El Salvador’s Experiment with Bitcoin as Legal Tender(nber.org)
nber.org
El Salvador’s Experiment with Bitcoin as Legal Tender
https://www.nber.org/digest-202207/el-salvadors-experiment-bitcoin-legal-tender
135 comments
Imagine you are super busy working all the time living in a country with a high amount of corruption. The government says "Here's some free """money""" just get this app and sign up".
Maybe you could take the time to research it but let's be honest, how the blockchain works is complicated to lay people. Also the history of coin is littered with scams, maybe different coins than btc but still.
You under estimate the fear the masses have of having the rug pulled from under them, especially when some are just trying to survive
Maybe you could take the time to research it but let's be honest, how the blockchain works is complicated to lay people. Also the history of coin is littered with scams, maybe different coins than btc but still.
You under estimate the fear the masses have of having the rug pulled from under them, especially when some are just trying to survive
> according to this article, 22% of el salvadorians knew about this app and didn't download it
Is it really surprising that Bitcoin isn't widely adopted in El Salvador in just 1 year?
Bitcoin has been in existence for just 13 years. Even very smart, technically minded people in economically prosperous nations who heard about Bitcoin over a decade ago barely understand the full implications of cryptocurrencies yet, to say nothing of poorer and often uneducated people in a country with some corruption and untrustworthy institutions.
Nobody can perfectly predict the future, but the story might be radically different down the road.
Is it really surprising that Bitcoin isn't widely adopted in El Salvador in just 1 year?
Bitcoin has been in existence for just 13 years. Even very smart, technically minded people in economically prosperous nations who heard about Bitcoin over a decade ago barely understand the full implications of cryptocurrencies yet, to say nothing of poorer and often uneducated people in a country with some corruption and untrustworthy institutions.
Nobody can perfectly predict the future, but the story might be radically different down the road.
Bitcoin has failed. It doesn't scale as a currency and its not a store of value. The cost of mining is simply too expensive and as an ecosystem its hemorrhaging a billion dollars a month. What's the net present value of an asset that loses a billion dollars a month, forever?
Short it and gain free money if you’re that confident.
Shorting a manipulated market is a fool's game.
Example: https://www.theblock.co/post/156031/uprise-lost-99-of-client...
> However, the system could not prevent the firm from being liquidated out of its LUNA futures trading position and losing 26.7 billion won ($20 million) in the process. This happened during Luna's price crash. It was reportedly shorting Luna — while its price plummeted — but got caught out during sudden price pumps along the way.
> The lost funds represent about 99% of the funds that Uprise was managing on behalf of its customers. These clients are high-net-worth individuals and corporate entities, according to the report. Uprise also reportedly lost $3 million of its own funds short trading LUNA.
They were absolutely correct about LUNA, and still got wrecked. Bart (https://www.newsbtc.com/news/bitcoin-price-bart-simpson-char...) will murder you.
Example: https://www.theblock.co/post/156031/uprise-lost-99-of-client...
> However, the system could not prevent the firm from being liquidated out of its LUNA futures trading position and losing 26.7 billion won ($20 million) in the process. This happened during Luna's price crash. It was reportedly shorting Luna — while its price plummeted — but got caught out during sudden price pumps along the way.
> The lost funds represent about 99% of the funds that Uprise was managing on behalf of its customers. These clients are high-net-worth individuals and corporate entities, according to the report. Uprise also reportedly lost $3 million of its own funds short trading LUNA.
They were absolutely correct about LUNA, and still got wrecked. Bart (https://www.newsbtc.com/news/bitcoin-price-bart-simpson-char...) will murder you.
If "head and shoulders" wasnt enough, now theres a name for an asset that fluctuates in a stable horizontal pattern?
> Bitcoin has been in existence for just 13 years.
Yeah, imagine how small the adoption would be of some other mysterious newfangled tech thing after only 13 years...
https://www.theverge.com/2015/4/27/8504033/apple-iphone-sale...
Yeah, imagine how small the adoption would be of some other mysterious newfangled tech thing after only 13 years...
https://www.theverge.com/2015/4/27/8504033/apple-iphone-sale...
Wireless communication was invented in like 1900 and it took til 2007 to make a desirable device everyone wanted to have, good point
Why stop by comparing it all wireless communication? Why don't you compare it to the act of speaking, or the act of making noise with a mouth? Then it took the iPhone millions of years to take off, so bitcoin has plenty of time.
Pretty sure radio and television were ubiquitous a few decades before that.
It would have been nice to see the prevalence of those reasons for not downloading the app. Regardless, the article indicates that 1/3 of residents didn't have the required technology (mobile phone with internet access):
> Residents didn’t need a bank account or a credit card to make transactions, only a mobile phone with internet access, something two-thirds of residents had.
> Residents didn’t need a bank account or a credit card to make transactions, only a mobile phone with internet access, something two-thirds of residents had.
Random banks in the USA offer way more than that (ranging from $200-$1500) to open checking accounts and credit cards, yet 300+ million people aren't jumping on the opportunity for free money. For most it just isn't worth the trouble, especially when you don't know what the hidden catch is.
You usually have to meet certain conditions (like maintaining certain balance) that most people don't want or can't do.
Assuming good intent on the part of Bukele, I tend to imagine that he wants to get the ball rolling on Bitcoin now so that his country can get ahead of the curve assuming bitcoin becomes more popular globally in the future.
Bukele is an autocrat and it is more likely he will use bitcoin's transferability to steal the funds. He's literally buying bitcoin with his cellphone.
> the top reason was a preference for using cash
With electronic transaction - and especially bitcoin - the government knows what goes in and out since every transaction is traceable. And with that info, they will be able to properly tax you ! The goal of El Salvador here is to fight rampant tax evasion by providing a fully traceable payment system. Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction and bartering.
With electronic transaction - and especially bitcoin - the government knows what goes in and out since every transaction is traceable. And with that info, they will be able to properly tax you ! The goal of El Salvador here is to fight rampant tax evasion by providing a fully traceable payment system. Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction and bartering.
> Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction
El Salvador tracks cash transactions.
El Salvador tracks cash transactions.
Surely you mean _large_ cash transactions. If not, could you explain how this works?
> Surely you mean _large_ cash transactions. If not, could you explain how this works?
Originally, like everywhere, only large transactions were registered.
But in the mid 2010s some laws and regulations were updated then interpreted in a way that required businesses to start registering transactions in in a more detailed way.
So for some years every purchase over US$ 100 has required an ID. in practice the threshold is lower though.
For example in banking transactions even depositing a one cent coin is linked to an ID card. Previously the threshold was $500.
Utility companies do something similar too, like registering not only the account holder name, but also the ID and name of the person who pays the utility bill for any amount. So paying a $2 water bill with coins requires and ID.
