El Salvador hopes to becomes the world’s first country to adopt bitcoin as legal tender

[johnarb]

There will be a government trust fund that will allow anyone who gets paid in bitcoin to convert to US $

No risk for anyone who does not want the volatility risk but everyone has to accept bitcoin as legal tender even for existing loans

They have 30 minutes to convert to US $. They can use a government version of the bitcoin wallet (in partnership with Strike) but any bitcoin wallet is allowed for others who want to hodl bitcoin and accept the volatility risk

The President of El Salvador is on Twitter spaces right now, f'n Legend

https://twitter.com/x/status/1402497926891458563

 

[maxinger]

Is El Salvador going to change their mind?
It is still not too late to change their mind.

Hackers have proven that they can empty the bitcoin wallets.

 

[cesfx]

Is El Salvador going to change their mind?
It is still not too late to change their mind.

Hackers have proven that they can empty the bitcoin wallets.

I see no proof at all that the private key could was hacked, yet. They did not disclose how they got hold of this private key, but only that they acted on USA soil.

If they had a quantum hacking power to do this, would they waste it on this relative tiny amount of BTC?

 

[mlawson71]

I doubt it they will change their minds. They are also seriously considering legalizing BTC mining with the intent of promoting it. This is a direct opposite move of what China recently did, as it banned crypto mining altogether. These plans will be further discussed within a meeting with the International Monetary Fund.

They may be hoping people would move all that crypto mining from China to their country.

 

[Sig]

I doubt it they will change their minds. They are also seriously considering legalizing BTC mining with the intent of promoting it. This is a direct opposite move of what China recently did, as it banned crypto mining altogether. These plans will be further discussed within a meeting with the International Monetary Fund.

They may be hoping people would move all that crypto mining from China to their country.

Invite significant electricity demand to a country with a spotty electric sector to start with where the marginal generators depend on imported LNG. Sounds like a great idea!

Seriously, you can't just create a couple GW (China uses about 4GW of capacity on Bitcoin mining now) of generation out of thin air in a third world country with barely a GW of existing capacity, let alone build distribution for it. These are 5 year minimum projects from first setting up the deal to electrons flowing to where they're needed. Worst case they build a 3 GW generation and distribution system and the crypto industry moves on leaving the poor folks there to socialize the cost in their rate base for decades for a system much bigger than they need. And imported LNG electricity is never going to be nearly as cheap as the coal power from a plant adjacent to a mine like they have in China, so the whole thing makes little sense. It smacks of third world leadership wanting to sound sophisticated by chasing a shiny object they don't actually understand. And as I mentioned before, a solution that makes everything appreciably worse compared to their already dollar denominated economy.

 

[virtusa]

Invite significant electricity demand to a country with a spotty electric sector to start with where the marginal generators depend on imported LNG. Sounds like a great idea!

Seriously, you can't just create a couple GW (China uses about 4GW of capacity on Bitcoin mining now) of generation out of thin air in a third world country with barely a GW of existing capacity, let alone build distribution for it. These are 5 year minimum projects from first setting up the deal to electrons flowing to where they're needed. Worst case they build a 3 GW generation and distribution system and the crypto industry moves on leaving the poor folks there to socialize the cost in their rate base for decades for a system much bigger than they need. And imported LNG electricity is never going to be nearly as cheap as the coal power from a plant adjacent to a mine like they have in China, so the whole thing makes little sense. It smacks of third world leadership wanting to sound sophisticated by chasing a shiny object they don't actually understand. And as I mentioned before, a solution that makes everything appreciably worse compared to their already dollar denominated economy.

All these countries who are interested in BTC are countries with a very weak and crashing economy. The result is that their currencies crash too. They are dreaming that BTC can revive the economy and wipe out all the misery they have? This shows how desperate they are. When people are desperate, stupidity takes over control.

They are the typical victims of scams. People in a desperate financial situation would believe anything. Put MLM in it and they will all try to get other people in the scam to make some bonus. The ponzi pyramid system. As long as BTC is not implimented in the entire economical system it will not work because parts of the economy are "fiat money connected" the massive swing will have to be neutralized.
If you buy bread but the flower to produce the bread is bought in $, every swing in BTC will have impact on the buying power of the people. Some days they will have not enough money to buy bread.

 

[Daal]

Strike uses a really clever way to solve the remittances and underbanking problem. Its not a coincidence they choose El Salvador for their efforts. The country already uses the USD and 70% of their people are underbanked

So the idea is that someone who owns USD in the US, can then through Strike send those USD to someone in El Salvador by instantly converting it to BTC, send it through the Lightning Network and the person who receives it El Salvador will have it instantly converted to USD. The cost of this will be free, compared with the legalized theft perpetuated by companies like Western Union who has been charging 3-10% and taking 2-3 days to deliver funds for over 100 years. No BTC risk is taken by this transfer as Lightning takes 2-3 secs for a transfer

https://podcasts.apple.com/my/podcast/jack-mallers-vs-the-world/id1317356120?i=1000504716648

Now the people in El Salvador will be able to be banked by simply having an app, no need for a bank account. And most people these days have a cell phone. If you look at what MPesa was able to do in Africa for the underbanked, this is a version of that

Can this lead to problems? Yes, people might decide disable the conversion of BTC to USD and be overly exposed to BTC instead. Some people will have gambling urges from having all their money in BTC and during bear markets, they could go into financial trouble but on the other hand, they could actually make more money and be better off. Who knows what the long-term impact will be, but in terms of remittances and enabling underbanked to having some access to finance, its going to be great, they just need to make sure people understand the risks and volatility involved if they do decide to bet on BTC prices

 

[virtusa]

The cost of this will be free, compared with the legalized theft perpetuated by companies like Western Union who has been charging 3-10% and taking 2-3 days to deliver funds for over 100 years.

Did this afternoon a transfer with Western Union. Cost was 1.56% and money was cash available after a few minutes in any bank in a country far away.
So not 3-10% and taking 2-3 days.

 

[Daal]

Did this afternoon a transfer with Western Union. Cost was 1.56% and money was cash available after a few minutes in any bank in a country far away.
So not 3-10% and taking 2-3 days.

Well, you dont represent the planet. Read around about how many people in 3rd world countries are taken advantage by remittance companies
https://voxeu.org/article/stubbornly-high-cost-remittances

"Cross-border remittances are far from costless. On average, the charge for sending $200 – the benchmark used by authorities to evaluate cost – is $14. That is, the combination of fees (including charges from both the sender and recipient intermediaries) and the exchange rate margin typically eats up fully 7% of the amount sent. It is less expensive to send larger amounts, with the global average cost of sending $500 at just under 5% (World Bank 2017b). Even so, the aggregate cost of sending remittances in 2017 was about $30 billion, roughly equivalent to the total non-military foreign aid budget of the US!"

I will take free over this any day, especially with no BTC risk

 

[Pekelo]

Strike uses a really clever way to solve the remittances and underbanking problem.

Tether? With Tether you don't need the utter stupidity of LN or the volatility of BTC. I could have said Bitcoin Cash too, but that is still volatile.

And no, tx fees are not even close to free with BTC.