El Salvador abandons Bitcoin as legal tender • Hacker News Board

Re: El Salvador abandons Bitcoin as legal tender

#751

Post by mikepurvis » Tue, Feb 04, 2025, 2:55 PM UTC

varenc wrote: post #305

mikepurvis wrote: post #164

Earlier quoted context omitted.

And quite apart from that fundamental misalignment, sovereign states having some measure of control over their own monetary policy is arguably a pretty good thing .

This is moot for El Salvador. They’ve been dollarized since 2001 and USD is effectively the only legal tender.

That is helpful context— it's too bad TFA wasn't a bit more clear on the history.

In any event, you could still make the case that prior to this bitcoin experiment, the people and economy of El Salvador still were benefiting from a human hand on the monetary tiller, it's just it was that of the US Fed rather than their own officials (elected or otherwise).

Re: El Salvador abandons Bitcoin as legal tender

#752

Post by oneeyedpigeon » Tue, Feb 04, 2025, 2:57 PM UTC

troupo wrote: post #734

oneeyedpigeon wrote: post #669

Earlier quoted context omitted.

Sure, my point was that there are many reasons someone might spend money today that might be better off saved for the future, however much it may increase in value.

> there are many reasons someone might spend money today Yes, because that's the value of money . Bitcoin isn't money. It's a speculative asset precisely because people are hoping its value will only go up.

I'm speaking from experience. I literally spent Bitcoin last week that I would rather have held, because I needed the money.

Re: El Salvador abandons Bitcoin as legal tender

#753

Post by 4ggr0 » Tue, Feb 04, 2025, 2:57 PM UTC

Gud wrote: post #662

girvo wrote: post #388

Earlier quoted context omitted.

Well, for buying Monero to buy drugs online right?

Yes. First I buy bitcoin from the X, then I transfer it to my bitcoin wallet. Next I transfer it to kraken, convert it to Monero and deposit it on my drug market of choice. It used to be simpler but this is how I do it nowadays.

kraken must have some from of KYC, right?!? meaning that you're buying drugs online without trying to be anonymous. impressive...

Re: El Salvador abandons Bitcoin as legal tender

#754

Post by zhoujianfu » Tue, Feb 04, 2025, 3:01 PM UTC

llamaimperative wrote: post #728

floydnoel wrote: post #725

Earlier quoted context omitted.

deflation is fine for an economy. inflation is disastrous for an economy. the people in charge of the money printers are trying to keep you confused. don’t buy it.

LOL I have $1,000. I believe that tomorrow, my $1,000 will be worth $2,000. Why would I ever spend my money? Hence, economy freezes. This is so plainly obvious to everyone except crypto zealots I literally gasped seeing your comment.

Not arguing too hard but people do have to spend some money to live regardless… it could be said people are less careful with their money when they feel like it’s losing value, so they spend more and save less. Yes it results in more spending but on what?

Re: El Salvador abandons Bitcoin as legal tender

#755

Post by llamaimperative » Tue, Feb 04, 2025, 3:02 PM UTC

zhoujianfu wrote: post #754

llamaimperative wrote: post #728

Earlier quoted context omitted.

LOL I have $1,000. I believe that tomorrow, my $1,000 will be worth $2,000. Why would I ever spend my money? Hence, economy freezes. This is so plainly obvious to everyone except crypto zealots I literally gasped seeing your comment.

Not arguing too hard but people do have to spend some money to live regardless… it could be said people are less careful with their money when they feel like it’s losing value, so they spend more and save less. Yes it results in more spending but on what?

Yes, it would drive consumption toward the barest minimum to live and investment toward zero.

This is bad.

> Yet it results in more spending but on what?

Well near target inflation rates (which is a positive non-zero number) it results in a mix between consumption and investment.

This is good.

Re: El Salvador abandons Bitcoin as legal tender

#756

Post by loophole27 » Tue, Feb 04, 2025, 3:04 PM UTC

listenallyall wrote: post #387

freedomben wrote: post #294

Earlier quoted context omitted.

I used to pay my dish network bill with it before they stopped accepting it. I've also used it to send money to friends and family, and to donate to open source projects and other things. If the fees were lower I'd use it for plenty of other things too.

