One year on, El Salvador’s Bitcoin experiment has proven a failure
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One year on, El Salvador’s Bitcoin experiment has proven a failure
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Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#2Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic.
If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#3I principly agree on all criticisms, especially the seemingly reckless investment.
However, the presupposed lack of adoption of Bitcoin as a means of payment is not supported by the source bar chart. The numbers are actually pretty impressive compared to card: ~25% of businesses accept card and 20% accept Bitcoin as payment. That is impressive adoption after 1 year by any standard in a country that primarily uses cash.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#4Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
> I'm sure the adoption would be higher
Adoption for what purpose though?
If you're not keeping a substantial "float" in the currency, you have to buy more every time you want to use it. So you've just inserted an extra, riskier step into your ecommerce or international wire transfer.
Within El Salvador, the policy behaves like dollarisation with all its advantages and disadvantages, with an extra disadvantage that the currency has fallen by a third against the dollar.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#5I principly agree on all criticisms, especially the seemingly reckless investment. However, the presupposed lack of adoption of Bitcoin as a means of payment is not supported by the source bar chart. The numbers are actually pretty impressive compared to card: ~25% of businesses accept card and 20% accept Bitcoin as payment. That is impressive adoption after 1 year by any standard in a country that primarily uses cas…
The businesses in question are not required to accept cards. However, they are legally required to accept Bitcoin. Given that, it is pretty low.
From the article:
> But Bukele wanted more. Making bitcoins legal tender meant a payee had to accept them. As the 2021 legislation stated, “every economic agent must accept Bitcoin as payment when offered to him by whoever acquires a good or service”.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#6Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
My best guess at why the average person is hesitant to use bitcoin as a primary currency is: where do I go when it goes wrong? If the system holding my money is hacked, or I get scammed in some way, where is my legal recourse? Legal recourse is typically something provided by a state. But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency. I'm not up to scratch on the details in El Salvador, so curious to know whether they have solved this issue.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#7Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
> If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher
Interestingly, that is also the analysis that most central banks make. Their monetary policy sets a positive target inflation rate for this exact goal.
However, that monetary policy is often a large part of why people use Bitcoin.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#8Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
> If there was some crypto without any incentives of hodling long term
There are some that strongly discourage speculation by having a purely linear emission, which after n years still has a yearly supply inflation of 1/n and takes a whole century to get down to 1%. Offering the same rewards to later generations helps avoid concentration of wealth that most cryptocurrencies, especially premined ones, suffer from.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#9Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
> If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher Interestingly, that is also the analysis that most central banks make. Their monetary policy sets a positive target inflation rate for this exact goal. However, that monetary policy is often a large part of why people use Bitcoin.
Should do what Switzerland has been trying to do. Negative interest rates to punish those who are hodl the Swiss Franc.
Re: One year on, El Salvador’s Bitcoin experiment has proven a failure
#10Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic. If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
My best guess at why the average person is hesitant to use bitcoin as a primary currency is: where do I go when it goes wrong? If the system holding my money is hacked, or I get scammed in some way, where is my legal recourse? Legal recourse is typically something provided by a state. But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency. I'm not up to scratch on the…
> If the system holding my money is hacked
We the hodlers believe that Bitcoin can be hacked only by hacking cryptografic hash-functions, which will lead to collapse all the banks, all passwords on all websites, maybe some data structures like hash-maps.
> or I get scammed in some way, where is my legal recourse?
How will you get scammed if you have a backup which you promise to yourself to not even introduce to computer with online? Also nobody recommends you to hold all your wealth in crypto. Some metals work not bad also, my favorite example is copper.
> But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency.
Let me guess, you have not read / have to reread the bitcoin.org/bitcoin.pdf whitepaper?