By - rdfporcazzo
It’s a regular meeting scheduled in 2020 but postponed due to Covid and is NOT to discuss crypto in particular. This guy is twisting the facts here.
>In follow up tweets, the president announced that the Central Bank of São Tomé and Príncipe, Central Bank of Paraguay, National Bank of Angola, Bank of Ghana, Bank of Namibia, Bank of Uganda, Central Bank of the Republic of Guinea, Central Bank of Madagascar, Bank of the Republic of Haiti, and the Bank of the Republic of Burundi, Central Bank of Eswatini and its Ministry of Finance, Central Bank of Jordan, Central Bank of The Gambia, National Committee of Banks and Seguros of Honduras, Directorate General of Treasury, Ministry of Finance and Budget, Madagascar, and the Maldives Monetary Authority are among those that will be attending.
>Bukele added that the National Bank of Rwanda, Nepal Rastra Bank, Sacco Societies Regulatory Authority (SASRA), Kenya, State Bank of Pakistan, General Superintendency of Financial Entities of Costa Rica, Superintendence of the Popular and Solidarity Economy of Ecuador, and the Central Bank of El Salvador will also be in attendance.
>On Friday, May 13, the Twitter account for Bitcoin Beach announced that “Central bankers from Angola, Armenia, Bangladesh, Burundi, Congo, Costa Rica, Egypt, Gambia, Ghana, India, Namibia, Senegal, Sundan, Uganda, Zambia and 25 other developing countries are getting on planes today to fly to El Salvador.”
This is very interesting. I wonder if this would be worth keeping track of.
with a bag of popcorn
It's really that bad?
the guy tried to use bitcoin soaring tendencies as state investment and also promote bitcoin as currency for the people of his country. those two policies look like they are failing.
in more detail (though not an expert), he just put a lot of the country's money into bitcoin and recently the price crash of btc practically halfed the money they put into it. though in all honesty, i dont have the figures (im sorry economics sub). for once i know he put at least 120 million usd into bitcoin so he could give every willing citizen a wallet of 30 usd to incentivize bitcoin as currency (total 4 million used the incentive) and no one really used it after the few first transactions... so that is money thrown into a well with no way to retrieve it (is every citizen going to remember the bitcoin wallet password key?) , and that money has already halfed anyways... apart from that, they are just using the country's budget to further invest into btc and hope for the best.
i would like to know how much state money the guy is throwing into it, but surely it is not a small amount, they announce they invest another dozens of millions of dollars every week..
Here is a web site with a time line of his tweets and current portfolio (or port-fool-io if you like). Currently down about 35%.
i'm so relieved its just in the order of *hundreds of millions of dollars* of loss (they can really fuck it if they want, if they try to go to the billions). Though, compared to the anual national salvador budget, that's a lot of money wasted. Each year the goverment spends about 4.000 million usd, and so the loss from 2021 to 2022 is anualized around 2.5% of the spending. Still, that is a lot of money that could have went to other, sutantainable projects, for the betterment of their society.
Also, considering their revenue, throwing money into the bitcoin fire dump has been a losing strategy.
Sit down and try to relax a bit and don’t look up usa military budget.
kind of unrelated... and also rich countries with money may invest into stupid stuff and do well regardless (although the US is a big fuck up), the thing is, salvador is not a rich country
Let's put it this way: I'm not sure whether Bitcoin is bad for El Salvador or if El Salvador is bad for Bitcoin.
He is desperately trying to cover up the fact that his reckless policies ruined the country.
"ruined the country"? You know we are talking about El Salvador, the previous administration put the country into heavy debt with the IMF and absconded with most of the money.
This guy is using that debt to buy Bitcoin. Lol.
How do you use previously incurred debt to buy something?
What do you mean? Incurring debt increases cash on the “balance sheet” for simplicity.
You incur debt, the money is then spent, interest is then paid.
You can incur debt and just let the cash sit there doing nothing, or use it to buy Bitcoin.
But that's not at all what happened. The previous government did not incur debt just to let the cash sit there for the new administration to buy bitcoin with it.
Exactly. So why is he doing it? The debt was issued presumably so the cash would fund other purposes.
Also the US keeps creating hardened criminals and deporting them to El Salvador.
Or you know, just deporting illegal migrants to their country of origin.
