[HN Gopher] El Salvador's Experiment with Bitcoin as Legal Tender
___________________________________________________________________
El Salvador's Experiment with Bitcoin as Legal Tender
Author : Bostonian
Score : 42 points
Date : 2022-07-06 20:33 UTC (2 hours ago)
(HTM) web link (www.nber.org)
(TXT) w3m dump (www.nber.org)
| Barrera wrote:
| > In theory, developing nations like El Salvador are ideal
| candidates for cryptocurrency adoption. More than half its
| citizens rely exclusively on cash, rather than credit or debit
| cards. Some 70 percent of households have no bank account and
| nearly 90 percent do not use mobile banking. A digital payment
| platform could be a way to make the economy more inclusive and
| accessible.
|
| I have a really hard time understanding what lasting effect El
| Salvador hopes to accomplish.
|
| > More than half its citizens rely exclusively on cash rather
| than credit or debit cards
|
| That's not in itself a problem.
|
| > Some 70 percent of households have no bank account
|
| That's may be a problem, but is it something that Bitcoin itself
| can solve? For example, people who have no savings and survive
| hand-to-mouth really don't need a bank account. Maybe that's what
| the 70% statistic is telling us.
|
| > and nearly 90 percent do not use mobile banking.
|
| The experience of using bitcoin for most people is not unlike the
| experience of using a mobile banking app. What is it about
| Bitcoin in particular that makes it a better fit?
|
| > A digital payment platform could be a way to make the economy
| more inclusive and accessible.
|
| Possibly, but only if the reasons for lack of inclusivity and
| accessibility are understood, and Bitcoin is compatible with
| resolving them. If the reasons are social/political, Bitcoin is
| not going to help at all. Monetary policy is effectively set
| elsewhere, either Washington or the Internet through the Bitcoin
| protocol. Being the hardest form of money ever created, bitcoin
| is especially bad at funding public works projects like the kind
| El Salvador is going to need to elevate its standard of living.
|
| Then there's the elephant in the room: money printing. El
| Salvador has no currency of its own. It uses the US dollar, and
| now Bitcoin. This means that the government has voluntarily
| foregone the ability to print the money to cover the debts
| incurred for domestic spending. Adding Bitcoin just doubles down
| on the status quo: no domestic currency and no possibility of
| money printing.
| wmf wrote:
| The real feature they want is the ability to receive
| remittances without the high fees caused by retail labor. This
| requires some kind of app whether it's online banking or
| crypto.
| el-salvador wrote:
| We've had this for about three years in El Salvador.
|
| 1. Download banking app
|
| 2. Open an account by taking a selfie and a picture of the
| national ID card.
|
| 3. Go to " Receive Remmitance Option", type the remmitance
| code/MTCN.
|
| 4. Remmittance in your acount.
| wmf wrote:
| Do you know why people aren't using it? How hard is it to
| get an ID card?
| pastor_bob wrote:
| Wouldn't be surprised if El Salvador's bitcoin holdings move to
| some unknown wallets when Nayib Bukele's time as president is up.
| el-salvador wrote:
| El Salvador's current bitcoin wallets are unknown.
| [deleted]
| iliekcomputers wrote:
| I never really understood what incentive a government had to
| recognize bitcoin as legal tender. There are no real benefits
| over something like UPI in terms of user UX. It takes things out
| of the government's hands, as it's harder to print money.
| overtonwhy wrote:
| Presumably people in the government got bribed. Did they also
| make their banking system crypto friendly?
| el-salvador wrote:
| > Did they also make their banking system crypto friendly?
|
| El Salvador banks don't exchange or accept bitcoin as
| deposit. Some of them accept bitcoin for loan payments, via
| an external payment processor.
| JumpCrisscross wrote:
| > _never really understood what incentive a government had to
| recognize bitcoin as legal tender_
|
| El Salvador is very corrupt, in the neighborhood of Sierra
| Leone and Algeria [1]. It is unclear to what degree the state
| has a monopoly on violence [2]. Bitcoin is a precedented dark
| money channel.
|
| [1] https://www.transparency.org/en/cpi/2021/index/slv
|
| [2] https://www.cfr.org/in-brief/why-has-gang-violence-spiked-
| el...
