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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#821
post #533

Earlier quoted context omitted.

> There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find. I think you need to take a pause and read what you wrote because there's some serious cognitive dissonance in your claims. The IMF is a fund put together and ran by…

>_> Cheeky FYI, but cognitive dissonance is the "mental disturbance people feel when they realize their cognitions and actions are inconsistent or contradictory" [0]. While I'm certainly not above that, in this case I don't think I even made and defended enough claims here for them to be contradictory in principle and you don't seem to be arguing that. Consider going with the more straightforward "I disagree!" or "Th…

It is a textbook case of cognitive dissonance. For example, you are somehow trying to hold contradictory claims on how Bitcoin's clear failure as a currency is somehow a sign of it's success.

The mental disturbance angle is also compounded by the far-fetched conspiracy theories on how El Salvador ditched Bitcoin because "the man" wants to kill it.

Re: El Salvador abandons Bitcoin as legal tender

#822

Earlier quoted context omitted.

> Why should the money holder do anything productive? Why getting richer and richer becomes something bad when we go crypto? This question works better the other way round. Why should people that do all the work and take all the investment risks to make the riches get continually decreasing returns on their efforts whilst the people that sit and HODL get continually increasing returns on doing nothing?

Because people are willing to pay more. Why should I make money because my house is worth more than it was? Because people are willing to pay more. There's no more "should" required than that.

Um... if the only legal tender around was an asset with fixed supply, people holding it wouldn't be willing to pay more, (or invest it in making more stuff) that's the whole point.

Re: El Salvador abandons Bitcoin as legal tender

#823
post #376
post #317

Earlier quoted context omitted.

Why do you think the USD has so many orders of magnitude usage? Nobody missed the question, that was the point: for currencies, stability is what makes them useful. You don’t have an incentive to hoard dollars hoping they’ll go up in value, so you spend them and boost the economy. Other countries use dollars because they have the same benefit: I can write a contract with you saying what we’ll pay over the next year a…

> Why do you think the USD has so many orders of magnitude usage? Nobody missed the question, that was the point: for currencies, stability is what makes them useful. Hint: cause and effect. You did miss the point and still do probably.

Can you share the point you think people are missing?

Re: El Salvador abandons Bitcoin as legal tender

#824
post #583

Earlier quoted context omitted.

> There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find. I think you need to take a pause and read what you wrote because there's some serious cognitive dissonance in your claims. The IMF is a fund put together and ran by…

Why are you guys saying adopting Bitcoin was a failure? Because the wallet used by its citizens is too complex and nobody uses it? Or because Bircoin more than doubled in Price since El Salvador started buying? El Salvador will not sell its bitcoins and keep on adding them, maybe now as strategic reserve. Meanwhile Tether is moving to El Salvador.

> Why are you guys saying adopting Bitcoin was a failure?

Because it was a failure in each and every single thing it was claimed it would achieve, specially the fact that everyone in El Salvador ditched the system once they cached out their sign on bonus.

https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

Re: El Salvador abandons Bitcoin as legal tender

#825

Earlier quoted context omitted.

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 thin…

Perhaps the argument I left in a different comment will illustrate why inflationary currencies are preferable. Please note that by inflationary I don't mean high inflation, I mean small, controlled, inflation.

> 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 potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but it's giving you different things.

Now think of this on a large scale. You want hot potatoes going around. That means they'll be moving at a reasonably fast pace, changing hands and going places. You need your money to move so that it reaches all parts and doesn't stagnate places. That's not to say that savings, like the type you'd do at a bank, are bad for the economy, but that is to say that if everyone were to save a bunch of money under a mattress, that would be bad. That would mean that a solid chunk of currency in the economy is frozen and effectively useless to everyone but its owner until they decide to take it out and spend it.

https://en.wikipedia.org/wiki/Deflation#Historical_examples should give you some other examples of situations in which economies have been in deflation.

Again, controlled small inflation is the goal. Yes, this can, in the wrong hands, turn into too much inflation, but this is the same the other way too. These are not static states; they're highly dynamic systems that can spin out of control in either direction. And all things considered, it's easier to deal with high inflation than it is to deal with high deflation. It's playing with fire, but there is no other way, and if you find such a way, I and many others would be rather interested in hearing it.