A new reporting requirement was added last year, in which businesses and 'tax-contributors' are required to upload every month to the Tax Ministry a CSV containing all transactions with other tax-contributors.
So if Alice's Medical Supply Store sells $5.00 to Bob the Doctor, the Tax Ministry will expect Alice to report in an individualized way the sale to Bob, and to Bob to report the purchase to Alice. Including their IDs, amounts and invoice numbers.
It is still not required to report the ID of sales to 'final consumers', but the change is just one CSV column away from happening.
Originally, like everywhere, only large transactions were registered.
But in the mid 2010s some laws and regulations were updated then interpreted in a way that required businesses to start registering transactions in in a more detailed way.
So for some years every purchase over US$ 100 has required an ID. in practice the threshold is lower though.
For example in banking transactions even depositing a one cent coin is linked to an ID card. Previously the threshold was $500.
Utility companies do something similar too, like registering not only the account holder name, but also the ID and name of the person who pays the utility bill for any amount. So paying a $2 water bill with coins requires and ID.
A new reporting requirement was added last year, in which businesses and 'tax-contributors' are required to upload every month to the Tax Ministry a CSV containing all transactions with other tax-contributors.
So if Alice's Medical Supply Store sells $5.00 to Bob the Doctor, the Tax Ministry will expect Alice to report in an individualized way the sale to Bob, and to Bob to report the purchase to Alice. Including their IDs, amounts and invoice numbers.
It is still not required to report the ID of sales to 'final consumers', but the change is just one CSV column away from happening.
> paying a $2 water bill with coins requires and ID
Well, that's pretty terrible.
Well, that's pretty terrible.
Thank you for the detailed explanation. This program sounds pretty dystopian.
It would have been interesting if the journalist went a little deeper and researched why the adoption rate was so poor.
How hard was it for a middle aged farmer to actually download and set up the app to get $30 out of it?
And to your point, how many citizens are using cash primarily because its untraceable? When people say they prefer cash, The journo should have followed up with 'why'?
I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.
How hard was it for a middle aged farmer to actually download and set up the app to get $30 out of it?
And to your point, how many citizens are using cash primarily because its untraceable? When people say they prefer cash, The journo should have followed up with 'why'?
I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.
> I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.
The government sponsored bitcoin wallet is easier to use than the banking apps.
For a normal Salvadoran most of the day to day transactions are micro transactions.
$0.25 loaf of read, $0.21 bus ticket, $1.00 groceries. For those amounts, handing a coin is faster than scanning a QR code.
The government sponsored bitcoin wallet is easier to use than the banking apps.
For a normal Salvadoran most of the day to day transactions are micro transactions.
$0.25 loaf of read, $0.21 bus ticket, $1.00 groceries. For those amounts, handing a coin is faster than scanning a QR code.
It's "free money" like cash back on your credit card is "free money". It's only free if you ignore the implicit hidden costs and risks.
Another reason could be the dependence of these Bitcoin transactions on an Internet connection. I'm not sure how Chivo works but if you need a smartphone readily connected to the Internet just to proceed with simple payments, then that's already a significant friction for most users.
It's a similar scenario here in my home country which is also considered as having a developing economy. Not a lot of people here have Bitcoin wallets but digital wallets (which are not stored in immutable ledgers) are already gaining some popularity. More than half of young adults here probably have at least one digital wallet. However, it's still not a viable substitute for cash transactions because of that Internet connection requirement barrier. And since prepaid is more popular than postpaid mobile data plans, a lot of users see it as just an unnecessary additional cost. Actually, some might even see it as less convenient as digital wallet transactions are usually riddled with QR code scan failures and sometimes, sluggish loading times.
It's a similar scenario here in my home country which is also considered as having a developing economy. Not a lot of people here have Bitcoin wallets but digital wallets (which are not stored in immutable ledgers) are already gaining some popularity. More than half of young adults here probably have at least one digital wallet. However, it's still not a viable substitute for cash transactions because of that Internet connection requirement barrier. And since prepaid is more popular than postpaid mobile data plans, a lot of users see it as just an unnecessary additional cost. Actually, some might even see it as less convenient as digital wallet transactions are usually riddled with QR code scan failures and sometimes, sluggish loading times.
> Another reason could be the dependence of these Bitcoin transactions on an Internet connection. I'm not sure how Chivo works but if you need a smartphone readily connected to the Internet just to proceed with simple payments, then that's already a significant friction for most users.
This is an important factor. The Chivo app was initially zero-rated (requiring no data plan to use) but this lasted only some months. Now it won't work without wi-fi or data.
This is an important factor. The Chivo app was initially zero-rated (requiring no data plan to use) but this lasted only some months. Now it won't work without wi-fi or data.
> 1) free conversion from btc to usd 2) large discounts for purchases of gasoline using btc 3) no bank account or a credit card needed
I mean... if I'm paying for my gas, I'd rather just put my card in the chip reader instead of getting out my phone/hardware wallet, preparing a transaction with the proper amount of Bitcoin, introducing the transaction to the gas pump, waiting for the transaction to register with the ledger and then leaving. Even if we're talking about a 20% discount here, I'd probably just stick with the debit card. Playing with a crypto wallet was fun for larping as a hacker when I was in middle school, but nowadays I don't think it's worth the trouble (much less the shitshow that is L2 chains).
I mean... if I'm paying for my gas, I'd rather just put my card in the chip reader instead of getting out my phone/hardware wallet, preparing a transaction with the proper amount of Bitcoin, introducing the transaction to the gas pump, waiting for the transaction to register with the ledger and then leaving. Even if we're talking about a 20% discount here, I'd probably just stick with the debit card. Playing with a crypto wallet was fun for larping as a hacker when I was in middle school, but nowadays I don't think it's worth the trouble (much less the shitshow that is L2 chains).
From the article
> In theory, developing nations like El Salvador are ideal candidates for cryptocurrency adoption. More than half its citizens rely exclusively on cash, rather than credit or debit cards. Some 70 percent of households have no bank account and nearly 90 percent do not use mobile banking. A digital payment platform could be a way to make the economy more inclusive and accessible.
> In theory, developing nations like El Salvador are ideal candidates for cryptocurrency adoption. More than half its citizens rely exclusively on cash, rather than credit or debit cards. Some 70 percent of households have no bank account and nearly 90 percent do not use mobile banking. A digital payment platform could be a way to make the economy more inclusive and accessible.
That makes no sense. People are already "in" the economy. The economy has worked so far and will continue to do so without bitcoin.
That's because you have the privilege to not care. There are people who spend their days scraping parks for bottles and cans to make $0.05 at a time.
Apparently even people without privledge don't really care either, though. Given the option to use cryptocurrency for lower-priced goods, the majority of their country is sticking with traditional payment methods, probably for convenience/familiarity purposes.
Why do you say "probably," do you know? I would guess that it has more to do with technological literacy.
