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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#411

Post by dragonwriter »

roenxi wrote: post #378
stephen_g wrote: post #200

Earlier quoted context omitted.

Despite that interference, from everything I’ve read though it’s hard to describe the bitcoin experiment as anything else than a massive failure…

If I could convince someone to give me 1.x billion to change my behaviour, I would consider that behaviour a massive success without much further thought. It isn't a huge amount of money at the scale of a national economy but >$1 billion for nothing is a win. Although of course it is unknowable how much of that money was bribe and how much El Salvador would have gotten without additional leverage.

> If I could convince someone to give me 1.x billion to change my behaviour

I think you need to refresh your understanding of the difference between a loan and a gift; it wasn't an incentive to change the behavior, it was a loan to deal with the problems caused by the behavior.

Re: El Salvador abandons Bitcoin as legal tender

#412

Post by laserbeam »

roenxi wrote: post #378
stephen_g wrote: post #200

Earlier quoted context omitted.

Despite that interference, from everything I’ve read though it’s hard to describe the bitcoin experiment as anything else than a massive failure…

If I could convince someone to give me 1.x billion to change my behaviour, I would consider that behaviour a massive success without much further thought. It isn't a huge amount of money at the scale of a national economy but >$1 billion for nothing is a win. Although of course it is unknowable how much of that money was bribe and how much El Salvador would have gotten without additional leverage.

This statement assumes all costs and losses involved in the experiment were “for nothing”. I highly doubt that’s the case.

Re: El Salvador abandons Bitcoin as legal tender

#413

Post by golergka »

dragonwriter wrote: post #404
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.

> to mitigate the risks associated with Bitcoin

Was that the goal of the loan? How did you come to this conclusion?

Re: El Salvador abandons Bitcoin as legal tender

#414

Post by lmm »

TeaBrain wrote: post #385
shash wrote: post #357

Earlier quoted context omitted.

That's because it's actually quite sane; relying on commodity backed currencies - especially those which are _finite_ leads to deflation. You see that with BTC, where the value keeps rising and you need more and more fractional denominations to make sense. With gold (and historically, more so silver), it was _very rarely_ used for actual trade because it ended up being like five gold coins == someone's entire life sa…

>Debased currency - a problem every large state eventually faced - is a consequence of deflation Inflation in the monetary supply, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.…

> Inflation, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.

No, that's not debasement - in fact it was the opposite, the huge supply of silver (not so much gold) meant those Spanish coins were good-quality bullion. Inflation happened, and while that can commonly be caused by debasement, that wasn't the cause in this instance.

Re: El Salvador abandons Bitcoin as legal tender

#415

Post by dragonwriter »

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…

> Yet, nobody would deny that gold cannot form a good monetary foundation

I wouldn’t say nobody (fools exist), but, sure, only a fool would deny the statement “gold cannot form a good monetary system”.

But... Isn't that the opposite of your Bitcoin claim?

Re: El Salvador abandons Bitcoin as legal tender

#416

Post by brokenmachine »

thinkski wrote: post #354
brokenmachine wrote: post #298

Earlier quoted context omitted.

The way I understand it, billionaires would hold it if they could, but then they'd actually have to pay tax when they spent it. This way, they get to control unlimited assets without paying any tax. Personally, I don't think that's so great "for the economy", because I actually don't care about the economy... I care about people, and having 500 billionaires owning everything and charging everyone to use it is not the…

Why not work to become a billionaire, then donate your wealth? Or begin donating your earnings today? I would guess most people on Hacker News are in the upper decile of wealth globally — there are still billions of people living poverty. Feels like a fairer way to help people than trying to do it with other people’s wealth — the latter feels like hypocrisy.

>fairer way to help people than trying to do it with other people’s wealth

That "other people's wealth" you're talking about is everyone's wealth.

Billionaires stole the profits of our work from us, and they didn't do it fairly.

I feel you underestimate how much a billion dollars is.

https://mkorostoff.github.io/1-pixel-wealth/

Nobody in history has ever worked hard enough to earn a billion dollars fairly.

It's crazy to me that you'd defend these people who have corrupted and degraded the entire system - the government, the finance sector, the media - to only favor holding everyone else to ransom. Not producing but holding. Societal wealth stolen without paying tax to benefit society. People didn't choose this.

I'm not starving, sure. And I'd be absolutely fine paying significantly more tax than I am now.

But I'm not about to voluntarily donate while I am still forced to work towards retirement, and there are people controlling literally 10,000 times more assets than I am that pay zero tax.

Do you not see the inevitable outcome of that?

You and your children, and their children, will own nothing because the super-rich will outbid you and everyone else for everything.

Food, houses, cars, travel, hotels, healthcare, medicine. EVERYTHING.

You will be poor. The rich is a tiny club and you're not in it.

Everyone, even the wealthy ones here on hn will eventually succumb. You will be outbid for everything.

You will have to sell your house to afford necessities while all your work goes towards luxuries for oligarchs.

There must be some mechanism to limit wealth or that is the inevitable outcome.

Here's a little thought experiment...

It's a hot day and everyone's thirsty. You have $9. There's a bottle of water on the table that you want to buy and the price on it is $10.

I give you $1. You can almost feel your thirst satiated.

Then I give the person next to you $1,000. How do you feel now?

Well our current system is like that, but multiplied by 100.

I do not agree that society should exist solely for the benefit of a handful of super-rich freeloaders.

On the desert island, they would starve and/or be eaten. That's not my definition of a useful member of society.

Re: El Salvador abandons Bitcoin as legal tender

#417

Post by kjs3 »

desumeku wrote: post #36
cwillu wrote: post #31

Earlier quoted context omitted.

“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” -- https://reason.com/2025/02/03/el-salvador-walks-back-its-bit... Sounds pretty failed to me.

They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.

'Withholding'...well how dare they.

So how many IMF bailout loans must be dispersed, without condition of course, before this BTC economy will magically work?

Re: El Salvador abandons Bitcoin as legal tender

#418

Post by dragonwriter »

golergka wrote: post #413
dragonwriter wrote: post #404

Earlier quoted context omitted.

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.

> to mitigate the risks associated with Bitcoin Was that the goal of the loan? How did you come to this conclusion?

Its literally stated. in those words, in the upthread excerpt that describes them receiving the loan.

Re: El Salvador abandons Bitcoin as legal tender

#419

Post by elevaet »

LAMike wrote: post #125
derriz wrote: post #82

Earlier quoted context omitted.

Except it has none of the properties of gold as an asset. The value of bitcoin is highly correlated with equities and anti-correlated with gold. It’s the opposite of what you want to be holding as a hedge against a stock market crash.

It is more rare than gold and getting more rare every 4 years. What is the current supply of gold and what will it be in 2050?

There is an infinite supply of computer algorithms. Gold is an element.

Re: El Salvador abandons Bitcoin as legal tender

#420

Post by next_xibalba »

the_af wrote: post #104
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…

Regardless of whether you think of them as successful or failed, I don't think you can see El Salvador's policies as "progressive".

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