| jcranmer wrote:
| The wrong (but popular) answer is to say that this is a move to
| break El Salvador's reliance on the USD--the USD still remains
| legal tender in El Salvador, and from what I can tell, there is
| absolutely no movement whatsoever towards things like pricing
| in Bitcoin in lieu of USD or other steps that would insulate El
| Salvador from US monetary policy.
|
| The charitable answer I would give is that Bukele hoped to
| attract cryptocurrency investors with the move, perhaps to
| supplement existing institutional investors who haven't been
| happy with some of Bukele's policies.
|
| The uncharitable answer I would give is that Bukele is trying
| to innovate and translate core cryptocurrency strategies of
| extracting money from people's pockets into extracting money
| from El Salvador's citizens' pockets.
| thesausageking wrote:
| El Salvador is a USD-based economy and does not have their own
| currency. This means they're at the whims of the US Federal
| Reserve, which they have representation with. And any USD
| reserves that are abroad can be seized by the US, as
| Afghanistan ($7B seized) and Russia ($300B seized) learned
| recently.
|
| Bukele is promoting BTC as a way to attract talent and capital,
| and also to modernize El Salvador's economy. Similar to how
| Africa skipped landlines and jumped right to mobile phones. It
| remains to be seen how effective that part is. But, either way,
| it gives El Salvador some more independence from the US and
| sovereignty in a world where alliances are shifting fast.
| fny wrote:
| It's a patently stupid strategy over the long run though.
| Abandonment of ones own currency is suicide regardless of
| whether it's USD or Bitcoin. And clearly, Bitcoin did not
| help El Salvador improve it's financing situation: the
| Bitcoin bond they tried to push was a complete flop.
| Argentina has a way better model: they control their money,
| they've defaulted repeatedly, the currency has magically
| remained stable, and everyone comes back after each default.
|
| Another massive issue is that as a currency with an inelastic
| supply Bitcoin price volatility is guaranteed to remain
| unstable. This is not a desirable feature for any currency.
| 0xB31B1B wrote:
| Bukele is promoting BTC as a sort of crony
| capitalism/kleptocrat play. This is not a high minded
| "advancing society" play.
| walrus01 wrote:
| > as Afghanistan ($7B seized)
|
| This is because the Taliban is a terrorist organization that
| captured the capitol, not a government. You don't give $7bn
| to al qaeda, ISIS or lashkar-e-taiba either.
|
| You can thank Trump and Pompeo and their plan to withdraw
| 100% of US forces by a fixed deadline for that (removing all
| support for the afghan government's armed forces), and Biden
| for going along with the foolish plan.
| guelo wrote:
| I would also blame Trump's relentless political attacks
| about Obama returning Iran's assets. And Biden's political
| cowardice after the Afghan collapse. All of it is reducing
| trust in US's supposed rules-based institutions. US is
| speedrunning through the fall of an empire
| [deleted]
| daemoens wrote:
| While all this is true, his point still stands. The US
| still has the ability to seize your country's money at
| will.
| ForHackernews wrote:
| ...if you keep it in US banks (because you can't trust
| your own corrupt local financial system).
| anonporridge wrote:
| Almost all USD now is electronic, and control of movement
| of those dollars is entirely controlled by the single
| master node of Washington D.C.
|
| Russia defaulted on their USD loans, not because they
| don't have dollars, but because the US won't allow them
| to pay.
| giaour wrote:
| Russia _also_ defaulted because it can 't pay (in any
| currency) parties that are barred by sanctions from
| transacting with the Russian government. It wouldn't
| matter if Russia were able to ship paper USD to their
| creditors; the creditors cannot accept that payment.
| anonporridge wrote:
| I really don't want to defend the Taliban, but the core of
| any government is the group that maintains a monopoly on
| violence in a realm.
|
| The pre-Taliban government of Afghanistan as well as the US
| puppet state in 2021 failed in this core responsibility,
| and consequently lost the right to govern. Whether or not
| the Taliban will produce a stable or good government is a
| different question. I personally weep for those forced to
| live under it's rule.
