Bitcoin’s first day as El Salvador’s legal tender(bbc.com)
bbc.com
Bitcoin’s first day as El Salvador’s legal tender
https://www.bbc.com/news/business-58459098
102 comments
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.
Stable coins are not "crypto" currencies. They have black lists (similar to your bank's fraud department) and they are backed by deposited money (so there is trusted issuer who promises to redeem them for actual cash).
So 2 key features of a crypto-currency are lacking in stablecoins: censorship-resistance and absence of centralized trusted parties.
That you can move them on a blockchain (as long as permitted) with your private key is not much different from signing TLS connection in your Venmo. But with higher fees and latencies.
So 2 key features of a crypto-currency are lacking in stablecoins: censorship-resistance and absence of centralized trusted parties.
That you can move them on a blockchain (as long as permitted) with your private key is not much different from signing TLS connection in your Venmo. But with higher fees and latencies.
What about algorithmic stable coins like Dai, Terra, Fei, USDN, or cUSD? You still move them using your private key, but at least there's no centralized blocklist.
The trusted party there are price oracles. Plus, matters are muddied by the "governance" usually built-in which adds another trusted parties who are supposed to do emergency interventions (like Fed does ;-)
I don't mean to be mean, but if you have a fundamental security issue, "solving" it with a complicated protocol that still has the same security issues deep at the core, sounds like "scam" to me. Venmo, PayPal and Bitcoin are fair in their offerings: you know who you trust with what and that's the security model without any sugarcoating.
I don't mean to be mean, but if you have a fundamental security issue, "solving" it with a complicated protocol that still has the same security issues deep at the core, sounds like "scam" to me. Venmo, PayPal and Bitcoin are fair in their offerings: you know who you trust with what and that's the security model without any sugarcoating.
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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.
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?
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, 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?
I use LN every day. Also, have you heard the El Salvador news?
This is just active, malicious disinformation - why are you doing this?
LN blows away legacy payment rails by many orders of magnitude - you can do hundreds of millions of transactions per second, today.
Wait, is BTC really only doing 4 transactions a second? I knew it was bad, but I didn't realize this bad. Bitcoin is like a 1960s mainframe computer in an old bank headquarters that runs everything but is an archaic relic.
Yes. There was a big argument several years back about increasing transaction counts and the "more transactions please" advocates lost. BTC, by design, targets roughly this number of transactions per second regardless of how much energy is spent to mine.
Isn't this the reason for the Lightning network layer?
4 transactions a second!? I heard it was bad but that is absolutely pathetic, my local strip mall likely averages out to more then 4 transactions a second.
> chugged merrily along, at its usual 4 or so txns/second.
who needs failure when this is what success looks like?
who needs failure when this is what success looks like?
If taxpayers can pay taxes in bitcoin, then there is less need to convert to a fiat currency intermediary when buying and selling goods and services with bitcoin. That might add stability to BTC's value.
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.
It loses (or gains) 10%+ every few weeks.
No conspiracy needed.
Other than, you know, regular and systemic market manipulation by large holders of trading capital... the sort of thing the SEC prevents.
No conspiracy needed.
Other than, you know, regular and systemic market manipulation by large holders of trading capital... the sort of thing the SEC prevents.
Buy the rumours, sell the news. It was bought up in anticipation of this news. Then sold off, once someone starts selling enough to move the price down a few thousand, others pile in and drive it further down. Then those that sold at the beginning buy back their coins, with a nice profit.
It seems like everything Nayib Bukele is doing is working. He is using the name bitcoin to legally assimilate everyone digitally and probably using it as a way to launder money. The headlines are eating it up like something progressive. Genius.
This is the finest example of propaganda. Just look at the photo of a dude with a fire in the backdrop.
1. For most people in El Salvador Bitcoin does not matter and will not matter for quite some time.
2. "Bitcoin crashes" to a value a week or so ago. This is usually called a "correction". Even when it was crashing 80%, it was from some very short-living speculative highs and it's now trading close to all-time-high anyway.
1. For most people in El Salvador Bitcoin does not matter and will not matter for quite some time.
2. "Bitcoin crashes" to a value a week or so ago. This is usually called a "correction". Even when it was crashing 80%, it was from some very short-living speculative highs and it's now trading close to all-time-high anyway.
