I once bought video games from Steam with Bitcoin. Those were some expensive video games. Bitcoin is a completely new economic tool. It just doesn't seem to work that great as a traditional currency for day to day purchases.
El Salvador abandons Bitcoin as legal tender
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Re: El Salvador abandons Bitcoin as legal tender
#592IMF forced them to drop, but if they want to use crypto as legal tender, why use BTC which has high transaction fees? Why not something with low or zero fees and efficient chain? There is million of crypto out there and most open source, so govt could even launch their own coin on top of existing chains.
The lower the transaction fees, the lower the decentralization, security and usage. There has been no new breakthrough that gives "efficiency" without sacrificing other important factors.
Re: El Salvador abandons Bitcoin as legal tender
#593> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.
“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.
Not mandating businesses to accept Bitcoin is a more free market solution.
Re: El Salvador abandons Bitcoin as legal tender
#594Does anyone know how/if using BTC as daily currency works in practice? Can El Salvadorians just add it to their Google Wallet?
I don't know much about cryptocurrencies but there seems to be a scaling issue, last thing I read it can only handle 7 transactions/s, is that still valid?
If so, then how would this scale to a country-wide payment system?
Re: El Salvador abandons Bitcoin as legal tender
#595Earlier quoted context omitted.
It doesn't have to be "magic" that causes it to go up forever. People need a way to put large amounts of money in places that are difficult for governments to get to and /or easy to move across jurisdictional borders. Think: money launderers, people that are worried their corrupt government will seize their assets, people hiding money from someone they owe like a spouse in a divorce. These all seem to me to be reason…
But that doesn't distinguish Bitcoin from other cryptocurrencies. The thing that distinguishes Bitcoin is fame, pure and simple. Everyone has heard of it.
Fame and security. Bitcoin is the hardest crypto to attack socially and economically.
Re: El Salvador abandons Bitcoin as legal tender
#596Earlier quoted context omitted.
I would guess "Legal tender 2" was deemed a failed experiment, since rapid deflation is extremely undesirable in a currency.
> since rapid deflation is extremely undesirable in a currency What do you mean, why should my money NOT go up in value?
if you genuinely are interested in an answer to your question, I recommend this blog post by Matt Ranger:
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
Re: El Salvador abandons Bitcoin as legal tender
#597Earlier quoted context omitted.
Fame is part of it, but it's more that it's IMO probably the only truly decentralized cryptocurrency. Not just in terms of the nodes and miners being well spread out between organizations and parts of the world, but also in terms of its development and governance. Sure, there's a relatively small group of core contributors to Bitcoin, but they don't have much fame or personality cults around them like Ethereum's Vita…
Eth famously forked and reversed txns due to someone getting scammed.
ETH forked because the contract was poorly written and they didn't want to honor the contract because their buddies would have lost a lot of money and the project would have gotten an egg to their face.
Re: El Salvador abandons Bitcoin as legal tender
#598Bleh. Seems like the IMF, which was against this for blatantly selfish reasons, basically strongarmed them into this. This is essentially a continuation of colonialism by other means.
Re: El Salvador abandons Bitcoin as legal tender
#599Didn’t we learn back in the 1500s that asset-backed currencies are unsustainable? Bitcoin will never, ever be able to take the place of a fiat currency because it carries with it many of the same problems as Spanish silver the conquistadors were traveling all the way to SOUTH AMERICA to mine half a millennium ago. It was essentially a very difficult proof of work. The only real advantage bitcoin has is that it’s easy…
https://wtfhappenedin1971.com/ might temper your enthusiasm towards modern fiat currency.
Re: El Salvador abandons Bitcoin as legal tender
#600Earlier quoted context omitted.
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 tomo…
if you would like to continue your mental journey, I recommend reading this:
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...