[HN Gopher] El Salvador's Bitcoin use grows but headaches persist
___________________________________________________________________
El Salvador's Bitcoin use grows but headaches persist
Author : rsj_hn
Score : 88 points
Date : 2021-10-07 20:11 UTC (2 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| bob229 wrote:
| Crypto is trash
| rsj_hn wrote:
| Is there anyone here on HN who lives in El Salvador and can
| report how things are going?
| deviantfero wrote:
| I've been using it with a couple of other people and testing
| transfers between private wallets, chivo wallets, conversion
| between USD and BTC in small amounts, it hasn't failed on me
| yet.
|
| I've also bought in a supermarket with it, again small amounts
| 8.00 USD to be precise (avocados and some other stuff), a lot
| of businesses take BTC now, some of these businesses are:
|
| - Super Selectos (biggest supermarket chain here in ES) -
| Walmart (second biggest supermarket chain here in ES) - Siman
| (electronics, furniture, clothes) - ZARA (clothing) - Starbucks
| - Mcdonald's - Pollo Campero
|
| these are just some examples, a bunch more are taking BTC
| payments from chivo wallet and really any LN compatible wallet.
|
| you can take your money out of the government wallet by:
|
| 1. linking your existing bank account and transfering USD to
| your bank 2. cashing out in one of the 200 ATMs 3. transfering
| your BTC to a private wallet
|
| for me personally, superficially it works, the inner workings
| are opaque tho, I don't expect every BTC in government wallets
| to actually be backed by an actual BTC for example, the
| government does not have enough BTC to cover the $30 USD in BTC
| bonus they've been giving out, and not every BTC you get in the
| chivo wallet is reflected somehow in the blockchain.
|
| again my use has been pretty limited, I've day-traded with
| really small amounts, I've read people complaining about bank
| transfers taking a few days or not working at all (balance
| disappears from app, does not appear on bank), or ATMs being
| out of cash, or ATMs subtracting amounts from wallet and not
| giving money, I have not tried to do any of these yet though
|
| other issue is security, the facial verification seems to be a
| facade so anyone with your DUI (similar to SSN, but it is
| public knowledge) and your birthdate can claim your account and
| your $30 bonus if you haven't
| throaway6942 wrote:
| Aaron van Wirdum is a BitcoinMagazine journalist who documents
| Bitcoin in El Salvador.
|
| https://twitter.com/aaronvanw/status/1435236902274220040
| butmuh wrote:
| So now they are up 5% on their investment in two weeks and the
| establishment still has to nitpick on a national tech rollout
| with positive cashflow.Hmm.
| anonporridge wrote:
| Hardly surprising.
|
| Regardless of the future of bitcoin, I do wonder if this move
| will serve to accelerate the country's move towards more
| technological and digital literacy. For a place that's probably
| still pretty heavy on physical cash, this could be a net positive
| for them in the long term even if bitcoin as a currency doesn't
| work out.
| R0b0t1 wrote:
| May draw lots of money if it is easy to exchange USD for BTC.
| colechristensen wrote:
| Is it not easy to do this in the US with several popular
| legal local exchanges?
| fleddr wrote:
| There's a chance. If you consider that society is largely
| digital and increasingly remote, it stands to reason that
| theoretically a new mini Silicon Valley can be founded
| anywhere.
|
| El Salvador already offers permanent residency if you have a
| few BTC in capital. And they're going to start mining using
| excess volcano energy. We truly live in odd times.
|
| Imagine that it works. A tech society evolving in the jungle.
| The feeling of being part of a rapidly developing society,
| rather than one stagnating or in decline.
|
| And next, every neighboring country watching carefully. Which
| they already do. Because they're all tired of being a 2nd class
| America.
|
| On Twitter, the president of El Salvador dissed the IMF's
| concerns as if an immature crypto bro.
|
| I love it. It's a thing of beauty.
| anonporridge wrote:
| > 2nd class America
|
| You mean vassals of the American Empire, paying tribute in
| the form of currency debasement that only benefits citizens
| of the empire at the expense of your own citizens?
| fleddr wrote:
| Yep, that's another way to put it.
| pkulak wrote:
| Welcome to custodial wallets. The only way to get all the
| problems of banks and cryptocurrencies in one place.
| endisneigh wrote:
| If the government cares about making it easier to send
| remittances, should there be a simpler way than Bitcoin?
| tdeck wrote:
| This isn't about making things easier or better for ordinary
| people. If it were, the government wouldn't make it a crime for
| small businesses to not accept Bitcoin in a very poor country
| with limited communications infrastructure. El Salvador has 3.8
| million internet users out of a population of 6.4 million
| people.