People put effort into saving small amounts all the time, like cutting coupons or going to the cheaper store further down the road. But these things are understandable; using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.
People put effort into saving small amounts all the time, like cutting coupons or going to the cheaper store further down the road. But these things are understandable; using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.
> I would guess that it has more to do with technological literacy.
Which is why I added the "familiarity" qualifier. Pretty much anyone can barter with cash, and I've watched 7-year-olds buy ice cream with a Visa card. Initiating a Bitcoin transaction though? That requires some setup, even moreso if you have a 'proper' self-custody wallet that you manage yourself.
> using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.
I agree, I'm afraid you may have misread my sentiment. It's not that there's no motivation to use Bitcoin, the government subsidies are a pretty clear and obvious shot at luring less-fortunate citizens into the world of crypto. My larger point is that the low adoption among their population makes perfect sense to me. Even in a country with maximum digital literacy, I doubt most people would feel motivated to use crypto either.
Which is why I added the "familiarity" qualifier. Pretty much anyone can barter with cash, and I've watched 7-year-olds buy ice cream with a Visa card. Initiating a Bitcoin transaction though? That requires some setup, even moreso if you have a 'proper' self-custody wallet that you manage yourself.
> using a crypto wallet in a place where most people don't have a history of smartphone use isn't really the same thing.
I agree, I'm afraid you may have misread my sentiment. It's not that there's no motivation to use Bitcoin, the government subsidies are a pretty clear and obvious shot at luring less-fortunate citizens into the world of crypto. My larger point is that the low adoption among their population makes perfect sense to me. Even in a country with maximum digital literacy, I doubt most people would feel motivated to use crypto either.
> Even in a country with maximum digital literacy, I doubt most people would feel motivated to use crypto either.
Not sure we understand each other with this part. I'm arguing that it's about literacy, you're saying people just aren't interested. I think we just disagree.
Not sure we understand each other with this part. I'm arguing that it's about literacy, you're saying people just aren't interested. I think we just disagree.
Here we are talking about people that do not have bank accounts never mind cards though.
I think there is a deeper issue for not even trying it/getting free money -- which of course are used to acquire users here pretty aggressively.
I think there is a deeper issue for not even trying it/getting free money -- which of course are used to acquire users here pretty aggressively.
Maybe because cryptocurrency doesn't solve the more pressing issues in the country?
Because it's hard to scam poor people - they are guarding their money like offspring.
To them, that pocket change gift probably seems like more of a loan, they are expected to pay back with loyalty to the platform.
To them, that pocket change gift probably seems like more of a loan, they are expected to pay back with loyalty to the platform.
Here in Japan you can get a free 20K JPY in your cashless payment method of choice, pretty much just by registering your details. Most people aren't bothering.
So zero people in the town used it, but your gut blames the older folks. Is that town only made of older folks?
[deleted]
One experiment I've wanted to try, and would if I were more confident in my Spanish, is to just call 20 random businesses in El Salvador and ask them if I could pay in bitcoin. I've wondered how much of this is a publicity stunt versus real "Bitcoin is their currency" thing.
"Although the law requires all firms to accept bitcoin, in reality only 20 percent do so. Roughly 5 percent of all sales have been paid in bitcoin through Chivo Wallet, and just as most households using Chivo prefer to keep their money in cash rather than in bitcoin, 88 percent of firms convert their bitcoin into dollars."
20 percent of firms actually accepting bitcoin and 5 percent of all sales is actually much higher than I expected. If these numbers continue to grow that would be the first bit of evidence I've seen that makes me feel positive about crypto's future.
I'd also be curious to know where the bitcoin transactions are concentrated. I assume it's not a random 20% of firms and 5% of transactions. Is it crypto-tourists and resorts? Poor people who would see the most relative-incentive to adopt because of the 30 dollar bonus? Families with members working in other countries?
"Although the law requires all firms to accept bitcoin, in reality only 20 percent do so. Roughly 5 percent of all sales have been paid in bitcoin through Chivo Wallet, and just as most households using Chivo prefer to keep their money in cash rather than in bitcoin, 88 percent of firms convert their bitcoin into dollars."
20 percent of firms actually accepting bitcoin and 5 percent of all sales is actually much higher than I expected. If these numbers continue to grow that would be the first bit of evidence I've seen that makes me feel positive about crypto's future.
I'd also be curious to know where the bitcoin transactions are concentrated. I assume it's not a random 20% of firms and 5% of transactions. Is it crypto-tourists and resorts? Poor people who would see the most relative-incentive to adopt because of the 30 dollar bonus? Families with members working in other countries?
There have been a couple videos of folks walking around doing just that.
The participation rate was not very high. It was hard to find anyone who said yes.
People seemed to know what they’re asking but they just say no and move on… not even any effort to say something like “I do take cash” … just a hard no.
The participation rate was not very high. It was hard to find anyone who said yes.
People seemed to know what they’re asking but they just say no and move on… not even any effort to say something like “I do take cash” … just a hard no.
I never really understood what incentive a government had to recognize bitcoin as legal tender. There are no real benefits over something like UPI in terms of user UX. It takes things out of the government's hands, as it's harder to print money.
El Salvador is a USD-based economy and does not have their own currency. This means they're at the whims of the US Federal Reserve, which they have representation with. And any USD reserves that are abroad can be seized by the US, as Afghanistan ($7B seized) and Russia ($300B seized) learned recently.
Bukele is promoting BTC as a way to attract talent and capital, and also to modernize El Salvador's economy. Similar to how Africa skipped landlines and jumped right to mobile phones. It remains to be seen how effective that part is. But, either way, it gives El Salvador some more independence from the US and sovereignty in a world where alliances are shifting fast.
Bukele is promoting BTC as a way to attract talent and capital, and also to modernize El Salvador's economy. Similar to how Africa skipped landlines and jumped right to mobile phones. It remains to be seen how effective that part is. But, either way, it gives El Salvador some more independence from the US and sovereignty in a world where alliances are shifting fast.
> And any USD reserves that are abroad can be seized by the US
That doesn't have anything to do with USD. Any reserves (or really any asset) that is outside the country's jurisdiction can be seized by a foreign one. El Salvador could as easily lose all their Bitcoin reserves if they held them in a Coinbase wallet, for example.
That doesn't have anything to do with USD. Any reserves (or really any asset) that is outside the country's jurisdiction can be seized by a foreign one. El Salvador could as easily lose all their Bitcoin reserves if they held them in a Coinbase wallet, for example.
It absolutely does have to do with USD. Other than actual physical dollar bills, which do not scale and are not practical to use for long-distance international transactions, the only form that real redeemable USD can exist in is deposits with the Fed which can be seized by the US. This is a fundamental property of using the US dollar as your country's currency.
> absolutely does have to do with USD
Comment you're responding to is saying this is not unique to U.S. dollars. All currencies are controlled by their issuing sovereigns.
