[HN Gopher] One year on, El Salvador's Bitcoin experiment has pr...
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One year on, El Salvador's Bitcoin experiment has proven a failure
Author : ipeev
Score : 195 points
Date : 2022-09-14 08:09 UTC (14 hours ago)
(HTM) web link (theconversation.com)
(TXT) w3m dump (theconversation.com)
| can16358p wrote:
| Many people buy Bitcoin to "hodl", not to use, giving it some
| gold-like characteristic.
|
| If there was some crypto without any incentives of hodling long
| term, I'm sure the adoption would be higher. People don't spend
| Bitcoin the same way they don't spend gold in daily life: to own
| it as a long-term value reserve.
| tromp wrote:
| > If there was some crypto without any incentives of hodling
| long term
|
| There are some that strongly discourage speculation by having a
| purely linear emission, which after n years still has a yearly
| supply inflation of 1/n and takes a whole century to get down
| to 1%. Offering the same rewards to later generations helps
| avoid concentration of wealth that most cryptocurrencies,
| especially premined ones, suffer from.
| upsidesinclude wrote:
| If?
|
| There's Tether and USDC, plus a handful of others.
|
| The critical thing at the moment is to be "sophisticated"
| enough to make the right choice.
|
| In US law, an investor has to prove they have means (money to
| spare) to do risky things. They are "sophisticated" investors
| and can afford losses. (This word is used in the law)
|
| The rest don't get to play. So the rest don't know the rules
| and don't understand contract law.
|
| If you read a contract it defines the rules. Most people don't
| want to or don't know to do this and, right now, the government
| isn't stopping them from making these decisions about
| investment in crypto.
|
| Many people talk about crypto without acknowledging the
| fundamental nature of investments, because the don't invest
| (i.e. not "sophisticated"). They want something like their
| bank. Somebody to make sure they don't mess up and take care of
| them if things go sour.
|
| If that person is you, leave your opinions aside and keep your
| money in bonds and mutual funds
| latchkey wrote:
| This last cycle, many people bought Bitcoin to use as
| collateral for loans, which was a novel and even smarter use of
| it. Use your money to make money.
| jollybean wrote:
| "If there was some crypto without any incentives of hodling
| long term, "
|
| The opposite.
|
| Cryptos that are anchored to USD have no appeal. They're less
| useful than USD, and, there's no 'get rich quick' aspect. So
| what's the point.
|
| The Ponzi Mania is what drives people into BTC and to talk
| about it incessantly on the Internet etc.. Without the mania,
| it's not going to spread.
|
| An institutionalized crypto, like one by the government, and
| which had some kind of stability (i.e. central banked) would
| probably get critical mass and therefore have some utility.
|
| El Salvador leader is basically criminally derelict, he should
| be jailed.
| redox99 wrote:
| There's about 150B in stablecoins[1]. You can argue that some
| of that is fake, not backed. But even if 75% of that were
| fake it's still a huge amount of money. So it's clear that
| cryptos that are anchored to USD _do_ have appeal.
|
| The appeal however is not from people wanting to use them to
| buy their coffe. The appeal is DeFi.
|
| [1] https://coinmarketcap.com/view/stablecoin/
| jollybean wrote:
| $150B is a small amount of money that is otherwise just
| sitting there. Nobody is using it for anything and it's not
| growing.
|
| It's generally a riskless thing thing to put your money in
| so it's not surprising that a few funds have gone big on
| it. They will fold the bet eventually.
| sparkie wrote:
| The use of "stablecoins" is for crypto arbitrage. Exchanging
| to USD via traditional means is just too slow to take any
| risks.
|
| There was an early alt-coin, http://freico.in/, which had a
| demurrage fee for holding, which was intended to incentivize
| spending over saving. A terrible idea if you ask me.
|
| Long-term saving is the biggest selling-point for Bitcoin. If
| the value of savings went down by design, it would have never
| got to where it is.
| pjc50 wrote:
| > I'm sure the adoption would be higher
|
| Adoption for what purpose though?
|
| If you're not keeping a substantial "float" in the currency,
| you have to buy more every time you want to use it. So you've
| just inserted an extra, riskier step into your ecommerce or
| international wire transfer.
|
| Within El Salvador, the policy behaves like dollarisation with
| all its advantages and disadvantages, with an extra
| disadvantage that the currency has fallen by a third against
| the dollar.
| n4r9 wrote:
| My best guess at why the average person is hesitant to use
| bitcoin as a primary currency is: where do I go when it goes
| wrong? If the system holding my money is hacked, or I get
| scammed in some way, where is my legal recourse? Legal recourse
| is typically something provided by a state. But state
| regulation nullifies a lot of what bitcoin advocates claim is
| the advantage of cryptocurrency. I'm not up to scratch on the
| details in El Salvador, so curious to know whether they have
| solved this issue.
| upsidesinclude wrote:
| See my other comment.
|
| El S. is in a pretty strange place because they don't have
| their own currency. They have no control over their economy
| in that regard, so adopting a separate currency which frees
| them from singular dollar dependence is quite useful.
|
| Nullifies what claims exactly?
| n4r9 wrote:
| > Nullifies what claims exactly?
|
| Bitcoin seems to be intended as a decentralised payment
| system that bypasses any third party institutions. My gut
| feeling is that: in order for a state to provide legal
| recourse, bitcoin addresses need to be linked to a
| centralised personal/business identity that can be tracked
| down and sued or prosecuted if necessary. For Bitcoin to
| feel safe for the normal person, it would have to introduce
| centralisation and third parties. My gut may be wrong, of
| course.
| upsidesinclude wrote:
| You might be right.
|
| The important thing is that the person must accept the
| responsibility of owning all aspects of their wealth.
|
| No one can remove it from you, but you can make the
| mistake of giving it away. Then you bear the
| responsibility for losing it.
|
| That's not a very big trade off for some people.
| eimrine wrote:
| > If the system holding my money is hacked
|
| We the hodlers believe that Bitcoin can be hacked only by
| hacking cryptografic hash-functions, which will lead to
| collapse all the banks, all passwords on all websites, maybe
| some data structures like hash-maps.
|
| > or I get scammed in some way, where is my legal recourse?
|
| How will you get scammed if you have a backup which you
| promise to yourself to not even introduce to computer with
| online? Also nobody recommends you to hold all your wealth in
| crypto. Some metals work not bad also, my favorite example is
| copper.
|
| > But state regulation nullifies a lot of what bitcoin
| advocates claim is the advantage of cryptocurrency.
|
| Let me guess, you have not read / have to reread the
| bitcoin.org/bitcoin.pdf whitepaper?
| saberience wrote:
| This borderline snarky and condescending comment isn't
| helpful and isn't what is encouraged on HackerNews.
| gjulianm wrote:
| I mean, if being secure requires an average person having
| an airgapped computer holding the wallet keys, it's not
| going to see much adoption. Also you can't really use it as
| a currency if you do that.
| redox99 wrote:
| > having an airgapped computer holding the wallet keys
|
| That's basically a hardware wallet (not 100% "airgapped"
| but the same idea). And yes you obviously you can use it
| as a currency that way.
|
| Still I agree that crypto is too complex for the average
| person and I wouldn't trust my mom to not lose it or get
| scammed.
| n4r9 wrote:
| I'm not talking about the hash function being hacked, I'm
| talking about websites like Coinbase that provide wallet
| and exchange services being hacked. Banks of course are
| also vulnerable to social engineering etc but there is more
| regulation and consumer protection for when that happens.
|
| And by "scammed" I mean someone providing a fraudulent or
| faulty service or product. In the UK we have "Section 75"
| which protects consumers who pay via credit card or paypal:
| https://www.citizensadvice.org.uk/consumer/somethings-
| gone-w... . Is such protection possible with bitcoin?
| eimrine wrote:
| > I'm not talking about the hash function being hacked,
| I'm talking about websites like Coinbase that provide
| wallet and exchange services being hacked.