| fleddr wrote:
| What is it about then? What possible dark scheme lies behind
| a system where citizens can instantly swap between USD or BTC
| at no charge?
|
| Remittances aren't about easy, it's about bypassing fees in
| traditional banking that may be as high as 30%. As well
| making remittances possibly to people that are unbanked, yet
| do have a smartphone.
| tdeck wrote:
| These policies go far beyond remittances. My understanding
| is that any business is required to accept bitcoin (through
| the government wallet system) for payment. In a mainly
| cash-based society this obviously gives the government more
| visibility and control.
| fleddr wrote:
| Being forced to accept Bitcoin is no different from being
| forced to accept any other legal tender, but you're right
| that the specific way in which it is implemented, is far
| from ideal. Most of the BTC community (if there is such a
| thing) also isn't happy with it.
|
| Then again, depending on the country, the traditional
| system also has deep insight into capital flow.
| jbverschoor wrote:
| The other country will have its own restrictions
| jdhn wrote:
| Personally, I think that the growing pains are going to result in
| a much needed UX improvement for bitcoin, and crypto in general.
| fleddr wrote:
| Agreed. This is a fascinating beta test for the masses. Another
| one around the corner is Bitcoin (and NFT) integration within
| Twitter.
| kd913 wrote:
| Purely bitcoin transactions will never be for the masses. It
| can't even scale past what 350k per day?
|
| For that it consumes the equivalent power of Countries?
| c54 wrote:
| Lightning network and power consumption have been discussed
| in countless HN threads
| StillWaiting wrote:
| What this thread really needs is a hot take like calling
| Bitcoin a pyramid scheme
| johnla wrote:
| And coin exchanges are becoming mainstream. There are
| lots of transactional coins that can be converted into.
| Although there are still some usability hurdles, it's
| getting better all the time.
| Centmo wrote:
| These transactions are not occurring on the bitcoin network
| - they are occurring on the lightning network which is a
| second layer on top of the base bitcoin layer. Transactions
| here are virtually free and use virtually no energy. This
| is how bitcoin scales for many small transactions.
| kd913 wrote:
| Transactions on the lightning network have difficulty
| scaling because each node needs to what compute the
| entire graph/nodes and setup channels?
|
| A problem which scales even worse the more nodes in play.
|
| https://www.reddit.com/r/Bitcoincash/comments/8n9xbp/why_
| the...
| Animats wrote:
| Is El Salvador really using Bitcoin, or is it just using Bitcoin-
| denominated local bank accounts? The Bitcoin blockchain has
| nowhere near enough transaction capacity to handle all those
| transactions if they actually go out to the blockchain.
| PretzelPirate wrote:
| El Salvador uses the Lightning network to avoid the high BTC
| transaction fees and slow settlement time.
| asdff wrote:
| Why would they adopt something as volatile as cryptocurrency as
| legal tender?
| Vadoff wrote:
| Pretty much any fledging currency will be volatile. So you
| might as well be asking why anyone would adopt any new
| currency?
|
| As a currency gains adoption and value, its volatility
| naturally goes down.
|
| As far as what advantages bitcoin has over traditional existing
| currency? Numerous. Immutable, unseizable, uncensorable, fixed
| supply/non-inflationary/store of value, digitally transferrable
| without a 3rd party.
| jodrellblank wrote:
| Bitcoins have been seized, and stolen. Bitcoins have been
| banned in China. Not at all transferable without a majority
| of nodes on the network agreeing - unless you mean you can
| hand a flash drive to someone, and that's not an advantage to
| a currency you can hand notes to someone.
|
| Why is "non inflationary" an advantage? It means less
| incentive to spend, more incentive to hoard, and anyone who
| comes later is necessarily poorer. It's terrible, population
| increases and younger people fight for the scraps of the few
| bitcents left, so the pyramid early adopters can take
| advantage. That isn't going to hold as a stable system.
| treebot wrote:
| How would a government seize Bitcoin? Stealing Bitcoin is
| not the same as seizing.
| dragonwriter wrote:
| > How would a government seize Bitcoin?
|
| The same way it seizes anything else; have people with
| guns show up [0] to the person with control over it, and
| inform them they must turn it over or face dire
| consequences. Seizing money held in a personal wallet
| means doing that to the owner (whether its a physical or
| digital wallet), seizing money held in a third-party
| service (often the case with Bitcoin) means doing it to
| the service operator.
|
| > Stealing Bitcoin is not the same as seizing.
|
| True, in that "stealing" is what is called when someone
| seizes property from another _without legal authority_.
| But false in the senae that seems intended, in that the
| mechanics the government uses when seizing something are
| exactly mechanics that would constitute stealing if they
| weren 't backed by law.
