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One year on, El Salvador’s Bitcoin experiment has proven a failure

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Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#61

Post by jinzo »

simple-thoughts wrote: post #36

Prediction: El Salvador will look genius in the next Bitcoin cycle. Other emerging market central banks will proceed to copy their model creating the next cycle’s peak. Once they stop buying, the market will crash again creating either a global depression or a bailout of the btc economy by USG, causing a repeat of the bank bailout that spawned btc in the first place.

They invested US$100 million (and currently that's around US$50 million). The next bond payment (2023 note that they are trying to buy back now) is due in January and that alone is US$800 million. So, their investment should yield really high returns for it to even make a decent dent into the first bond.

From all the fanfare around them, I was sure they had to invest more. But after looking up the numbers, this looks like a publicity stunt more than any serious investment. Also 20% adoption when it's mandatory to support it, is quite interesting too.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#62

Post by 2muchcoffeeman »

SkipperCat wrote: post #42
wikfwikf wrote: post #21

Earlier quoted context omitted.

That's not the whole story. When Bitcoin started it was used more as a currency than it is now. Firstly by evangelists who tried to establish a BTC economy, and secondly in the illicit economy. Bitcoin miners and devs took the project in a specific direction a few years later, optimizing it for use as digital gold, while making it much harder and more expensive to use as a currency.

100% agree. The early days of Silk Road showed the true value of Bitcoin. It was a great untraceable currency. Perfect for buying drugs (no moral judgement, just saying what happened). Then, around 2016, CNBC “discovered” crypto and so much investor money and mania jumped in. Now it’s just a value store for dreamers. The fact that the word HODL exists kinda proves that point.

Not just dreamers, it’s an identity. Someone else on this topic is calling themselves a “hodler”. Not just an investor. But a “hodler”, a “True Believer” I suppose.

Your investment is there to make you money, not to provide you with an identity.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#63

Post by amarant »

Kathula wrote: post #19
croon wrote: post #11

It's not a failure because Bitcoin tanked (relatively), it's a failure because Bitcoin tanking was and will always be a significant risk. People who got rich from Bitcoin weren't savvy, they won the lottery. It's not a sound investment decision based on outcome. Investments are sound based on probability and risk beforehand. El Salvador gambled which is stupid. Whether they won or lost at the lottery is inconsequenti…

It isn't lucky to hold through multiple multi-year 80% drawdowns, it's called doing research and having a conviction. I didn't sell at 60k, I'm not selling now, because I have a strong conviction. You call this lucky, but it isn't. If you have a conviction and a span longer than four years you could get "lucky" too.

But if you didn't sell at 60k you're not lucky at all. If you're still sitting there, hodling the ball, you're one of the suckers who paid the lunch for those who did get lucky.

You're the opposite of lucky.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#64

Post by upsidesinclude »

rawoke083600 wrote: post #28

Ja that is crazy... one wonder if they pick a different time (read long term market-regime) if the results would be any different for better or worse. The best alternative payment system I have seen myself is M-Pesa in Kenya [0] It's THE payment system in Kenya everything runs of it in terms of commence for the "ordinary man". It has a somewhat unique starting point, since Kenya (Africa) (I'm from there myself), was…

This is a great point most people from the US and Europe can't understand.

Much like Africa, all of SE Asia went directly to cell service and skipped all landlines because they were so far behind. The same goes for banking in these parts of the world and India.

The people there will skip over the traditional banking system which is massively undeserving the population and adopt a digitally native banking system. The masses will go with the flow and accept the CBDC, but many already understand the implications and limitations.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#65

Post by benj111 »

WHATDOESIT wrote: post #56
benj111 wrote: post #50

Earlier quoted context omitted.

On some level yes. If you're day trading. But you are actually buying a slice of a company and its future earnings. With bitcoin what are you actually buying?

What are you actually buying while Forex trading? (I'd really like to know. To me, BTC trading and Forex trading sound exactly the same.)