The earliest gangs originated in L.A
Organized crime existed long before L.A. was even a thought
Yeah and the war on drugs made them sooo much more powerful
Still better then Funes and Saca.
Also 60% drop in homicide rate since he entered office in the highest murder rate country in the western hemisphere is good.
The Bitcoin decision is a sketchy one but honestly so is relying on a foreign currency to maintain value like they do with the USD.
Are you seriously equating adopting BTC and USD (or a peg) as legal tender?
Yes. Relying on foreign currency maintaining it's value is high risk. Having 0 say on what your own nations monetary policy is is high risk. How much value has USD lost in the last year without El Salvador having a say? 8% more?
While foregoing your own monetary policy is an obvious downside of adopting a peg, many smaller, developing economies are unable to maintain a technical, independent, and credible central bank. Hence, despite the downsides, it's still a net positive for them.
This is nothing like establishing BTC as legal tender, the practical issues of which I won't even list here.
> How much value has USD lost in the last year without El Salvador having a say? 8% more?
A lot less than Bitcoin has lost? Bitcoin has lost 33% in the last year without El Salvador having a say, and also has lost 54% from its November high
If you are going to play that game maybe do it since the policy was started in 2019.
Value of a Bitcoin in 2019 was under 10,000 USD and even post losing that value it is still a nearly 400% increase for El Salvador in that time.
Meanwhile their holdings in USD a foreign currency have lost 12% of their cumalitive value.
Diversifying has long been seen as a good way to protect your assets. He didn't base the entire El Salvador economy on Bitcoins he diversified some to protect themselves against foreign policy and it has been effective.
They purchased the coins in 2019 they made them legal tender last year. They invested a total of 100 million in the coins and that is it. For reference a previous president was recently arrested for siphoning 300 million to personal family and business.
USD is not based purely on speculation is is very likely to be stable. Cryptos can just crash and for a central medium of exchange create incredibly volatile pricing system.
Imagine prices going up 300% in a month because the crypto crashed. How is crypto less risky? That's insane.
BTC is not a currency is a high tech ponzi scheme. It can't be used as a currency, it never has been used as a currency, and no attempt should be made to use it as a currency.
Man, it’s just baffling how overconfident crypto bros are these days… Defending Bukele’s insane decisions is both amusing and concerning.
... crypto currency is extremely volatile and significantly less trustworthy due to the lack of regulations official currencies have. The USD is the backbone of the world currency for a reason, even with inflation. Crypto currency can swing 15% positive onr day and -60% the next. That's insanity.
Yes, a reduction by negotiating with the gangs, even though that's also what previous administrations and other local officials did and people like you probably hated them for it. This is either a troll account or you are just too young to reckon with what has led the country to the current situation.
Anyone seeing this, yes please prepare your popcorn. Idiots like this poster will continue to make the comments worth reading.
You think the murder rate drop is due to good government or that he made a deal with the gangs that rule the country?
He has a 70+% approval rating according to most polls.
The total losses of the Bitcoin investment is 38 million. Just 0.7% of the federal budget of El Salvador for 1 year.
Even assuming Bitcoin tanks to nothing (one in a million chance) it will be 2% of the federal budget.
For that cost an estimated 14% of the population has started banking consistently (1/5 of all Salvadorans have continued using Chivo after the 30 USD worth of Bitcoin they received). Which was a major stated goal of this plan. This is an attempt to modernize the El Salvadoran economy from a mostly cash only economy. They bank as much as the US did in the 19th century currently which means there is a huge lack of credit available to it's citizens and is a driving factor in the 30% poverty rate in the country.
I have seen consistent worse performing investments in other countries. Claiming they "ruined the country" is strictly over the top.
He still has a 70+% approval rating per most polls in the country so obviously most Salvadorans disagree with you at this time.
It was a failed experiment and he gambled with peoples lives. 86% of businesses never had a transaction in bitcoin and half of the population doesn’t even have internet.
This meeting is probably to ask for monetary help because they’re about to default on their IMF loans
What is putins approval rating?
You are comparing an economic issue to a nationalism one. Apples and oranges.
Putin's actions is in the best interest of Russia in their eyes. We may condemn it for being horrible but that doesn't matter to a country that views NATOs expansions since 1997 aggression. NATO as part of the negotiations that enabled Russia to peacefully let many countries break away during the collapse of the USSR was promised NATO would expand "not an inch to the east" since then 14 Eastern European nations have been enveloped into the American led alliance.
