They probably don't understand what is Tulipmania, what caused it.
They are solving problems by creating more problems,
ie solve problems with problems.
El Salvador hopes to becomes the world’s first country to adopt bitcoin as legal tender
- Thread starter johnarb
- Start date
They probably don't understand what is Tulipmania, what caused it.
They are solving problems by creating more problems,
ie solve problems with problems.
All El Salvador needs to do is upload its entire population into the Metaverse - problem solved!
I wonder how (whether) this will affect Bukele's popularity - until recently, it was in the 90s. Imagine if he'd spent that time, energy, and political capital developing new export industries, or reducing corruption.
My impression was always that this was a bright shiny object he could distract everyone with in order to avoid the hard real work of tackling things like new export industries or reducing corruption.
While you certainly have valid critiques, btc is currently a risk asset on it's way (or not) to be a global reserve currency. It's either a boomer coin that does nothing and that is a pro or con depending on one's perspective.
The article states;
"Bukele also sold the legislation on the idea that bitcoin would make remittances — money sent to Salvadorans from friends and family members working abroad — cheaper. However, the opposite was often true.
This is because citizens would typically turn the bitcoin into cash after receiving it, Fortune reports. To do that, they needed to travel to an ATM, which takes a substantial cut of the money withdrawn. Exchange platforms like Coinbase also take anywhere from two to four percent of the money as well.
Hanke believes that that winds up being nearly four times as expensive as traditional remittances."
At first blush, accessing a legacy processor would also require "travel". Doesn't seem like an apples to apples comparison.
https://remittanceprices.worldbank.org/en/service/ria-united-states-el-salvador-57
4% on first $200
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It wasn't my impression that the travel wasn't included in part of the percentage transaction cost, that was just an extra bonus potential hardship.
El Salvador is a little different case than most others in that there's never been a currency exchange issue because they use the dollar, so the whole "We're all for the poor people who have to make remittances" argument is even more facile there than usual. That means you could always use something like Venmo, Zelle, or PayPal to both move money and pay for things. I don't have a ton of first-hand experience in El Salvador but do in the Bahamas where there is a similar dollar peg. Even in the most remote of places, you can pay for your groceries, for example, using Venmo. So the cost of that is basically zero, your relatives in the U.S. remit money to your Venmo account, you use it to pay the store. So at best a store that was willing to accept BTC could equal the status quo that's worked fine for years and everyone understands. And if the store doesn't accept Venmo et. al., you can use something like a Wise card, which also works at any ATM, not just a BTC ATM, and as a credit card. As I've said over and over, BTC is a solution looking for a problem when it comes to remittances. As the articles indicated, it's fallen flat on its face for this purpose in El Salvador, which was quite predictable by anyone not blinded by the hype.
I don't understand why sociopath losers think people of El Salvador are suffering
They're having a great time as their economy is booming. Mexicans are jealous of their president who they love
They did not buy or acquire all their bitcoins at the highest price
They acquire and spend since btc was at 30k when it became legal tender, they acquire and spend as btc goes up, they acquire and spend as btc goes down
People of El Salvador are saving hundreds of millions of money transfer fees plus the inconvenience of being limited to business hours.
The use of western union and the likes have plummeted and it's not eliminated as an option. No one is prevented from using them
Bitcoin Billionaires and Millionaires are constantly traveling back and forth to El Salvador some are taking residency in El Salvador
I know some people from El Salvador in real life. They are very happy with President Bukele
Turkey is interested in El Salvador, maybe they will be next to announce Bitcoin as legal tender
They're having a great time as their economy is booming. Mexicans are jealous of their president who they love
They did not buy or acquire all their bitcoins at the highest price
They acquire and spend since btc was at 30k when it became legal tender, they acquire and spend as btc goes up, they acquire and spend as btc goes down
People of El Salvador are saving hundreds of millions of money transfer fees plus the inconvenience of being limited to business hours.