|
| It would make about as much sense to say the United States
| in 1783 was not a government, but a terrorist organization
| that attacked the rightful British government of the
| American colonies. The British lost the right to govern
| when they failed to maintain their monopoly on violence in
| the American colonies, and a new governmental organization
| formed from the ashes of the war that proved it.
| paxys wrote:
| > And any USD reserves that are abroad can be seized by the
| US
|
| That doesn't have anything to do with USD. _Any_ reserves (or
| really any asset) that is outside the country 's jurisdiction
| can be seized by a foreign one. El Salvador could as easily
| lose all their Bitcoin reserves if they held them in a
| Coinbase wallet, for example.
| makomk wrote:
| It absolutely does have to do with USD. Other than actual
| physical dollar bills, which do not scale and are not
| practical to use for long-distance international
| transactions, the only form that real redeemable USD can
| exist in is deposits with the Fed which can be seized by
| the US. This is a fundamental property of using the US
| dollar as your country's currency.
| JumpCrisscross wrote:
| > _absolutely does have to do with USD_
|
| Comment you're responding to is saying this is not unique
| to U.S. dollars. All currencies are controlled by their
| issuing sovereigns.
|
| Separately, the idea that Bitcoin is unsanctionable is
| laughable. It may require enabling legislation. But
| marking wallets as sanctioned, and threatening any
| wallets that transact with it to be either similarly
| sanctioned or subject to heightened scrutiny, would
| diminish the value of those coins relative to coins which
| can be freely traded with anyone. Given the public nature
| of the blockchain, enforcement would likely be easier
| than _e.g._ enforcing an Iranian oil embargo.
| giaour wrote:
| > But marking wallets as sanctioned, and threatening any
| wallets that transact with it to be either similarly
| sanctioned or subject to heightened scrutiny, would
| diminish the value of those coins relative to coins which
| can be freely traded with anyone
|
| Doesn't this already happen? Basically any bitcoin that
| comes out of a tumbler or any wallet address that has
| transacted with tumbled coins is banned on KYC exchanges:
| https://sethforprivacy.com/posts/fungibility-graveyard/
| Spellman wrote:
| The Libertarians would argue that the government not being able
| to print money is the feature and can build trust in the
| currency
| Geee wrote:
| In addition, bitcoin limits government power. Most
| autocracies fund their operations with inflation. Even in
| liberal democracies, deficit spending funded with inflation
| is not really what people have voted for. People are fine
| with taxes to the extent they have voted for them, but that
| should be enough. Inflation is a way to covertly siphon
| wealth from citizens on top of tax revenues.
| JumpCrisscross wrote:
| > _autocracies fund their operations with inflation_
|
| There is limited evidence for connecting countries' foreign
| debt levels to their degree of democratization [1].
|
| More pointedly, there is ample evidence--millenia of it!--
| for empires on commodity money waging war and whatnot and
| having a fine time of it.
|
| > _deficit spending funded with inflation is not really
| what people have voted for_
|
| Deficit spending / bond issuance is voted on at multiple
| levels of government practically every cycle. People _have_
| voted for this. Because the alternative is austerity, and
| fanatical governments that pursue that for its own sake
| tend to get replaced.
|
| [1] https://d1wqtxts1xzle7.cloudfront.net/68966375/bf002246
| 81202...
| Geee wrote:
| Well, you are right in that people usually do vote for
| more government spending. The problem exists in all kinds
| of governments.
|
| Anyway, my point was that bitcoin can limit government
| spending and protect individuals against inflation due to
| government spending. It doesn't mean that a rich nation
| couldn't wage war.
| imtringued wrote:
| I am not sure what libertarian really means but the idea that
| the rich of the past deserve to control the present and
| future strikes me as secretly authoritarian.
| anonporridge wrote:
| Except in bitcoin, having a large share from the past
| doesn't directly confer control in the present, since it's
| not a proof of stake system.
|
| If it's actually used as a currency, a person with a large
| stockpile will gradually lose their relative share over
| time as they consume, since you don't generate interest on
| it.
|
| It's also confusing to me that people can hold the
| cognitive dissonance of defending a post gold standard,
| infinitely inflatable currency with a negative view income
| inequality, which only started increasing drastically after
| we abandoned the gold standard.
