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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#861

Post by KetoManx64 »

llamaimperative wrote: post #730
agumonkey wrote: post #698

Earlier quoted context omitted.

can you explain their reasoning ? just curious (i'm a newb)

Sure: if I buy today, I’ll be richer tomorrow. Ergo, the exact reason it’s a horrible currency for the system. It’s really just the infamous libertarian inability to consider the needs of the system as separate but still important and sometimes in tension with the desires of the individual. It’s just a particularly goofy one because a deflationary currency very obviously cannot support an economy.

You're right, It is a horrible currency for the system. How would we prop up the military industrial complex and wars with foreign third world countries if we could no longer print money out of thin air? Just dreadful to think about.

Re: El Salvador abandons Bitcoin as legal tender

#862

Post by KetoManx64 »

paulgb wrote: post #183
yalogin wrote: post #66

Earlier quoted context omitted.

Looks like a fair take to me. They are not forcing people to accept it anymore because it didn’t work. It was never supposed to work. Bitcoin tried for 15-20 years to find a use case but now it’s just an asset class like gold and nothing else, it will never be more than that.

The trouble is, it needs to be more than that if it is to survive. Since inception, mining has mostly been subsidized by new bitcoin, which is capped by design (and about 95% distributed). Satoshi’s paper assumed that transaction costs would make up for the exponentially declining subsidy, but that hasn’t really happened since it never lived up to his “digital cash” vision.

Why does it need to be more than a store of value? If every single country In the world is off the gold standard and inflates their citizen's savings away at a whim, why does Bitcoin need to be more than a way to keep your savings safe, especially if it's the best way to do so with the least amount of government meddling.

Re: El Salvador abandons Bitcoin as legal tender

#863

Post by slashdev »

nyokodo wrote: post #148
slashdev wrote: post #117

Earlier quoted context omitted.

Wouldn’t they need to balance a budget first? Not in my lifetime

> Not in my lifetime Were you alive in the mid to late 90s? A string of balanced budgets and surpluses. There are new problems and no dot com bubble right now but most Americans were alive the last time we had balanced budgets. It is quite possible.

I remember it well.

It was possible. That’s not the same as saying it is still possible at this debt level with the massive shortfalls in social security and other entitlements.

I do not think it’s possible without also seriously eroding the debt burden through sustained higher inflation. That horse has left the barn.

Re: El Salvador abandons Bitcoin as legal tender

#864

Post by yesfitz »

motorest wrote: post #829
mike_d wrote: post #574

Earlier quoted context omitted.

> 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-...

Lenders of money want to get their money back. They try to minimize the number of factors that threaten getting their money back. Those factors are called "risks".

El Salvador wants to borrow money. The IMF is willing to lend it, but sees El Salvador's Bitcoin policies as a risk to getting their money back.

From the IMF's perspective it is a risk to El Salvador's economy and therefore the repayment of the IMF's loan.

~ You may want to review the Hacker News Guidelines for commenting. Your comment is out of line with a few of them. https://news.ycombinator.com/newsguidelines.html

Re: El Salvador abandons Bitcoin as legal tender

#865

Post by kkfx »

The reason why BTCs are not much an usable currency for a whole economy is that they are a deflationary currency like gold, meaning the more time passes the less new BTC are created till the end with no creation at all. This means they will always more interesting to be stockpiled then spent. Also they can't decrease nor increase "as needed" the BTC base, meaning that if you are short of natural resources you can't reduce their usage tightening the number of circulating money.

The idea behind BTC is very valid, but they can be more like the old ECU or CFA/CFP not money you normally use for day to day stuff.

Re: El Salvador abandons Bitcoin as legal tender

#866

Post by llamaimperative »

KetoManx64 wrote: post #861
llamaimperative wrote: post #730

Earlier quoted context omitted.

Sure: if I buy today, I’ll be richer tomorrow. Ergo, the exact reason it’s a horrible currency for the system. It’s really just the infamous libertarian inability to consider the needs of the system as separate but still important and sometimes in tension with the desires of the individual. It’s just a particularly goofy one because a deflationary currency very obviously cannot support an economy.