Separately, the idea that Bitcoin is unsanctionable is laughable. It may require enabling legislation. But marking wallets as sanctioned, and threatening any wallets that transact with it to be either similarly sanctioned or subject to heightened scrutiny, would diminish the value of those coins relative to coins which can be freely traded with anyone. Given the public nature of the blockchain, enforcement would likely be easier than e.g. enforcing an Iranian oil embargo.
Comment you're responding to is saying this is not unique to U.S. dollars. All currencies are controlled by their issuing sovereigns.
Separately, the idea that Bitcoin is unsanctionable is laughable. It may require enabling legislation. But marking wallets as sanctioned, and threatening any wallets that transact with it to be either similarly sanctioned or subject to heightened scrutiny, would diminish the value of those coins relative to coins which can be freely traded with anyone. Given the public nature of the blockchain, enforcement would likely be easier than e.g. enforcing an Iranian oil embargo.
> But marking wallets as sanctioned, and threatening any wallets that transact with it to be either similarly sanctioned or subject to heightened scrutiny, would diminish the value of those coins relative to coins which can be freely traded with anyone
Doesn't this already happen? Basically any bitcoin that comes out of a tumbler or any wallet address that has transacted with tumbled coins is banned on KYC exchanges: https://sethforprivacy.com/posts/fungibility-graveyard/
Doesn't this already happen? Basically any bitcoin that comes out of a tumbler or any wallet address that has transacted with tumbled coins is banned on KYC exchanges: https://sethforprivacy.com/posts/fungibility-graveyard/
It’s why it’s so important to taint and mix the history of all coins. Given enough time, eventually all UTXOs are tainted, thus nothing is tainted. Most of the supply of BTC can be linked to SR taint from early 2010s. Doesn’t matter now.
Litecoin just introduced a sidechain called (mimblewimble extension blocks) MWEB, it permits “cut-through” transactions where UTXOs can mix. It looks like a single UTXO on the main chain. Very Fungible!
Litecoin just introduced a sidechain called (mimblewimble extension blocks) MWEB, it permits “cut-through” transactions where UTXOs can mix. It looks like a single UTXO on the main chain. Very Fungible!
What if instead of normalizing money laundering you just didn't launder money?
“What it instead of normalizing privacy, you just don’t have privacy.”
The problem is one of pragmatism. All money is dirty. All great fortunes are founded on exploitation.
Every dollar in your pocket has been used for crime many times. The system works because we choose to ignore this. If we could programmatically enforce rules, the system would be fail in a day.
So it’s not about money laundering, it’s about achieving some kind of pragmatic equivalence, while permitting the system to continue to function.
The problem is one of pragmatism. All money is dirty. All great fortunes are founded on exploitation.
Every dollar in your pocket has been used for crime many times. The system works because we choose to ignore this. If we could programmatically enforce rules, the system would be fail in a day.
So it’s not about money laundering, it’s about achieving some kind of pragmatic equivalence, while permitting the system to continue to function.
I guess the problem for me is that the immediate action being normalized is just too ethically suspect. The closest analog outside of the cryptocurrency space is a crime that is generally only committed to get away with another crime. That feels categorically different from, say, normalizing using HTTPS or encrypted messenger apps.
It’s the dilemma of cryptography, in that you cannot have a secure system that doesn’t also allow bad guys to use it too. The only victim of weakening a system to fight bad guys are the good guys, as the bad guys will just use the original secure version of the protocol, etc.
My point is that eventually the major cryptocurrencies will have some fungibility enhancement mechanisms to deal with the practical limitations of taint and chain analysis. Tornado cash, Coinjoin, MW, etc. Its not about normalization of crime. It’s the default ignorant status quo.
My point is that eventually the major cryptocurrencies will have some fungibility enhancement mechanisms to deal with the practical limitations of taint and chain analysis. Tornado cash, Coinjoin, MW, etc. Its not about normalization of crime. It’s the default ignorant status quo.
> It’s the dilemma of cryptography, in that you cannot have a secure system that doesn’t also allow bad guys to use it too.
I hear similar things from the NRA about how we'd all be safer if everyone carried a concealed firearm. I just don't want the world to be a place where we all have to be armed and launder our money after every transaction.
There is always a balance that needs to be struck between privacy and accountability. Bob Woodward violated the privacy of the Nixon white house, but we generally believe the public interest there outweighs the privacy concerns at stake. I am always particularly skeptical of financial privacy maneuvers, since they are of considerably greater interest to the already rich and powerful.
I hear similar things from the NRA about how we'd all be safer if everyone carried a concealed firearm. I just don't want the world to be a place where we all have to be armed and launder our money after every transaction.
There is always a balance that needs to be struck between privacy and accountability. Bob Woodward violated the privacy of the Nixon white house, but we generally believe the public interest there outweighs the privacy concerns at stake. I am always particularly skeptical of financial privacy maneuvers, since they are of considerably greater interest to the already rich and powerful.
> as Afghanistan ($7B seized)
This is because the Taliban is a terrorist organization that captured the capitol, not a government. You don't give $7bn to al qaeda, ISIS or lashkar-e-taiba either.
You can thank Trump and Pompeo and their plan to withdraw 100% of US forces by a fixed deadline for that (removing all support for the afghan government's armed forces), and Biden for going along with the foolish plan.
This is because the Taliban is a terrorist organization that captured the capitol, not a government. You don't give $7bn to al qaeda, ISIS or lashkar-e-taiba either.
You can thank Trump and Pompeo and their plan to withdraw 100% of US forces by a fixed deadline for that (removing all support for the afghan government's armed forces), and Biden for going along with the foolish plan.
I really don't want to defend the Taliban, but the core of any government is the group that maintains a monopoly on violence in a realm.
The pre-Taliban government of Afghanistan as well as the US puppet state in 2021 failed in this core responsibility, and consequently lost the right to govern. Whether or not the Taliban will produce a stable or good government is a different question. I personally weep for those forced to live under it's rule.
It would make about as much sense to say the United States in 1783 was not a government, but a terrorist organization that attacked the rightful British government of the American colonies. The British lost the right to govern when they failed to maintain their monopoly on violence in the American colonies, and a new governmental organization formed from the ashes of the war that proved it.
The pre-Taliban government of Afghanistan as well as the US puppet state in 2021 failed in this core responsibility, and consequently lost the right to govern. Whether or not the Taliban will produce a stable or good government is a different question. I personally weep for those forced to live under it's rule.
It would make about as much sense to say the United States in 1783 was not a government, but a terrorist organization that attacked the rightful British government of the American colonies. The British lost the right to govern when they failed to maintain their monopoly on violence in the American colonies, and a new governmental organization formed from the ashes of the war that proved it.
The Taliban is not a terrorist organization. The Taliban was the government of the country of Afghanistan before we invaded it, and it is the government of the country of Afghanistan after we've left. "Terrorism" isn't a euphemism for killing US soldiers. If they're invading your country, the proper word is "patriotism."