Correction relative to what fundamental value? And what’s the difference between a speculative high and the normal price?
Well, fundamental value is well over >$8T which is a rough estimate of the gold's monetization (because BTC is superior to gold in every respect as a store-of-value). BTC still has to climb 10x till there and all the dips on the way are corrections.
> BTC is superior to gold in every respect as a store-of-value)
Maybe in some respects, but every respect? Is it really beneficial for a store of value to have wild fluctuations in its value on a timescale of days/weeks?
Maybe in some respects, but every respect? Is it really beneficial for a store of value to have wild fluctuations in its value on a timescale of days/weeks?
That's just early stages of adoption. Until BTC saturates the market, there will be huge rallies, huge drops and otherwise volatility. Right now everyone knows about USD and gold and holds as much USD or gold as they want. But there are still millions of people who don't know about Bitcoin or don't know they want to hold Bitcoin. Once Bitcoin reaches its saturation point (which could be at gold's level or 10x higher - who knows), of course it will be no more volatile than any other established commodity.
In other words, volatility is not an inherent feature of Bitcoin or any commodity whatsoever, but just a state of the markets. The better argument would be to point out some inherent issue with Bitcoin that keeps it niche, the markets thin and value subject to wild swings forever.
In other words, volatility is not an inherent feature of Bitcoin or any commodity whatsoever, but just a state of the markets. The better argument would be to point out some inherent issue with Bitcoin that keeps it niche, the markets thin and value subject to wild swings forever.
Hindsight? I am pretty sure that is what people are using for the definition.
If the new high didn't hold, it was speculative, if it did hold and it went up further, it was its normal pricing.
If the new high didn't hold, it was speculative, if it did hold and it went up further, it was its normal pricing.
What timescale defines the difference between fundamental value and speculation? A week? A decade? A century?
No one knows... I was being facetious in my earlier comment.
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In other news, bitcoin is at the same price as it was 2 to 3 weeks ago.
I'm also intrigued that this has 29 points and 0 comments.
I'm also intrigued that this has 29 points and 0 comments.
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 when Bitcoin surges vs the dollar debt is less of a burden. And vise versa. Similar to the sort of problems emerging markets dollar denominated debts have faced many times.
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 when Bitcoin surges vs the dollar debt is less of a burden. And vise versa. Similar to the sort of problems emerging markets dollar denominated debts have faced many times.
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.
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.
Unless the market is an autarky, it's a problem. Say you're a company that buys a bunch of components, many from overseas, assembles a widget from them, and sells it at a 5% margin. You're probably ordering your components ahead of time, because that's how it's done. At that point, significant volatility becomes a big problem.
That's a mighty big if though, since to a first approximation nothing except maybe ransoms is priced in Bitcoin. Most shops notionally accepting it actually set prices in USD and simply convert as needed.
That. What is actually denominated in BTC?? For that, you’d need a substantial economy in which most factors of production (including wages) are denominated in BTC.
Bitcoin is volatile not in relation to USD, but to "real prices". USD or EUR are just more stable in relation to those, so it's convenient to measure BTC in USD. You can't fix the prices in BTC because you'd soon find that you are overpricing or underpricing in relation to real supply and demand of all the stuff around.
They don’t solely accept btc. They accept it in addition.
That never holds. Arbitrage will cause prices for goods to be equal in USD and BTC. https://www.investopedia.com/terms/a/arbitrage.asp
Unless you control the whole market via price controls but those eventually break as well. https://www.investopedia.com/terms/p/price-controls.asp
Unless you control the whole market via price controls but those eventually break as well. https://www.investopedia.com/terms/p/price-controls.asp
Products from outside that market will have a fixed cost in a different currency, someone has to assume a risk and lose/profit from it.
This happens a lot currently but usual currencies dont fluctuate this much.
As example, I dont expect El Salvador to build iPhones anytime soon and the price for that is usually fixed in USD
This happens a lot currently but usual currencies dont fluctuate this much.
As example, I dont expect El Salvador to build iPhones anytime soon and the price for that is usually fixed in USD
This is only true if its zoned market in the sense that the country is self sufficient and relies on no foreign imports, which is rarely the case.