|
| [0] Or people without guns with the implicit backing of
| people with guns. Or just messages from an agency known
| to be backed by people with guns.
| stale2002 wrote:
| > have people with guns show up [0] to the person with
| control over it
|
| It is much easier to physically confiscate cash, than it
| is to confiscate a wallet that you don't have the keys
| to.
|
| Sorry, but it just is. Yes, an arresting authority can
| always threaten people, with violence, but that has
| problem and roadblocks to it. People get mad. Courts come
| into the picture. And although yes it is _possible_ it is
| still more _difficult_ to do, with greater negative
| consequences to doing so.
|
| The point of censorship "resistance" is not to be
| completely immune from a mind reading mecha-hitler, who
| will nuke the universe if you don't give up the password
| to your crypto wallet.
|
| Instead, the point is to make it more difficult to
| confiscate assets, in more situations, such that it
| significantly reduces but does not stop completely, the
| times that assets are confiscated, as opposed to the
| absurd super hitler with nukes hypothetical.
|
| > that the mechanics the government uses when seizing
| something are exactly mechanics that would constitute
| stealing if they weren't backed by law.
|
| Nope. The mechanics that are used and available to the
| government, in real life actual examples, of how actual
| governments work, make it easier for those existing
| governments to confiscate cash as opposed to crypto.
|
| This is not about absurd hypotheticals. This is about
| existing government laws and implementations of those
| laws.
|
| Once all the governments in the world, actually change
| their laws such that they can now threaten to nuke the
| universe, if you don't give up your keys, _then_ you can
| start talking about how technical solutions have zero
| effect on getting around existing government policies.
|
| Or, in other words, the "wrench" solution has significant
| drawbacks that make it difficult for current governments
| to implement. So it is stupid to bring that up, as some
| gotcha counter example, for why you think technical
| solutions are worthless, when talking about actual real
| life, as opposed to your sci-fri fantasy novel.
| hackingforfun wrote:
| Trezor [1] and Ledger [2] are both hardware wallets that
| can have a passphrase which would generate any number of
| wallets, each derived from the user's private key, but
| each generating a different public key. If someone has 20
| wallets with 20 different passphrases, how would the
| people with guns know which one they are getting? There
| can be dummy wallets, or wallets without the entirety of
| funds stored in them. A user can have as many passphrases
| as they want even on just one hardware wallet.
|
| [1] https://wiki.trezor.io/Passphrase
|
| [2] https://support.ledger.com/hc/en-
| us/articles/115005214529-Ad...
| zitterbewegung wrote:
| The only thing I can think of is monitoring of all
| transactions.
| anonporridge wrote:
| You can do that way more easily will centralized digital
| fiat.
| Apocryphon wrote:
| How are cryptocurrencies even "encrypted" and more anonymous
| than hard cash if all transactions are recorded in a ledger,
| the ledger that is the very basis of the currency? Isn't that
| the very antithesis of anonymity?
| freeflight wrote:
| Afaik that claim to fame originally came from the fact how
| it's really difficult to track down the real owner of a
| wallet.
|
| With traditional bank accounts there's usually a whole
| circus of verifying your real identity involved that's
| directly tied to the account.
|
| While getting a BC wallet involves none of that, heck, it
| can probably be automated to such a degree that asking the
| question "Who actually owns the wallet created by a bot?"
| could become an interesting legal conundrum.
| treebot wrote:
| Actual paper cash is more anonymous than most crypto,
| including Bitcoin.
| kristjansson wrote:
| Bitcoin and its ilk are explicitly pseudonymous not
| anonymous. Others attempt to provide actual anonymity, but
| lack the usage and mindshare of bitcoin
| rcohngru wrote:
| From what I have read, this is actually not the case.
| Remittances account for 1/5 of El Salvador's GDP, which is
| one of the highest ratios in the world. The companies that
| facilitate these remittances often charge pretty high fees,
| so the idea behind using bitcoin is to increase the amount of
| money that makes it home to El Salvador by reducing the cost
| incurred from transfer fees.
| WJW wrote:
| Lack of imagination.
|
| Step 1: Buy a lot of bitcoin.
|
| Step 2: Convince/bribe the President of El Salvador to make
| bitcoin the legal tender.
|
| Step 3: Bitcoin goes up because "OMG legal tender status"
| even though it is in a super minor country that was de facto
| using the USD as currency anyway.
|
| Step 4: Sell your bitcoin at a profit due to the events of
| step 3.
|
| Step 5: Who cares about what happens after step 4.
| fleddr wrote:
| The El Salvador plan has done absolutely nothing for
| Bitcoin's price, so I guess the plan (which you made up)
| failed.
|
| BTC price swings occurs due to institutional buying (or
| selling) which are generally triggered by macro conditions.