The Taliban is both. I agree that killing invading foreign soldiers on your own soil isn't terrorism, but that's not where the Taliban stops. Plenty of attacks on their own populace over the last two decades.
While all this is true, his point still stands. The US still has the ability to seize your country's money at will.
...if you keep it in US banks (because you can't trust your own corrupt local financial system).
Almost all USD now is electronic, and control of movement of those dollars is entirely controlled by the single master node of Washington D.C.
Russia defaulted on their USD loans, not because they don't have dollars, but because the US won't allow them to pay.
Russia defaulted on their USD loans, not because they don't have dollars, but because the US won't allow them to pay.
Russia also defaulted because it can't pay (in any currency) parties that are barred by sanctions from transacting with the Russian government. It wouldn't matter if Russia were able to ship paper USD to their creditors; the creditors cannot accept that payment.
I would also blame Trump's relentless political attacks about Obama returning Iran's assets. And Biden's political cowardice after the Afghan collapse. All of it is reducing trust in US's supposed rules-based institutions. US is speedrunning through the fall of an empire
Calm down with the theatrics. Money continues to flow into the US during this current crisis because the US is still seen as the most stable place in the world. Rich people around the world wouldn't be rushing to park their money here if they thought the US was going to collapse.
[deleted]
Bukele is promoting BTC as a sort of crony capitalism/kleptocrat play. This is not a high minded “advancing society” play.
It's a patently stupid strategy over the long run though. Abandonment of ones own currency is suicide regardless of whether it's USD or Bitcoin. And clearly, Bitcoin did not help El Salvador improve it's financing situation: the Bitcoin bond they tried to push was a complete flop. Argentina has a way better model: they control their money, they've defaulted repeatedly, the currency has magically remained stable, and everyone comes back after each default.
Another massive issue is that as a currency with an inelastic supply Bitcoin price volatility is guaranteed to remain unstable. This is not a desirable feature for any currency.
Another massive issue is that as a currency with an inelastic supply Bitcoin price volatility is guaranteed to remain unstable. This is not a desirable feature for any currency.
I'm not sure why you view Argentina as a "better model". They're in the middle of (another) currency crisis right now which is causing their economy to collapse and social unrest:
https://www.wsj.com/articles/argentina-names-new-economy-min...
The annual inflation rate in Argentina is ~76%. It's basically impossible to do business in Pesos when it's devaluing so quickly. Every contract programmer in Argentina is doing business in Bitcoin or stablecoins because they would lose ~40-60% if they were paid in USD from abroad. People are stashing savings dollars (and Bitcoin) to keep it out of government hands and protect it from becoming worthless.
https://www.wsj.com/articles/argentina-names-new-economy-min...
The annual inflation rate in Argentina is ~76%. It's basically impossible to do business in Pesos when it's devaluing so quickly. Every contract programmer in Argentina is doing business in Bitcoin or stablecoins because they would lose ~40-60% if they were paid in USD from abroad. People are stashing savings dollars (and Bitcoin) to keep it out of government hands and protect it from becoming worthless.
If historically your government has breached the trust of its people from careless money printing local
currency, using a major world currency as your money is something to keep you honest.
Bitcoin is like this for all governments and currencies. It is honest true hard money that cannot be devalued by the money printers. It’s the hard money of last resort and you bet this will be more and more important as we lose trust for each other’s currency.
Bitcoin is like this for all governments and currencies. It is honest true hard money that cannot be devalued by the money printers. It’s the hard money of last resort and you bet this will be more and more important as we lose trust for each other’s currency.
The wrong (but popular) answer is to say that this is a move to break El Salvador's reliance on the USD--the USD still remains legal tender in El Salvador, and from what I can tell, there is absolutely no movement whatsoever towards things like pricing in Bitcoin in lieu of USD or other steps that would insulate El Salvador from US monetary policy.
The charitable answer I would give is that Bukele hoped to attract cryptocurrency investors with the move, perhaps to supplement existing institutional investors who haven't been happy with some of Bukele's policies.
The uncharitable answer I would give is that Bukele is trying to innovate and translate core cryptocurrency strategies of extracting money from people's pockets into extracting money from El Salvador's citizens' pockets.
The charitable answer I would give is that Bukele hoped to attract cryptocurrency investors with the move, perhaps to supplement existing institutional investors who haven't been happy with some of Bukele's policies.
The uncharitable answer I would give is that Bukele is trying to innovate and translate core cryptocurrency strategies of extracting money from people's pockets into extracting money from El Salvador's citizens' pockets.
> never really understood what incentive a government had to recognize bitcoin as legal tender
El Salvador is very corrupt, in the neighborhood of Sierra Leone and Algeria [1]. It is unclear to what degree the state has a monopoly on violence [2]. Bitcoin is a precedented dark money channel.
[1] https://www.transparency.org/en/cpi/2021/index/slv
[2] https://www.cfr.org/in-brief/why-has-gang-violence-spiked-el...
El Salvador is very corrupt, in the neighborhood of Sierra Leone and Algeria [1]. It is unclear to what degree the state has a monopoly on violence [2]. Bitcoin is a precedented dark money channel.
[1] https://www.transparency.org/en/cpi/2021/index/slv
[2] https://www.cfr.org/in-brief/why-has-gang-violence-spiked-el...
The Libertarians would argue that the government not being able to print money is the feature and can build trust in the currency
History has repeatedly shown that being able to print money is a critical tool during financial crises. No one likes their money being debased, but they like economic depressions even less.
There is a reason that nations have abandoned the gold standard.
There is a reason that nations have abandoned the gold standard.
Gold's physical characteristics tended towards centralization. Centralizing gave the institutions controlling the gold strong incentives to allow debasement of gold-backed money, as it gave those institutions handsome profits and strong political control.
History has repeated shown us that printing money in a crisis just makes it worse, eventually. Taking that away is hard, but honesty is the best policy, even if it hurts at first.
The reason we ditched the gold standard was for deviance. It’s very hard to fight wars if you can’t print the money. Ww1 ww2 Vietnam, Afghanistan, Iraq … try that on gold. Bitcoin = End of all war.
The reason we ditched the gold standard was for deviance. It’s very hard to fight wars if you can’t print the money. Ww1 ww2 Vietnam, Afghanistan, Iraq … try that on gold. Bitcoin = End of all war.
I mean most wars happened before I the World Wars. Like the overwhelming majority of wars happened on a gold standard. Bitcoin would probably make us too poor for war though.
> Bitcoin would probably make us too poor for war though.
...?
...?
Let a recession happen when we deserve one, so the depressions don't happen.
Holding back the floodgates until the problem is ready to kill everyone equally is stupid, and the opposite of a meritocracy.