> If the fees were lower Aye, there's the rub. With all due respect, why not Bitcoin Cash or some other coin? Bitcoin Cash is the exact same thing as Bitcoin - same protocol, same 21 million coin limit, same Satoshi whitepaper, same everything, except bigger blocks and thus, much lower fees. If you are using a coin as an actual currency, and not as a speculator, why stick with high-fee Bitcoin?

Took a lot of scrolling to find a mention of Bitcoin Cash.

I used to believe in Bitcoin in the beginning, but the high fees make it impractical to use as everyday currency.

Bitcoin Cash is much closer to what I had hoped Bitcoin would become. It’s the same as Bitcoin, except that it ideologically split exactly for the reason that some people wanted it to behave more like an actual currency, while others invented the “digital gold” narrative.

Re: El Salvador abandons Bitcoin as legal tender

#757

Post by el-salvador » Tue, Feb 04, 2025, 3:07 PM UTC

cle wrote: post #288

purist33 wrote: post #276

Earlier quoted context omitted.

There is a book called "Talking to your daughter about Economics", where the author explains one of the problems with bitcoin is, you cant print more of it in a crisis. Maybe thats what happened here.

Ironically part of the long-term problem was El Salvador's dollarization, also preventing them from printing in a crisis (that crisis being the COVID pandemic).

Dollarization was unpopular at first in El Salvador but after 24 years of dollarization, and both right and left wing governments, there are are no official plans of rolling it back. It's way too convenient to use the world's most used currency as our everyday currency.

Re: El Salvador abandons Bitcoin as legal tender

#758

Post by chowchowchow » Tue, Feb 04, 2025, 3:08 PM UTC

ggm wrote: post #704

chowchowchow wrote: post #540

Earlier quoted context omitted.

> You are conflating liquidity with deflation. To be a currency it has to be liquid, we agree. We also agree btc is not as liquid as cash. But deflation or stability is orthogonal from liquidity. I’m not; you have a limited view of what inefficiency means. The currency can be liquid and still inefficient for exchange due to other kinds of overhead such as opportunity cost of spending the currency itself. The economy…

Maybe it's improved but when i played with btc and made 3x and freaked out and bought a secondhand pixel with my $800 stake in milliBTC the friction was huge. I paid unpredictable vig getting $ and I had very indirect access to sell price which was being constantly fucked over by whales playing. A true economy of low friction btc transactions for pizza has never existed at the scale banks do pay wave. Its hypothetica…

Totally. The practicalities of BTC or any crypto as currency today are also a big problem. On top of the fundamental whyyyy of it all. If you can easily convert to/from USD to crypto or other desired store of value doesn’t that provide the required buffer against inflation? Why imbue the currency itself with value? I know societies used to do it that way but that’s not really an argument for doing so in the present day on its own…

Re: El Salvador abandons Bitcoin as legal tender

#759

Post by loophole27 » Tue, Feb 04, 2025, 3:22 PM UTC

markasoftware wrote: post #348

ekianjo wrote: post #320

Earlier quoted context omitted.

BTC cash has lower fees I believe, I wonder if it could actually work as a currency for day to day payments.

It can work as a day-to-day currency, but it compromises the decentralization that is key to Bitcoin's usefulness as a store of value: + By allowing 8x larger blocks (unless it's even larger now?), if in widespread use with full blocks, the blockchain would be 8x larger. Bitcoin's blockchain is already the better part of 1TB, though you can still fit that on a cheap SSD. Imagine if it were 8 and growing fast. + Becau…

I used to run nodes to “contribute”, but it’s cumbersome and does not really contribute to decentralization .

The only ones who need to have full blockchain nodes are the miners, and for them it’s just another disk in their data center.

Re: El Salvador abandons Bitcoin as legal tender

#760

Post by mkipper » Tue, Feb 04, 2025, 3:24 PM UTC

josu wrote: post #37

Here is the retained purchasing power of each of the coins since the law was passed in September 2021: Legal tender 1: -15% Legal tender 2: +115% Guess which one has been deemed a "Failed experiment".

And if you wrote this comment in December 2022, Bitcoin would be sitting at -70%.

I sincerely don't know anything about monetary policy, but I can't imagine that sort of volatility in the value of your currency is considered a good thing.