no fees are charged.

I'm talking about from a technical perspective.

ACH is roughly free - it costs about $0.0033 to the depository institution in bulk (citation available on request) - which makes sense as Strike also allows you to deposit via ACH in the US.

Their fees are likely dominated by risk, compliance and regulatory.

Obviously Strike's service isn't costless to operate so they're subsidizing their operations via investment.

Re: El Salvador to adopt Bitcoin as legal tender

#365

Post by arcticbull »

rafaelero wrote: post #362
arcticbull wrote: post #350

Earlier quoted context omitted.

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

It takes too long, it has significant fees, it can be censored and, as far as I know, requires a bank account, something 70% of the population in El Salvador don't have.

Strike is a fiat custodial wallet. They can also be censored in exactly the same way which is part of my confusion around the offering. In fact, it's not available in New York or Hawaii.

Further, Wise offers their multi-currency account, including in El Salvador (https://wise.com/us/multi-currency-account/) and allows you to store any of 56 currencies without conversion and offers banking details in 9 jurisdictions. It's kind of perfect for remittances because you can have your US parties ACH to your US routing and account number, and it appears in the multi-currency account, free, and very fast. Or $7.50 to receive a wire, instantly.

[edit] I'm not knocking crypto here, I'm trying to understand what they've built and why. I don't know why they're using crypto here at all. I'm seriously confused about their technical payments architecture. They seem to only use LN to move money, and between two of their own custodial accounts at that.

For what it's worth I've listened to over an hour of podcasts with Jack Mallers.

Re: El Salvador to adopt Bitcoin as legal tender

#366

Post by gverrilla »

lottin wrote: post #282
bigger_inside wrote: post #275

Earlier quoted context omitted.

no, the devs can't unilaterally make decisions on how the network works. There are decentralized nodes (very low-barrier to entry) that run the code; the nodes must actually run that code, and devs have no control over it. Then there are miners, not quite as decentralized because the barriers to entry are much higher here; they have to mine on that chain, which is also a way of "running" it. So the devs have to inter…

Yes, of course. But the fact that bitcoin governance makes it very difficult to introduce changes means that all the relevant decisions were made during the design phase by the original developers, and that everybody who came later had no influence on these decisions. Whereas a currency that is managed through democratic institutions allows the community that uses it to have control over crucial aspects of the curren…

Well you could create your own fork. If the masses decide it's good, there will be adoption and value aswell. Try to declare an island sovereign territory to see what happens. Because bitcoin is mainly built in imagination-land for now. That's why bitcoin tech has given birth to a lot of different protocols and cryptocurrencies with wildly different implementations. Because it was open source from the beginning. Communities having control over crucial aspects of the government that governs them is not the rule at all.

Re: El Salvador to adopt Bitcoin as legal tender

#367

Post by rualca »

cinntaile wrote: post #244
bb88 wrote: post #226

Earlier quoted context omitted.

You mean like... Tether?

There are several alternatives nowadays, you're being dishonest by only mentioning the most controversial one.

For the sake of argument, what's the absolute best alternative to Tether that you feel could safely be used as an example?

Because you quickly resorted to ad hominem attacks even though you failed to provide any alternative or even a single counter example.

Re: El Salvador to adopt Bitcoin as legal tender

#368

Post by ineedasername »

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.

Yes, it allows you to buy more for the same amount of money, increasingly as time goes on. This is why it results in economic slowdowns, because people are more hesitant to spend money when it may be worth more later.

In fact we see this in a small scale in the tech sector all the time: products get more powerful or cheaper or both, meaning people who might want to upgrade often agonize over waiting to spend their money to a point where it will obtain more per unit of value.

Or with Crypto, consider the HODL mentality. BTC would have made a lot more progress towards use as a medium of exchange if an enormous number of people weren't simply buying it on the hope of future value, or speculate by continuously selling the peak and buying the dip. There's even the cautionary tales in the crypto community against actually using any if it to cash out for purchases, such as the person who paid for a Pizza with enough bitcoin to be worth over $100,000,000 today. The message is "Never use it, always HODL" Of course there's always the anecdotal person here an HN who will chime in with, That's not true, I just bought X with it!". Which is fine, but an extreme outlier.

It will never deliver on it's goals when that, and investment speculation, are the two dominant use cases. Bitcoin is trapped in a cul-de-sac right now, and absent some unexpected event, mainstream everyday use of crypto by average people-- if that comes to pass-- will bypass BTC by as it circles around that cul-de-sac.

Re: El Salvador to adopt Bitcoin as legal tender

#369

Post by ineedasername »

landemva wrote: post #344
acdha wrote: post #305

Earlier quoted context omitted.

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 valu…

Bitcoin may ultimately become a store of value, but highly volatile asset classes are not what people look for in that.

Re: El Salvador to adopt Bitcoin as legal tender

#370

Post by ineedasername »

landemva wrote: post #343
foepys wrote: post #221

Earlier quoted context omitted.

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.

Automation doest not bring deflation. It brings a higher standard of living where people have more money so they can buy more things. Prices still increase though-- inflation. The key is to have wage increases, and therefore quality of life, increase at a rate that at least slightly exceeds inflation so that people continuously have increasing amounts of money to improve quality of life.

This is why wage stagnation or when wages do not keep pace with inflation it's bad.

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