Something to consider: economists' study, learn theory, and perform controlled experiments so that we can learn about these things. These are not unknowable truths of the economy that we can only roll the die and see what happens. And something that is often not considered by hard currency supporters is the results if things turn sour.

After all, you can have years upon years of nice solid performance of an economy built on whatever, for any sort of reasons, but the true assessment of that whatever as a means to serve as the currency for a nation, is how it performs under stress. Our modern fiat currencies and the ways we control them have been built on the ruins of previous methods and currencies. These ruins are costly and violent to a nations progress. This is not something you want to "wait and see". So instead of just thinking about the functions of bitcoin "during the day", while things are normal and people are behaving well, think also about that same currency at night. Think about what may happen if some exogenous shock hits the economy (not related to the currency itself), think oil embargo in the 70s. How will your economy deal with that? What are the tools at the government's disposal to get the economy repaired and back on track? Do they have any recourse? Do they have to just wait it out? This is beyond human lives at risk, this is human progress, human time.

Therefore, it's not about what people like, it's about what keeps the whole system as successful as possible for as long as possible. Economic systems are complex and unintuitive beasts, this is not an area that benefits from great civilian oversight and control. If your system works amazing for 20 years but then has a horrendous crash that wipes 10 years off of your progress, how good was it really?

Re: El Salvador abandons Bitcoin as legal tender

#826

Earlier quoted context omitted.

CNN says Secretary Rubio just struck a deal with Bukele to accept deportees from the United States regardless of nationality, including US citizens, as long as we pay to house them in his prison.

Isn’t this what caused the gang problem in the first place in El Salvador? I’m no expert but that was my understanding.

El Salvador is going to keep them in prisons, not just let them loose.

Re: El Salvador abandons Bitcoin as legal tender

#827

Earlier quoted context omitted.

CNN says Secretary Rubio just struck a deal with Bukele to accept deportees from the United States regardless of nationality, including US citizens, as long as we pay to house them in his prison.

They're deporting US citizens? How is that even legal?

That is not what is happening. The agreement is to use El Salvadorian prisons instead of US prisons for prisoners. El Salvador said they would be willing to accept any prisoner, regardless of nationality. The US citizens would not be deported, but imprisoned in another country. However, it is not clear if the US will use El Salvadoran prisons for US citizens, only foreigners or not at all.

Re: El Salvador abandons Bitcoin as legal tender

#828

IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocur…

If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

> If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

In addition, the whole country ditched Bitcoin as a payment system as soon as they cached out their sign on bonus. How is a national currency depicted as a success if no one uses it at all once they cached out the free money?

Crypto bros need to stop moving the goal posts they themselves plant arbitrarily and against any reason.

Re: El Salvador abandons Bitcoin as legal tender

#829
post #574

Earlier quoted context omitted.

If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

> mitigate the risks associated with Bitcoin The IMF gave them 1.4 billion dollars to mitigate the risk of bitcoin to the IMF. A subtle but important difference.

> The IMF gave them 1.4 billion dollars to mitigate the risk of bitcoin to the IMF.

You need to be functionally illiterate to draw that take from the announcement. Read the thing, be informed.

https://www.imf.org/en/News/Articles/2024/12/18/pr-24485-el-...

Re: El Salvador abandons Bitcoin as legal tender

#830

Earlier quoted context omitted.

What do you call someone who bought a pizza with BTC last year? Paper hands? Shouldn’t they have hodled and not had pizza? How can this be a currency.

The utility of the money is in how you spend it. Your same question could be asked about the S&P. Why would anyone sell? Well at some point in your life you want to use the money to accomplish your life goals

You could and should ask the same question about stock shares - and indeed there’s an entire profession with centuries of history around that – but it’s a fundamental error to ignore magnitude. The stock market is based on real value and that avoids wild swings when nothing has fundamentally changed - even through the mortgage bubble my portfolio made made gains because people still needed to buy food, cars, phones, clothing, etc. and if did even a little research it had been easy to spot companies whose fundamentals didn’t support their valuation. In contrast, a pure fiat currency like bitcoin has value only from social consensus and has far more volatility.
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