> If a zoned market solely accept Bitcoin and a good costs say 1 BTC
The problem is that nobody selling regular goods WANTS to sell his goods with a fixed bitcoin price; the volatility of bitcoin would make it easy for buyers to buy the goods only when their prices where especially low in non-crazy-volatile currency and resell the goods at a favorable price immediately. There's arbitrage there
The problem is that nobody selling regular goods WANTS to sell his goods with a fixed bitcoin price; the volatility of bitcoin would make it easy for buyers to buy the goods only when their prices where especially low in non-crazy-volatile currency and resell the goods at a favorable price immediately. There's arbitrage there
This is true of other currencies (usd being the global reserve currency) as well though.
No sellers want the Argentine peso or Zimbabwean dollar either.
No sellers want the Argentine peso or Zimbabwean dollar either.
What about import/export prices? The matter is especially important for a small country, which relies heavily on the international trade.
If you want to import anything at all you need foreign currency. One of the ways you can do this is by exporting goods, of course, but you could also sell some of your local currency in exchange for dollars or whatever. Bitcoin volatility makes this harder. Also I’m guessing that volatility makes it hard to get foreign currency loans collateralized by BTC
Because for import/export currency volatility matters a lot. 99% of goods depend on import in some way.
Let's say you buy a house for 1 BTC. I sell that house for $250K. Two things can happen:
* I made a profit if acquiring that 1 BTC cost me a lot less than $250K
* 1 BTC = $250K
* I made a profit if acquiring that 1 BTC cost me a lot less than $250K
* 1 BTC = $250K
The world does not work like that, if they starts selling bananas for 1btc (or 0.0000001, but in 3years the btc price goes to 500k) people from all over the world would go to el salvador to sell bananas to send btc abroad.
i dont get why they didn't enforce the use of a stablecoin in addition of btc tho, that would be better
Unless the zoned market is fully self-sufficient, it would still rely on trading without outsiders. The trade between the zoned market and the outside would still cause the volatility to leak into the market.
Here's one. If you have 1 BTC and it pays for a sandwich, but that same BTC is worth a thousand sandwiches elsewhere, why would you spend it in the zoned market? Likewise, why would the sandwich shop put the btc back into the local economy?
I think, the main issue is, that the BTC price is affected by the outside world AND that the country has to import things from the outside world.
What you said would probably work if you had a token that was only minted and traded in only one country.
What you said would probably work if you had a token that was only minted and traded in only one country.
Why should BTC advocates care about USD inflation if this argument holds? The value of USD goes down but it doesn't matter because my rent and salary are both denominated in USD. But avoiding inflation is one of the major ideological reasons why advocates support BTC.
There goes my Bitcoin investing brother's sanity
It's normal BTC behavior, BTC spikes up and goes down all the time. 10-15% per day moves happen regularly. Open the price chart and look at it.
Which is why BTC is an asset and not a currency.
Currencies need stability of value so that everyone doesn't have to update their prices ever few hours: https://simplicable.com/new/money
But maybe in the new world, all prices can be in digital and thus ever changing?
Currencies need stability of value so that everyone doesn't have to update their prices ever few hours: https://simplicable.com/new/money
But maybe in the new world, all prices can be in digital and thus ever changing?
If it's not a good currency, then it's not much of an asset either.
Would pricing in another unit cause more issues or solve issues?
If customers paid a conversion to some unit each time, and conversion is determined at point of sale. One customer may pay 100pBTC for a loaf of bread, and another may pay 101pBTC.
Does that help, or make things worse?
If customers paid a conversion to some unit each time, and conversion is determined at point of sale. One customer may pay 100pBTC for a loaf of bread, and another may pay 101pBTC.
Does that help, or make things worse?
You want stability. There are many ways to achieve that.
Your example above shows a 1% swing -- which is nothing. Yesterday BTC dropped by 14-18% depending on how you define it.
Imaging buying a Tesla and you budgeted for $40K but today it jumped $45K. That would throw off your plans and you wouldn't probably buy it, hoping for things to change. This means that the thing you are using for the transaction is actually preventing commerce because now timing matters. This is a hinderance to commerce and those using it will not have the liquidity/dynamic economy as compared to those using a stable currency.