Holding back the floodgates until the problem is ready to kill everyone equally is stupid, and the opposite of a meritocracy.
But you could more easily "not print money" by making the Euro or US Dollar your currency.
As people have pointed out this means that the US or wherever can print money and controls your monetary policy, but that's actually the least of the problems. Euros and US Dollars in large quantities, and digitally transferrable versions of them, can essentially only exist as numbers in databases controlled by the US and EU government respectively. So by adopting them as your country's currency, you're effectively giving them control over your money. They get to decide whether it continues to exist, whether you get to access it, whether it gets transferred to some well-connected megacorporations in those countries that bribed your former leader into a dodgy deal... In short, it gives a whole bunch of control to powerful entities who have tended to use their powers in ways that have not been good for developing countries at all.
Because then you're beholden to another country, which may be hostile to your country, and their money printer.
With Bitcoin, no one has control!
With Bitcoin, no one has control!
> With Bitcoin, no one has control!
Well, until a little over 50% of the miners decide they don't like you.
Ethereum's fork proved "no one has control" is an illusion.
Well, until a little over 50% of the miners decide they don't like you.
Ethereum's fork proved "no one has control" is an illusion.
Ethereum is not Bitcoin. Ethereum just showed the world Botcoin's unique value compared to Ethereum and the thousands of crypto projects so often conflated with Bitcoin.
The 2017 Bitcoin scaling wars proved that one can't simply change Bitcoin's consensus rules by majority control of the miners. I think at one point 80% of the miners were in favor of large blocks, yet they didn't have buy-in from the rest of the network participants (developers, regular users, merchants, exchanges).
Bitcoin has really robust decentralization.
The 2017 Bitcoin scaling wars proved that one can't simply change Bitcoin's consensus rules by majority control of the miners. I think at one point 80% of the miners were in favor of large blocks, yet they didn't have buy-in from the rest of the network participants (developers, regular users, merchants, exchanges).
Bitcoin has really robust decentralization.
Bitcoin also famously forked into BTC and BCH. And Ethereum Classic is still ticking away printing blocks. Forks are a feature, not a bug.
Forks promise an infinite, ever-growing supply of deflationary digital scarcity.
No, not at all. Bcash isn’t Bitcoin. BSV isn’t Bitcoin. Eth classic is Ether. Existence of forks has zero impact on digital scarcity.
[deleted]
Stop repeating this.
The ETH fork happened before the people on HN were even following cryptocurrency happenings.
That's how early in the project a fork was done — the project would never survive another at this stage of maturity.
And everyone knows that.
So stop repeating it?
The ETH fork happened before the people on HN were even following cryptocurrency happenings.
That's how early in the project a fork was done — the project would never survive another at this stage of maturity.
And everyone knows that.
So stop repeating it?
That’s silly. HN is where I heard about it. The collapse of the DAO got many, many comments. Just one of the threads: https://news.ycombinator.com/item?id=11921900
I just don't see the relevance considering the absolutely insane amount of things that have happened that would cause nobody to act in this fashion again, namely...uh...many public people are using the project publicly.
The fork stuck because it was still an alpha, as far as society was concerned.
It's currently in a grey area between a social movement and a FOSS project, and it simply started as a FOSS project.
I think it's important to characterize what occurred with this context. Devs won't get another chance at that without the project (and movement!) ending — and everyone knows it.
The fork stuck because it was still an alpha, as far as society was concerned.
It's currently in a grey area between a social movement and a FOSS project, and it simply started as a FOSS project.
I think it's important to characterize what occurred with this context. Devs won't get another chance at that without the project (and movement!) ending — and everyone knows it.
If you are using another country's currency you are tied to their monetary and indirectly fiscal policy which most likely does not align to yours.
In fact trying to get a neutral or deflationary currency is a no brainer. Especially, if you have a small banking system/network.
Of course there are gotchas.
In fact trying to get a neutral or deflationary currency is a no brainer. Especially, if you have a small banking system/network.
Of course there are gotchas.
You are always tied to the monetary and fiscal policy of the majority of a currency’s participants.
Can you make your own currency? Of course. How will you back it? Who will trust it? Who governs those policies? These are people problems people want to solve without people (crypto folks), with expected results (speed running financial regulation). They came at the king (reserve currencies) and missed by a mile.
Can you make your own currency? Of course. How will you back it? Who will trust it? Who governs those policies? These are people problems people want to solve without people (crypto folks), with expected results (speed running financial regulation). They came at the king (reserve currencies) and missed by a mile.
The US dollar was el Salvador's currency. They are trying to diversify away from that total dependence.
El Salvador already uses the US dollar, but it has no control over what the US does to its money supply.
Correct, but historically the price had been stable and predictable.
Imo you're just trading "beholden to the usgovt" with "beholden to miners, whales and wall street" plus wild price swings. Former or latter may be preferable for certain reasons, but for fiscal stability or day-to-day use the choice seems obvious to me.
Imo you're just trading "beholden to the usgovt" with "beholden to miners, whales and wall street" plus wild price swings. Former or latter may be preferable for certain reasons, but for fiscal stability or day-to-day use the choice seems obvious to me.
I'm pretty sure that if the US Government wanted to be a BTC whale to mess up El Salvador, we would be able to do so and barely break a sweat.
The price of BTC, even today, seems very easy to manipulate.
The price of BTC, even today, seems very easy to manipulate.
[deleted]
I am not sure what libertarian really means but the idea that the rich of the past deserve to control the present and future strikes me as secretly authoritarian.
Except in bitcoin, having a large share from the past doesn't directly confer control in the present, since it's not a proof of stake system.
If it's actually used as a currency, a person with a large stockpile will gradually lose their relative share over time as they consume, since you don't generate interest on it.
It's also confusing to me that people can hold the cognitive dissonance of defending a post gold standard, infinitely inflatable currency with a negative view income inequality, which only started increasing drastically after we abandoned the gold standard.
An inflationary currency benefits the wealthy asset owners more than the working class almost by design. Asset owners get to borrow against their assets and pay it back in a depreciating currency, while at the same time getting to use a psychological magic trick to make poorly educated employees think they're getting a pay raise, when in real terms they're getting a pay cut.
If I was a greedy rich person who wanted to make sure I could never lose my wealth, I would build a financial system on a currency that inflates away by design.
If it's actually used as a currency, a person with a large stockpile will gradually lose their relative share over time as they consume, since you don't generate interest on it.
It's also confusing to me that people can hold the cognitive dissonance of defending a post gold standard, infinitely inflatable currency with a negative view income inequality, which only started increasing drastically after we abandoned the gold standard.
An inflationary currency benefits the wealthy asset owners more than the working class almost by design. Asset owners get to borrow against their assets and pay it back in a depreciating currency, while at the same time getting to use a psychological magic trick to make poorly educated employees think they're getting a pay raise, when in real terms they're getting a pay cut.