You can see how this would concern a nation right? We invaded Iraq not because we where scared they would invade and conquer us but because we where scared of other strategic issues. The biggest difference between the Iraq invasion and the Ukraine one is that we won quickly so we got to control the narrative and we got to use islamaphobia following 9/11 to justify invading any Islamic country we wanted.
Bush was super popular following an invasion into a country that had nothing to do with 9/11 he rode that popularity through a reelection years later.
I don't see the president of El Salvador doing or dealing with anything along those lines.
Exactly. The best thing to do would be stop talking about coin immediately
Doubtful, likely a misdirection from how bad his choices were for his country.
Gambia! Eswatini! All the heavy hitters are there. The movers and shakers of global finance.
If anything, it'd be moreso the small economies thar are more willing to experiment
For the economics community, I have some questions.
What happens when an asset of verifiable scarcity is used as money?
What happens when bonds are issued against an asset which has verifiable and immutable scarcity?
What will happen if the money that a people choose to use is not inflationary in nature, but rather deflationary?
How does a consumer economy thrive in an economic environment where the means of transaction incentivizes savings?
You either have Bitcoin lending, which will lead to a 1929 style crisis when the credit cycle turns bad, or lending is outlawed, which probably reduces capital investment by individuals and businesses and significantly reduces the potential output of the economy.
There is a reason why the world moved away from currencies pegged to gold.
The world has cycled through hard asset money, (type 1 money); paper that’s backed by a hard asset, (type 2); and fiat currencies (type 3) multiple times.
You are only referencing the current cycle here in the west.
Could you please provide some examples of your statement? Ones that were within in a modern financial system, preferably.
Ray Dalio studied monetary systems in his book “a changing world order” across the last 500 years in the west, and across the last 1500 years in China. It’s an awesome book.
Could you please provide some of those examples here that would be useful for the discussion? Your statement is very broad and I'd like to know what you are actually referring to. How significant were these transitions, did they have large impacts, are they representative of forces beyond their immediate environment, etc. Because we know there are real limitations to basing a currency on a scarce resource, it just takes away too many financial instruments that make modern financial systems run smoothly. And if I'm being honest, I have spoken to too many radical libertarians on reddit who would say that anything not gold is a lie. I know I'm exaggerating, but you understand my skepticism.
While I'm sure it's a good book, I really don't have time to read every book I see mentioned on reddit.
My point is that because societies have cycled through these monetary cycles multiple times, it’s a recency bias of everyone here to assume “fiat is what we have no so it’s the best and we won’t have another type of money”.
There is no “best” money; they all have pros and cons. Which is likely why society cycles through them once the incumbent type inevitably fails - as they all do.
Not sure what the request is here, you want me to name the actual currencies?
Hey I appreciate the response, but you don't need to explain the concept to me, I understand what you are saying and what those types of currencies are.
You made a claim that we have cycled in and out of those types of currencies multiple times. I asked if you could tell me what some of those times were.
Here are all of the instances its occured in China: [https://imgur.com/a/3d2dq1h](https://imgur.com/a/3d2dq1h)
Not expecting you to believe me - i wasn't there, I'm just referring from a book on economic history.
Type 1 occurred in the Roman Empire as well for a very long time, Rome inevitably enacted the earliest for of QE by devaluing their currency (coins) with other metals until they were so impure that no one accepted the coins. (fun fact thats where ridges on coins originated - so you could tell that no one scraped off a sliver off of a coin).
This is an example of jumping from type 1 (backed by the metal inside of the coin) to type 3 (backed by the military and faith of the roman military).
And of course you know of the cycle we have gone through in the US since pre-great depression. Devaluing the currency (relative to gold) saved the economy from the Great Depression.
Furthermore, these cycles of currency changes typically have occured after large-scale nationally internal or external conflicts -- world wars, revolutions, etc.
I would not say the Roman Empire or ancient/medieval China are the best examples for the cyclic claim. They did not have the understanding of economics or the financial institutions and tools we use. And I see this trend only going in one direction since those types of mechanisms were invented, toward fiat currency (since pre-great depression, by your example). If you have any more modern examples of the currency moving in the other direction within a (relatively) modern financial context, I would be interested.