| Nothing else triggers it because the market cap is too
| large to move on minor news.
|
| Finally, an opportunistic Bitcoin trader wants Bitcoin to
| go down, not up. So that they can buy more.
| rattlesnakedave wrote:
| From what I understand citizens are allowed to swap the
| government for USD. El Salvador's current president seems keen
| on building a Bitcoin reserve.
| modeless wrote:
| The "local currency" is US dollars. And now Bitcoin.
| asdff wrote:
| In that case maybe their strategy might be to convert as
| much USD within the country into bitcoin as possible, wait
| for the inevitable next huge surge, sell at the peak and
| increase their central bank holdings of USD by a massive
| amount.
| colechristensen wrote:
| I really doubt a central banks fiscal policy revolves
| around speculating in BTC.
| fleddr wrote:
| Admittedly, they are the first, but there's little to be
| surprised about.
|
| Bitcoin is the best performing asset with a 200% average
| YoY return for 12 years straight. Whilst still volatile,
| there's enough trust in long term value for institutional
| adaption, which is the phase we're in the middle of.
|
| 1 in 6 Americans own Bitcoin. Companies are holding it.
| Clearly, it no longer is an internet joke. It's accepted
| as an asset.
| javert wrote:
| They can continue to price things in US dollars without letting
| American elites steal from them through the Cantillon effect.
| If you didn't know, they were using US dollars before.
|
| Just my two cents.
|
| The real reason is probably so the El Salvador political powers
| can enrich themselves, either through simply holding bitcoin,
| or some form of corruption.
| arenaninja wrote:
| It's an attempt to attract foreign investment to reduce
| dependency on US remittances
| WJW wrote:
| It was also sold to the President of El Salvador by some
| rather savvy salesmen who may or may not have had a prior
| long position in bitcoin before the announcement was made.
| fleddr wrote:
| Was this before or after the IMF party telling the country
| what is good for them, but never is?
| sremani wrote:
| It is an attempt to become 'panama' without the legal and
| political framework.
| randomhodler84 wrote:
| Not cryptocurrency, Bitcoin.
|
| "The central bank must be trusted not to debase the currency,
| but the history of fiat currencies is full of breaches of that
| trust." - SN
|
| Volatility is of far less concern than a 3rd party countries
| money printing.
| ceejayoz wrote:
| > Volatility is of far less concern than a 3rd party
| countries money printing.
|
| Not when you get your weekly paycheck, it's not.
| sonicggg wrote:
| Let's start sending your weekly payment checks in
| Zimbabwean Dollars, and see how much of that matters.
| ceejayoz wrote:
| Zimbabwean dollars were _highly volatile_.
|
| Getting your paycheck and not knowing it'll be worth
| roughly the same amount next week when rent is due is a
| serious problem.
| thebean11 wrote:
| Both seem like issues to me? Either your paychecks are
| being adjusted for inflation (in which case they could be
| adjusted to the Bitcoin price) or they are not adjusted for
| inflation and each check is smaller than the last.
| stocknoob wrote:
| Do you want your weekly paycheck in an inflationary or
| deflationary currency?
| postingawayonhn wrote:
| Either, whichever is most stable.
| ceejayoz wrote:
| I don't really care if it's inflationary or deflationary,
| as long as the _rate_ of inflation /deflation is fairly
| small.
| fleddr wrote:
| Then you swap it instantly to USD, which is part of the
| implementation.
|
| So citizens can chose. Conservative ones pick USD for its
| stability, others may pick BTC. Which has appreciated by
| 200% for 12 years straight, but hey, who's counting.
|
| Or, mix it up. 75% USD, 25% BTC. So...what is the problem
| again?
| gus_massa wrote:
| Real green USD or just USDT? Can they get the USD in
| cash? What is the extraction fee?
| fleddr wrote:
| Real dollars, and zero.
| tombert wrote:
| Apparently, a fairly high percentage of El Salvador's economy
| is based on people outside the country sending currency in, so
| I think the idea was to use a currency that makes it relatively
| cheap and easy to send money from the US to El Salvador.
|
| That said, since they're on the US Dollar anyway, I think it
| might have made more sense to use a stablecoin like GUSD or DAI
| or something.
| xtracto wrote:
| I think at some point I read that given the amount of the GDP
| that remittances are in El Salvador, and the % that Western
| Union and similar services charge for each transfer, they
| calculated that a good chunk of the GDP was being left in
| these transfer services.
|
| In the case of Mexico, remittances would be 3.8% of the GDP,
| and the WU fee is 8% [1], which means that 0.3% of the GDP is
| being left in the table. In El Salvador I think it is about
| 20%, which would mean that 1.6% of the GDP is being left in
| the WU and similar services.