If I was a greedy rich person who wanted to make sure I could never lose my wealth, I would build a financial system on a currency that inflates away by design.
A small amount of inflation (1-2% per year) is required or else you'd get deflation. Deflation is an almost guarenteed death spiral for an economy as everything grindes to a halt because not spending makes you richer.
This is something you might hear in a grammar school economics class, or a Federal Reserve presentation, but I don't think it's a hard fact.
Why are you presenting it as such?
Why are you presenting it as such?
Because it has occurred multiple times in multiple countries. It is a hard fact.
What does that even mean? Is there any fiat currency system you can point to where elite insiders don't get special access to the money printer before us plebs do?
You could have stopped after "I am not sure what libertarian really means"
Might even call it crypto-fascism lol
In addition, bitcoin limits government power. Most autocracies fund their operations with inflation. Even in liberal democracies, deficit spending funded with inflation is not really what people have voted for. People are fine with taxes to the extent they have voted for them, but that should be enough. Inflation is a way to covertly siphon wealth from citizens on top of tax revenues.
> autocracies fund their operations with inflation
There is limited evidence for connecting countries' foreign debt levels to their degree of democratization [1].
More pointedly, there is ample evidence--millenia of it!--for empires on commodity money waging war and whatnot and having a fine time of it.
> deficit spending funded with inflation is not really what people have voted for
Deficit spending / bond issuance is voted on at multiple levels of government practically every cycle. People have voted for this. Because the alternative is austerity, and fanatical governments that pursue that for its own sake tend to get replaced.
[1] https://d1wqtxts1xzle7.cloudfront.net/68966375/bf00224681202...
There is limited evidence for connecting countries' foreign debt levels to their degree of democratization [1].
More pointedly, there is ample evidence--millenia of it!--for empires on commodity money waging war and whatnot and having a fine time of it.
> deficit spending funded with inflation is not really what people have voted for
Deficit spending / bond issuance is voted on at multiple levels of government practically every cycle. People have voted for this. Because the alternative is austerity, and fanatical governments that pursue that for its own sake tend to get replaced.
[1] https://d1wqtxts1xzle7.cloudfront.net/68966375/bf00224681202...
Well, you are right in that people usually do vote for more government spending. The problem exists in all kinds of governments.
Anyway, my point was that bitcoin can limit government spending and protect individuals against inflation due to government spending. It doesn't mean that a rich nation couldn't wage war.
Anyway, my point was that bitcoin can limit government spending and protect individuals against inflation due to government spending. It doesn't mean that a rich nation couldn't wage war.
It would be deeply unpopular as it could only be funded by austerity at home, and it would be very short.
I believe Bitcoin standard world is post war. It is uneconomical, and that hits the people very hard very quickly. No home propaganda could convince the people it was just…
I believe Bitcoin standard world is post war. It is uneconomical, and that hits the people very hard very quickly. No home propaganda could convince the people it was just…
Presumably people in the government got bribed. Did they also make their banking system crypto friendly?
> Did they also make their banking system crypto friendly?
El Salvador banks don't exchange or accept bitcoin as deposit. Some of them accept bitcoin for loan payments, via an external payment processor.
El Salvador banks don't exchange or accept bitcoin as deposit. Some of them accept bitcoin for loan payments, via an external payment processor.
> In theory, developing nations like El Salvador are ideal candidates for cryptocurrency adoption. More than half its citizens rely exclusively on cash, rather than credit or debit cards. Some 70 percent of households have no bank account and nearly 90 percent do not use mobile banking. A digital payment platform could be a way to make the economy more inclusive and accessible.
I have a really hard time understanding what lasting effect El Salvador hopes to accomplish.
> More than half its citizens rely exclusively on cash rather than credit or debit cards
That's not in itself a problem.
> Some 70 percent of households have no bank account
That's may be a problem, but is it something that Bitcoin itself can solve? For example, people who have no savings and survive hand-to-mouth really don't need a bank account. Maybe that's what the 70% statistic is telling us.
> and nearly 90 percent do not use mobile banking.
The experience of using bitcoin for most people is not unlike the experience of using a mobile banking app. What is it about Bitcoin in particular that makes it a better fit?
> A digital payment platform could be a way to make the economy more inclusive and accessible.
Possibly, but only if the reasons for lack of inclusivity and accessibility are understood, and Bitcoin is compatible with resolving them. If the reasons are social/political, Bitcoin is not going to help at all. Monetary policy is effectively set elsewhere, either Washington or the Internet through the Bitcoin protocol. Being the hardest form of money ever created, bitcoin is especially bad at funding public works projects like the kind El Salvador is going to need to elevate its standard of living.
Then there's the elephant in the room: money printing. El Salvador has no currency of its own. It uses the US dollar, and now Bitcoin. This means that the government has voluntarily foregone the ability to print the money to cover the debts incurred for domestic spending. Adding Bitcoin just doubles down on the status quo: no domestic currency and no possibility of money printing.
I have a really hard time understanding what lasting effect El Salvador hopes to accomplish.
> More than half its citizens rely exclusively on cash rather than credit or debit cards
That's not in itself a problem.
> Some 70 percent of households have no bank account
That's may be a problem, but is it something that Bitcoin itself can solve? For example, people who have no savings and survive hand-to-mouth really don't need a bank account. Maybe that's what the 70% statistic is telling us.
> and nearly 90 percent do not use mobile banking.
The experience of using bitcoin for most people is not unlike the experience of using a mobile banking app. What is it about Bitcoin in particular that makes it a better fit?
> A digital payment platform could be a way to make the economy more inclusive and accessible.
Possibly, but only if the reasons for lack of inclusivity and accessibility are understood, and Bitcoin is compatible with resolving them. If the reasons are social/political, Bitcoin is not going to help at all. Monetary policy is effectively set elsewhere, either Washington or the Internet through the Bitcoin protocol. Being the hardest form of money ever created, bitcoin is especially bad at funding public works projects like the kind El Salvador is going to need to elevate its standard of living.
Then there's the elephant in the room: money printing. El Salvador has no currency of its own. It uses the US dollar, and now Bitcoin. This means that the government has voluntarily foregone the ability to print the money to cover the debts incurred for domestic spending. Adding Bitcoin just doubles down on the status quo: no domestic currency and no possibility of money printing.
The real feature they want is the ability to receive remittances without the high fees caused by retail labor. This requires some kind of app whether it's online banking or crypto.
We've had this for about three years in El Salvador.
1. Download banking app
2. Open an account by taking a selfie and a picture of the national ID card.
3. Go to " Receive Remmitance Option", type the remmitance code/MTCN.
4. Remmittance in your acount.
1. Download banking app
2. Open an account by taking a selfie and a picture of the national ID card.
3. Go to " Receive Remmitance Option", type the remmitance code/MTCN.
4. Remmittance in your acount.
Do you know why people aren't using it? How hard is it to get an ID card?