But based on what you have shown I would question whether it is cyclic in nature as the steps of a cycle are often repeated in sequence and are often causal of each other. Given the information in your comment I would not conclude that it is a cycle as if it is a byproduct of financial forces are producing feedback loops that cause the next (not that you claimed that specifically). It's far more likely that the currency type is more dependent on governmental stability, trade networks, or other external forces.
To which I would say that calling it a cycle is a bit misleading or at least presumptuous, and more that moving in either direction is something that can occur under certain circumstances. And that we are not necessarily in a "current cycle" based on our understanding of currency withing our financial systems.
I loved this book - great read. Anyone into economics should have it as a must read.
Thanks for the recommendation. Seems like reviews say it's good (but of course as for all pop-sci books, grain of salt)
But how did the world use gold as currency for thousands of years, but the last 50 years we needed fiat?
It's not that we need fiat, it's that fiat is better. We have learned the economic tools that are required to use a fiat currency. Without proper management of the currency it fails fast due hyperinflation. There have been times in the past where fiat currency has been implemented but it wasn't done in economically sound way leading to hyperinflation.
How does the US debt and printing trillions of dollars fit into this? And how close or far is it from “proper management”? I’m not particularly alarmed about this, but many people seem to be.
Most of the world either didn't have a well established lending system which limited output this whole time or went through deep economic cycles with mass bankruptcies when using gold as currency. Just look at the economic recovery in 2008 vs 1929.
There would be liquidity constraints -all depends on how the speed of money circulation can adapt itself-
There still be inflation because it not only have monetary causes.
the same as with inflation, you will need more btc to pay for certain services. Just because it is never ending does not mean that it is secure to hold. The more it falls the more hands it will swap. Its like negative leverage. The higher it goes the less volatile it might become since it does not produce any revenues or assets unlike stocks (cuz stocks are shares that a company issues and you are buying a part of business that produces value.) This is why Buffet and Munger say that btc is worthless, which it is. It will go down the same way as tulips did in 19th century. I get it, ive read some books on btc and it is smartly made but it is still just a token. BTC not having inflation is actually bad for the economy, since inflation is needed to adjust for different situations in the market , a recession for example. You need to print money to keep people to spend money.
So tired of the lazy tulips reference. Tulip Mania lasted three years.
Blockchains have solved a long standing problem in mathematics and computer science called the Byzantine Generals Problem. It is absolutely an important breakthrough. We can argue about limited supply in the case of Bitcoin, but if you look at how DeFi systems have effectively replaced (“disintermediated”) credit unions, it is very clear that the future of finance is blockchains.
It’s really not a meaningful solution for the Byzantine generals problem, it’s just an excessive amount of redundancy.
And defi has not at all effectively replaced credit unions. Credit unions are very much still around, blockchain needs to do a lot more to show it can be the future of finance
True , it has solved that problem , but Bitcoin is not blockchain, it uses blockchain. I cant argue that blockchain is not an important investment , but by buying bitcoin , you are not investing in developing blockchain for sustainable finance. IMO it makes more sense to invest in a company that tries to develop blockchain further. Bitcoin is simply a token, that is based on blockchain. Its like buying a car that uses gas because you believe in gas and treating it like it is an investment. Car , same as bitcoin , does not produce any assets if it sits or is traded. Sure you can get some money from doing so, but it will never produce earnings, will never expand as businesses do , etc. Again, I think that blockchain is a good investment, but you are better off finding and funding companies that you believe in and are developing new advancements for blockchain.
Same argument Buffett has against gold. I get it. Yet here we are with gold at 1800 and Bitcoin at 30000. The only thing I know for sure is that my USD will continue its slide into worthlessness.
By the way, Bitcoin continues to evolve although understandably slower than other coins that have far less value riding on them. Lightning Network makes payments fast and cheap. Taproot enables new smart contract layers. Personally I see Bitcoin’s fixed supply as being very useful for large net settlements and for reserve capital to support issuance (debasement) of other everyday currencies. It doesn’t need to be a point-of-sale currency to have value.
gold value goes up with inflation so your argument is not valid. Gold is physical , bitcoin is not. Bitcoin cannot be traced, unlike cash. Everybody can make as many wallets as they wish to do, bank accounts do not really work that way. Your credentials are needed when you create a bank account in order for you income and expenses to be tracked. With bitcoin it is not possible at the moment, which means that it is highly unregulated.
Bitcoin hodler here.