|
| An inflationary currency benefits the wealthy asset owners
| more than the working class almost by design. Asset owners
| get to borrow against their assets and pay it back in a
| depreciating currency, while at the same time getting to
| use a psychological magic trick to make poorly educated
| employees think they're getting a pay raise, when in real
| terms they're getting a pay cut.
|
| If I was a greedy rich person who wanted to make sure I
| could never lose my wealth, I would build a financial
| system on a currency that inflates away by design.
| vlunkr wrote:
| You could have stopped after "I am not sure what
| libertarian really means"
| tokai wrote:
| Might even call it crypto-fascism lol
| chrisco255 wrote:
| What does that even mean? Is there any fiat currency system
| you can point to where elite insiders don't get special
| access to the money printer before us plebs do?
| [deleted]
| andrewmutz wrote:
| History has repeatedly shown that being able to print money
| is a critical tool during financial crises. No one likes
| their money being debased, but they like economic depressions
| even less.
|
| There is a reason that nations have abandoned the gold
| standard.
| jkepler wrote:
| Gold's physical characteristics tended towards
| centralization. Centralizing gave the institutions
| controlling the gold strong incentives to allow debasement
| of gold-backed money, as it gave those institutions
| handsome profits and strong political control.
| dragontamer wrote:
| But you could more easily "not print money" by making the
| Euro or US Dollar your currency.
| makomk wrote:
| As people have pointed out this means that the US or
| wherever can print money and controls your monetary policy,
| but that's actually the least of the problems. Euros and US
| Dollars in large quantities, and digitally transferrable
| versions of them, can essentially only exist as numbers in
| databases controlled by the US and EU government
| respectively. So by adopting them as your country's
| currency, you're effectively giving them control over _your
| money_. They get to decide whether it continues to exist,
| whether you get to access it, whether it gets transferred
| to some well-connected megacorporations in those countries
| that bribed your former leader into a dodgy deal... In
| short, it gives a whole bunch of control to powerful
| entities who have tended to use their powers in ways that
| have not been good for developing countries at all.
| jdminhbg wrote:
| Sure, but the ECB or Federal Reserve can print money, and
| you don't control them. If your goal is a mathematically
| guaranteed money supply (this would not be my goal, fwiw),
| BTC is superior.
| avrionov wrote:
| The supply is mathematically guaranteed, but the price
| fluctuates more than the dollar.
| Spellman wrote:
| Because then you're beholden to another country, which may
| be hostile to your country, and their money printer.
|
| With Bitcoin, no one has control!
| ceejayoz wrote:
| > With Bitcoin, no one has control!
|
| Well, until a little over 50% of the miners decide they
| don't like you.
|
| Ethereum's fork proved "no one has control" is an
| illusion.
| [deleted]
| chrisco255 wrote:
| Bitcoin also famously forked into BTC and BCH. And
| Ethereum Classic is still ticking away printing blocks.
| Forks are a feature, not a bug.
| ForHackernews wrote:
| Forks promise an infinite, ever-growing supply of
| deflationary digital scarcity.
| jkepler wrote:
| Ethereum is not Bitcoin. Ethereum just showed the world
| Botcoin's unique value compared to Ethereum and the
| thousands of crypto projects so often conflated with
| Bitcoin.
|
| The 2017 Bitcoin scaling wars proved that one can't
| simply change Bitcoin's consensus rules by majority
| control of the miners. I think at one point 80% of the
| miners were in favor of large blocks, yet they didn't
| have buy-in from the rest of the network participants
| (developers, regular users, merchants, exchanges).
|
| Bitcoin has really robust decentralization.
| schemescape wrote:
| El Salvador already uses the US dollar, but it has no
| control over what the US does to its money supply.
| altarius wrote:
| Correct, but historically the price had been stable and
| predictable.
|
| Imo you're just trading "beholden to the usgovt" with
| "beholden to miners, whales and wall street" plus wild
| price swings. Former or latter may be preferable for
| certain reasons, but for fiscal stability or day-to-day
| use the choice seems obvious to me.
| eftychis wrote:
| If you are using another country's currency you are tied to
| their monetary and indirectly fiscal policy which most
| likely does not align to yours.