You're right, It is a horrible currency for the system. How would we prop up the military industrial complex and wars with foreign third world countries if we could no longer print money out of thin air? Just dreadful to think about.

Lol

Re: El Salvador abandons Bitcoin as legal tender

#867

Post by twodave »

toenail wrote: post #580
twodave wrote: post #431

Earlier quoted context omitted.

I’m not sure what exact point or points you want me to care about, but none of these charts seem to suggest _why_ we and every other country moved to fiat. I’ll admit I didn’t look at them all, you didn’t give me nearly the effort in your comment that you’re asking from me…

We moved to fiat because politicians like the indirect taxation through inflation. It's free money for them, what's not to like?

That is not why we moved to fiat. It may be a consequence, but there are also seriously consequential checks against doing it too freely.

Re: El Salvador abandons Bitcoin as legal tender

#868

Post by wruza »

wqaatwt wrote: post #733
wruza wrote: post #647

Earlier quoted context omitted.

I mean, what I'm about is really the same, just the other way round. Countries usually erase zeroes after hyperinflation adds them, cryptocoins can just add extra zeroes due to deflation. No change in value, just higher granularity. The rest left me puzzled, can you elaborate? Why should the money holder do anything productive? Why getting richer and richer becomes something bad when we go crypto?

> Why getting richer and richer becomes something bad when we go crypto? Is that sarcasm? It discourages any type of economic activity. Why would someone invest into or try to start a business when you can become richer by just sitting on your money pile with no risk. Artificially constricting the supply of money in a non static economy is a bad idea. Like the gold standard just much worse.

Any type of economic activity in USD involves paying rent or huge surplus to those who hoarded real estate (which doesn’t go away any soon). I don’t see the big difference here. Doesn’t mean it’s a good thing, but let’s at least apply the arguments symmetrically.

Why would someone invest into or try to start a business when you can become richer by just sitting on your _property_ pile with no risk.

Yeah, I guess.

Re: El Salvador abandons Bitcoin as legal tender

#869

Post by aboardRat4 »

creato wrote: post #474
aboardRat4 wrote: post #432

Earlier quoted context omitted.

>You do not want this in your currency. I really want this in my currency. Bitcoin might be a Ponzi scheme, but fiat currencies are even more so.

> I really want this in my currency. A deflationary currency that you own a disproportionate amount of is great. For you.

Quite the opposite.

If you own a disproportionate amount of INflationary currency, you are, you know, still a rich person who can afford investments, investment consultants, tax optimization experts, have preferential treatment from banks and personal relations with the government employees, so you're good anyway.

Whereas if you're poor, you don't even have a chance to save enough to invest a little bit, because whatever you save today becomes useless paper tomorrow, so you're forced to spend, thus enriching service and goods providers, that is the rich.

In a deflationary currency you actually have a chance to save some money for an investment, plan for tomorrow, or even next year, and not spend everything today while money still have today's value.

Re: El Salvador abandons Bitcoin as legal tender

#870

Post by floydnoel »

adammarples wrote: post #805
floydnoel wrote: post #790

Earlier quoted context omitted.

computers have experienced rapid deflation in the previous decades. did that prevent people from buying computers? no, obviously not. of course you are just trolling ("LOL") and you are incurious to any evidence or argument that contradicts your straight-from-cable-news talking points.

This isn't quite the same. Money that is deflating becomes literally more functionally useful the longer you hold it. Computers stay as functionally useful as you hold them and arguably degrade relative to the software you need to run on them. In your analogy you should be concerned with whether I want to sell my computer (analogous to spending my money). If a computer truly did become more functional with passing ti…

you're technically correct, yes it isn't exactly the same. good job! for an example that is exactly the same, look at the general monetary deflation in the united states during the majority of the 19th century. I know most people won't, so I used a similar example that everyone is familiar with.
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