This is a sign you are not using a currency for the transaction but rather an asset.
Now USD is stable in parts because it is accepted widely and everything is denominated in it. If everything was denominated in BTC, then it would have similar stability. Basically the more things are denominated in a particular currency/asset, the more stable it becomes.
Your example above shows a 1% swing -- which is nothing. Yesterday BTC dropped by 14-18% depending on how you define it.
Imaging buying a Tesla and you budgeted for $40K but today it jumped $45K. That would throw off your plans and you wouldn't probably buy it, hoping for things to change. This means that the thing you are using for the transaction is actually preventing commerce because now timing matters. This is a hinderance to commerce and those using it will not have the liquidity/dynamic economy as compared to those using a stable currency.
This is a sign you are not using a currency for the transaction but rather an asset.
Now USD is stable in parts because it is accepted widely and everything is denominated in it. If everything was denominated in BTC, then it would have similar stability. Basically the more things are denominated in a particular currency/asset, the more stable it becomes.
Thanks for explaining, that makes sense.
So by your strange definition unstable currencies are not currencies. Is Bolivar not a currency then?
> Is Bolivar not a currency then?
It doesn't meet the requirements of a good currency. There is hyper inflation and they have redenominated it a few times now and are planning on doing it again.
Is a boat with a huge hole in its hull a good boat? Technically it is probably a boat, but it isn't what one would consider a good and desirable boat and it doesn't allow one to do what one can usually do with boats.
This is the same with BTC. You can call it a currency, but if you use it as a currency it doesn't currently exhibit the properties that one wants from a currency.
It doesn't meet the requirements of a good currency. There is hyper inflation and they have redenominated it a few times now and are planning on doing it again.
Is a boat with a huge hole in its hull a good boat? Technically it is probably a boat, but it isn't what one would consider a good and desirable boat and it doesn't allow one to do what one can usually do with boats.
This is the same with BTC. You can call it a currency, but if you use it as a currency it doesn't currently exhibit the properties that one wants from a currency.
> It doesn't meet the requirements of a good currency
Aaand you just moved the goal posts. Notice how you switched your argument from "currency" to "good currency". So dishonest.
Aaand you just moved the goal posts. Notice how you switched your argument from "currency" to "good currency". So dishonest.
> Aaand you just moved the goal posts. Notice how you switched your argument from "currency" to "good currency". So dishonest.
I think you want a binary world where things are either A or B and not somewhere in between. BTC is being used as a currency in El Salvador and it is government mandated as a currency. Thus it is a currency by that definition. But my argument is that it isn't a good currency based on its properties (which I listed some and also linked to an article on desirable principles of a currency), rather it has the qualities of an asset.
I think I haven't changed what I am arguing, but I think you misunderstood my argument as something much more simplistic than what I was actually saying.
I think you want a binary world where things are either A or B and not somewhere in between. BTC is being used as a currency in El Salvador and it is government mandated as a currency. Thus it is a currency by that definition. But my argument is that it isn't a good currency based on its properties (which I listed some and also linked to an article on desirable principles of a currency), rather it has the qualities of an asset.
I think I haven't changed what I am arguing, but I think you misunderstood my argument as something much more simplistic than what I was actually saying.
then you used bad language
>Which is why BTC is an asset and not a currency.
Is a pretty straight forward sentence
>Which is why BTC is an asset and not a currency.
Is a pretty straight forward sentence
Are you using BTC as a currency? What was the last thing you bought using BTC directly?
Does it meet the 10 characteristics here?https://simplicable.com/new/money
I think that few are using BTC as a currency because it doesn't make sense as a currency, rather 99.9% of people are using it as a speculative investment asset.
Does it meet the 10 characteristics here?https://simplicable.com/new/money
I think that few are using BTC as a currency because it doesn't make sense as a currency, rather 99.9% of people are using it as a speculative investment asset.
I don't have much to add about it being a currency or not, just that you aren't being very clear. One moment you say its not, then the next it is, just not a good one, the next it's not again. And "not a good one", objectively you could lump just about anything into
I'm under the belief that if it can be locally commonly exchanged for goods or services is a currency. If its gold, cash, btc, or bottle caps. If its a good form of currency or not is a completely different question
I'm under the belief that if it can be locally commonly exchanged for goods or services is a currency. If its gold, cash, btc, or bottle caps. If its a good form of currency or not is a completely different question
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 conversions will happen automatically.