It is possible to have parallel monetary systems, where two commodities like gold and silver are both used as money. During the end of the Roman Empire, the Romans had the silver Denarius and the gold Solidus. The silver Denarius was used for everyday transactions and was constantly debased while the gold Solidus held its value and was used for large transactions.
Bimetalism, not pure gold standard, was quite common in history, even in the US. [Here's a good paper to read on it.](https://www.nber.org/system/files/working_papers/w20852/w20852.pdf)
Personally, I think that bitcoin will end up coexisting with government issued currencies or some other currency system. Not sure at all what that ends up looking like, but maybe a dual currency system with one currency (maybe a fiat currency) being more liquid and responsive to economic conditions, and the other currency being a neutral, unchanging entity might be more stable than either currency system alone.
In fact, Meissner, in the paper I linked to above, seems to suggest just that.
> Contemporaries and Velde and Weber (2000) argued that bimetallism’s strength and value was its ability to generate greater price stability than a monometallic regime. On the other hand, bimetallism might be theoretically inefficient when compared to a gold or silver standard if both precious metals have non-monetary uses (Velde and Weber, 2000). If this is true, then bimetallism’s failure shows how an efficient institution (i.e., the gold standard in Europe) can displace an inefficient institution. On the other hand, if the sole function of a monetary system is to maintain price stability, the disappearance of bimetallsim was a negative outcome.
Most of history has run that way, so we can use gold and silver economies as a reference.
Generally things run fine with one exception: there is no way for the state to operate a war machine. Even as far back as ancient Rome, emperor's wanting to fund a war needed some way to devalue the currency. They has to resort to debasing the metal in their coin system.
Unlike gold or silver, there is no way to debase bitcoin. So if bukele is able to run a country off of it, he won't be able to maintain much if any military.
Why does a military rely on devaluation?
Historically, it always has. The sharp need for quicl capital to fund a war cannot wait till harvest season, nor tolerate the losses and time needed to stock a treasury in advance. Devaluation leads to an army being formed quickly and well supplied.
Wars are expensive
How do you think biden is funding ukraine?
Wasn’t a coincidence right before WW1 you saw countries already begin to break the peg, eventually confiscate the gold and then completely fall off it
Anyone telling you that “we moved off the gold standard for a reason” is having recency bias
We didn’t need it for vast majority of human history, and Nixon himself promised that we would return back to the gold standard, it’s really only been 50 years of this experiment where currency is backed by nothing but debt and trust
No, it doesn't run fine and the military is not the issue. The issue is that a fixed monetary supply hurts the economy by being an anchor on commerce. It makes debt more expensive, and discourages investment.
Study after study at this point has shown that countries that weren't on the gold standard did better than those that were in the Great Depression.
I'm not disagreeing with you... but frankly I'm sick of the west spending money we dont have on war and welfare.
> What will happen if the money that a people choose to use is not inflationary in nature, but rather deflationary?
We've had long periods of deflation in the western world coupled with growth. Most of the 19th century was deflationary in the US, with the big exception being the period during the civil war.
The idea that deflation is bad for growth doesn't really have very strong empirical evidence.
What’s even weirder is this entire fiat experiment has run for like 50 years of history
Let that sink in when anyone tells you “we need fiat, there’s a reason we abandoned gold, deflation is bad, the evidence shows it”
>bitcoin is not scarce because it is divisible into sats
1 BTC = 100 million sats. This doesn’t change the fact that there will only be 21 million bitcoins available. Ever.
If you have $100 USD, convert it into cents, does that make your initial $100 more abundant?
This sub is a meme.
> This sub is a meme.
Sums it up.
If you think tens of thousands of nodes will all be in agreement to change the one thing which defines the integrity of the protocol, i.e it’s fixed supply, then you must be smoking some serious shit.
I’m not saying you are wrong on the Bitcoin part as I don’t have enough knowledge but the part of unemployment is not accurate. Stimulus for people was also not accurate because percentage wise just a small part of the printing.
>it’s already been done in the past countless times. It’s human nature
Ah yes, I remember the countless times humans were able to manipulate the fixed supply and transactions of a wholly open and decentralised global ledger. Yes that was sarcasm.
Human nature is to inflate the monetary supply and it’s only possible when the power to do so is held by a centralised entity.
Your arguments are proving to be a solid example as to why we need a decentralised monetary protocol which *cannot* be manipulated by a centralised entity, as you have described. And for the first time in humanity’s existence, we have engineered just that.