|
| What part of Bitcoin whitepaper tells you have to rely on
| third-parties? I'm not a trader, I'm a hodler, I even do
| not have a Coinbase account.
|
| Of course if third-parties get lost you lose everything
| you have believed they will guard for you.
|
| _upd after reading responses_
|
| Sorry guys I forgot that average person needs to be an
| idiot. My bad, usually I consider an opposite.
| UncleMeat wrote:
| "Don't worry, you can manage your wallet completely
| yourself without any 3rd parties" is in absolutely stark
| opposition to "adoption will grow and grow." If the only
| people that use BTC are hobbyists who are willing to go
| through the trouble to find a way to safely manage their
| own wallet then BTC will _never_ see widespread use.
| thraxil wrote:
| > upd after reading responses > Sorry guys I forgot that
| average person needs to be an idiot. My bad, usually I
| consider an opposite.
|
| Right. Wanting simplicity and low risk around basic daily
| purchases and transactions means that someone's an idiot.
| You seem like a lovely person. Thanks for representing
| the crypto/BTC community so well.
| andybak wrote:
| When I held crypto, I used a 3rd party.
|
| Why?
|
| Because they are more trustworthy than my own ability to
| not screw up. I lose/break things all the time. I didn't
| want a fragile token or backup costing me 5 figures.
| thraxil wrote:
| Remember that the comment started with "My best guess at
| why the average person is hesitant to use bitcoin".
|
| The "average person" needs something roughly equivalent
| to a current bank or credit card in terms of simplicity.
| Currently, that basically means using third-parties like
| Coinbase, not reading the Bitcoin whitepaper, managing
| their own hardware wallets and encryption keys, thinking
| through backups and disaster recovery scenarios, and
| being dilligent about maintaining opsec.
| wikfwikf wrote:
| That's not the whole story. When Bitcoin started it was used
| more as a currency than it is now. Firstly by evangelists who
| tried to establish a BTC economy, and secondly in the illicit
| economy.
|
| Bitcoin miners and devs took the project in a specific
| direction a few years later, optimizing it for use as digital
| gold, while making it much harder and more expensive to use
| as a currency.
| SkipperCat wrote:
| 100% agree. The early days of Silk Road showed the true
| value of Bitcoin. It was a great untraceable currency.
| Perfect for buying drugs (no moral judgement, just saying
| what happened). Then, around 2016, CNBC "discovered" crypto
| and so much investor money and mania jumped in. Now it's
| just a value store for dreamers. The fact that the word
| HODL exists kinda proves that point.
| 2muchcoffeeman wrote:
| Not just dreamers, it's an identity. Someone else on this
| topic is calling themselves a "hodler". Not just an
| investor. But a "hodler", a "True Believer" I suppose.
|
| Your investment is there to make you money, not to
| provide you with an identity.
| cool_dude85 wrote:
| Personally, I like for my untraceable currency not to
| have a permanent, public ledger showing every transaction
| I make.
| ridgered4 wrote:
| Yes, my understanding of bitcoin is that it is not
| untraceable at all since the transactions can be followed
| back to their source, but it was widely perceived as such
| by dark markets for a number of years. I guess maybe if
| you mined it yourself (no longer really feasible for an
| individual?) or somehow purchased it with cash it might
| be.
| pessimizer wrote:
| > That's not the whole story. When Bitcoin started it was
| used more as a currency than it is now.
|
| I still reflexively think of bitcoin primarily as the way
| you buy abstract board games from Spanish libertarians,
| because of https://nestorgames.com/
| espadrine wrote:
| > _If there was some crypto without any incentives of hodling
| long term, I 'm sure the adoption would be higher_
|
| Interestingly, that is also the analysis that most central
| banks make. Their monetary policy sets a positive target
| inflation rate for this exact goal.
|
| However, that monetary policy is often a large part of why
| people use Bitcoin.
| sschueller wrote:
| Should do what Switzerland has been trying to do. Negative
| interest rates to punish those who are hodl the Swiss Franc.
| taolegal wrote:
| I have a hard time with left leaning economics if only
| because they revile "consumerism" but their policy
| prescriptions, in practice, make it impossible to do
| anything but consume.
|
| The demonization of "hoarding" is basically an endorsement
| of consumption. Of course, they then regulate your
| consumption.
|
| You could see how people resent the micromanaging of their
| lives.
| soco wrote:
| Then it wouldn't be a free currency anymore, and that's a
| tenet of crypto (whether real or only promised, the mileage
| may vary).
| karaterobot wrote:
| I asked a group of visiting college students from El Salvador
| about the situation with the Chivo wallet. They all uniformly
| believed the U.S. had put sanctions against the country's
| official exchange, making it hard to send money between the two
| countries. I could not find any evidence that such sanctions had
| actually occurred, but they all believed it was true. I wonder
| how they got this idea, how common it is, and whether it's had
| any effect.
| mihaic wrote:
| After so many cycles, Bitcoin has become one of the most
| respectable pyramid schemes available to the general public (only
| behind real estate speculation maybe).
|
| I think we'll see another even worse cycle unfortunately within
| the next 10 years.
| triceratops wrote:
| Real estate has at least one thing going for it: you can live
| in a house.
| prottog wrote:
| Not only can you live in a house, literally every economic
| activity requires land on top of which you set up your
| capital and perform your labor. It's not the same thing at
| all as Bitcoin.
| pessimizer wrote:
| At least it may have peaked before we got to the point where we
| had 15 "Flip this Token" shows airing on the Bitcoin & Garden
| network.
| __MatrixMan__ wrote:
| This was implemented poorly (and bitcoin was a poor choice), but
| it's not crazy to want a currency that is decoupled from the US
| government. Especially in Central America where the US government
| has a pretty shady track record.
| lbriner wrote:
| That's the thing. No-one wondered why they might want Crypto,
| the question was always "Why Bitcoin"?
|
| There are many deep subtle questions about Economics, even with
| stablecoins but the choice of Bitcoin was way off base, the
| only possible reason to use it was because it was the only one
| most people had heard of.
|
| Bitcoin is totally nonsensical for low-value high volume
| transactions and by the time the money gets paid to the seller
| for already bought goods, they could be making a loss. At least
| inflation in normal currency is only (usually) a few percent
| per year.
| SilverBirch wrote:
| This isn't a problem though, countries issue their own
| currencies all the time. The problem is when you need to run a
| trade deficit, you need to buy more stuff than you sell
| internationally. It drives down the value of your currency. But
| crypto doesn't solve that. And borrowing against the national
| debt to buy risky crypto assets (which is what El Salvador did)
| makes that problem worse, not better. They _will_ default on
| this debt.
| __pache__ wrote:
| Ok, let's talk in 10 years :)
| jonathan-adly wrote:
| Despite the well-known HN sentiment, it is worth repeating that
| no significant financial investment should be judged by 1 years
| worth of data.
| bannedbybros wrote:
| rawoke083600 wrote:
| Ja that is crazy... one wonder if they pick a different time
| (read long term market-regime) if the results would be any
| different for better or worse.
|
| The _best_ alternative payment system I have seen myself is
| M-Pesa in Kenya [0]
|
| It's THE payment system in Kenya everything runs of it in terms
| of commence for the "ordinary man". It has a somewhat unique
| starting point, since Kenya (Africa) (I'm from there myself), was
| not "modern enough" for the everyday man to make use of
| traditional banking services. But even the "low tech man" had a
| cellphone.
|
| I hope to see more examples like this in the future, and I'm sure
| many a BigCorp is doing just that, I do wish the next-gen version
| of these services will be more community-driven and less bigcorp.
| Oh gosh I _almost_ described the _original vision_ of bitcoin :)
|
| [0]https://en.wikipedia.org/wiki/M-Pesa
| upsidesinclude wrote:
| This is a great point most people from the US and Europe can't
| understand.