|
| In fact trying to get a neutral or deflationary currency is
| a no brainer. Especially, if you have a small banking
| system/network.
|
| Of course there are gotchas.
| toomuchtodo wrote:
| You are always tied to the monetary and fiscal policy of
| the majority of a currency's participants.
|
| Can you make your own currency? Of course. How will you
| back it? Who will trust it? Who governs those policies?
| These are people problems people want to solve without
| people (crypto folks), with expected results (speed
| running financial regulation). They came at the king
| (reserve currencies) and missed by a mile.
| louloulou wrote:
| The US dollar was el Salvador's currency. They are trying
| to diversify away from that total dependence.
| rmac wrote:
| according to this article, 22% of el salvadorians knew about this
| app and didn't download it. Considering the following incentives:
|
| 1) free conversion from btc to usd 2) large discounts for
| purchases of gasoline using btc 3) no bank account or a credit
| card needed
|
| This blows my mind. The reasons stated were:
|
| 'Among the one in five Salvadorans who knew about Chivo but did
| not download it, the top reason was a preference for using cash.
| Others said they did not trust the system or bitcoin, they did
| not own a phone with internet, or the technology was
| complicated.'
|
| I was just in El Cuco, a small town in southern El Salvador. This
| town has no bank and no ATM but they do have one of these Bitcoin
| ATMs. I asked the hotel owner about it and ZERO PEOPLE HAD USED
| IT. We are talking about free money here. My gut is telling me
| it's mostly older folks who think it's too complicated to figure
| out.
|
| When freshly made tortillas are less than 5 us cents, and the
| cost of gas is near $5/a gallon, I would have assumed _everyone_
| would run for the free $30 in btc. Color me impressed.
| schemescape wrote:
| It would have been nice to see the prevalence of those reasons
| for not downloading the app. Regardless, the article indicates
| that 1/3 of residents didn't have the required technology
| (mobile phone with internet access):
|
| > Residents didn't need a bank account or a credit card to make
| transactions, only a mobile phone with internet access,
| something two-thirds of residents had.
| paxys wrote:
| Random banks in the USA offer way more than that (ranging from
| $200-$1500) to open checking accounts and credit cards, yet
| 300+ million people aren't jumping on the opportunity for free
| money. For most it just isn't worth the trouble, especially
| when you don't know what the hidden catch is.
| themitigating wrote:
| Imagine you are super busy working all the time living in a
| country with a high amount of corruption. The government says
| "Here's some free """money""" just get this app and sign up".
|
| Maybe you could take the time to research it but let's be
| honest, how the blockchain works is complicated to lay people.
| Also the history of coin is littered with scams, maybe
| different coins than btc but still.
|
| You under estimate the fear the masses have of having the rug
| pulled from under them, especially when some are just trying to
| survive
| logicalmonster wrote:
| > according to this article, 22% of el salvadorians knew about
| this app and didn't download it
|
| Is it really surprising that Bitcoin isn't widely adopted in El
| Salvador in just 1 year?
|
| Bitcoin has been in existence for just 13 years. Even very
| smart, technically minded people in economically prosperous
| nations who heard about Bitcoin over a decade ago barely
| understand the full implications of cryptocurrencies yet, to
| say nothing of poorer and often uneducated people in a country
| with some corruption and untrustworthy institutions.
|
| Nobody can perfectly predict the future, but the story might be
| radically different down the road.
| pirate787 wrote:
| Bitcoin has failed. It doesn't scale as a currency and its
| not a store of value. The cost of mining is simply too
| expensive and as an ecosystem its hemorrhaging a billion
| dollars a month. What's the net present value of an asset
| that loses a billion dollars a month, forever?
| logicalmonster wrote:
| Short it and gain free money if you're that confident.
| ForHackernews wrote:
| > Bitcoin has been in existence for just 13 years.
|
| Yeah, imagine how small the adoption would be of some other
| mysterious newfangled tech thing after only 13 years...
|
| https://www.theverge.com/2015/4/27/8504033/apple-iphone-
| sale...