The funny thing is you don’t even see the irony in your own arguments. Just another reminder that this sub is a meme.
Everyone here knows the economy has gone to shit and things are not improving. But somehow when they try to find the root cause. They suddenly become blind.
Cognitive dissonance is a real thing
the chain has been forked numerous times... its just a matter of changing the protocol to accept new bitcoin mining and that's it. they will probably do it if it even exists a hundred years from now
You can fork Chess to play with five queens if you want, but you'll need to find someone who wants to play that game with you.
The chain has indeed been forked multiple times, hundreds. Yet BTC remains number 1. The free market has decided that the most valuable chain is the original protocol where the monetary policy has not been altered. The numbers of market cap do not lie. I have no doubt that in future, the forking of new chains will indeed continue. But does that guarantee the free market will move their money over from the original chain? Based on the value proposition for the bitcoin network (immutable ledger, fixed supply and 0 centralised entities calling the shots), I believe the chances of free market investors running to the forked chain where they will lose these value propositions will be minimal.
> What happens when an asset of verifiable scarcity is used as money?
There are over 10,000 cryptocoins and new ones are created every day. There is no scarcity of crypto assets.
> What happens when bonds are issued against an asset which has verifiable and immutable scarcity?
How can you issue a bond against something with no cashflows?
EDIT: downvotes without an argument send a message - "I don't like what you have to say but I have no refutation."
You cannot issue a bond against something which does not have cashflows, and all the downvotes in the world will not make that possible.
Yes you can issue it. The asset it self does not need to have cash flow but rather whatever the activity of the bond issuer.
E.g. a company issues a bond denominated in bitcoin to use the capital for a productive activity that yields more bitcoins.
Bond issuing has absolutely nothing to do with the ability of the underlying to produce cash flow. Dollar on themselves do not produce cash flow.
Pd: I’m not a crypto bro. In my view its a scam.
Just because 10,000 shit coins are created everyday doesn’t mean that the free market will hop onto each one and adopt the network.
BTC is clearly worth something. It’s an open source protocol that is available for anyone to use. If an asset class that doesn’t have a centralised team, 0 executive boards, 0 marketing hype and 0 VC investment is somehow able to reach $1 trillion in market cap, then it’s safe to assume that the free market has assigned value to said asset. There will never be another cryptocurrency which can replicate the immaculate conception of bitcoin and the free market clearly agrees thus far. Numbers don’t lie.
Though if you choose to admit this or not is an entirely different thing.
This is not any sort of explanation as to how you can issue a bond against something that has no cashflows.
> Just because 10,000 shit coins are created everyday doesn’t mean that the free market will hop onto each one and adopt the network.
I never said it did. I said it meant there is no scarcity. And there isn't.
Well you’re framing your entire argument on the basis that we *need* bonds.
The reality is that government bonds only exist as a debt security to support government spending and, more often than not, war spending.
The question we should be asking is what % of government spending is used for tangible benefits for the society it governs and how much of that is amassed by bonds vs tax revenue.
Bitcoin has a very fixed supply. It's actually the most scarce thing on the planet, as there is no option or method to increase supply.
Regardless of el salvadors uktimate success or failure, It will be interesting to see a hard money economy using a unit even harder than gold, a first in human history.
Ohhhhh.... I can see some nations going seriously under in this Bitcoin shite.
This will deserve popcorn but I'm tired of popcorn ... any suggestions of what to have as snacks now that I hate popcorn?
NFT popcorn. Fewer calories!!!!
Seriously though, how can these countries be seriously discussing the adoption of BTC given its recent plunge in value.
From their POV, it’s cheaper to get in now.
He’s definitely pleading with them to help stabilize the market. 100%
I doubt a bunch of broke dick countries would even be worth pleading with to stabilize the market.
It might just be crazy enough [to work](https://www.youtube.com/watch?v=ZiJa9diJOMk)!
It’s not necessarily cheaper because any valuation of bitcoin compares it to fiat (real) currencies, so the price shouldn’t have the same effect on international trade until it actually (not just legally) becomes a unit of account for these nations. I.e. bitcoin price goes down -> you need to spend more to buy the same goods/services so overall price stays the same.
