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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#901

Post by npoc »

lxgr wrote: post #807
oneeyedpigeon wrote: post #664

Earlier quoted context omitted.

A house in 5-10 years is nice, but it doesn't stop me from starving to death today.

That's exactly the problem: People will (rationally!) limit their spending to bare necessities if they expect the currency they have on hand to strongly appreciate over time.

Imagine that, having the option of saving your money for things you really want instead of being forced to spend it on things you don't, or risk lending it out for essentially free to compensate for the continuous fall in value.

Re: El Salvador abandons Bitcoin as legal tender

#902

Post by npoc »

troupo wrote: post #762
oneeyedpigeon wrote: post #752

Earlier quoted context omitted.

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

And yet, en masse Bitcoin is used as speculative investment, not money.

All investments are speculative.

Re: El Salvador abandons Bitcoin as legal tender

#903

Post by npoc »

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.

Who cares? The "economy" is just people buying and selling things. If they choose not to and save instead, that's great. It's called freedom.

It's like saying - "if we have some money that keeps going up in value, we won't need to work anymore and unemployment figures will go up - that's terrible - we must not allow it to happen!"

Re: El Salvador abandons Bitcoin as legal tender

#904

Post by npoc »

llamaimperative wrote: post #876
floydnoel wrote: post #873

Earlier quoted context omitted.

it isn't the opposite, it is the same. many people are confused about money though, so understandable that you had trouble relating them. how could panics be what I'm talking about? we are talking about price levels, or I'm trying to at least.

The glorious periods of deflation that you're glamorizing are referred to in the historical record as panics and depressions. Because they were very unenjoyable.

It's of course not that bankers put this spin on it to give them an excuse to continuously print money (all the money in fact) out of thin air and charge interest on it.

Remind me, why is the target inflation rate 2-3% again? It couldn't be that it's the amount of money creation they can get away with without devaluing the currency so much that it destabilises into hyperinflation could it?

I'm just having fun - I'm sure I'm completely wrong

Re: El Salvador abandons Bitcoin as legal tender

#905

Post by npoc »

toenail wrote: post #778
yieldcrv wrote: post #723

Earlier quoted context omitted.

thanks! yes I mean to check on bitcoin after major network upgrades like Taproot. okay that article was last updated 10 months, how is that panning out with standardized protocols and wallet integration and issuance? I’m curious where the communities about this are, or are nowadays

I personally have no need for "stable" assets, so I don't know more than that they exist.

Same here. I'd rather hold and use an asset that unstably increases in value greatly over time, than one which continuously goes down in value to 0 (all fiat currencies go to zero eventually)

Re: El Salvador abandons Bitcoin as legal tender

#906

Post by cco »

kragen wrote: post #676
cco wrote: post #653

Earlier quoted context omitted.

> But not, for example, Ireland in the 01840s and 01850s; that was neither, being colonialist and agricultural. England was a capitalistic economy in the 1850s, no?

Yes, and England was at that time and for almost another century causing famines in its colonies abroad by preventing them from becoming either capitalist or liberal. Ireland didn't even get the worst of it; India suffered much worse under the English yoke.

Agreed. So it sounds like capitalistic economies can cause famines?

Re: El Salvador abandons Bitcoin as legal tender

#907

Post by derangedHorse »

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.

That 'LOL' comes across as very arrogant for someone who seems to have a tentative grasp at best on what they're commenting on. We have already experienced stagflation which runs counter to a lot of Keynesian ideas about inflation. It turns out it doesn't always encourage spending and employment. Similarly there is no evidence deflation will lead to stagnation of productivity[1]. People will always want to spend more than is needed for survival and doing so in a deflationary environment makes people think harder on how money is spent.

[1] Read this for a more comprehensive view of deflation from an economist who lived through it: https://www.amazon.com/Economic-Changes-Production-Distribut...

Re: El Salvador abandons Bitcoin as legal tender

#908

Post by derangedHorse »

motorest wrote: post #883
zhoujianfu wrote: post #754

Earlier quoted context omitted.

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?

> Not arguing too hard but people do have to spend some money to live regardless… This isn't about a decision to buy bread and milk for your breakfast. It's about the decision on whether you invest in a grocery store vs let your money sit in a bank. If doing nothing is more profitable than doing something then society as a whole will gravitate towards generating no economic activity. This has disastrous consequences…

> If doing nothing is more profitable than doing something then society as a whole will gravitate towards generating no economic activity.

You're operating off a false premise. Do you think all economic activity would be less profitable than the interest rate offered by deflation?

The whole point of investing in any business is to make a return. Giving businesses competition in the form of deflationary currencies will not eradicate businesses from being formed, and there's no evidence to suggest these businesses will be less profitable than holding a deflationary currency.

We see this in various cryptocurrencies claiming to be deflationary with the concept of 'yield', which shows investing to be a function of their wealth, interest, and expectation of return. Inflation does not need to be in the equation for this type of development.

Re: El Salvador abandons Bitcoin as legal tender

#909

Post by derangedHorse »

dragonwriter wrote: post #411
roenxi wrote: post #378

Earlier quoted context omitted.

If I could convince someone to give me 1.x billion to change my behaviour, I would consider that behaviour a massive success without much further thought. It isn't a huge amount of money at the scale of a national economy but >$1 billion for nothing is a win. Although of course it is unknowable how much of that money was bribe and how much El Salvador would have gotten without additional leverage.

> If I could convince someone to give me 1.x billion to change my behaviour I think you need to refresh your understanding of the difference between a loan and a gift; it wasn't an incentive to change the behavior, it was a loan to deal with the problems caused by the behavior.

> it wasn't an incentive to change the behavior, it was a loan to deal with the problems caused by the behavior.

You are both incorrect in different ways. Bitcoin as legal tender in El Salvador was not a well-adopted initiative and thus they were okay with axing it. The loan was not to deal with the problems of their behavior, but to push more important things in El Salvador's agenda.

Re: El Salvador abandons Bitcoin as legal tender

#910

Post by llamaimperative »

npoc wrote: post #904
llamaimperative wrote: post #876

Earlier quoted context omitted.

The glorious periods of deflation that you're glamorizing are referred to in the historical record as panics and depressions. Because they were very unenjoyable.

It's of course not that bankers put this spin on it to give them an excuse to continuously print money (all the money in fact) out of thin air and charge interest on it. Remind me, why is the target inflation rate 2-3% again? It couldn't be that it's the amount of money creation they can get away with without devaluing the currency so much that it destabilises into hyperinflation could it? I'm just having fun - I'm s…

> Remind me, why is the target inflation rate 2-3% again?

Because empirically it seems to yield a pretty sustainable mixture of consumption, investment, and savings, while also not risking a wage-price spiral.

You tell me what the target inflation rate should be and point to some moments in history informing that target so I can go read about them.

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