The use of western union and the likes have plummeted and it's not eliminated as an option. No one is prevented from using them
Bitcoin Billionaires and Millionaires are constantly traveling back and forth to El Salvador some are taking residency in El Salvador
I know some people from El Salvador in real life. They are very happy with President Bukele
Turkey is interested in El Salvador, maybe they will be next to announce Bitcoin as legal tender
As I understand it, the central idea is to go bankless and not have any trusted intermediaries. Paypal was notorious for freezing funds back in the day with ebay speculators. While Strike is custodial, it allows for self-custody of btc which arguably is a path to self-sovereignty. Venmo nor Paypal, even though they allow purchase of btc, do not offer self-custody of btc. I see the experiment in El Salvador requiring more education of the populace to become a successful endeavor. Plus the fortunate positioning of using geo-thermal for btc-mining gives El Salvador an advantage if/as btc gains adoption.
What is your perspective on currency debasement?
El Salvador’s President has likely lost money through Bitcoin trading, economists say
El Salvador’s President Nayib Bukele is probably the only head of state in the world who uses public funds to trade Bitcoin with his phone.
So far, it appears he’s lost money. That’s because the process is shrouded in secrecy, though the country has bought at least 1,391 Bitcoins, based on what the 40-year-old Bukele has said on Twitter.
The purchase Bukele says he’s made would have cost the Central American country about $71 million based on an average acquisition price of $51,056 per token using the date and time of his tweets, as calculated by Bloomberg. Assuming the government has held the digital coins, they’re now worth about $61 million at Wednesday’s price, a 14% loss.
El Salvador began buying Bitcoin in September after Bukele pushed through a plan to make the nation the first to consider it legal tender. Bitcoin was trading around $50,000 then, and the nation continued to buy as the token approached a record high of almost $69,000 in early November. It has since lost as much as 40% of its value.
Even with the slump in Bitcoin, any likely trading losses are dwarfed by the plunge in the nation’s bonds, which has raised El Salvador’s financing costs. The country’s overseas dollar bonds posted the world’s worst performance in 2021 as investors were spooked by Bukele’s unorthodox economic management and the nation’s experiment with Bitcoin. The government didn’t respond to requests for comment.
The yield on the nation’s $800 million of dollar bonds due January 2023 rose to 34% on Tuesday, from less than 9% a year ago. An extended fund facility with the International Monetary Fund has not come to fruition due to the multilateral lender’s concerns over Bitcoin.
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Rekt.
No-one in the remittance community is worried in the slightest about trusted intermediaries. That's a first-world problem cited by people who haven't the first clue what it's like to be the people who they're condescendingly crafting solutions for. Again, this is a solution looking for a problem.
Speaking of solutions, this surplus of geothermal power is as mythical as the poor remittance worker saved by BTC. El Salvador imports 25% of it's electricity and 40% of the power they do generate is from imported fossil fuels. It's frankly recklessly irresponsible to purposely add a significant power load to a country like that to do something that adds absolutely no value to the citizens who live there, running purposelessly difficult algorithms to mine bitcoin. If you actually could increase geothermal generation there by orders of magnitude, the first thing you would want to do is eliminate costly imports and polluting fossil fuel, the second would be to add industry that actually provided jobs and GDP to the country, the third would be to lower electricity costs for residents, the fourth would be to increase electrification....and so on until the 101st thing would be to waste it mining BTC! Which brings us to another ugly underbelly of crypto, Bitcoin alone already uses more power than all of Argentina. If crypto ever did actually become a reserve currency, we would have to significantly increase the power production in the world, with all the attendant waste and pollution. If we put all that to productive use, it would significantly increase the world's GDP. If we squander it on solving meaningless equations to mine for BTC, it get's us what, this freedom from trusted intermediaries thing that less than 1% of the worlds population gives a crap about?
So what do I think of "currency debasement"? I think the fact that BTC has been "debased" by 40+% in the span of a couple months is a pretty strong indicator of why it's a horrible idea to use it as a reserve currency or even a remittance device for poor El Salvadorans. What are your thoughts?