Earlier quoted context omitted.
Governmental monetary systems are usually founded on hopes and prayers (and military might).
Governmental monetary systems have been used by every government for what now? 3000 years?
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El Salvador abandons Bitcoin as legal tender
631–640 of 930 posts
Re: El Salvador abandons Bitcoin as legal tender
#632Earlier quoted context omitted.
Yeah, i really dislike bitcoin, but have to admit, it has been a very profitable investment for a lot of people (and still hasn't completely crashed like expected)... ... although as a form of currency (as opposed to an investment) for El Salvador, it looks like it's a failure
It’s around 100k USD apiece, +875% in the last 5y, +340% over last 2y, +130% over last 1y… I’d also qualify this as “not quite crashed yet” I dont know what the future hodls but it’s looking pretty good for bitcoin so far
>I dont know what the future hodls but it’s looking pretty good for bitcoin so far
The future always looks good right before a crash. You really don't want a currency as unstable as bitcoin as your legal ledger. we would have had 2 crashes already in this decade alone: the obvious 2020 dip and the dip in 2023.
All the DOGE/Trump shennaigans + the investigation on the Hawk Tuah coin will probably crash it again late this year.
Re: El Salvador abandons Bitcoin as legal tender
#633Earlier quoted context omitted.
Are you able to point to a single case where Bitcoin was used as legal tender in an every day business transaction? By this I mean, can you give an example where someone ordered a cup of coffee with Bitcoin directly and not through a proxy?
Gresham's law says that "bad money drives out good". Due to the dynamic this describes, it is unlikely bitcoin would commonly be used to buy and sell things even if it did not suffer practical obstacles. Bitcoin experiences less inflation than regular currencies. Some coins get created now, but over time we know its character will become deflationary: no new coins will be created, and some will be lost at times due t…
Society needs at least some inflation for things to keep moving, but an individual usually wants the opposite.
The elected government serves the society of its citizens, while inventors and holders of unofficial currencies are individuals who ultimately serve only themselves.
Re: El Salvador abandons Bitcoin as legal tender
#634Earlier quoted context omitted.
I sleep better at night knowing my savings aren't part of a massive Ponzi scheme that's going to one day leave lots of working class people holding the bag as the savings they invested in bitcoin are transferred to the wealthy insiders.
If you own a house you are part of a Ponzi scheme in most developed nations. Japan already has houses worth $0 because Japan has run out of population growth to keep the demand for houses growing. The same issue will occur in other countries that have low population growth. In New Zealand we have been importing people so house prices have been appreciating. However my impression is that other countries are competing…
People don't own the house just to sell it for more later on. Some live in them.
Re: El Salvador abandons Bitcoin as legal tender
#635Earlier quoted context omitted.
> it is also against the conservative status quo thinking of how to deal with crime How are tough on crime policies "against the conservative status quo"?
The people who are seen to be the experts and authorities in social theory and practice in their ivory towers in the UN and academia cling to their outdated and falsified ideas of what works and what doesn't and refuse to change or accept new things. Firstly, they are adamant that "tough on crime" policies do not work, they were adamant that Buekele's reforms would not work. Now sure there are probably ways they may…
I’m really not a tough on crime guy but I agree with everything you’re saying, I do just worry that if Buekele is ousted that another leader could be elected who uses the same heavy hand to lock up more than just criminals.
Re: El Salvador abandons Bitcoin as legal tender
#636Earlier quoted context omitted.
For daily usage, Bitcoin is simply inferior to Ethereum and other blockchains.
That opinion is not shared by those who think Proof of Stake and no ceiling to supply are bugs vs features.
Proof of Stake etc are a bit irrelevant for daily use. If you want to do something like make a bet on polymarket the newer chains are faster, easier and cheaper than bitcoin or ethereum on the whole. Polymarket uses polygon for example which is a fork off ethereum but it doesn't matter much which such network you use and the bets are denominated in US$. Bitcoin lightning is ok but more awkward to use than polygon et al.
Proof of Stake and no ceiling to supply are important if you are going to hold the thing for decades which is a different issue.
Re: El Salvador abandons Bitcoin as legal tender
#637Earlier quoted context omitted.
It’s being “used” as a speculative asset. That’s not a firm foundation to run a governmental monetary system on. Maybe there are other cryptocurrencies better suited to the task, but BTC isn’t
Don’t forget buying drugs online! Which is mostly what I use it for…
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Re: El Salvador abandons Bitcoin as legal tender
#638Earlier quoted context omitted.
Gresham's law says that "bad money drives out good". Due to the dynamic this describes, it is unlikely bitcoin would commonly be used to buy and sell things even if it did not suffer practical obstacles. Bitcoin experiences less inflation than regular currencies. Some coins get created now, but over time we know its character will become deflationary: no new coins will be created, and some will be lost at times due t…
Society needs at least some inflation for things to keep moving, but an individual usually wants the opposite. The elected government serves the society of its citizens, while inventors and holders of unofficial currencies are individuals who ultimately serve only themselves.