Unless they are just speculators hoping the price will go up (surely not) then they probably do see it as cheaper as you say. But I’d argue current price has no meaningful predictive power for future price anyway…
I’m sure the intelligent and trustworthy officials in charge of this initiative will think all this through and make a sensible decision.
Thats their form of buy the dip.
Bukele keeps trying to buy the dip and then it goes down more.
*looks at chart*
“Ok boys it’s up thousands of percent within a time frame that is minuscule to a nation state’s interests. It’s “buy high” time MFers, woo!”
The same happens with my shares. At least i know they will create value in the future.
The craziest part is they will bet their countries future on a coin that is easily manipulated with no god damn accountability . There's no regulation which is BAD!
Thats why they are meeting up, to discuss regulating it.
Saying BTC has no accountability is comepletly oblivious to the fact that it has a completely open ledger where everyone in the world can see every transaction ever processed.
What happens when hedge funds aka whales manipulate the market? Nothing right yeah there's 0 regulation.
Yeah lol what happens when people do that with fiat.
Market manipulation is a tale as old as the stock Market itself.
> Yeah lol what happens when people do that with fiat.
I worked with someone who got ten years in jail for doing exactly that.
This is also a problem only on exchanges, not really something Bitcoin does
The problems of exchanges cannot really be run away from though
The same thing happens with fiat. I'm not saying it doesn't or won't happen with crypto but to wield a comment like this is just silly. The same institutions literally own the regulators in the U.S, who are you kidding with this market manipulation comment. Manipulation is what defines modern markets, especially in the U.S.
There are laws against this. People go to jail for these offenses all the time, particularly in countries which aren't the United States.
That's transparency. That has nothing to do with accountability.
Suppose an anonymous account uses cryptocurrency to buy child sexual exploitation videos. Explain how this account holder is held to account simply by the blockchain. Be specific.
Literally exactly this
Yes, I have read that story twice before.
This involved _the police_ and _the law_ and _inept criminals_. Yes, police and laws keep us safe. That does not mean the blockchain is magically self-regulating.
I'm with you. Fuck the blockchain.
Regulations kill the market. Our markets are currently manipulated by regulations.
Regulations create markets. There’s no commercial radio or wireless communications without regulations dividing and apportioning spectrum to broadcasters / equipment.
Regulations *preserve* markets in forestry and fishing, preventing over catching.
Bitcoin and Ether and other crypto are self regulated. The code that runs them is the regulation and there are rules built in place to reward good behavior and punish bad behavior on these blockchains. This is why they are able to exist without a central organization or government
Punish bad behavior? How?
Explain why it's been forked about a hundred times then?
And *who* forked it? Surely not some... central authority type group?
"Forking" is not a noteworthy event. You can declare yourself an independent nation, or lay claim to all the real estate on Ganymede, and that would be just as significant as you "forking" bitcoin.
Even better, it's not a currency. It would be similar to a country saying "Our national currency is now Google stocks." The only difference is that stocks have an actual intrinsic store of value as their backed by a company literally making or not making money.
Instead, what they're getting is magic beans.
LOL. I had not thought about the calories.
As it regards the plunge of BTC, it makes me wonder if they even get newspapers down there.
Have you seen the stockmarket? Bitcoin hasn't dropped as hard as some of the huge stocks have.
Central Banks shouldn't be messing around with stock markets, either (though there are some that do so).
So because Bitcoin didn't bomb as hard as some stocks (yet), it is a viable currency? Yikes. Tech bros getting into economics is a really annoying trend.
If BTC becomes, as it is, more and more correlated with the stock market, its value as an asset plummets
Also, the proper comparison is between a market portfolio ie SP500 and BTC, not cherry picking individual stocks.
Massive amounts of corruption
A widely publicized drop in price can be an indicator that a big player wants to purchase.
It’s still going up, when you compare it to 1-2 years ago
"It has gone up in the past so it will continue to go up," is not good reasoning for r/economics.
You could say that about it going down too. “It’s going down so it will continue to go down forever”Also not a good reason
Bitcoin is _not an appropriate currency_ for a government because of its huge volatility.
That’s where I disagree. Bitcoin is good for governments because they can’t print more. There will always be the same number of Bitcoin. 1 Bitcoin now will always be 1 Bitcoin 100 years from now. That is stable to me, you can’t say that about any fiat currency. 1 USD now will be worth 0.01 USD 50 years from now
What? That is so divorced form a fundamental understanding of currencies.