|
| Much like Africa, all of SE Asia went directly to cell service
| and skipped all landlines because they were so far behind. The
| same goes for banking in these parts of the world and India.
|
| The people there will skip over the traditional banking system
| which is massively undeserving the population and adopt a
| digitally native banking system. The masses will go with the
| flow and accept the CBDC, but many already understand the
| implications and limitations.
| croon wrote:
| It's not a failure because Bitcoin tanked (relatively), it's a
| failure because Bitcoin tanking was and will always be a
| significant risk. People who got rich from Bitcoin weren't savvy,
| they won the lottery. It's not a sound investment decision based
| on outcome. Investments are sound based on probability and risk
| beforehand.
|
| El Salvador gambled which is stupid. Whether they won or lost at
| the lottery is inconsequential to its stupidity.
| hackerlight wrote:
| > It's not a failure because Bitcoin tanked (relatively), it's
| a failure because Bitcoin tanking was and will always be a
| significant risk.
|
| A lot of the risk can be hedged by custodians, so I don't
| agree.
|
| The reason it should fail for transactions is because Bitcoin
| sucks for transactions. Few people will prefer slow,
| irreversible and expensive transactions.
| VMG wrote:
| Those that need unstoppable transactions are willing to pay
| the 10'000 satoshi fee on a transaction with arbitrary
| amount.
| mrguyorama wrote:
| Which users actually need and want irreversible
| transactions. What's the utility of a system that doesn't
| let you combat fraud?
| VMG wrote:
| people targeted by law enforcement or secret police need
| unstoppable transactions
| plebianRube wrote:
| Lightning is popular because few prefer slow transactions.
|
| El Salvador primarily uses lightning network, same network
| Strike uses for instant cross border payments.
| hackerlight wrote:
| Of course, I stand corrected about that.
|
| So, aside from irreversibility of transactions, what is
| preventing adoption?
| adastra22 wrote:
| Setting up lightning channels are still slow, expensive,
| and worse require hot, online wallets.
| spiralx wrote:
| It doesn't even use that, the Chivo wallet only uses LN
| for external transactions, everything else is a plain old
| centralised app.
| plebianRube wrote:
| I don't have time to thoroughly research the topic and
| come back to you, so maybe you can do some leg work.
|
| But I do know people over estimate what can be
| accomplished in a year and underestimate what can be
| accomplished in 10.
| MrMan wrote:
| also correlation doesn't equal causation, the Overton
| window, etc
| donatj wrote:
| Have you seen the dollar's buying power recently?
|
| I went from living very comfortably to living paycheck-to-
| paycheck in about 6 months. Holding my value in USD has become
| a significant risk.
| dragontamer wrote:
| > Have you seen the dollar's buying power recently?
|
| Yeah, its up like 100% over Bitcoin and like +30% over Euro,
| Yen, and GBP? In fact, holding Cash/USD has been basically
| one of the best performing things in my entire portfolio this
| year (after oil/energy)
|
| Have _you_ seen BTC's buying power recently?
| donatj wrote:
| USD is not _up_. _Everything_ is down. Have you been to a
| store recently?
| dragontamer wrote:
| USD is hugely up vs Yen and Euro. You buy anything from
| overseas recently? USD is hugely strong. USD is up vs the
| stock market, vs the bond market, vs the overseas bond
| market, vs overseas stocks.
|
| USD is also up vs Bitcoin.
|
| EDIT: Feel free to look at gold, silver, and other
| 'inflation hedges' while you're at it. The main thing
| going up is commodities (oil and food), which is
| certainly important. But there's more to the world than
| those two things.
| nightski wrote:
| Inflation is basically the exact definition of the change
| in USD's value relative to goods & services.
|
| Unless you are arguing we currently don't have any
| inflation, which would be a tough sell :)
|
| Also this last CPI report oil & gas pulled inflation down
| whereas just about everything else pulled it up. Food is
| hot, but a lot of other things are as well including non-
| commodity service based industries.
| dragontamer wrote:
| > In fact, holding Cash/USD has been basically one of the
| best performing things in my entire portfolio this year
| (after oil/energy)
|
| This is what I'm arguing. Do you deny it?
|
| ------
|
| In a bear market, you don't have to outrun the bear to
| get ahead. You only have to outrun your friends.
| [deleted]
| AuryGlenz wrote:
| That all depends on the timeframe you're looking at. The
| Bitcoin I bought (not nearly enough of) at under $80 is
| doing a lot better than any cash I still have from around
| then.
|
| A year or two from now Bitcoin very well might be back
| above it's all time high.
| dragontamer wrote:
| When people are complaining about the declining
| purchasing power of USD, they are mostly talking about
| since November 2021, because that's when inflation
| started to really kick in.
|
| Its ironically, also when BTC really began to collapse
| from its $60,000 high. So it really demonstrates how much
| the BTC was benefiting from low-interest rate /
| inflationary policies.
| hajile wrote:
| Inflation numbers for December of 2021 were 6.8% CPI and
| 9.6% for wholesale (way higher when you look at goods
| only rather than services).
|
| CPI was nasty for most of June 2020 to June 2021. It's
| just that fewer publications were picking up the story
| yet.
|
| https://www.bls.gov/news.release/archives/cpi_07132021.pd
| f
| SketchySeaBeast wrote:
| > So it really demonstrates how much the BTC was
| benefiting from low-interest rate / inflationary
| policies.
|
| It's almost like it's not a hedge at all and just another
| part of the exact same game as the rest of the market.
| [deleted]
| jallen_dot_dev wrote:
| > Have you seen the dollar's buying power recently?
|
| Yeah, it's been going up relative to almost all other
| currencies and especially BTC.
| pjc50 wrote:
| People are unable to distinguish "prices have gone up from
| money printing" from "prices have gone up due to the pandemic
| and the war between Russia and Ukraine". Neither bitcoin nor
| gold can hedge against the latter.
| pookha wrote:
| Prices have gone up because we have demand side inflation:
|
| https://www.mercatus.org/publications/inflation/inflation-
| la...
|
| Which is mostly driven by putting trillions of dollars into
| the economy. The Fed had 1 trillion on it's books during
| the 07 recession. It has 8 trillion on it's books now.
| That's a major problem.
| psychlops wrote:
| I guess you'll have to put me in the camp of unable to
| distinguish. There is always an "emergency" reason to print
| money.
| ceejayoz wrote:
| Now imagine you had half as much USD for your groceries,
| because you decided to put it in BTC a year ago instead.
| donatj wrote:
| Quite literally what happened. My groceries cost over twice
| as much.
| Zanfa wrote:
| Ignoring the fact that you're implying a 100% USD
| inflation over the past year, you'd only have 25% of the
| purchasing power if you "invested" in BTC per the GPs
| example.
| sp332 wrote:
| "Inflation" is an average of several things. Actual
| inflation doesn't have to be even across all items.
| Groceries went up more than other things.
|
| Edit: some examples https://www.ers.usda.gov/data-
| products/food-price-outlook/su... Retail egg prices went
| up 38% from July 2021 to July 2022.
| the_gastropod wrote:
| Yes. And eggs are the highest increase on that list, at
| 38%--still a far cry from 100%. Comparatively, fresh
| fruits are _down_ 0.8%, and fresh veggies up only 0.8%.
| benj111 wrote:
| It isn't literally what happened because that would be
| equivalent to your groceries costing 4 times as much.
| UncleMeat wrote:
| I cannot think of a single individual item that I buy at
| the grocery store that has doubled, let alone more than
| doubled.
| yamtaddle wrote:
| IIRC the giant flats of Costco eggs went up to 3-4x their
| former price over the last year or so. Still a great
| deal, they're just not "holy shit that's practically
| free!" like before.
| UncleMeat wrote:
| Weird. Eggs by the dozen (along with onions, one of the
| most volatile staples at the grocery store) are up only
| like 75% for me. Admittedly that's a lot and more than I
| had expected when I went and checked but I'm still seeing
| very different numbers.