There is a legitimate role for both things: to have some non-inflationary things that serve as a store-of-value, and then some inflationary things to serve as regular currency.
It is worth emphasising here: non-inflationary currency does not grow its value, so it would be unusual for people to want to put their wealth exclusively into store-of-value. Rather, most people will want a mix of inflationary-currency, store-of-value, and investment in growth-generating businesses.
When people talk about wanting to use bitcoin as a day-to-day currency, I feel like they are missing the best benefit if could offer us.
We already have effective day-to-day currencies. But we have not had a reliable store of value. The US, UK and Australia each have a history of denying ownership of gold when it suits them, which is when people need it most.
The lack of reliable store-of-wealth has made it too-easy for governments to fleece wealth-generating people in order to buy votes. This is not the long-term strategic path, but it creates a race-to-the-bottom due to short-term incentives. Perhaps blockchain will change that, by allowing the creation of an easily accessed utility that sits beyond the easy influence of the nation state.
To be effective it does not need to be perfect, just better than the options we have now. It has been encouraging to me to see the CCP struggling with blockchain, and then outlawing it because they cannot control it.
Re: El Salvador abandons Bitcoin as legal tender
#639Earlier quoted context omitted.
That's an odd take. What's bad for the economy is, for the most part, bad for you. But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot pota…
> But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value That's an odd definition of money. The ancient Greeks already thought that money is medium of exchange AND a store of value, and throughout history people have preferred money that held its value. It's also circular reasoning. A medium of exchange should lose val…
=) you're conflating meanings, perhaps due to some of my handwaving. There's a difference between a medium of exchange that loses value, and a medium of exchange that LOSES value. People don't want the latter. That potato is too hot. You want something that loses a measured, controlled, amount of value over time. How much? About 3% per year seems to be a good number that people more educated than me tout around.
I'm also not sure that's a circular reasoning as I provide the reasons why you want a medium of exchange that loses value...
Hmmm... sure, I suppose you can look at it that way. In an inflationary-esque economy, you worry about saving your wealth, so you create instruments to do so: fractional reserve banking, mutual funds, etc. This is a problem with many solutions. On the other hand, in a deflationary-esque economy, you worry about spending your wealth, and perhaps more importantly, getting everyone around you to spend it as well. That problem has less solutions.
I said you struggle, you don't hold on forever, you struggle letting go. As in you eventually do let go, but not as quickly as if it had been depreciating. It functions as a brake on consumption, not a full stop. It slows things down. Slow is not good. Things start to go down when things slow.
Re: El Salvador abandons Bitcoin as legal tender
#640Earlier quoted context omitted.
These are the typical statements you hear repeated as gospel from the economists. > With a deflationary currency, the incentive is to put off purchases as long as possible as your currency will buy more tomorrow than it does today. What I hear from this is that people think twice before making a purchase, that is, they use their money more wisely. Seems like a bonus to me. Regardless of this, people will still need t…
hahaha it was a good idea to remove that last sentence from your comment I'll nibble at the bait regardless: Your comment of spending patterns is missing the forest for the trees. A modern, capitalist infused, economy works like a big cardiovascular system, or like an engine. That is to say, it's happiest when blood/oil is pumping through it. Therefore, you can compare to a certain extent the different states an econ…
Thank you for your explanation, and the reason why I removed the last sentence is that I thought it was thoroughly unhelpful.
I'm not intending to bait. Really I find the arguments against deflation insufficient. I get the picture that some inflation is good to keep the system running smoothly, however, the description of why inflation is desirable is lacking when explaining why deflation is necessarily bad, all things considered. I don't see a first principles argument against deflation, neither do I see a thorough comparative analysis between deflationary and inflationary economies. The only example given is Japan, which, as I said before, doesn't seem to have fared too badly. Moreover, the list of countries that have had problems with runaway inflation is very long. Inflation is a well established economic malaise. In fact, it is almost a maxim that all states are destined to at some point or another, debase their currency.
I think one has to weigh the economic arguments, whatever they may be, against the fact that humanity has never had sound money that can't be debased, and that isn't at the whims of some elite, however well intentioned and wise they may be -- which more often than not, they aren't.
Cryptocurrencies will continue being developed, the flaws will be solved, and the wrinkles ironed. We will have something that may work as sound money. And I say we let it compete fairly against fiat money, put our theories to the test, and see what kind of money if preferred by the people. If it turns out that sound money is finally achieved, I'm sure it'll be a momentous time in human history, and could very well become a new human right: the right to own and use sound money.