|
| [1] https://www.westernunion.com/us/en/send-money/app/price-
| esti...
| asdff wrote:
| If its USD to USD in this case, why not mail a check? I
| wonder if you could even just scan a check and email it and
| use a mobile bank app to deposit a printed copy. Or even have
| the US relative log into the Salvadoran relatives bank
| account and do it all within the U.S.
| woah wrote:
| You should let the El Salvadoreans know about all these
| ideas, might save them a lot of trouble
| tombert wrote:
| Well, I mean, _mailing_ a check takes a long time,
| certainly longer than sending some bitcoin would take, even
| if it was free. Emailing a scan could work, but wouldn 't
| that be completely trivial to abuse? If someone gets a
| Gmail password, they could just photoshop a the check to
| empty out your relative's account with very low effort.
|
| I think blockchain kind of solves these two particular
| problems; the money transfers are relatively quick (around
| 20 minutes for bitcoin), and you have all this
| cryptographic goodness to minimize the potential for fraud.
| hackingforfun wrote:
| Lightning network transactions occur in seconds, if not
| milliseconds [1].
|
| https://lightning.network/
| asdff wrote:
| It shouldn't matter how long it takes to mail after the
| first check is mailed, right? If the relative in the US
| is sending money every biweekly pay check and it takes 9
| days or whatever to mail a check, the relative in El
| Salvador is still getting a check every two weeks, just
| nine days later on the calendar than payday.
| int_19h wrote:
| Checks are not common outside of US and a few other
| countries. Checks from another country especially can be a
| hassle to cash, may take a long time (as in weeks!), and
| may require paying a percentage fee to the bank.
| tombert wrote:
| They're not terribly common even within the US. I
| refinanced my house recently, and and I had to order a
| new checkbook from my bank to do it, because I couldn't
| find the one they gave me four years ago. Every time I
| _do_ have to write a check, I always have to "figure it
| out" again, which isn't exactly rocket science, but is a
| testament to how little I write checks.
|
| Like most of the world, I use credit cards or debit cards
| or a cash sending app.
| dqpb wrote:
| In theory as you earn bitcoin, you can exchange it in a
| marketplace for other currencies if various risk levels,
| including stablecoins for low risk, or even for a few fiat
| currencies.
|
| In practice, I assume most El Salvadorians aren't on Binance or
| Coinbase Pro.
| I_am_tiberius wrote:
| Because it's great to have multiple options. As a consumer you
| don't have to use it.
| jcranmer wrote:
| Ostensibly, the purpose of adopting Bitcoin is to make possible
| remittances with lower fees.
|
| This immediately raises the question of why not establish or
| partner with another bank that would allow lower fee
| remittances, and instead partner with a shadow bank to do so.
| And the most reasonable answer, to me at least, is that by
| using a shadow banking mechanism, they'd evade (international)
| inspection, which would allow them to potentially skim money
| out of ordinary El Salvadoran bank accounts.
| m00dy wrote:
| El Salvador is the only place on Earth where you can exchange
| your bitcoins to USD without any questions are being asked. It is
| the wormhole between bitcoin and legacy financial system.
| mrtksn wrote:
| I'm not sure it's true. Crypto is very popular in Turkey too
| and you can easily sell your coins for fiat Turkish lira,
| withdraw the money to your bank account in seconds any time of
| the day and convert it to USD - no questions asked. Then you
| send that USD anywhere or withdraw it from a branch or an
| ATM(that supports USD, there are plenty).
|
| Also, 45x the economy, 15x the population with significant
| percentage of it having at least one exchange account. No
| question asked when bringing money from abroad is the
| governments policy, strong EU, UK and US financial ties and
| integrations are in place with billions already laundered. The
| neighbouring Bulgaria, the police seized 200K Bitcoins and sold
| them at the previous bull market.
|
| I know what you mean but El Salvador is a micro-wormhole. The
| value essentially comes from the publicity, they had something
| like 700 BTC last time I checked.
|
| El Salvador is a storm in a teacup. One noisy storm though.
| Their president is a millennial who knows how to ride the hype
| train.
| inter_netuser wrote:
| isn't the difference that the entities in El Salvador are
| _obligated_ to take it?
|
| Questions or not, that's a different story, but Citibank in
| Turkey is not obligated to accept Bitcoin, but in El Salvador
| - they are under a legal obligation to accept it.
|
| Citibank is active in El Salvador.
| mrtksn wrote:
| Yes, that's the difference. However the volume in El
| Salvador is so small that it's insignificant in any real
| terms. It's a poor country with a tiny population. They
| certainly wont be able to exchange you USD for BTC and vise
| versa if you try to do it with a significant amount.