| pessimizer wrote:
| Another datapoint: eggs are up 3-4x for me in Chicago.
| yamtaddle wrote:
| I'm not sure other eggs are up as much as those large-
| flat Costco ones (60 eggs? Something like that). I have a
| feeling they were losing money on them before, they were
| _so_ cheap.
| njarboe wrote:
| Do you happen to live in California? If so, most of the
| egg price increase is likely due to compliance with Prop
| 12 regulations.
| yamtaddle wrote:
| Nope, midwest.
| donatj wrote:
| Cereal and butter. A box of cereal is $7+ now, whereas it
| was $4 not long ago. A pack of butter was $2.50 and now
| close to $5.
| Bud wrote:
| Butter actually wasn't $2.50 at any point in the recent
| past. This is easy to track.
|
| https://fred.stlouisfed.org/series/APU0000FS1101
|
| So of the two items you cherry-picked to support an
| assertion that groceries have more than doubled, one is
| up...around 30-35%. In fact, there doesn't appear to be a
| single food item in this list that has doubled in the
| past year. Eggs are the closest.
|
| https://www.bls.gov/regions/mid-
| atlantic/data/averageretailf...
| Supermancho wrote:
| Well butter prices have gone up almost 100% -
|
| https://www.ams.usda.gov/mnreports/dywabutter_cme.pdf
|
| https://www.globaldairytrade.info/en/product-
| results/butter/
|
| But that's not the whole story. Prices are not primarily
| set by wholesale costs for many goods.
|
| I think cereal has only gone up 30%, although there have
| been other events that influenced Kellogs pricing (notice
| how the Poptarts boxes have changed slightly) and then
| there has been the opportunity to steal away some extra
| profit - https://www.wxyz.com/news/now-cereal-prices-are-
| on-the-rise-... (search for "Mills").
| mrguyorama wrote:
| Meanwhile pork and chicken are roughly the same as
| they've always been where I am, at least ignoring sale
| pricing.
|
| Hell, I got 3.5 pounds of steak tips for $20 about a
| month ago.
|
| My food costs have absolutely gone up, but it's MUCH
| closer to the "10 percent" figures quoted as inflation
| than anything close to what you have said. Where do you
| live and shop?
| Supermancho wrote:
| > I got 3.5 pounds of steak tips for $20 about a month
| ago.
|
| A lot of cattle was recently liquidated (made into meat
| products, this year) as grazing fields have been drying
| up and, due to climate change, meat pipelines have had to
| start making MAJOR changes.
| mrguyorama wrote:
| I want to clarify this was a specific prepackaged product
| that likely needed to be clearance because it wasn't
| popular. General purpose steak tips are NOT $6 a pound at
| my local hannaford. However, they aren't much more
| expensive than they are historically, which is why I'm
| looking for more info from the parent poster, who claims
| essentially 100% increase in product prices, while my
| personal experience on a wide array of items is closer to
| 10% on a sporadic list of things. I think they are
| experiencing some rather extreme local price situations.
| pessimizer wrote:
| If 8% inflation has put you paycheck to paycheck, living
| "very comfortably" was already living far beyond your means.
| donatj wrote:
| The 8% figure doesn't match real life. My electric bill
| doubled, my natural gas bill doubled, my municipal bill
| doubled, my groceries doubled.Everything that makes up the
| vast majority of my expenditures had doubled.
| pessimizer wrote:
| You could be the guy where it's only raining above his
| house, but the people you are having this conversation
| with also live in the world and disagree with your
| figures as much as the statistics do.
| splitstud wrote:
| jollybean wrote:
| It should not have been any kind of 'investment' in the first
| place.
| koonsolo wrote:
| I agree with you on the El Salvador part, but not on the
| investment part.
|
| > Investments are sound based on probability and risk
| beforehand.
|
| Investing in bitcoin had a limited downside (lose 100%), but a
| very high upside (reaches it's initial goals). For me, the
| potential gains outweighed the low probability.
|
| I consider myself very lucky that I made some money (wasn't
| crazy to put all my money in there). But for me, when it would
| have gone to 0, I still feel it was worth the risk.
|
| But of course, with such a high risk high reward investment,
| only invest a small % of your total money.
| gopuck16 wrote:
| What you've stated here is your experience, now if you try to
| extrapolate the thinking/investment model you've used to
| large number of people - there is very limited upside and
| very high downside.
| koonsolo wrote:
| No it stays the same if you have an investment portfolio
| and only invest max 5% in high risk assets.
|
| Assume you invest 1% of your portfolio in Bitcoin. What is
| your downside? 1%. Not that high, is it?
|
| What is your upside? Maybe x100, so double your entire
| portfolio.
|
| Right now, you came late to the game, so don't expect a
| x100. The risk is probably still the same, but the upside
| way lower. But when Bitcoin was still young, the upside was
| definitely worth the risk. And it didn't even live up to
| its original intent. Imagine the price if it did!
| SketchySeaBeast wrote:
| If we think like this why wouldn't I invest 1% of my
| portfolio in lottery tickets? At worst lose 1%, at best
| x1,000,000 upside?
| prottog wrote:
| You could consider lottery tickets as an OTM option
| expiring in a week with those payoffs, I suppose. If you
| spread 1% of your portfolio over a year and buy lottery
| tickets every week, you're effectively losing 1% per year
| with a very small chance of becoming very rich.
|
| There are probably better places to put your 1% on. ;-)
| SketchySeaBeast wrote:
| > There are probably better places to put your 1% on. ;-)
|
| I totally agree, but the argument being made is that "the
| potential upsides outweigh the low probability". That's
| not investing, that's gambling.
| koonsolo wrote:
| Your argument is that once it's high risk, it's gambling.
| Sorry but that is just not the case. It's a ratio. If you
| don't understand this, then I agree that you should stay
| away from anything that involves risk management.
|
| Let's say we play a game where you throw a coin 3 times
| in the air. If it's not 3 times head, I'll pay you $1. If
| it's 3 times head, you pay me $10.
|
| Your chance of winning is pretty high, while my chance is
| low. Yet, I would love to play this game.
| SketchySeaBeast wrote:
| > Your argument is that once it's high risk, it's
| gambling.
|
| No, my argument is that once it's a matter of "you could
| lose everything or make it big!" is gambling.
|
| > It's a ratio.
|
| With totally unknown values.
|
| > Yet, I would love to play this game.
|
| This is exactly what the people who currently hold
| bitcoin are suggesting to those who don't.
| koonsolo wrote:
| > This is exactly what the people who currently hold
| bitcoin are suggesting to those who don't.
|
| I never suggested this, as you could see a few replies
| up:
|
| > Right now, you came late to the game, so don't expect a
| x100. The risk is probably still the same, but the upside
| way lower. But when Bitcoin was still young, the upside
| was definitely worth the risk.
|
| Nevermind, this conversation is clearly going nowhere.
| koonsolo wrote:
| The reward/risk ratio of lottery tickets is very well
| known. And it's obviously not in your favor. So it's
| basically a no brainer not to invest in them.
|
| Things like startups for example also have a very high
| risk rate, but also potential high payouts. There it
| actually makes sense since the ratio is way better.
| SketchySeaBeast wrote:
| > And it's obviously not in your favor.
|
| Yeah, but that payout ratio - millions to one! Bitcoin
| will never pay out at that level - I don't know if it
| ever did.
|
| I find it interesting you're arguing that an unknown
| ratio is preferable to a known one. Bitcoin has a known
| current cost, but entirely unknown chances and payouts
| over an unknown duration. There's little reason to assume
| that Bitcoin will make another massive jump other than
| optimism that there will be a new wave of true believer
| bag holders. I know the lottery is going to be drawn each
| week and I know the cost and the odds, as well as the
| minimum payout, and the current payout is updated as we
| get closer to the drawing.