Well I don't do Forex trading but you are buying a currency backed by a government. My understanding is it's closely linked to interest rates.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#66

Post by scotty79 »

smcl wrote: post #40
simple-thoughts wrote: post #36

Prediction: El Salvador will look genius in the next Bitcoin cycle. Other emerging market central banks will proceed to copy their model creating the next cycle’s peak. Once they stop buying, the market will crash again creating either a global depression or a bailout of the btc economy by USG, causing a repeat of the bank bailout that spawned btc in the first place.

I admire your optimism, but I can't get on board. It would be naive to deny the growth of cryptocurrencies over the last few years, but it seems like the people who were meant to make money have since cashed out, that everything's peaked and turned a corner and the general public have turned against it (due in no small part to a few many shitcoins, rugpulls, scams, BAYC, and a couple of defunct exchanges). I'm sure c…

> it seems like the people who were meant to make money have since cashed out, that everything's peaked and turned a corner and the general public have turned against it

Every 4 years it looks like that. And yet the next greed fueled ascension comes around like a clock. Each next one smaller than the last one.

Next one will come around 2025 but this time it's going to be just few hundred percent.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#67

Post by upsidesinclude »

can16358p wrote: post #2

Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.

If?

There's Tether and USDC, plus a handful of others.

The critical thing at the moment is to be "sophisticated" enough to make the right choice.

In US law, an investor has to prove they have means (money to spare) to do risky things. They are "sophisticated" investors and can afford losses. (This word is used in the law)

The rest don't get to play. So the rest don't know the rules and don't understand contract law.

If you read a contract it defines the rules. Most people don't want to or don't know to do this and, right now, the government isn't stopping them from making these decisions about investment in crypto.

Many people talk about crypto without acknowledging the fundamental nature of investments, because the don't invest (i.e. not "sophisticated"). They want something like their bank. Somebody to make sure they don't mess up and take care of them if things go sour.

If that person is you, leave your opinions aside and keep your money in bonds and mutual funds

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#68

Post by upsidesinclude »

n4r9 wrote: post #6
can16358p wrote: post #2

Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.

My best guess at why the average person is hesitant to use bitcoin as a primary currency is: where do I go when it goes wrong? If the system holding my money is hacked, or I get scammed in some way, where is my legal recourse? Legal recourse is typically something provided by a state. But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency. I'm not up to scratch on the…

See my other comment.

El S. is in a pretty strange place because they don't have their own currency. They have no control over their economy in that regard, so adopting a separate currency which frees them from singular dollar dependence is quite useful.

Nullifies what claims exactly?

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#69

Post by WHATDOESIT »

benj111 wrote: post #65
WHATDOESIT wrote: post #56

Earlier quoted context omitted.

What are you actually buying while Forex trading? (I'd really like to know. To me, BTC trading and Forex trading sound exactly the same.)

Well I don't do Forex trading but you are buying a currency backed by a government. My understanding is it's closely linked to interest rates.

So you're buying into trust of that government. With BTC you're buying into trust of the technology and other network participants. Is it really so different? I don't trust governments so much - my local currency is currently facing 25% YoY inflation. I bought Bitcoin.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#70

Post by koonsolo »

croon wrote: post #11

It's not a failure because Bitcoin tanked (relatively), it's a failure because Bitcoin tanking was and will always be a significant risk. People who got rich from Bitcoin weren't savvy, they won the lottery. It's not a sound investment decision based on outcome. Investments are sound based on probability and risk beforehand. El Salvador gambled which is stupid. Whether they won or lost at the lottery is inconsequenti…

I agree with you on the El Salvador part, but not on the investment part.

> Investments are sound based on probability and risk beforehand.

Investing in bitcoin had a limited downside (lose 100%), but a very high upside (reaches it's initial goals). For me, the potential gains outweighed the low probability.

I consider myself very lucky that I made some money (wasn't crazy to put all my money in there). But for me, when it would have gone to 0, I still feel it was worth the risk.

But of course, with such a high risk high reward investment, only invest a small % of your total money.

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