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Bitcoin becomes Legal Tender in El Salvador

coindesk.com

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Re: Bitcoin becomes Legal Tender in El Salvador

#51

Post by Semaphor »

FreeTrade wrote: post #18

Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC. BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to…

> Even if Lightning worked (it doesn't)

What doesn’t work? I’ve only skimmed some LN search results, and it looks like there are a bunch of services using it, including strike [0] which was mentioned in a comment of the big thread here [1]. This would have the same problem (proprietary network) you mentioned, but it seems to be working still?

[0]: https://strike.me/

[1]: https://news.ycombinator.com/item?id=27408978

Re: Bitcoin becomes Legal Tender in El Salvador

#52

Post by nly »

timdaub wrote: post #10
mrtksn wrote: post #4

The strictly limited amount of BTC makes this into a land grab. First comers are entitled to the services of the real economy due to their virtue of being first(or lucky to be on the right place at the right tweet). Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21 Unlike fiat money, BTC is not an accounting tool for value exchange. Unlike actual land, it doesn’t have any intrins…

The intrinsic value argument is a funny one. What's the idea behind it? Assume you have asset X but then one key assmption fails. Now, is asset X still valuable considering the failed assumption? For land, you can say that even in the case that society collapses it is still valuable. Or is it? What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?

> What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?

For me the easiest way to determine if something has intrinsic value is ask yourself what would happen if you owned all of it (and couldn't be forced to give it up).

If you owned all the Bitcoin in the world, we wouldn't accept its use, and would just create another currency with identical properties.

If you owned all the land in the world, people would come to you to buy or rent it. You can't build a house or a factory unless someone is willing to sell or lease you the land. That's what makes it valuable.

In many ways, this is why we have the word "priceless". Things become priceless when, in certain contexts (for certain people at certain times), they will not be sold for any price. Land can be priceless because I can have a sentimental attachment to a particular place. Its value isn't derived from how many $'s people will pay for it.

Re: Bitcoin becomes Legal Tender in El Salvador

#53

Post by darkwater »

pinkybanana wrote: post #48
onion2k wrote: post #34

Earlier quoted context omitted.

Isn't that exactly what FreeTrade meant by " Salvadorians will end up forced to use proprietary payment networks denominated in BTC. "? Coinbase might do it for free, but that doesn't mean the eventual winner will be free, nor does it mean that users couldn't be banned, or tracked, or forced to use 'supported' services, etc.

As long as BTC transfers between custodians are possible, that should be quite small problem. There might be winner in terms of liquidity and volume, but because anyone can quite easily fire up custodian service, there should be also plenty of competition.

So we have basically invented... banks, but with bitcoins?

Re: Bitcoin becomes Legal Tender in El Salvador

#54

Post by berkes »

mrtksn wrote: post #4

The strictly limited amount of BTC makes this into a land grab. First comers are entitled to the services of the real economy due to their virtue of being first(or lucky to be on the right place at the right tweet). Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21 Unlike fiat money, BTC is not an accounting tool for value exchange. Unlike actual land, it doesn’t have any intrins…

Isn't this the case for nearly all money-like assets? E.g. stock has very similar 'land grab' properties. This is almost entirely the businessmodel of VC and AI.

Re: Bitcoin becomes Legal Tender in El Salvador

#55

Post by BreakfastB0b »

dangero wrote: post #24
FreeTrade wrote: post #18

Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC. BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to…

Forget Lightning— Did you know you can transfer Bitcoin from one user to another on Coinbase with zero transaction fees instantly? Any exchange can do the same. Centralized layer two scales just fine for many use cases and is working today.

This is the dumbest thing I've ever read. So you designed a system that sacrifices everything to achieve trustlessness, and then you immediately reintroduce a centralised trusted entity. You can't make this shit up. I'm so glad I left the crypto community in 2014, it's become completely deranged.

Re: Bitcoin becomes Legal Tender in El Salvador

#56

Post by willeh »

wereHamster wrote: post #39
gjulianm wrote: post #33

Earlier quoted context omitted.

But then why use Bitcoin if you're going to use what is essentially a bank?

Ease of access to and exchange with global marketplaces. I can transfer/trade directly from/to El Salvador without any bank being involved in that transaction.

A bank by any other name is still a bank. Sure there is definitely a legal difference such as deposit insurance and access to their lender of last resort. For the customer however it doesn't matter they still need KYC, the cops can still see their transactions, they still have to ask where the money is from, they can still knock on your door and put your hands in handcuffs. Many of the advantages to people in El Salvador with BTC is avoiding extreme inflation in the national currency. However one does well to note that inflation woes in the Atlantic world actually correlated with a partial deflation of the Bitcoin bubble, so if you're in the EU/US bitcoin is an investment when money is cheap, not a hedge for your money becoming cheap.

Re: Bitcoin becomes Legal Tender in El Salvador

#57

Post by ben_w »

Tabular-Iceberg wrote: post #8

Isn't the whole point of Bitcoin to bypass the entire concept of "legal tender"?

I think you’re mixing up “fiat currency” with “legal tender”. The former being “money created and backed by the power of a government” and the latter being “money which a government says courts are required to recognise when offered as payment for a debt”.

If we were on the gold standard, gold would be legal tender, even though it isn’t fiat.

Re: Bitcoin becomes Legal Tender in El Salvador

#58

Post by [deleted] »

wereHamster wrote: post #39
gjulianm wrote: post #33

Earlier quoted context omitted.

But then why use Bitcoin if you're going to use what is essentially a bank?

Ease of access to and exchange with global marketplaces. I can transfer/trade directly from/to El Salvador without any bank being involved in that transaction.

[deleted]

Re: Bitcoin becomes Legal Tender in El Salvador

#59

Post by xxs »

hutzlibu wrote: post #38
mrtksn wrote: post #19

Earlier quoted context omitted.

The idea behind it is that it is useful beyond the accounting. Gold has a very little intrinsic value. Decorative and tool making value due to its physical properties are there but they are minor comparatively. BTC has none. That doesn’t mean it doesn’t have a value, of course but it’s simply a value within a certain ecosystem.

"Gold has a very little intrinsic value. " Not really true, the only reason it is not used much more widely in electronic components, despite being superior to copper, is the high price it has, because of its function as value storage.

Gold is not superior to copper for everything - incl. the most important one feature: conductivity. Gold (22.14 nΩ⋅m) is, of course, a lot less chemically active which makes it ideal for terminals, contacts, etc. (and mostly as plating agent), however as a sole conductor it's worse than copper (16.78 nΩ⋅m). Gold has worse thermal conductivity as well... and it's a lot heavier.

That being said, it's still a very valuable material for electronics.

Re: Bitcoin becomes Legal Tender in El Salvador

#60

Post by mrtksn »

bawolff wrote: post #37
mrtksn wrote: post #4

The strictly limited amount of BTC makes this into a land grab. First comers are entitled to the services of the real economy due to their virtue of being first(or lucky to be on the right place at the right tweet). Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21 Unlike fiat money, BTC is not an accounting tool for value exchange. Unlike actual land, it doesn’t have any intrins…

That's how all money-esque things work. First mover advantage is pretty extreme in anything money related. > I’m very curious to see an elite class whose core virtue is based on being an early adopter. How do you think the elite class became elite? How do queens and kings get their power? By having some ancestor in the right place at the right time take advantage of an opportunity before other people tried.

>How do you think the elite class became elite

They fought and murdered the competition. Their offsprings continue doing that until they no longer had the intelligence or power and got exterminated and their wealth redistributed.

This is very, very different than stumbling upon something.

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