| darth_aardvark wrote:
| So don't invest it in that lottery. Invest it in my
| lottery! I'll sell you as many tickets as you want, I pay
| out a trillion to one if you win, and I'll keep the risk
| rate totally unknown to you.
| the_gastropod wrote:
| Boy do I have the investment for you! Give me your life
| savings, and I'll give you 50% equity in my Evil Empire. I
| plan on taking over the planet by 2028. What an upside! Only
| risk is losing 100%--that's practically nothing in
| comparison!
|
| Or I guess you could buy lottery tickets. Probably a slightly
| less insane way to "invest" your money.
| koonsolo wrote:
| Both seems like a bad idea. Bitcoin on the other hand, made
| me a shitton of money :D
|
| Have a nice day.
| afterburner wrote:
| It's worse than a lottery for some. It rewarded incorrect
| thinking on how the financial industry works.
|
| Speculative spikes can happen for a lot of reasons, but that
| Bitcoin would replace all currencies (as early advocates would
| have had you believe) was not one of those reasons.
| theplumber wrote:
| >> but that Bitcoin would replace all currencies (as early
| advocates would have had you believe) was not one of those
| reasons.
|
| Bitcoin was not bought because people believed it will
| replace all currencies. They bought bitcoin to get rich fast
| and cash out BEFORE the expected crash.
| afterburner wrote:
| Yeah, that was happening too, but I was getting an earful
| of terrible economic viewpoints in the earlier days.
|
| I guess they could have all been lying to puff up their
| investments, but then I guess I'm left with thinking those
| particular people were stupid _and_ liars.
| JauntTrooper wrote:
| I remember hearing similar economic arguments in 2006 -
| 2012 about gold and silver.
|
| I often wonder if those same people moved into Bitcoin.
| spiralx wrote:
| When I saw the announcement of the release of the Bitcoin
| 0.3 client back on Slashdot in 2010, both the whitepaper
| and the comments (and who was making them) cemented my
| view as it being more of the "an-cap gold-buggery" that
| the site was rampant with. Basically the same people
| making the same arguments that they had over the Liberty
| Dollar a year previously following the arrest of its
| founders, and before that any time money came up as a
| topic i.e. fiat bad, gold good - which carried straight
| into fiat bad, gold good, Bitcoin best of all...
|
| https://en.wikipedia.org/wiki/Liberty_dollar_(private_cur
| ren...
| adastra22 wrote:
| Yes, they did.
| MrMan wrote:
| those people (where I was) also loudly predicted (and
| lost real-money bets) on the trading floor that Obama was
| definitely coming for our guns and that mass shootings
| were all false flag operations to justify seizure of
| personal firearms. The Venn diagram of gun nuts and gold
| bug - hard money types at many places I frequent was
| basically a circle.
| jl6 wrote:
| A lot of the early enthusiasm absolutely was from
| cypherpunk futurists who genuinely did want/expect it to
| make traditional finance obsolete.
| JeremyNT wrote:
| This is pretty amusing to me, as somebody who did buy
| into the early hype - now over a decade ago. I actually
| got really excited about bitcoin, even mining way back
| when. It seemed like the possibilities were endless!
|
| That excitement disappeared pretty quickly once I came to
| the (in hindsight, obvious) realization that its only
| valid use cases were illicit transactions and
| speculation. I donated whatever I had and moved well away
| from it (certainly a poor financial decision in
| retrospect, but I still believe it was the right choice
| personally).
|
| The shine has been off BTC for a long time. Even though
| some (if not most) of the early adopters were as you
| describe, I suspect that almost all of the more recent
| comers have only joined the party for the get rich quick
| scheme.
| throw10920 wrote:
| > its only valid use cases were illicit transactions
|
| What makes this argument different than the "I don't have
| anything to hide" anti-privacy argument?
| undreren wrote:
| The "only valid use cases" of privacy is not to hide
| illegal or criminal activity.
|
| Crypto currency is a wasteful, destructive, expensive and
| innefficient technology that has few benefits _except_
| facilitating crimes like tax evasion, money laundering,
| financing terrorism and purchasing drugs.
| throw10920 wrote:
| > The "only valid use cases" of privacy is not to hide
| illegal or criminal activity.
|
| What are the others, in the specific context of this
| conversation (which is privacy from the government, not
| from random other citizens)?
| undreren wrote:
| Governments could easily use private data to blackmail or
| silence you, even if you've done nothing illegal.
|
| This is perhaps the primary reason that the right of
| privacy even exists.
| mrb wrote:
| As an early Bitcoin adopter, I wouldn't say so. I have
| never seen anyone among the people I knew in the Bitcoin
| community in the last 12 years who believed it would
| "make tradfi obsolete".
|
| For example, I expect Bitcoin to likely remain an
| alternative system, used only for a minority of
| transactions. And this view didn't conflict with my
| desire to buy in when I did.
| edwnj wrote:
| The bet being made by El Salvador is to get the immense
| benefits of being an early adopter at the cost of short term
| volatility and risk of bitcoin failing.
|
| Regardless of your opinion on this, you have to at least wait
| till the proposition plays out before passing judgement. You
| have to see if they can withstand the short term volatility and
| whether bitcoin succeeds or not.
|
| Calling the experiment failure before the results is silly to
| say the least.
| el-salvador wrote:
| > The bet being made by El Salvador is to get the immense
| benefits of being an early adopter at the cost of short term
| volatility and risk of bitcoin failing.
|
| Salvadoran here.
|
| It's hard to see the benefits if there is no transparency on
| the process.
|
| If we could even have a dashboard and an official website
| were we could have access to audited reports about the
| results of this bet, and see how its value varies over time.
| Then I might agree.
|
| Maybe just a graph like the one found Norway's Sovereign Fund
| website
|
| https://www.nbim.no/
|
| In reality we just don't. Public information is limited or
| contradictory. The few public information available includes
| a tweet about the president buying bitcoin from his phone
| while not wearing clothes.
|
| https://www.washingtonpost.com/world/2022/01/26/el-
| salvador-...
|
| As far as I know, the trust that holds El Salvador bitcoin
| doesn't have a public website. And the state wallet's website
| doesn't publish an address or phone number.
|
| The only time I've seen their address is a receipt from a
| veterinary hospital run by the same state company operating
| the wallet, in which every procedure costs only US $0.25
| because they are subsidized by "bitcoin profits"
|
| El Salvador is a strange country sometimes.
| Kathula wrote:
| It isn't lucky to hold through multiple multi-year 80%
| drawdowns, it's called doing research and having a conviction.
| I didn't sell at 60k, I'm not selling now, because I have a
| strong conviction. You call this lucky, but it isn't. If you
| have a conviction and a span longer than four years you could
| get "lucky" too.
| jollybean wrote:
| Your 'convictions' will not help you predict where a herd of
| cows will move or stampede. And that's all BTC is. Whatever a
| crew of people believe it will be worth. Other currencies are
| integrated into the economy, which gives them a baseline
| value from which valuation isn't going to go to far away
| from.
|
| Moreover, the entire philosophy of holding BTC as some store
| of value destroys the notion of BTC as a viable currency.
| amarant wrote:
| But if you didn't sell at 60k you're not lucky at all. If
| you're still sitting there, hodling the ball, you're one of
| the suckers who paid the lunch for those who did get lucky.
|
| You're the opposite of lucky.
| welshwelsh wrote:
| Only if you bought around 60k.
|
| I bought in 2015 when Bitcoin was about $250, so still
| looking good on a 10 year timescale.
| codyb wrote:
| Yes, because people who bought at 20,000 are holding your
| ball for you... and you're holding the ball for people
| who bought at 10 dollars...
|
| Or am I missing something?
| warinukraine wrote:
| wikfwikf wrote:
| You would have been much luckier if your worldview had
| allowed you to sell at $60k and buy back at $20k.
| Kathula wrote:
| I had no conviction that 60k would be the top. But I have a
| conviction that it'll be surpassed eventually.
