Oh, well - you guys wanna tank your economy even further?
Bitcoin becomes Legal Tender in El Salvador
91–100 of 145 posts
Re: Bitcoin becomes Legal Tender in El Salvador
#92A few points of interest for those that want to dig more:
* This is an analysis of what was actually passed. It's a big deal as far as "legal tender" goes: https://twitter.com/robustus/status/1402456274340442113 For an discussion on what "legal tender" can mean, see: https://www.coindesk.com/el-salvador-bitcoin-legal-tender-ko...
* For those that don't know, the US Dollar was El Salvador's previous only legal tender. For a list of some other countries that use USD or are pegged to USD: https://en.wikipedia.org/wiki/List_of_countries_by_exchange_... - note of those, the Marshall Islands has previously announced plans for a CBDC (working w/ Algorand) and politicians in Ecuador has also brought up the possibility of introducing Bitcoin as legal tender. Many LatAm politicians (many that have been pegged to USD) have announced support for cryptocurrencies. Perhaps domino theory is back in play? https://twitter.com/balajis/status/1402279912623464458
* The plan for the merchant/end-user use case is apparently to use Strike https://strike.me/ , which is a custodial service built on the Lightning Network - see also https://www.businesswire.com/news/home/20210605005045/en/Str... (Technically it's opt-in and you can use any wallet, but I'll just leave this recent thread here as an example of why this isn't really an option: https://threadreaderapp.com/thread/1376286470256873475.html )
* Anyway, that last detail is I believe is getting sidetracked from the main point, which is that as a (to my mind) clear direct consequence/reaction to current US monetary policy, and a shot across the bow of USD's reserve currency status. One doesn't have to look further than the numbers for foreign holding of US Treasury Bills to see how the wind has been blowing: https://ycharts.com/indicators/increase_in_foreign_holdings_... but of course, you can also listen to much smart people than me opine about this: https://youtu.be/ScAeHsXIUqI?t=528
(It appears that El Salvador plans hold $150mm USD in a fund that will slowly convert into BTC, assuming price volatility risk for merchants that want USD)
Re: Bitcoin becomes Legal Tender in El Salvador
#93Earlier quoted context omitted.
> Also, it might be difficult to get every merchant in the country to be able to accept bitcoin. How's the Internet infrastructure in El Salvador?
* US $30 a month for 20/30Mbps in cities. * Wireless data can be spotty in rural areas due to many hills and mountains. We would need an MVNO for rural areas coverage, as it wouldn't be cost effective for the four mobile networks to place a tower in every rural corner. * Wireless coverage in cities was limited/overloaded for about 5 years due to lack of new frequencies. This was a regulatory issue fixed about 2 years…
Doesn't sound great. I assume that cash is still king, especially in rural areas?
Re: Bitcoin becomes Legal Tender in El Salvador
#94Earlier quoted context omitted.
The intrinsic value argument is a funny one. What's the idea behind it? Assume you have asset X but then one key assmption fails. Now, is asset X still valuable considering the failed assumption? For land, you can say that even in the case that society collapses it is still valuable. Or is it? What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?
> What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero? For me the easiest way to determine if something has intrinsic value is ask yourself what would happen if you owned all of it (and couldn't be forced to give it up). If you owned all the Bitcoin in the world, we wouldn't accept its use, and would just create another currency with identical properties. If you owned…
That's a rather theoretical argument. If you were the sole owner of the world's land, then people would probably resort to kill or capture you to redistribute the land.
Re: Bitcoin becomes Legal Tender in El Salvador
#95Earlier quoted context omitted.
As long as BTC transfers between custodians are possible, that should be quite small problem. There might be winner in terms of liquidity and volume, but because anyone can quite easily fire up custodian service, there should be also plenty of competition.
So we have basically invented... banks, but with bitcoins?
The full circle
Re: Bitcoin becomes Legal Tender in El Salvador
#96Earlier quoted context omitted.
Forget Lightning— Did you know you can transfer Bitcoin from one user to another on Coinbase with zero transaction fees instantly? Any exchange can do the same. Centralized layer two scales just fine for many use cases and is working today.
This is the dumbest thing I've ever read. So you designed a system that sacrifices everything to achieve trustlessness, and then you immediately reintroduce a centralised trusted entity. You can't make this shit up. I'm so glad I left the crypto community in 2014, it's become completely deranged.
I think the parent poster was being somewhat self-aware and tongue-in-cheek. They're not saying centralization is the ideal; just that it exists and works well.
Re: Bitcoin becomes Legal Tender in El Salvador
#97Earlier quoted context omitted.
Once you have BTC you can choose to store it outside of a bank as a non-inflationary asset. No one can remove it from your wallet.
I can do that with gold. Gold is less volatile, and the value of the volume of a €2 coin in gold is 9 months of El Salvador nominal GDP per capita. Or the gold could be stored elsewhere and accessed via an app, with exactly the sort of database every bank already uses. Either way, BTC adds nothing. Apps might, depending on the banking infrastructure, but BTC itself? Nada.
This is a new unit of measure! Now I need to know my monthly salary in eurocent volume of gold.
Re: Bitcoin becomes Legal Tender in El Salvador
#98Earlier quoted context omitted.
> What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero? For me the easiest way to determine if something has intrinsic value is ask yourself what would happen if you owned all of it (and couldn't be forced to give it up). If you owned all the Bitcoin in the world, we wouldn't accept its use, and would just create another currency with identical properties. If you owned…
> If you owned all the Bitcoin in the world, the world wouldn't accept its use, and would just create another currency with identical properties. Don’t all modern currencies work like this?
Yes, they do. It's literally the definition of fiat money that it has no intrinsic value.
Re: Bitcoin becomes Legal Tender in El Salvador
#99Earlier quoted context omitted.
As long as BTC transfers between custodians are possible, that should be quite small problem. There might be winner in terms of liquidity and volume, but because anyone can quite easily fire up custodian service, there should be also plenty of competition.
So we have basically invented... banks, but with bitcoins?
With Bitcoin, I don't have to keep my savings in the bank even if I choose to use a bank for other services. As someone whose had their bank account frozen before, this is of great value to me.
I could use banks or Lightning like a checking account, while keeping the majority of my savings under my control.
Re: Bitcoin becomes Legal Tender in El Salvador
#100Earlier quoted context omitted.
Forget Lightning— Did you know you can transfer Bitcoin from one user to another on Coinbase with zero transaction fees instantly? Any exchange can do the same. Centralized layer two scales just fine for many use cases and is working today.
But then why use Bitcoin if you're going to use what is essentially a bank?
The only other legal tender in El Salvador is the US Dollar. If, for any reason, you have qualms about the US financial system, especially as someone foreign to the US with little priority in its decision making processes, it might be desirable to opt for a different currency. Is BTC the right currency for their government to bend to that purpose? I guess we'll find out.