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El Salvador abandons Bitcoin as legal tender

ticotimes.net

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Re: El Salvador abandons Bitcoin as legal tender

#401

Post by [deleted] »

chii wrote: post #379
EVa5I7bHFq9mnYK wrote: post #277

Earlier quoted context omitted.

The article says "92% of Salvadorans did not use bitcoin in their transactions in 2024". Which means that 8% did use it in their transactions.

it is probably the same with gold - in fact, i say gold is used even less in transactions. Yet, nobody would deny that gold cannot form a good monetary foundation . Of course, it's not the best - fiat is still, imho, better - but it doesn't mean it can't work. So why is the IMF so against bitcoins that they'd rather pay to eliminate it? Or are the IMF scared that bitcoin can actually succeed, in a way which prevents…

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#402

Post by notpushkin »

the_sleaze_ wrote: post #392
wruza wrote: post #355

Earlier quoted context omitted.

It is highly divisible though, there’s 2.1e15 satoshi and 2.3e14 cents in the world (re google). It can lose 90% of itself before being unable to replace cents. Also, the network can just agree to change the protocol to fix this issue, should it arise. Countries do redenominations all the time.

I think the fundamental appeal of Bitcoin is the lack of ability to change the protocol based on any external factors at all. Otherwise it's just fiat all over again

But you can change the protocol – you just need to convince people to use your version, i.e. make a softfork. https://en.bitcoin.it/wiki/Softfork

(Or a hardfork, if your changes have to apply to all transactions, though this would be extremely tricky.)

Re: El Salvador abandons Bitcoin as legal tender

#403

Post by listenallyall »

markasoftware wrote: post #348
ekianjo wrote: post #320

Earlier quoted context omitted.

BTC cash has lower fees I believe, I wonder if it could actually work as a currency for day to day payments.

It can work as a day-to-day currency, but it compromises the decentralization that is key to Bitcoin's usefulness as a store of value: + By allowing 8x larger blocks (unless it's even larger now?), if in widespread use with full blocks, the blockchain would be 8x larger. Bitcoin's blockchain is already the better part of 1TB, though you can still fit that on a cheap SSD. Imagine if it were 8 and growing fast. + Becau…

Every Bitcoin Cash transaction is on the chain itself. Bitcoin is increasingly reliant on off-chain "Lightning" transactions. An extra few TB of data or majority of transactions not on the chain at all? I'll go with more data & transparency, thank you.

Re: El Salvador abandons Bitcoin as legal tender

#404

Post by dragonwriter »

portaouflop wrote: post #188

IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocur…

If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

Re: El Salvador abandons Bitcoin as legal tender

#406

Post by [deleted] »

starspangled wrote: post #73

It's interesting and nice to see how progressive and creative El Salvador has been. Some failures are perfectly understandable when one is willing to try new things. Their approach to crime is another thing that comes to mind that was lambasted and ridiculed by the "international community" and "experts". Yet in the space of a single decade they went from murder capital of the world to safer than New Zealand (in term…

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#407

Post by daedrdev »

throw101010 wrote: post #244
daedrdev wrote: post #95

Earlier quoted context omitted.

The IMF probably rightfully sees a structurally deflationary currency (bitcoin) as a massive risk should it gain widespread adoption

It is structurally disinflationary, not just deflationary. Bitcoin is still emitted every ~10 minutes with currently an average inflation rate just under 1% of its supply per year. The "massive risk" the IMF sees is that without central banks or even less influential central banks the IMF existence would be threatened.

If an economy grows at 2% and the supply grows by 1% it is in permanent deflation. For a country like el salvador with much higher growth, the deflation can easily be much higher

Re: El Salvador abandons Bitcoin as legal tender

#408

Post by next_xibalba »

olalonde wrote: post #314
georgeecollins wrote: post #105

Earlier quoted context omitted.

There seems to be two concepts that are getting conflated. One concept is that BTC is a good investment. Historically that is undeniable. The other concept is that it is a good medium of exchange. I think that is not so true because 1) its neither cheap nor easy to buy a lot of things with it 2) a thing that goes up in value is not a good medium of exchange because people don't want to spend it, they want to hoard it…

You're also conflating two distinct concepts: "Bitcoin the currency" and "Bitcoin the payment network." The currency itself can be used independently of its base-layer network, which is intentionally slow and costly (functioning primarily as a settlement layer). This separation is enabled by off-chain or layer 2 systems, such as the Lightning Network or custodial platforms. These solutions retain Bitcoin's monetary b…

That’s a lot of words for “it cannot be used in everyday financial transactions”.

Re: El Salvador abandons Bitcoin as legal tender

#409

Post by elevaet »

paulgb wrote: post #183
yalogin wrote: post #66

Earlier quoted context omitted.

Looks like a fair take to me. They are not forcing people to accept it anymore because it didn’t work. It was never supposed to work. Bitcoin tried for 15-20 years to find a use case but now it’s just an asset class like gold and nothing else, it will never be more than that.

The trouble is, it needs to be more than that if it is to survive. Since inception, mining has mostly been subsidized by new bitcoin, which is capped by design (and about 95% distributed). Satoshi’s paper assumed that transaction costs would make up for the exponentially declining subsidy, but that hasn’t really happened since it never lived up to his “digital cash” vision.

I'm so curious what will happen as mining approaches the asymptote. When the mining rewards become more and more rare and if people aren't incentivizing the network with a lot of transactions, will transaction times just get slower and slower until it becomes a stranded asset?

Re: El Salvador abandons Bitcoin as legal tender

#410

Post by LoganDark »

wordofx wrote: post #358
patrickaljord wrote: post #344

Earlier quoted context omitted.

> I dislike cryptocurrencies as much as the next guy Is this really the general sentiment on HN?

It should be. It’s dumb as hell. Bitcoin and blockchain have no real use.

TBF Monero is pretty decent for buying drugs.
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