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Bitcoin’s first day as El Salvador’s legal tender

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Re: Bitcoin’s first day as El Salvador’s legal tender

#91

Post by q1w2 »

bufferoverflow wrote: post #68
grey-area wrote: post #26

Earlier quoted context omitted.

That’s just another reason (along with all the others) it should never be imposed as a currency, particularly in a country with lots of people living near the poverty line. Imagine leaving home not sure if you can afford the bus ride to work or food to eat because of volatility.

I agree that people shouldn't be forced to use any currency, and should be able to choose freely. The reality is, most countries force you to use the currency they issue. The worse reality is, all of them are inflationary by design. Cryptocurrencies give you a deflationary option. Don't like it? Don't use it. I think cryptocurrencies are the future, and we will see more and more stores accepting them, and the convers…

A small amount of inflation (single digits per year), is a feature, not a bug. It prevents the boom-bust of people hoarding currency, and forces the currency itself to be used efficiently.

If the gov't can maintain a bond rate below that of the inflation rate, it also acts as a small tax to help fund the gov't - which also isn't a bad thing.

Not that any of this matters at the moment, because the real limitation of cryptocurrencies is the tiny transaction throughput.

Re: Bitcoin’s first day as El Salvador’s legal tender

#92

Post by q1w2 »

wolframhempel wrote: post #7

I appreciate this has been debated extensively already - but while crypto currency (especially stable coins) can be a worthwhile alternative to fiat money, bitcoin really isn't. A significant crash or surge happens every couple of weeks.

One day, some crypto somewhere will figure out a way to implement a distributed mechanism to dynamically adjust the money supply to maintain a reasonable 0.5%-1% inflation rate per year.

Re: Bitcoin’s first day as El Salvador’s legal tender

#93

Post by q1w2 »

nuclearnice1 wrote: post #22
j_barbossa wrote: post #4

One argument critics bring in I don't understand is that Bitcoin is too volatile to be a currency. If a zoned market solely accept Bitcoin and a good costs say 1 BTC, why does it matter if the BTC-to-USD price is increasing or decreasing? For the zoned market it's still 1 BTC for said good.

I think it has to do with the connections to other currencies. If you sell something priced in Bitcoin, that you acquire in dollars, you’re exposed to that volatility. Say you sell gold retail. You collect Bitcoin. Then turn around and need dollars for buying more gold. Same situation for any import really. It also applies to debt. If your debt is denominated in dollars and you’ve been collecting and saving Bitcoin w…

Exactly. If I am from Turkey, earn a Turkish Lira for salary, and pay for stuff locally in Turkish Lira, you might be tempted to think that currency exchange moves don't impact me.

That would be very very wrong, and one trip to any store would immediately wake you from that fantasy.

Supply chains are global. Local prices are based on the GLOBAL costs and global exchange rates.

Stability is critical. A small business will die with Bitcoin level volatility. Their margins might be 5%. A 15% shift in prices will drive them bankrupt in a day.

Re: Bitcoin’s first day as El Salvador’s legal tender

#94

Post by WalterSear »

jdhn wrote: post #15

Pretty interesting how the day that it become legal tender in a country, the price goes down by 10%. The more conspiracy minded would say that this was done on purpose to convince people not to use it.

It was done to cream leveraged punters who thought it would be a sure thing.

Re: Bitcoin’s first day as El Salvador’s legal tender

#95

Post by qecez »

UncleMeat wrote: post #78
seanw444 wrote: post #74

Earlier quoted context omitted.

Isn't this the reason for the Lightning network layer?

It is. There are some people who believe that lightning causes a "worst of both worlds" situation where you are reliant on intermediate processors for everything and the network still emits gobs of CO2.

This is wrong. Lightning Network transactions are 100% non-custodial.

Re: Bitcoin’s first day as El Salvador’s legal tender

#96

Post by qecez »

frays wrote: post #63
dustintrex wrote: post #3

Unfortunate wording in the title. The price of Bitcoin "crashed" as in plummeted, and the Chivo wallet system they're trying to use in El Salvador "crashed" as in went offline. The Bitcoin network, of course, chugged merrily along, at its usual 4 or so txns/second.

Is it still 4 txns/second even with the Lightning network?

LN blows away legacy payment rails by many orders of magnitude - you can do hundreds of millions of transactions per second, today.

Re: Bitcoin’s first day as El Salvador’s legal tender

#97

Post by qecez »

mort96 wrote: post #71
frays wrote: post #63

Earlier quoted context omitted.

Is it still 4 txns/second even with the Lightning network?

4 transactions per second is for the main chain, not side-chains. Nobody uses side-chains, so I don't think their capacity is the interesting number.

> Nobody uses side-chains...

I use LN every day. Also, have you heard the El Salvador news?

This is just active, malicious disinformation - why are you doing this?

Re: Bitcoin’s first day as El Salvador’s legal tender

#99

Post by nextlevelwizard »

ninetenfour wrote: post #81
nextlevelwizard wrote: post #77

Earlier quoted context omitted.

I am not advocate for Bitcoin, but I assume prices in BTC would raise with inflation like any other currency

BTC is designed to be highly limited in supply and thus all prices denominated in BTC should drop over time by design of the currency. Everything else in society, if it was all on BTC, would do similarly. Basically your salary this year should be smaller than it was last year but your buying power should be similar. This encourages people to hold BTC because its relative value increases over time. Thus BTC by being d…

The thing is that to be actual currency BTC can not be limited forever. Think about it for a moment. Every year BTC gets stolen and will continue to be stolen and it will only increase if it was "the world currency" thus limiting the supply ever more. Then people hoarding it will die and passwords to their wallets will be regularly forgotten again limiting the supply sooner or later we will be at a point where even 1 satoshi is so valuable you can not use it for daily purchases.

This scheme also effectively fucks over the future generations since older generations had the opportunity to hoard wealth while they were earning couple BTCs each month, but then future generations will be only earning couple hundred satoshis. If you think property prices are now out of hand just think what happens when about half the population has effectively millions of dollars in inheritance. If your parents fucked up and didn't leave you any of the family fortune you are just screwed with no way to recover. Or if they died in an accident and their bitcoin wallets were now locked forever.

Re: Bitcoin’s first day as El Salvador’s legal tender

#100

Post by deadfish »

grey-area wrote: post #86
bufferoverflow wrote: post #68

Earlier quoted context omitted.

I agree that people shouldn't be forced to use any currency, and should be able to choose freely. The reality is, most countries force you to use the currency they issue. The worse reality is, all of them are inflationary by design. Cryptocurrencies give you a deflationary option. Don't like it? Don't use it. I think cryptocurrencies are the future, and we will see more and more stores accepting them, and the convers…

As a retailer why would you accept payment in a currency with this sort of daily volatility of 10%, which doesn’t even have instant confirmation (!!??), has slow transactions, no rollback, no fraud detection or insurance and has high fees? As a customer why would you make payment in a currency with high fees, poor ux, slow transactions and just enough anonymity to make it perfect for scammers? As a payment processor…

Not that I don't agree with a lot of what you are saying, but I think despite being digital crypto is a lot more like cash than card payments. But cash also has 'no rollback, no fraud detection or insurance'. At least you are don't have the risk of counterfeit notes.
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