| IMTDb wrote:
| > the top reason was a preference for using cash
|
| With electronic transaction - and especially bitcoin - the
| government knows what goes in and out since every transaction
| is traceable. And with that info, they will be able to properly
| tax you ! The goal of El Salvador here is to fight rampant tax
| evasion by providing a fully traceable payment system.
| Unsurprisingly, people are resisting that by using the best way
| they know how: untraceable cash transaction and bartering.
| el-salvador wrote:
| > Unsurprisingly, people are resisting that by using the best
| way they know how: untraceable cash transaction
|
| El Salvador tracks cash transactions.
| rory wrote:
| Surely you mean _large_ cash transactions. If not, could
| you explain how this works?
| rmac wrote:
| It would have been interesting if the journalist went a
| little deeper and researched why the adoption rate was so
| poor.
|
| How hard was it for a middle aged farmer to actually download
| and set up the app to get $30 out of it?
|
| And to your point, how many citizens are using cash primarily
| because its untraceable? When people say they prefer cash,
| The journo should have followed up with 'why'?
|
| I suspect one of the larger reasons this failed is due folks
| above age 40 not given it a shot because of how complex it
| all is to use for them.
| el-salvador wrote:
| > I suspect one of the larger reasons this failed is due
| folks above age 40 not given it a shot because of how
| complex it all is to use for them.
|
| The government sponsored bitcoin wallet is easier to use
| than the banking apps.
|
| For a normal Salvadoran most of the day to day transactions
| are micro transactions.
|
| $0.25 loaf of read, $0.21 bus ticket, $1.00 groceries. For
| those amounts, handing a coin is faster than scanning a QR
| code.
| jerry1979 wrote:
| Assuming good intent on the part of Bukele, I tend to imagine
| that he wants to get the ball rolling on Bitcoin now so that
| his country can get ahead of the curve assuming bitcoin becomes
| more popular globally in the future.
| pirate787 wrote:
| Bukele is an autocrat and it is more likely he will use
| bitcoin's transferability to steal the funds. He's literally
| buying bitcoin with his cellphone.
| dimgl wrote:
| Maybe because cryptocurrency doesn't solve the more pressing
| issues in the country?
| [deleted]
| smoldesu wrote:
| > 1) free conversion from btc to usd 2) large discounts for
| purchases of gasoline using btc 3) no bank account or a credit
| card needed
|
| I mean... if I'm paying for my gas, I'd rather just put my card
| in the chip reader instead of getting out my phone/hardware
| wallet, preparing a transaction with the proper amount of
| Bitcoin, introducing the transaction to the gas pump, waiting
| for the transaction to register with the ledger and _then_
| leaving. Even if we 're talking about a 20% discount here, I'd
| probably just stick with the debit card. Playing with a crypto
| wallet was fun for larping as a hacker when I was in middle
| school, but nowadays I don't think it's worth the trouble (much
| less the shitshow that is L2 chains).
| beaned wrote:
| That's because you have the privilege to not care. There are
| people who spend their days scraping parks for bottles and
| cans to make $0.05 at a time.
| smoldesu wrote:
| Apparently even people without privledge don't really care
| either, though. Given the option to use cryptocurrency for
| lower-priced goods, the majority of their country is
| sticking with traditional payment methods, probably for
| convenience/familiarity purposes.
| beaned wrote:
| Why do you say "probably," do you know? I would guess
| that it has more to do with technological literacy.
|
| People put effort into saving small amounts all the time,
| like cutting coupons or going to the cheaper store
| further down the road. But these things are
| understandable; using a crypto wallet in a place where
| most people don't have a history of smartphone use isn't
| really the same thing.
| smoldesu wrote:
| > I would guess that it has more to do with technological
| literacy.
|
| Which is why I added the "familiarity" qualifier. Pretty
| much anyone can barter with cash, and I've watched
| 7-year-olds buy ice cream with a Visa card. Initiating a
| Bitcoin transaction though? That requires some setup,
| _even moreso_ if you have a 'proper' self-custody wallet
| that you manage yourself.
|
| > using a crypto wallet in a place where most people
| don't have a history of smartphone use isn't really the
| same thing.
|
| I agree, I'm afraid you may have misread my sentiment.