By your logic of Bitcoin 1 USD is 1 USD also 50 years from now, but what they are able to buy from it is what changes. Comparing historic currency values serves to demonstrate inflation or relative currency value fluctuations, or in other words:
1 Bitcoin ten years ago is worth 0.000169 BTC today
Does inflation happen because the things and services we buy get more expensive? Capitalism should be making things cheaper and more efficient, but inflation flattens this and the poorest people never see the benefits of capitalism.
My argument is that if governments used Bitcoin or some deflationary crypto, we should see more wealth distribution amongst the poorest, and not the top capitalists gaining all the benefits because they know where to park their money to avoid inflation.
I’m not an economist so maybe my explanation isn’t the best. I also live outside the US, and financial services are not the same to us.
do you mean the run from 3k to 30k that just happened over the last couple years?
I always loved Dots at the movies.
It almost feels like they’re threatening the imf/international community with suicide in the name of economic experimentation.
Excuse my ignorance, but what do you mean by "this Bitcoin shite"?
El Salvador officially adopted bitcoin as legal tender and converted a large portion of their international reserves into it. They are very likely to default on their external debt due to mismanagement and losses.
Is that not a major, potentially fatal, hurdle for bitcoin? If a huge section of the population doesn't trust it, and a bigger section doesn't even understand it, then it seems at least a couple generations away from going any further than it has. Add in that most of the current adopters are "investors" rather than users and I don't see how it develops beyond a niche tool. It may bounce in value (and I have a small amount of it just in case) but I can't imagine any scenario where bitcoin unseats the dollar in the next few decades. The only thing I've ever actually used crypto for is gambling and that's because the type of gambling I wanted to do wasn't legal here.
It is indeed a hurdle. Most of the new people coming in the space sees Bitcoin as an old, slow and boring "crypto". They buy some alts, maybe get some profits before it melts down in a rug pull. Rinse and repeat.
It takes knowlegde , time and effort to actually understand Bitcoin and why it so important. Then you have these people who bruntly shrug it off as an ponzi etc without even trying to read up on the topic.
Looking at the state of the world, the USD and how the US is being run, I really struggle to see how the dollar will exist in the coming decades. It's not sustainable and the working class will take the biggest hit (as always).
I always try to challenge my views on Bitcoin, but I only see these argument on repeat which really doesn't make an impact. (Energy-FUD, it's volatile, Proof of work is no good lol, no intrinsic value). Too many people in power has too much to lose supporting Bitcoin. Maybe the poorest countries in the world can be the change that is needed for the network. They certanly doesn't gain anything under this current system.
Pretty much, yes. Forming a opinion based on headlines and misinformation is pretty common these days, but if that is how you deal with new tech and a everchanging world, you are going to be left behind.
PS: Im still waiting for a breif explanation on how Bitcoin is shit.
Edit: The USD is the best crackhouse on the crack-street. Every fiat-currency are a melting icecream competing in a race to the bottom.
The iPod is no longer being made, grandpa!
Imagine you built your future around iPods in the year 2002. "15 years from now everything is going to be an iPod!"
Well now the reason for the iPod existing isn't important anymore and the tech has moved on from that.
Same thing will happen for Bitcoin.
Tell that to the guy I responded to then.
Ah. You're the guy threatened by Bitcoin.
I don't have any reason to be threatened by it. I just don't see crypto as the future. Not in it's current form at least.
When was the last time you used bitcoin to buy anything?
A country this poor should not be buying speculative assets. El Salvador president is using vital resources to buy a speculative asset vs investing in badly needed infrastructure. I can’t think of a more incompetent, inept, foolish way to waste your countries limited resources.
This guys a complete clown.
They have around 1801btc which is worth 54M dollars, for a country is nothing, even for a small country like salvador, that only represents 1% of their international reserves.
That's a salty person if I've ever seen one. Get a grip dude.
What’s to discuss??? Shitcoin is down and your fucked, so what!! post your losses on Reddit and get over it, sounds like he’s gonna convince a bunch of other poor countries to buy in and go deeper in debt
Amen. Fricking speculative bubble roulette boom-bust ponzi scheme. I hope the reality is starting to hit the BTC fanboys with a brick.
Amen to that.
Afaik he only used bitcoin. Is el salvador also experimenting with a shitcoin ? (Not counting usd)