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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#461

Post by motorest »

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 check up with reality because your scenario has nothing to do with the one reported in the article. If you read the report, you'll understand thay El Salvador reached out to the IMF, a lender of last resort, asking for funding to finance their reform agenda. Among the long list of requirements designed to improve financial health, Bitcoin ceases to be an official currency.

Re: El Salvador abandons Bitcoin as legal tender

#462

Post by kragen »

postalrat wrote: post #373
kragen wrote: post #303

Earlier quoted context omitted.

While that's conceivable, Merkle-graph systems like Bitcoin are surprisingly resilient. It's been almost 20 years since MD5 was thoroughly broken, but still nobody has published a second preimage attack. For SHA2 and SHA3 nobody has even published a collision attack. And SHA-256 (what Bitcoin uses) is post-quantum-safe (Grover's algorithm still needs 2¹²⁸ time) though AFAIK there isn't yet a post-quantum cryptosystem…

To me its inevitable. And just a matter of time. Any year there could be a breakthrough that quickly leads to missing math.

We still don't know if P = NP. You seem peculiarly certain it is, which is odd given that most of the people who study the topic strongly suspect otherwise. They could of course be wrong, but what makes you so sure?

Re: El Salvador abandons Bitcoin as legal tender

#463

Post by zomglings »

mystified5016 wrote: post #236
aydyn wrote: post #209

Earlier quoted context omitted.

What currency is stable in value? Certainly not the U.S. dollar.

The USD doesn't frequently lose all or nearly all value as we see from cryptocoins. My $10 today will be worth $10 tomorrow barring nuclear war or an apocalypse.

And 1 bitcoin in your possession today will be worth 1 bitcoin in your possession tomorrow, barring a successful and very expensive attack on the network.

You have little assurance that the buying power of $10 today will be the buying power of $10 tomorrow. If the tariffs had gone through as initially advertised, that would certainly not have been the case.

Re: El Salvador abandons Bitcoin as legal tender

#464

Post by pajko »

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.

The loan was not to mitigate the risk of the Bitcoin. They needed the loan for reasons. The IMF deemed the high involvement in Bitcoin risky for the loan. The IMF text has a "meanwhile": https://www.imf.org/en/News/Articles/2024/12/18/pr-24485-el-...

Re: El Salvador abandons Bitcoin as legal tender

#465

Post by liontwist »

chowchowchow wrote: post #459
liontwist wrote: post #452

Earlier quoted context omitted.

The utility of the money is in how you spend it. Your same question could be asked about the S&P. Why would anyone sell? Well at some point in your life you want to use the money to accomplish your life goals

You should not sell your shares in the S&P 500 to buy pizza unless your financial situation changes drastically for the worse or I guess maybe you are near death. As I said in the other thread, the problem is that btc is too desirable in the market to be a functioning currency and using it for pizza or impulsive daily purchases is a nonstarter in reality.

But you’re wrong. People sell S&P and BTC everyday even if they aren’t dying.

This is time value of money. If I wait 20 years instead of buying a house, I can have more money. But that’s 20 years of my life I didn’t live in the house I wanted.

I could invest more in S&P and not go on vacation, but then I won’t have as much time to go on vacations.

Goods and services now can be more valuable than money later, and that’s why people sell. And that’s why deflationary currency is fine.

Re: El Salvador abandons Bitcoin as legal tender

#467

Post by ggm »

For anyone else who enjoyed this tree, I enjoyed reading this book by Galbraith many years ago. I don't say you have to agree with him politically or economically, but as a basic introduction to the idea of money, and national economies, it's a great read.

Money: Whence It Came, Where It Went. John Kenneth Galbraith. (1975)

He had a very interesting life.

Re: El Salvador abandons Bitcoin as legal tender

#468

Post by [deleted] »

chowchowchow wrote: post #459
liontwist wrote: post #452

Earlier quoted context omitted.

The utility of the money is in how you spend it. Your same question could be asked about the S&P. Why would anyone sell? Well at some point in your life you want to use the money to accomplish your life goals

You should not sell your shares in the S&P 500 to buy pizza unless your financial situation changes drastically for the worse or I guess maybe you are near death. As I said in the other thread, the problem is that btc is too desirable in the market to be a functioning currency and using it for pizza or impulsive daily purchases is a nonstarter in reality.

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#469

Post by chowchowchow »

liontwist wrote: post #465
chowchowchow wrote: post #459

Earlier quoted context omitted.

You should not sell your shares in the S&P 500 to buy pizza unless your financial situation changes drastically for the worse or I guess maybe you are near death. As I said in the other thread, the problem is that btc is too desirable in the market to be a functioning currency and using it for pizza or impulsive daily purchases is a nonstarter in reality.

But you’re wrong. People sell S&P and BTC everyday even if they aren’t dying. This is time value of money. If I wait 20 years instead of buying a house, I can have more money. But that’s 20 years of my life I didn’t live in the house I wanted. I could invest more in S&P and not go on vacation, but then I won’t have as much time to go on vacations. Goods and services now can be more valuable than money later, and that…

I notice you mentioned big ticket purchases which I specifically did not mention. Your argument looks a bit different if you replace houses and vacation with lattes and sneakers. We live in a consumer economy where a marginal drag on purchasing activity due to currency deflation would probably be pretty disruptive to put it mildly.

Re: El Salvador abandons Bitcoin as legal tender

#470

Post by TeaBrain »

Aloisius wrote: post #435
TeaBrain wrote: post #385

Earlier quoted context omitted.

>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.…

Em. Spain, famously, didn't debase its currency. The gold escudo was 22-karat for basically it's entire existence,.

I was more thinking in terms of the modern conception of currency debasement resulting from the increase in the monetary supply, though I think I must have just been thinking of the real, not the escudo. Several years ago, I read a couple of books on the conquistadors, where the details of the devaluation of silver was discussed, but it's been a while since the information was fresh in my mind.
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