| It's not that there's no motivation to use Bitcoin, the
| government subsidies are a pretty clear and obvious shot
| at luring less-fortunate citizens into the world of
| crypto. My larger point is that the low adoption among
| their population makes perfect sense to me. Even in a
| country with maximum digital literacy, I doubt most
| people would feel motivated to use crypto either.
| eftychis wrote:
| Here we are talking about people that do not have bank
| accounts never mind cards though.
|
| I think there is a deeper issue for not even trying
| it/getting free money -- which of course are used to acquire
| users here pretty aggressively.
| ChadNauseam wrote:
| From the article
|
| > In theory, developing nations like El Salvador are ideal
| candidates for cryptocurrency adoption. More than half its
| citizens rely exclusively on cash, rather than credit or
| debit cards. Some 70 percent of households have no bank
| account and nearly 90 percent do not use mobile banking. A
| digital payment platform could be a way to make the economy
| more inclusive and accessible.
| ALittleLight wrote:
| One experiment I've wanted to try, and would if I were more
| confident in my Spanish, is to just call 20 random businesses in
| El Salvador and ask them if I could pay in bitcoin. I've wondered
| how much of this is a publicity stunt versus real "Bitcoin is
| their currency" thing.
|
| "Although the law requires all firms to accept bitcoin, in
| reality only 20 percent do so. Roughly 5 percent of all sales
| have been paid in bitcoin through Chivo Wallet, and just as most
| households using Chivo prefer to keep their money in cash rather
| than in bitcoin, 88 percent of firms convert their bitcoin into
| dollars."
|
| 20 percent of firms actually accepting bitcoin and 5 percent of
| all sales is actually much higher than I expected. If these
| numbers continue to grow that would be the first bit of evidence
| I've seen that makes me feel positive about crypto's future.
|
| I'd also be curious to know where the bitcoin transactions are
| concentrated. I assume it's not a random 20% of firms and 5% of
| transactions. Is it crypto-tourists and resorts? Poor people who
| would see the most relative-incentive to adopt because of the 30
| dollar bonus? Families with members working in other countries?
| duxup wrote:
| There have been a couple videos of folks walking around doing
| just that.
|
| The participation rate was not very high. It was hard to find
| anyone who said yes.
| baby wrote:
| My questions are:
|
| * why Bitcoin, versus a cryptocurrency with low latency?
|
| * why not a stablecoin?
| ArtWomb wrote:
| >>> why not a stablecoin?
|
| Berkeley Labs hypothesizes a "thermodynamically" stablecoin. If
| that experiment fails, there may be no hope for defi ;)
|
| 'Holy grail': Researchers create physics-based cryptocurrency
|
| https://www.dailycal.org/2022/06/20/holy-grail-researchers-c...
| jkepler wrote:
| Bitcoin is already thermodynamically secured by proof-of-
| work, as miners burn electricity for the right to add new
| blocks of transactions to the blockchain. The ESG crowd can
| criticize energy use, but human civilization flourished with
| abundant energy (and that energy allows building of wealth to
| be able to afford a clean environment for all creatures);
| energy use secures bitcoin.
| varajelle wrote:
| * Using the lightning network, which the official app use,
| there is no latency.
|
| * Because the whole point is to be independent from foreign
| currency
| kzrdude wrote:
| We hear very little about lightning. Is it used much? Works
| well?
| rmac wrote:
| i just decompiled the most recent android chivo app. It does
| not have a lnd client on it.
|
| It looks like the government ARE running a lightning node as
| part of the service, however:
|
| https://davidgerard.co.uk/blockchain/2021/08/24/el-
| salvador-...
| unicornmama wrote:
| May as well be entitled their attempt at insanity. Although that
| statement is not fair to El Salvandorians - many of whom were
| forced to watch their government collaborate with foreign
| entities to rob their country blind.
|
| Bitcion is not a stable store of value, therefore it is useless
| as a currency. Something that can move 10-20% daily cannot be
| used in commerce, especially for goods on and services sold on at
| razor tight margins. And let's not even get into the amount of
| borrowed money that went into propping up Bitcoin, whose
| unwinding we've witnessed [and it's not over yet].
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