| m00dy wrote:
| 1-) If your transactions have low volume, no one is going to
| question what you are doing. The problem arises when you have
| a lot of Bitcoins and couldn't really explain where they come
| from. El Salvador fixes this.
|
| 2-) Sending/Receiving USD is not as free as you think. You
| can get sanctioned like IRAN. Every foreign USD transfer must
| be checked through a blacklist. That's how it works.
| mrtksn wrote:
| Actually, no one asks anything. That's why it's really
| popular money laundering destination. I lost count of
| scandals of money laundry, fraud and tax evasions that each
| are over a billion USD. They tend to come out when
| something political happens. The amount of cocaine seized
| this year was in the scale of metric tons with no arrests
| made on the receiving side.
|
| Oh and about your 2). I have some exposure to that stuff
| and I assure you, it's not how it works. The US does have
| sanctions but these are lists of names and specific
| corporations, you don't suddenly get into a blacklist.
| These lists change with the political situations. Also,
| there are known terrorist, so if you are not one of those
| or if you are not politically targeted you wont have
| problems.
|
| If you are in a list, you use private jet to move cash or
| gold. Turkey is truly the wild west of illicit money at the
| moment.
|
| If you send USD, it will go through the usual SWIFT
| mechanisms and will be visible to the USA but you can
| always move cash and gold. Turkey's proximity to major
| markets and the infrastructure is excellent. EU is just
| right there, accessible by plane, train, car, bus or boat.
| UK is less than 4 hours of flight, just like Dubai.
|
| Istanbul has a physical cash only gold and USD/EUR/GBP
| trading center. The city of Istanbul is gargantuous, 3
| times of El Salvador's population.
| m00dy wrote:
| It doesn't matter. There is a central entity that decides
| on his behalf who's going to be in that list.
| m00dy wrote:
| >> Turkey is truly the wild west of illicit money at the
| moment.
|
| Any source on this ? I born and raised in Turkey and I
| won't let you to bullshit on my country
| mrtksn wrote:
| I'm sure you've heard of Reza Zarrab, the Kingston
| Brothers, Sedat Peker, Tosuncuk that comes to my mind
| from the recent years.
|
| For context, Reza Zarrab is an Iranian-Azeri who
| laundered Iranian money with help of a major Turkish
| government owned bank, Halkbank. He flew gold with his
| private jet for years. He ended up in the witness
| protection program in the USA. There are very serious
| allegation of involvement with high ranking Turkish
| officials. It come to light that Erdogan personally
| lobbied Trump during his trail.
|
| The Kingston Brothers are some mormon community in Utah
| that stole billions from the US government and laundered
| money with the Help of a Turkish businessman. The
| brothers are now in a US prison, the Businessman is in
| Switzerland and Turkey and US are fighting over who is
| going to get him. That businessman also has proven ties,
| multiple photos with Erdogan and other highly ranked
| Turkish officials.
|
| Sedat Peker, a mafia boss who was disowned by the
| political elite that protected him for years. He escaped
| to Saudi Arabia and start doing tell-all YouTube videos.
| He again exposed billions and billions of USD of
| corruption and drug and arms trade. Many of the
| allegations were proven or confirmed by those involved
| but almost no action was taken. When it come time to make
| a video about Erdogan, he was silenced. At that time
| Turkey and the Saudis had very bad relations, probably
| that's why he went to Saudi Arabia. When the video time
| come to Erdogan, the relationships begin to improve, the
| saudis intervened and the video about Erdogan never came.
| Here is his YouTube channel, if you are curious about the
| Mobster: https://www.youtube.com/c/sedatpekerreis/videos
|
| He got 180 million views! He promised that the next video
| will be about Erdogan and that video never came.
|
| Tosuncuk, or his real name Mehmet Aydin, is a high school
| dropout who build an online pyramid scheme in form of a
| game like farmville. When the scheme collapsed he run
| away to South America, keeping close to a billion of USD.
| The exact sum is debatable because he started buying
| Bitcoins just before the 2018 Bitcoin bull market and run
| away with unknown amounts of Bitcoins. Just this year,
| somehow he decided to turn himself in and is promising
| that he has all the money he collected and can pay back
| everyone. Again, there were photos of his affiliates
| posing with the Interior minister and the relatives of
| the interior minister.
|
| Fascinating stuff are happening in Turkey, sometimes I
| feel bad for those who don't speak Turkish. Serious next
| level corruption and drama have been happening the past
| few years and don't get me started about the stuff that
| happened from 2013 to 2016. Just amazing. BTW, Turkey's
| GDP has been in free fall since 2013 and it's definitely
| not a coincidence.
