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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#481

Post by willmadden »

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.

What are you talking about? Their Bitcoin holdings more than doubled in value.

Re: El Salvador abandons Bitcoin as legal tender

#482

Post by 2030ai »

markasoftware wrote: post #350
2030ai wrote: post #331

Earlier quoted context omitted.

Eth famously forked and reversed txns due to someone getting scammed.

the fact that eth classic was created from this incident and still exists does inspire some confidence that ethereum's governance is somewhat decentralized also, to be fair. And IIRC it wasn't a "scam", it was a bug in a smart contract.

Yes a smart contract bug. Hacked might be a better word. Or outsmarted?

Re: El Salvador abandons Bitcoin as legal tender

#483

Post by [deleted] »

chowchowchow wrote: post #469
liontwist wrote: post #465

Earlier quoted context omitted.

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.

[deleted]

Re: El Salvador abandons Bitcoin as legal tender

#484

Post by chowchowchow »

liontwist wrote: post #479
chowchowchow wrote: post #469

Earlier quoted context omitted.

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.

If you’re arguing that people would think harder about their purchases and frivolous spending would decline. I agree. And I think that’s a benefits If you’re asking if people would not use their deflating currency to buy lattes and sneakers, I disagree. People like sneakers and lattes more than money. They prove this everyday by buying them instead of s&p. There is an issue of the cost of a transaction - which nis ba…

More than money, yes. More than precious bitcoin?

The argument simply is that exchange should be frictionless and deflationary currency will slow the velocity of money. I guess you agree this will lead to reduced prosperity and economic activity, though you call it frivolous purchases. Your comment about preferences doesn’t play into it; this is about mechanics of exchange, and a precious asset is an inefficient medium for commerce which would lead to reduced economic activity because not only do you have to factor in the opportunity cost of buying a good or buying some other good (sneakers or s&p), now you also have hodling, zero economic activity, as a 3rd option with its own expected return and opportunity cost to forgo. When I buy sneakers, the s&p 500, or btc, my dollars don’t disappear. A counterparty receives them and they stay in the economy. If you pay me in btc and I just hold it, then that money effectively does disappear from the economy.

And I’m not even mentioning all the macro issues of not being able to provide liquidity in the form of new capital in times of crisis.

Re: El Salvador abandons Bitcoin as legal tender

#485

Post by hackernudes »

twodave wrote: post #422
hackernudes wrote: post #369

Earlier quoted context omitted.

So the modern version of traversing the world for silver would be energy used to mine? Like hypothetically the US building tons of nuclear power plants to "win" at mining? Of course that wouldn't add to the supply of bitcoin (harder than silver), so I'm not convinced your analogy stands. I don't know much about 16th century history, so I'm not trying to be too snarky. You might think about the long game where no more…

The point is that the money supply needs to increase at or near the pace of the economy or we end up with a currency shortage, and bitcoin being harder to mine would prove that point faster than silver ever did.

Thanks for clarifying!

Although I don't think I agree. Wouldn't a currency shortage be another way to say deflation? If your economy is producing more value than your currency represents, then your currency is more valuable.

I have also heard people say deflationary currencies inevitably lead to a catastrophic spiral where liquidity dries up because no one wants to spend (or loan) today what can be more valuable tomorrow. There's even a page on the Bitcoin wiki about it that has been there since 2010.

Also, a quick google brings me to the "Price revolution" page on Wikipedia (https://en.wikipedia.org/wiki/Price_revolution) where it says: "Generally it is thought that this high inflation was caused by the large influx of gold and silver from the Spanish treasure fleet from the New World; including Mexico, Peru, Bolivia and the rest of the Spanish Empire."

In the end... I don't really know. I appreciate you sharing your thoughts.

Re: El Salvador abandons Bitcoin as legal tender

#486

Post by neilwilson »

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…

No country with its own money ever needs to get the IMF involved.

Largely because the only place the IMF can get your money is from you.

Currencies are public monopolies.

The problems always arise when a state starts issuing state backed liabilities in other denominations - as there is no way for a state to absolve itself of that debt without paying it back. It becomes a debtors prison.

Re: El Salvador abandons Bitcoin as legal tender

#487

Post by whoknowsidont »

golergka wrote: post #428
dragonwriter wrote: post #418

Earlier quoted context omitted.

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

1. That's what stated by the IMF, and so far I don't see any reason to believe it's true. 2. That statement refers to government holding bitcoin as reserves. Which has little relation to use of Bitcoin in the country as legal tender.

>and so far I don't see any reason to believe it's true.

Yeah I guess bitcoin is only allowed to go UP everything negative is always false! There's no way that virtual beanie-babies couldn't overcome the evil IMF!

Re: El Salvador abandons Bitcoin as legal tender

#488

Post by dang »

epigramx wrote: post #426
dragonwriter wrote: post #418

Earlier quoted context omitted.

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

[flagged]

Can you please not post in the flamewar style here, regardless of how wrong another commenter is or you feel they are?

https://news.ycombinator.com/newsguidelines.html

Re: El Salvador abandons Bitcoin as legal tender

#489

Post by not_really »

creato wrote: post #474
aboardRat4 wrote: post #432

Earlier quoted context omitted.

>You do not want this in your currency. I really want this in my currency. Bitcoin might be a Ponzi scheme, but fiat currencies are even more so.

> I really want this in my currency. A deflationary currency that you own a disproportionate amount of is great. For you.

did the person you are responding to say that he owns a lot of a given currency? How do you know?
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