> Do you know why people aren't using it?
35% of the remittances are paid by banks, but I do not have numbers on how many of them are paid via an app.
El Salvador's informal economy is cash-based, doing business mostly with the small businesses in their neighborhood. I guess they don't have an account because they don't need them or because they don't have enough money to save. Other's want to avoid monthly fees that some of the traditional paper based bank accounts have.
People who need a bank accounts do open them. Like for receiving a wage from a 'formal' business or having to do electronic payments (like paying a landlord who lives in another town).
> How hard is it to get an ID card?
This is something El Salvador does very well. Our ID/Passport issuing system is really state of the art. I'd say it takes about 45 minutes to get an ID card or a passport. I've seen this take weeks or months in other countries. The first ID card is free, renewals cost about $10 every eight years.
There were edge cases though, like older people who's birth certificates were lost in town hall fires which were common during the war in the 80s. Or people who had duplicate but different birth certificates. In those cases they had to go through a longer process to replace their birth records and then apply for an ID card.
35% of the remittances are paid by banks, but I do not have numbers on how many of them are paid via an app.
El Salvador's informal economy is cash-based, doing business mostly with the small businesses in their neighborhood. I guess they don't have an account because they don't need them or because they don't have enough money to save. Other's want to avoid monthly fees that some of the traditional paper based bank accounts have.
People who need a bank accounts do open them. Like for receiving a wage from a 'formal' business or having to do electronic payments (like paying a landlord who lives in another town).
> How hard is it to get an ID card?
This is something El Salvador does very well. Our ID/Passport issuing system is really state of the art. I'd say it takes about 45 minutes to get an ID card or a passport. I've seen this take weeks or months in other countries. The first ID card is free, renewals cost about $10 every eight years.
There were edge cases though, like older people who's birth certificates were lost in town hall fires which were common during the war in the 80s. Or people who had duplicate but different birth certificates. In those cases they had to go through a longer process to replace their birth records and then apply for an ID card.
May as well be entitled their attempt at insanity. Although that statement is not fair to El Salvandorians - many of whom were forced to watch their government collaborate with foreign entities to rob their country blind.
Bitcion is not a stable store of value, therefore it is useless as a currency. Something that can move 10-20% daily cannot be used in commerce, especially for goods on and services sold on at razor tight margins. And let's not even get into the amount of borrowed money that went into propping up Bitcoin, whose unwinding we've witnessed [and it's not over yet].
Bitcion is not a stable store of value, therefore it is useless as a currency. Something that can move 10-20% daily cannot be used in commerce, especially for goods on and services sold on at razor tight margins. And let's not even get into the amount of borrowed money that went into propping up Bitcoin, whose unwinding we've witnessed [and it's not over yet].
[deleted]
My questions are:
* why Bitcoin, versus a cryptocurrency with low latency?
* why not a stablecoin?
* why Bitcoin, versus a cryptocurrency with low latency?
* why not a stablecoin?
* Using the lightning network, which the official app use, there is no latency.
* Because the whole point is to be independent from foreign currency
* Because the whole point is to be independent from foreign currency
i just decompiled the most recent android chivo app. It does not have a lnd client on it.
It looks like the government ARE running a lightning node as part of the service, however:
https://davidgerard.co.uk/blockchain/2021/08/24/el-salvador-...
It looks like the government ARE running a lightning node as part of the service, however:
https://davidgerard.co.uk/blockchain/2021/08/24/el-salvador-...
I'm wondering about the Strike app also that twitter is using.
My guess is that none of these apps actually handle keys, and the backend is an exchange using lightning network.
I've always seen the lighting network as a not great solution unless it is used between exchanges (think Coinbase <-> Binance). If it were to be used by users directly, you'd still have to pay the user-cost of receiving enough (takes time) and then establishing a channel.
I've always seen the lighting network as a not great solution unless it is used between exchanges (think Coinbase <-> Binance). If it were to be used by users directly, you'd still have to pay the user-cost of receiving enough (takes time) and then establishing a channel.
We hear very little about lightning. Is it used much? Works well?
Yeah, it rocks!! Love Lightning. I send sats to friends and family who can exchange them for goods and services in their local currencies. It’s almost instant and very low or zero fees.
I recommend checking out BTCPay server, it is a full BTC node, LN node and payment invoicing system. Integrated into e-commerce platforms and apps.
I recommend checking out BTCPay server, it is a full BTC node, LN node and payment invoicing system. Integrated into e-commerce platforms and apps.
But you're using it through a service that uses lightning and custodies your funds? Or you are managing your own channel?
Uh, it’s me. Of course I’m running my own node and managing my own channels!! BTCPay is sweet man, check it out.
Ride the Lightning is a nice webui for LN
Ride the Lightning is a nice webui for LN
>>> why not a stablecoin?
Berkeley Labs hypothesizes a "thermodynamically" stablecoin. If that experiment fails, there may be no hope for defi ;)
‘Holy grail’: Researchers create physics-based cryptocurrency
https://www.dailycal.org/2022/06/20/holy-grail-researchers-c...
Berkeley Labs hypothesizes a "thermodynamically" stablecoin. If that experiment fails, there may be no hope for defi ;)
‘Holy grail’: Researchers create physics-based cryptocurrency
https://www.dailycal.org/2022/06/20/holy-grail-researchers-c...
Bitcoin is already thermodynamically secured by proof-of-work, as miners burn electricity for the right to add new blocks of transactions to the blockchain. The ESG crowd can criticize energy use, but human civilization flourished with abundant energy (and that energy allows building of wealth to be able to afford a clean environment for all creatures); energy use secures bitcoin.
can we please stop posting bullshit comments like this
It’s not bullshit comment, and the fact you are still saying this means you don’t get it! How you can be so deep in the shitcoin game and still not understand is troubling to me for a man of such intelligence.
Wouldn't be surprised if El Salvador's bitcoin holdings move to some unknown wallets when Nayib Bukele's time as president is up.
El Salvador's current bitcoin wallets are unknown.
1) free conversion from btc to usd 2) large discounts for purchases of gasoline using btc 3) no bank account or a credit card needed
This blows my mind. The reasons stated were:
'Among the one in five Salvadorans who knew about Chivo but did not download it, the top reason was a preference for using cash. Others said they did not trust the system or bitcoin, they did not own a phone with internet, or the technology was complicated.'
I was just in El Cuco, a small town in southern El Salvador. This town has no bank and no ATM but they do have one of these Bitcoin ATMs. I asked the hotel owner about it and ZERO PEOPLE HAD USED IT. We are talking about free money here. My gut is telling me it's mostly older folks who think it's too complicated to figure out.
When freshly made tortillas are less than 5 us cents, and the cost of gas is near $5/a gallon, I would have assumed everyone would run for the free $30 in btc. Color me impressed.