| johnmaguire wrote:
| Does 1981 qualify as a millennial? Do generational terms make
| sense in an international context? Hmm...
| paxys wrote:
| The questions will still be asked at some point. Are you
| exchanging it for cash? If so, how are you getting the cash
| back to your home country? If to a local bank account, how do
| you transfer it back to the US (or another country) without
| raising flags?
| zaik wrote:
| This is likely a solved problem for people who are in the
| money laundering business.
| colechristensen wrote:
| And doing things like this are quite likely to make you guilty
| of money laundering, it can of course be noticed if you're
| withdrawing large amounts of money from outside the country.
| m00dy wrote:
| That's the thing. I am super bullish on El Salvador. I think
| It could be next Switzerland in the new world order.
| vineyardmike wrote:
| > I think It could be next Switzerland in the new world
| order.
|
| Could be, but i suspect there are a lot more laws and
| historic reasons for the swiss status than just banking.
| choeger wrote:
| The irony is that a blockchain is the perfect tool to get rid
| of any form of money laundering: A permanent public record of
| each transaction. You can always run a simple program that
| checks your financial history against a blacklist.
|
| Now the problem with such a system is also quite obvious:
| Money laundering poisons the whole economy. If you could
| follow every dollar, you would likely find out it was at some
| point part of the profit from a criminal operation.
| oh_sigh wrote:
| I'm curious how long that is going to last. Can the US not
| allow El Salvador to use US currency?
| anonporridge wrote:
| How would they stop them? Invade and depose the
| democratically elected president, then setup a puppet
| government to do their will?
| 09bjb wrote:
| It wouldn't be the first time...or second, or third, or
| fourth, or fifth...
|
| Source: https://www.amazon.com/Overthrow-Americas-Century-
| Regime-Cha...
| dragonwriter wrote:
| > How would they stop them? Invade and depose the
| democratically elected president, then setup a puppet
| government to do their will?
|
| Are you at all familiar with Latin American history? That's
| hardly an unprecedented US response to ideological,
| commercial, or other differences.
| oh_sigh wrote:
| Threaten to cut diplomatic ties, prevent US banks from
| doing business with El Salvador, prevent USD remittances,
| make transferring BTC to El Salvadorans illegal, etc.
| nawgz wrote:
| You got it!
| anonporridge wrote:
| 'murica! Fuck you now do what we tell you!
| dilap wrote:
| That'd be extreme, but there would be all sorts of possible
| ways.
|
| See eg
|
| https://www.theguardian.com/commentisfree/2014/oct/23/gough
| -...
| Permit wrote:
| Lots of jokes about invading or overthrowing the gov't but
| I believe they would just cut El Savador off from the U.S.
| financial system entirely.
|
| The same thing was applied to a handful of Chinese and Hong
| Kong officials. See: https://www.scmp.com/economy/china-
| economy/article/3098691/h...
|
| > The extensive and complex nature of the US financial
| system means non-US international banks would most likely
| comply with the Hong Kong sanction requests to safeguard
| their overseas network and US dollar-denominated
| transactions that are ultimately cleared in the US by
| passing through the US Clearing House Interbank Payments
| System (Chips).
|
| My understanding is that if you do not comply you are
| basically unable to trade in USD.
| jdasdf wrote:
| > Lots of jokes about invading or overthrowing the gov't
| but I believe they would just cut El Savador off from the
| U.S. financial system entirely.
|
| Good thing they're using bitcoin now!
| [deleted]
| m00dy wrote:
| It is obvious that we are not going back to Petro-dollar
| system.
| SilasX wrote:
| I assume it would be more like requiring US exchanges to
| reject bitcoin from El Salvador addresses. I know people have
| been stung before on this exchanges for having deposited or
| withdrawn bitcoin that is too few hops from a prohibited use
| like gambling. (But don't have cites atm.)
| perl4ever wrote:
| I know of an ATM that claims to deal in bitcoin, in the
| basement of a government building in the US. I don't know how
| it works though, as I haven't tried it.
| newsclues wrote:
| If this allows US dollars to be laundered for drug money this
| is actually not a terrible idea.
| Geee wrote:
| Which countries are you referring to? No identification is
| required when exchanging peer to peer, and it's not illegal to
| exchange peer to peer. I don't know any countries where this
| would be forbidden.
|
| You can use service like https://hodlhodl.com to exchange peer
| to peer without questions or identification.
|
| If you're using your bank account, then it's not completely
| private. However, cash trades are always possible.
|
| On the other hand, Chivo requires strong identification with
| passport, so it's hardly a wormhole.
| m00dy wrote:
| I'm not talking about p2p exchange. I'm talking about
| injecting your bitcoins to legacy financial system without
| any question.