| Chris2048 wrote:
| > it'll be surpassed eventually
|
| money has a time-value, the opportunity loss of investing
| it in other instruments. The longer you wait for a peak,
| the more that peak has to be for it to be worth it. When
| the value you _would_ have had you invested elsewhere
| reaches your expected peak, you can officially say your
| strategy failed.
| benj111 wrote:
| And what objective metrics are you using to back up your
| conviction that bitcoin is worth X?
|
| Many people have conviction in their belief in God. That
| doesn't make the existence of God any more sound.
| plebianRube wrote:
| I may only buy when Fidelity and Blackrock say it is safe
| for retail, if at all.
|
| Until then, I will let institutions take the risk and I
| will stick with my index fund.
| welshwelsh wrote:
| For most of 2018-2020 it was between $4k and $10k.
|
| If someone's looking to sell high, what's to stop them from
| selling at $20k, which was an all time high in December
| 2020? Why not wait for $80k instead of selling at $60k?
|
| It's easy to see these opportunities in hindsight, but you
| can never be sure where the peak is.
| mtrycz2 wrote:
| It is a failure because BTC has pivoted away from the Bitcoin
| whitepaper (p2p ecash), limited its blocksize and has taken the
| path of this strange "digital store of value" (lol). BTC's
| activity rose gradually up to 2017, and then topped off at 1MB
| and even dropped. [1]
|
| If Bitcoin's momentum hadn't been dissolved, it wouldn't
| require people to be forced by State to accept it.
|
| [1] https://bitinfocharts.com/comparison/size-btc-
| ema14.html#all...
| Andrew_nenakhov wrote:
| /r/btc is strong in this one. Lost truly he is.
| frankenst1 wrote:
| Growth continued on second layers: Bitcoin's tx count on the
| Lightning Network has doubled over the last year. Forks of
| Bitcoin who attempted to scale by increasing the blocksize
| all failed and are practically dead (Bitcoin SV, Bitcoin
| Gold, Bitcoin Cash, eCash, Bitcoin ABC, ...).
| kranke155 wrote:
| Someone needs to explain to me how the Lightning Network
| actually works, because I find it super sus. How do people
| make money off transactions as miners if BTC transactions
| are so cheap ?
| Yizahi wrote:
| People must lock BTC in the "channels" from them to each
| of the peers they ever want to transact with, in the
| amount of what they will spend with them in the future.
| This should produce approximately 10billion*10billion
| channels in total (so 1^20 whateverellion channels for
| all humans). Then magic internet machine will solve this
| Traveler Salesman problem for each transaction.
|
| After people realised that this is a crap idea, they have
| reinvented banks, who take people's BTC and give them
| IOUs instead. Then only banks have to deal with the
| "channels" and "locked" tokens in a centralised way,
| lessening the overall complexity.
|
| Few understand :)
| thinkloop wrote:
| People have realized this a long time ago. The expected
| configuration is a node-based network like the internet.
| Messages (money) hop from "router" to "router" until they
| reach their final destinations through the shortest
| paths. The "bank" would still be your bitcoin wallet,
| while your lightning allocation would be like a credit
| account with every vendor simultaneously. The nodes are
| routers. The amount you put "at-risk" in lighting only
| needs to be a minimum amount you need to transact for the
| day/week/month - and it is not really "at-risk" since
| there are strong protections built-in.
|
| The general story is that not all transactions are equal.
| A payment from your cousin for a poker debt doesn't need
| the fury of a million computers protecting it. Similarly
| if you have an ongoing relationship with a vendor, and
| many other examples. In real-life there are vastly
| differing trust-profiles between transactions. It's ok to
| trade some security for some efficiency sometimes. It
| doesn't make sense to treat them all the same.
| Yizahi wrote:
| So user gets a credit at the Not-A-Bank router-node for
| the full amount of what he intends to spend. Tell me, how
| exactly does this differ from a bank? Except with less
| oversight?
| thinkloop wrote:
| Are you asking how do lighting STAKERS make money if
| lightning transactions are so cheap? Right now they
| don't, people are doing it to bootstrap the network. But
| in the future, they will be able to make it on volume.
| Staking is nearly costless. There were 369 billion
| purchase transactions for goods and services worldwide in
| 2018 [1]. At a penny per, that's a lot of scratch.
|
| [1] https://www.cardrates.com/advice/number-of-credit-
| card-trans...
| Yizahi wrote:
| More info about LN:
|
| https://github.com/davidshares/Lightning-Network
| mtrycz2 wrote:
| Since we're on a tech inclined site, you'll be happy to
| hear that an RPi4 can process 256MB blocks in well less
| than two minutes. Current 32MB size limit on BCH in 8
| seconds. Check for yourself.
|
| Bitcoin Cash (the og big block chain) is alive and kicking,
| and getting stable updates (both features and performance),
| and also has optional (affordable) coin shuffle). Lightning
| Network is a security and usability nightmare, and its
| total liquidity is in the low thousands of BTC (lol).
| frankenst1 wrote:
| Since LN's inception, liquidity and transaction count on
| the LN have roughly doubled with every year.
|
| In comparison, BCH has lost 80% of its transaction volume
| in the last year alone. Its blocksize is now 100KB on
| average and it now processes fewer transactions than LN.
| It also regularly hard-forks, either because of
| leadership cults (Ver, Wright, Sechet, ...) or because of
| scheduled hard-forks every 6 months which kick off all
| users who haven't updated. It's the opposite of stable
| and the market apparently does not share its
| determination in sacrificing decentralization for
| adoption.
| CyberDildonics wrote:
| That's not growth, bitcoin's throughput is still less than
| a 56k modem from 25 years ago.
|
| Being able to send and receive from anyone is growth,
| lightning isn't on the bitcoin chain until it gets
| synchronized.
|
| If I give you a bitcoin address, you can't send anything to
| me with the lightning network.
|
| It's unnecessary nonsense because bitcoin is pointlessly
| crippled. Every other cryptocurrency has plenty of
| throughput and can be used decentralized.
| frankenst1 wrote:
| > lightning isn't on the bitcoin chain until it gets
| synchronized.
|
| That is literally the purpose of building second layers.
| We don't need to keep on-chain records of every
| microtransaction and coffee purchase in an immutable,
| ever-growing blockchain synchronized across thousands of
| nodes across the globe.
|
| > If I give you a bitcoin address, you can't send
| anything to me with the lightning network.
|
| Sure I can. It is called a submarine swap.
| CyberDildonics wrote:
| > Sure I can. It is called a submarine swap.
|
| You can call it whatever you want, someone still has to
| sync with the main chain, where all the utility is. You
| can get together with your friend and give each other
| IOUs all day every day, it doesn't somehow change the
| fact that bitcoin's throughput is severely crippled to be
| the speed of a dialup modem.
|
| Have you ever stopped to think that other
| cryptocurrencies don't have second layers because people
| don't want them and their chains don't need them? Why go
| through all this when there is no reason to have a
| crippled chain in the first place?
|
| Using regular cryptocurrencies is incredibly simple and
| elegant. It's only when people started to believe
| propaganda about disk space and cpu time (that never made
| sense with the most basic examination) that somehow
| something that worked amazingly well is now a complete
| mess.
| taffronaut wrote:
| If he had invested in a corrupt opaque investment that by design
| lost $50M into the pocket of a wealthy supporter, everyone
| would've shrugged and said "business as usual".
| Macha wrote:
| "Only as bad as embezzlement" is not the endorsement for
| cryptocurrency or the response to criticism this comment
| portrays it as
| taffronaut wrote:
| How should we rank stupidity versus corruption? My point is
| that we are outraged at this guy's transparently stupid act,
| but I opine that we would be less outraged (or not even
| notice) if he was corrupt to the same extent that he is
| stupid. Neither is a virtue but as we stand in judgement then
| maybe our standards should be challenged.