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 conversions will happen automatically.
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 why would you touch this currency with a barge-pole given the above problems?
Cryptocurrency isn’t the future of currency or payments, and bitcoin in particular is solving the wrong problems, badly.
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 why would you touch this currency with a barge-pole given the above problems?
Cryptocurrency isn’t the future of currency or payments, and bitcoin in particular is solving the wrong problems, badly.
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.
Sure, and that's one of the reasons cash is going to disappear in the coming decades and yet another flaw in the design of bitcoin (which was modelled on physical currency or some sort of electronic gold just as that loses favour). It's not competing with cash, it's competing with free instant transfers between bank accounts and free payments (for the customer), which many people enjoy right now.
Physical currency was always an instrument of states, and now they have better ones, which retailers, consumers, and states prefer (digital currencies, not cryptocurrencies). In many countries cash usage is down to 20%, it's expensive to produce and manage and not required any more.
Physical currency was always an instrument of states, and now they have better ones, which retailers, consumers, and states prefer (digital currencies, not cryptocurrencies). In many countries cash usage is down to 20%, it's expensive to produce and manage and not required any more.
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.
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.
But if your rent is X BTC/mo how does the BTC relation to USD change your rent or make you go hungry? A 0.0001BTC sandwitch will be 0.0001BTC tomorrow as well. What we have here is people using bitcoin as proxy for other currencies.
I find it very funny that BTC advocates bring this up all the time, yet inflation of USD is considered to be an enormous threat. Surely both of these things cannot be true.
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 deflationary encourages holding and not spending. It will lead to a less dynamic economy than if we had an inflationary currency which encouraged spending/investment.
This encourages people to hold BTC because its relative value increases over time. Thus BTC by being deflationary encourages holding and not spending. It will lead to a less dynamic economy than if we had an inflationary currency which encouraged spending/investment.
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.
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.
IMO this is a likely explanation (includes timestamp): https://youtu.be/lEromo3ly4Q?t=542
Wild volatility can occur whenever a rich person or rich group liquidates a lot of their holdings.
Wild volatility can occur whenever a rich person or rich group liquidates a lot of their holdings.
"crash" not very accurate choice of words... exchange rate dip maybe better?
If any fiat currency would go down 15% we'd call it a crash.
USD/GBP fell 19% after the brexit-referendum, that was an abnormal noteworthy event with quite far-reaching consequences.
For BTC it's a daily occurence...
USD/GBP fell 19% after the brexit-referendum, that was an abnormal noteworthy event with quite far-reaching consequences.
For BTC it's a daily occurence...
"Crash" of an asset/currency is always against other assets/currency -- you need to define what its comparable otherwise you can not measure it.
Was it a "crash" though in scope?
Black Friday in 1987 was a 22% drop in the stock market. Yesterday was a 14% to 18% drop depending on how you calculate it. Close to what was considered a prototypical "crash": https://en.wikipedia.org/wiki/Black_Monday_(1987)
Basically BTC is highly volatile, thus it probably crashes all the time based on standard definitions.
Was it a "crash" though in scope?
Black Friday in 1987 was a 22% drop in the stock market. Yesterday was a 14% to 18% drop depending on how you calculate it. Close to what was considered a prototypical "crash": https://en.wikipedia.org/wiki/Black_Monday_(1987)
Basically BTC is highly volatile, thus it probably crashes all the time based on standard definitions.
Gold as well as Crypto crashed accoss the board except for Solana which gained so I don't think this says anything about Bitcoin in particular.
If you ignore the last few days, not much changed with the BTC price.
The timing is almost too convenient for large parties that are afraid of defi.
When the majority of the country doesn't have internet access, a "currency" that you can only transact in via the internet seems like a poor choice. It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet, which I'm sure is convenient for them.
My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
> When the majority of the country doesn't have internet access
The Chivo application works for free over cellular data without the need for a data plan. WiFi public hotspots aren't hard to come by either, especially in stores. If anything, getting more people online would be a good thing.