| Geee wrote:
| Do you have any source for that claim? As far as I know,
| banks in El Salvador follow all international KYC/AML-
| regulations.
| m00dy wrote:
| >> international KYC/AML-regulations
|
| I busted out loud at this one :). Of course they will
| follow "International KYC/AML regulations"
| gruez wrote:
| >and it's not illegal to exchange peer to peer. I don't know
| any countries where this would be forbidden.
|
| You're right that it's not technically illegal, if you can
| somehow find another private person (ie. not a business) to
| transact with, but good luck finding a supply of those. I
| suspect someone that makes those transactions enough would
| get classified as a money service business and would be
| subject to KYC/AML requirements.
| modeless wrote:
| > No identification is required when exchanging peer to peer,
| and it's not illegal
|
| People have been prosecuted for the crime of exchanging
| bitcoin for dollars in person-to-person meetings. It's
| probably not illegal to do it once for a small amount for a
| friend, but it absolutely is illegal in the US to do it
| regularly or for many people or for large amounts.
| goldcd wrote:
| You post me dollar bills and your address, and I'll send you
| back BTC for a 10% deduction.
|
| Or you could buy/sell some art anonymously? Or just pop down to
| vegas?
| jbverschoor wrote:
| > "It took my money but gave me nothing,"
|
| Sounds like any government or bank
| kevingadd wrote:
| What do you mean? I'm struggling to think of any examples here
| other than police stealing people's money. I don't understand
| the bank comparison here at all, deposits in most banks are
| insured.
| goldcd wrote:
| If you're paying for some chicken wings, then you're clearly not
| actually paying with bitcoin as the transaction fee would cost
| more than your dinner.
|
| From the sound of it the "Chivo app" is what you have to use - so
| government must be banking bitcoin and then issuing "Chivo-money"
| that's actually exchanged, backed by the bitcoin reserve.
|
| Bit like the old 'gold standard'. What's interesting though, is
| that the transfers are going to be asymmetric - bitcoins being
| sent in as remittance, then traded internally as Chivo-coins. I
| guess there has to be a mechanism to allow conversion back to BTC
| (and then maybe dollars) to import goods - but the circulating
| Chivo-coin is value that's been conjured out of thin air (as long
| as there's confidence it's still backed up with BTC).
|
| All quite fascinating - either a stroke of genius, or a disaster
| in the making.
| m00dy wrote:
| You are 5 light-years away from crypto industry.
| goldcd wrote:
| I clearly am. I'll see if I can downvote myself.
| tvhahn wrote:
| You're wrong. They are completing bitcoin transactions on
| lightning network, which is built upon the base bitcoin block
| chain (it's a layer two). Thus, the cost of spending bitcoin
| for some chicken wings is virtually free.
| I_am_tiberius wrote:
| Chivo uses the lightning network - transaction fees are close
| to 0!
| anonporridge wrote:
| Correction.
|
| Chivo is compatible with the lightning network, but Chivo to
| Chivo transactions are just centralized database updates.
|
| That's still really great, because people are perfectly free
| to use any other LN app (both custodied and self-custodied
| options available) to interact with Chivo users if they don't
| trust the El Salvador government app.
|
| This open network is why Bitcoin + Lightning will win.
| I_am_tiberius wrote:
| Ok, thanks!
| glenvdb wrote:
| People still talking about high Bitcoin transaction fees
| pretending like the Lightning Network doesn't exist... it's
| almost as though they aren't keeping up with latest
| developments in the space, instead relying on old information
| they formed their initial opinion on.
|
| Also El Salvadorians can use any app/wallet they want to
| transact over Bitcoin/LN. However, the government provides
| incentives to use Chivo. If the government is too exploitative
| people will move away from Chivo.
| gus_massa wrote:
| Once Chivo has 50% of the market, can they add a fee to send
| the BTC from/to other Lightning wallets?
|
| Is there any guaranty that the database in Chivo is 100%
| backed by BTC?
| throaway6942 wrote:
| Chivo is a fiat on/off to bitcoin lightning network. You are
| free to use any lightning supported wallet, maybe even Twitter.
|
| If you are a merchant you can accept BTC via lightning but
| settle in USD if you wish.
|
| Transactions costs are around $0.0005.
| DantesKite wrote:
| This just sounds like a way for the President of El Salvador to
| become a billionaire.
| wyck wrote:
| Reuters articles don't belong here.
| maerF0x0 wrote:
| Another side effect of this is someone like me is curious in
| going there just to use BTC for the fun of it. It would be
| interesting to know if there are other such tourist dollars as a
| side effect
| fleddr wrote:
| There's little fun to be had. The store owner holds up a QR
| code, you scan it and hit OK. Done. Money wired.
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