| pessimizer wrote:
| He is corrupt. El Salvador is half a dictatorship, and the
| reason it went on this bitcoin venture is because its
| beardo bro dictator hangs out with bitcoin people and
| unilaterally decided to do it.
| yuan43 wrote:
| The policy only ever made a little sense. What El Salvador
| desperately wants is a currency it can inflate to pay for the
| stuff it can not afford. In this regard, it is no different than
| any other country.
|
| What it had was a currency it does not print (US dollar) and for
| which there is an ongoing international shortage.
|
| What El Salvador got with Bitcoin was yet another currency it
| does not print and for which there is currently an international
| surplus.
|
| The thing the article does not mention, and the only reason the
| policy made any sense, is that ~50% of Salvadorans live abroad.
| So there is a substantial remittance market in El Salvador
| relative to GDP. Allowing remittances to flow through bitcoin
| cuts out companies like Western Union who scoop from the top.
|
| Even so, this scheme only makes a little sense. A better approach
| might have been for the government to have set up a USD-based
| remittance program of its own.
| hailwren wrote:
| > Even so, this scheme only makes a little sense. A better
| approach might have been for the government to have set up a
| USD-based remittance program of its own.
|
| This is just not true. Crypto as foreign remittance has been
| proven and is working quite well in Argentina.
|
| What you really don't want as a layperson in Latin America, is
| for really any third party -- but especially government third
| parties, to have control of your money in any capacity during
| remittance.
| georgeecollins wrote:
| That's a depressing statement about Argentina and Bitcoin. I
| would be much more interested if Bitcoin were useful for
| legal transactions in countries with stable currencies and
| banking.
|
| Bitcoin enthusiasts can be so anti-government that they seem
| to think ever government will turn into a basket case like
| Argentina. Perhaps every government gets into trouble
| eventually. But you could wait a couple lifetimes for it in
| some countries.
| hailwren wrote:
| Ok, but it hasn't been so long since presidents in El
| Salvador were siphoning public funds. https://en.wikipedia.
| org/wiki/History_of_El_Salvador#Corrupt...
| solveit wrote:
| Bitcoin as currency-of-last-resort makes quite some sense
| to me. More than any other usage for Bitcoin I've seen
| people selling, anyway.
| el-salvador wrote:
| > > Even so, this scheme only makes a little sense. A better
| approach might have been for the government to have set up a
| USD-based remittance program of its own.
|
| I agree with that. For example linking the U.S. banking
| system via ACH/Fedglobal with the El Salvador one as Panama
| and Mexico have done to bring down transactions costs.
|
| https://www.frbservices.org/financial-services/ach/fedglobal
|
| > This is just not true. Crypto as foreign remittance has
| been proven and is working quite well in Argentina.
|
| But El Salvador is not Argentina though. El Salvador had
| never been affected by unstable currencies or unfavorable
| exchange rates set by their governments.
|
| Bitcoin on the other hand, has been the first experience for
| Salvadorans, of having a currency that loses 50% of its
| value.
|
| I'm just judging from their accents in Youtube videos, but
| part of the Salvadoran bitcoin wallet developers were from
| South American countries, so it seems to me that they were
| trying to solve a problem that existed in their countries,
| but not in El Salvador.
| hailwren wrote:
| > But El Salvador is not Argentina though. El Salvador had
| never been affected by unstable currencies or unfavorable
| exchange rates set by their governments.
|
| You're conflating two things. Inflation has little do with
| how well a remittance system functions. You wouldn't say
| that Western Union's system functions better or worse
| because of the currency it is denominated in.
|
| > so it seems to me that they were trying to solve a
| problem that existed in their countries, but not in El
| Salvador.
|
| While not inflation, El Salvador doesn't have a great
| history of fiduciary responsibility either. [1] 1 - https:/
| /en.wikipedia.org/wiki/History_of_El_Salvador#Corrupt...
| el-salvador wrote:
| > Western Union's system functions better or worse
| because of the currency it is denominated in.
|
| When funds are sent on the same currency there is no
| exchange rate markup on the Western Union transaction, so
| it's cheaper.
|
| > El Salvador doesn't have a great history of fiduciary
| responsibility either.
|
| The judicial system was able to sentence former ex-
| president. In Saca's case all his assets and companies
| were seized by the National Commission of Property
| Administration. Unfortunately Funes was able to leave
| before being sentenced, and obtained nationality in
| another country to prevent extradition.
| spywaregorilla wrote:
| you also, however, don't want your government to utterly
| collapse
| simonh wrote:
| True, but that's a completely separate concern. Frankly
| that's likely going to happen anyway. El Salvadorians
| suddenly trusting the government with large amounts of
| their cash isn't going to make that government any more
| fiscally competent. Better not to go down with them.
| spywaregorilla wrote:
| It's not a separate concern if you're arguing the
| government should not be able to print its own currency.
| simonh wrote:
| I didn't say any such thing and I don't see how that's
| relevant as remittances from the US are generally in
| Dollars, not local currency.
| Spellman wrote:
| Not really. Argentina is explicitly all about using crypto to
| get access to US Dollars. And they're all going through
| intermediaries, some who don't even control their own wallets
| and are just using available crypto exchanges. So that's a
| lot of 3rd parties, just not the Argentinian government.
|
| https://www.freethink.com/technology/crypto-argentina-
| black-...
| redox99 wrote:
| > Argentina is explicitly all about using crypto to get
| access to US Dollars.
|
| Kind of. It is very complex and I could write an essay, but
| to put it short, if you receive let's say a SWIFT transfer
| in USD, EUR, whatever, it will be forcibly converted to ARS
| (local currency) at an unfair rate: if you tried to buy
| back USD with the ARS you received, you could only get half
| of the original amount. It's almost like a 50% tax on any
| international wire.
|
| Anyway people use crypto for much more than bypassing that.
| Some are interested in holding crypto, some are interested
| in holding stable coins, some to arbitrage, and so on. To
| be clear crypto is not used in day to day transactions
| (buying coffee) in any shape or form.
|
| > And they're all going through intermediaries
|
| I'm not sure what you mean by this? People here use both
| Binance/CeXes and hardware wallets the same way it's used
| in any other country. And unlike other countries, here
| (because there was already a massive black market for
| physical US bills) you can very easily trade face to face
| relatively large amounts (1k-100k USD) of US bills for
| USDT/USDC. Which is cool because it's the true
| decentralized way to on-ramp/off-ramp crypto.
| phreack wrote:
| Not daily, but since crypto (mostly stables) is a much
| safer value storage than the local currency, I've seen
| plenty of people selling say USDT for ARS once or twice a
| month and living off of that. In major cities you can
| likely find someone willing to buy in every neighborhood.
|
| The fiscal aspect of it is just magical though. Everyone
| and their cousin either becomes an expert in tax law, or
| blatantly and unknowingly breaks it every day with no
| major consequences. So many, many, many people live
| outside the law that enforcing it equally would mean
| instant violent riots and protests.
| thehappypm wrote:
| Is sending Bitcoin really any cheaper than using something like
| Western Union? More convenient maybe.. but also more dangerous
| redox99 wrote:
| Yes
|
| About 1.50 USD bitcoin fee transfer[1][2], no fees for
| deposits or withdrawals on FTX for both BTC and USD (for >
| 0.01BTC, around 200 USD)[3]. And 0.07% taker, 0.02% maker
| fees for trades [4]
|
| [1] https://ycharts.com/indicators/bitcoin_average_transactio
| n_f...
|
| [2] Could be avoided or greatly reduced if using other
| cheaper cryptos
|
| [3] https://help.ftx.com/hc/en-
| us/articles/360034865571-Blockcha...
|
| [4] https://help.ftx.com/hc/en-us/articles/360024479432-Fees
| jonny_eh wrote:
| Compared to what?
| redox99 wrote:
| I was going to calculate it on WU but their webserver
| banned me for some reason [1]. So there goes the
| centralized experience lol.
|
| [1] Access Denied You don't have permission to access
| "http://www.westernunion.com/us/en/send-money/app/price-
| estim..." on this server.