> It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet
It should be noted that you don't have to use the government-sponsored wallet, but that is how they're distributing the $30 drop. For all intents and purposes, you could get the drop and delete the application.
The Chivo application works for free over cellular data without the need for a data plan. WiFi public hotspots aren't hard to come by either, especially in stores. If anything, getting more people online would be a good thing.
> It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet
It should be noted that you don't have to use the government-sponsored wallet, but that is how they're distributing the $30 drop. For all intents and purposes, you could get the drop and delete the application.
> When the majority of the country doesn't have internet access, a "currency" that you can only transact in via the internet seems like a poor choice.
If the shops have WiFi that's enough. Also, public WiFi. Still, your point stands to a certain extend, connected to your next line:
> It makes it a lot easier for the government to track people
There is indeed a danger to the democratic process here. But I don't know if the solution is to just not do crypto. I don't know what would be best.
> My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
My guess BTC takes off over there.
If the shops have WiFi that's enough. Also, public WiFi. Still, your point stands to a certain extend, connected to your next line:
> It makes it a lot easier for the government to track people
There is indeed a danger to the democratic process here. But I don't know if the solution is to just not do crypto. I don't know what would be best.
> My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
My guess BTC takes off over there.
It will be interesting to see how they go along.
The only valid argument I have seen for a wide adoption of crypto is in countries where the local currency is unusable: corrupt central bank, hyperinflation, high rates of counterfeits, low access to banks. I actually see that then some form of crypto is preferred.
So yes, watching that closely!
The only valid argument I have seen for a wide adoption of crypto is in countries where the local currency is unusable: corrupt central bank, hyperinflation, high rates of counterfeits, low access to banks. I actually see that then some form of crypto is preferred.
So yes, watching that closely!
I love the entrepreneurial spirit the shopkeeper keeps in all of this: "When others see a crisis though, I see an opportunity."
I'm not a huge proponent of bitcoin, and am unsure how great of a move this was, but man is this article ridiculous.
>The price of Bitcoin on Tuesday crashed to its lowest in nearly a month,
The lowest value in nearly a month is "crashing?" And saying that caused the country to lose $3 million pretends they sold all the bitcoint that day.
Using a picture of protestors in front of a massive fire implies there's some huge movement, not "about 1000 protestors."
>It says bitcoin could save the country $400m a year in transaction fees on funds sent from abroad. However, using data from the World Bank and the government, the BBC calculates this to be closer to $170m.
Saving $170m is still "up to $400m" and more than anything is being optimistic about future growth. And they are saying "however they'll only save $170m" as if the move would somehow not be worth saving $170m.
Finally, they interview a random shopkeeper and the opposition leader to show we got both sides of the issue. What a fair debate there.
>The price of Bitcoin on Tuesday crashed to its lowest in nearly a month,
The lowest value in nearly a month is "crashing?" And saying that caused the country to lose $3 million pretends they sold all the bitcoint that day.
Using a picture of protestors in front of a massive fire implies there's some huge movement, not "about 1000 protestors."
>It says bitcoin could save the country $400m a year in transaction fees on funds sent from abroad. However, using data from the World Bank and the government, the BBC calculates this to be closer to $170m.
Saving $170m is still "up to $400m" and more than anything is being optimistic about future growth. And they are saying "however they'll only save $170m" as if the move would somehow not be worth saving $170m.
Finally, they interview a random shopkeeper and the opposition leader to show we got both sides of the issue. What a fair debate there.
Take reporting done by mainstream media on cryptocurrencies with a grain of salt.
I'm not a cryptocurrency proponent, but the standard of news regarding this space is atrocious. That's why many cryptocurrency followers focus so much on Twitter.
I'm not a cryptocurrency proponent, but the standard of news regarding this space is atrocious. That's why many cryptocurrency followers focus so much on Twitter.
Take reporting done by ANY media on ANYTHING with a grain of salt.
It is totally redundant to add mainstream or bitcoin into that statement.
It is totally redundant to add mainstream or bitcoin into that statement.
This is your typical modern "objective" journalism today. The only thing not clear is whoose financial and / or political interests they are trying to boost today. Follow the money / power, I guess?
As someone who set up a Chivo wallet from outside of El Salvador last night, I knew these comments were going to be highly negative and schadenfreude-ic. I'm going to ignore all of it and dive right into the experience of the app itself.
Chivo's servers went offline temporarily in the morning in order to fix some bugs and add more capacity, according to tweets from the president. As far as major software product launches outside of Silicon Valley go, having your product work smoothly for millions of people on day one was unlikely, but within a few hours all was working.
This is the first high profile app to come from El Salvador, and I thought the app itself worked better than expected. It was the smoothest onboarding experience I've seen so far in a legal financial app, ever. El Salvador has a national ID called a DUI (Documento Unico de Identidad). When you first open the app, you type in your ID number and date of birth. Then you scan the front of your DUI card, the back, and take a selfie. You wait a bit for it to validate and then you're done. It knows your name already, there is no email/account registration, there are no address forms or weird credit check challenge questions to fill out. Easier than coinbase, venmo, or paypal to get onboarded and running. It takes seconds to get your $30 "drop", which did fluctuate a few cents in real time throughout the evening. This really shows what's possible with a national ID system IMO. The app has basic functions to scan to send or request payments, and has instant convertibility between USD and BTC. I was able to transfer .001 BTC from a non-affiliated wallet into Chivo and it showed "recibiendo" within minutes. I know I know, not your keys not your crypto, but nobody is obligated to use it. This is the national wallet made for ease of use and friction-less for retail purchases. If any Salvadoran wants to send or receive with any other wallet they are free to do so. They are also free to not use crypto at all and keep using USD.
Chivo's servers went offline temporarily in the morning in order to fix some bugs and add more capacity, according to tweets from the president. As far as major software product launches outside of Silicon Valley go, having your product work smoothly for millions of people on day one was unlikely, but within a few hours all was working.
This is the first high profile app to come from El Salvador, and I thought the app itself worked better than expected. It was the smoothest onboarding experience I've seen so far in a legal financial app, ever. El Salvador has a national ID called a DUI (Documento Unico de Identidad). When you first open the app, you type in your ID number and date of birth. Then you scan the front of your DUI card, the back, and take a selfie. You wait a bit for it to validate and then you're done. It knows your name already, there is no email/account registration, there are no address forms or weird credit check challenge questions to fill out. Easier than coinbase, venmo, or paypal to get onboarded and running. It takes seconds to get your $30 "drop", which did fluctuate a few cents in real time throughout the evening. This really shows what's possible with a national ID system IMO. The app has basic functions to scan to send or request payments, and has instant convertibility between USD and BTC. I was able to transfer .001 BTC from a non-affiliated wallet into Chivo and it showed "recibiendo" within minutes. I know I know, not your keys not your crypto, but nobody is obligated to use it. This is the national wallet made for ease of use and friction-less for retail purchases. If any Salvadoran wants to send or receive with any other wallet they are free to do so. They are also free to not use crypto at all and keep using USD.
> El Salvador has a national ID called a DUI (Documento Unico de Identidad). When you first open the app, you type in your ID number and date of birth. Then you scan the front of your DUI card, the back, and take a selfie. You wait a bit for it to validate and then you're done. It knows your name already, there is no email/account registration, there are no address forms or weird credit check challenge questions to fill out. Easier than coinbase, venmo, or paypal to get onboarded and running... This really shows what's possible with a national ID system IMO
That's nothing revolutionary, neobanks in the EU have been doing this ( or an older school version where there's a video call with a real person that inspects your face and if it matches your ID) for some time now. Yes, having a national ID is some pretty basic "how to government 101" stuff. The reluctance by Americans for anything resembling that is baffling.
That's nothing revolutionary, neobanks in the EU have been doing this ( or an older school version where there's a video call with a real person that inspects your face and if it matches your ID) for some time now. Yes, having a national ID is some pretty basic "how to government 101" stuff. The reluctance by Americans for anything resembling that is baffling.
> The reluctance by Americans for anything resembling that is baffling.
It's not that baffling. At any time 50% of Americans believe the other 50% would round them up and gas them given the opportunity.
It's not that baffling. At any time 50% of Americans believe the other 50% would round them up and gas them given the opportunity.