| jandrese wrote:
| Western Union.
|
| https://www.westernunion.com/us/en/send-money/app/price-
| esti...
|
| I just tried it myself and it says they will charge $60
| to send $1000 to the US.
|
| Also, they add this disclaimer:
|
| 2 In addition to the transfer fee, Western Union also
| makes money from currency exchange. When choosing a money
| transmitter, carefully compare both transfer fees and
| exchange rates. Fees, foreign exchange rates and taxes
| may vary by brand, channel, and location based on a
| number of factors. Fees and rates subject to change
| without notice.
| fdsffaef334 wrote:
| treis wrote:
| Xoom (Paypal) says $8 to send $200 so 4%. Percentage goes
| down as the transaction increases in size. At $1,000 it's
| $16.
|
| The bigger problem is KYC laws. Kind of hard to satisfy
| them as an illegal immigrant. Suspect that they're
| getting screwed by the additional middle man willing to
| break the KYC laws.
| moomoo11 wrote:
| I want to wake up one day and cryptocurrency and anything related
| to it just doesn't exist. Man that'd be a great day.
|
| Remove grifters, acquire actual progress.
| jayd16 wrote:
| The rats flee a burning building and move into the next rat's
| nest. Its nice to know what the current grift is. Although, it
| would be refreshing to see dumb money and hype thrown in a new
| direction.
| pjkundert wrote:
| Ya, back to where globalist bankster elites control every
| aspect of our lives. Ah, the good old days... ;)
| MrMan wrote:
| so by bankster elites which ethnic group are you referring
| to? are these people more "elite" than Bay Area YIMBY elites?
| Yizahi wrote:
| It's clearly better when instead of bankster elites we would
| be controlled by some shady scammers sitting in the non-
| extradition offshore. Truly a revolution in finance.
| pjkundert wrote:
| Seriously, though: having globally accessible, indelible and
| irrefutable shared ledgers containing balances which cannot
| be forged, whose operation cannot be stopped by any
| malicious, busy-body bureaucrat? This is a God-send. It is
| already the gold-standard for international payments for me,
| a small computer consultant.
|
| Think of all the poor slobs in Russia who've been steam-
| rolled by these sanctions, and can no longer sell their
| software or get paid for their little Apps. Whatever you
| might think about Russia -- "group punishment" is not cool;
| these are people like you and me who cannot now feed their
| families. To them, Bitcoin (and other even more capable
| cryptocurrencies now in development) is the difference
| between life and death.
|
| So, it might be worthwhile to ... reflect, if we find ourself
| agreeing with the obese head banker at BIS or weird Klaus
| Schwab, when they say they want to control all aspects of
| personal commerce. They can pound sand -- I'm going to
| continue to work to move cryptocurrency technology forward.
| runnerup wrote:
| I like it for the criminal options it facilitates. I don't
| personally agree with being unable to import affordable
| medicine (non-domestic brand generics which weren't produced in
| an FDA-approved facility) from India/Turkey/etc and I use
| bitcoin to facilitate buying the medicines I need from
| pharmacies which don't require doctors prescriptions. It saves
| me a boatload of money and helps me greatly in managing my
| health. Or to get around the current widespread pharmaceutical
| shortages which continue since Hurricane Maria destroyed a lot
| of pharmaceutical production infrastructure in Puerto Rico
| (e.g. bacteriostatic water).
|
| I also am largely okay with people using it for personal
| quantities of controlled substances, even though I do not use
| it for that personally. Sometimes these are for legitimate
| medicinal purposes as well (for example, schedule 2 TRT and HRT
| drugs)
| lake_vincent wrote:
| What is more likely is that you would wake up in a world where
| _Bitcoin_ may not exist, but is completely dominated by crypto
| nonetheless. Within a generation or two, I predict that _all_
| asset ownership will be crypto-backed. Property. Automobiles.
| Artwork. Securities. And of course, currency. Fiat itself will
| become a cryptocurrency once more millennials are in charge.
|
| I reserve judgement as to whether or not this will be a net
| benefit for society. I suspect _not_ , but our present
| ignorance is far too great to make such a prediction - I just
| think it's gonna happen whether we want it to or not, so get
| used to the idea of crypto-everything.
| wsc981 wrote:
| Crypto in the form of CBDCs will very likely be a loss. One
| head honcho at the Bank of International Settlements was
| quite clear that they want to fully control how people spend
| money. And at that point it's not really your money anymore
| anyways ...
| Yizahi wrote:
| Could you please describe in your own words how an asset can
| be "crypto backed", and exactly what operations/interactions
| are improved by this?
| lake_vincent wrote:
| I mean, it is not that hard to imagine, right? A car title
| becomes an NFT. Whoever owns the NFT owns the car. Same
| with a house. Or a horse. I'm not a crypto expert, but that
| is a relatively trivial use case for NFTs.
|
| As for how this scales? I have no idea. I'm just
| speculating that it's gonna happen _somehow_. I mean, hell,
| look at this post - a nation adopted Bitcoin. You think
| that 's the last time a government will experiment with
| crypto? China is already developing their own fiat
| cryptocurrency. You think it's just gonna stop?
|
| I don't necessarily want this to happen, nor am I
| advocating for it. It's just a prediction, so I'm now sure
| how to answer your questions.
| tinco wrote:
| Well, no crypto expert ever predicted this. The idea of
| NFT's has pretty much been discounted by everyone in the
| crypto community for a decade, until they randomly became
| a fad in 2021. So I wouldn't say it's very easy to
| imagine.
|
| Smart contracts backing more real world assets has a
| slightly higher chance of becoming a thing, but even with
| those the value isn't super clear. The whole idea of
| tracking ownership is that it's backed by authority to
| enforce it, and the whole idea of cryptocurrency is that
| it works _without_ authority.
|
| If you think NFT you think about that vague thing that
| has no bearing on the real world. Bitcoin is the magic
| technology that manages to be scarce and be manifest in
| the real world despite being fully digital and networked.
| Ethereum managed to one-up Bitcoin with the smart
| contracts of which the DAI stablecoin which anchors
| itself to the real world currency without relying on
| authority.
|
| NFT's basically are the exact opposite of the sort of
| thing cryptocurrency offers as value to the real world.
| Yizahi wrote:
| Ok, lets go with your example. Car title. Or a house
| title.
|
| Just where exactly the title itself is stored? I would
| assume it's a at least moderately long plaintext file,
| describing property and conditions. Maybe some
| authenticity attributes, like digital signatures of
| multiple parties. Where do you think is this artifact
| located? Inside the NFT?
| pdntspa wrote:
| The grifters will go back to pushing day-trading schemes
|
| Crypto can keep them, it's nice to not have to deal with the
| noise
| bitxbitxbitcoin wrote:
| > I want to wake up one day and internet and anything related
| to it just doesn't exist. Man that'd be a great day.
|
| Remove grifters, acquire actual progress.
|
| I wonder if there were people in the 80s that said that.
| nxmnxm99 wrote:
| No, because the internet is actually useful.
| ypeterholmes wrote:
| Imagine saying something so utterly subjective in such a
| definitive way
| pmarreck wrote:
| Rationally, I understand what you're saying, speaking as
| someone who was intrigued by Bitcoin in 2012 and possibly
| made a little money off it while I was interested in it.
|
| Humanistically, I gotta say, perceptions matter. I left
| crypto because it just started "tasting gross", regardless of
| the technological interest I had. Clearly, I wasn't in a
| minority with that.
| cowmix wrote:
| Not really.
|
| There are (and always will be) people who see no good in the
| Internet. I played a small part in its growth in the early
| 90s and even I have pangs of regret over what it has become.
| AND there was a lot of grift and lawlessness in the early
| Internet -- that is what paid the bills at first.
|
| However, at the time I was able to articulate all the ways
| moving X, Y and Z to the Internet would make things better --
| for hours on end -- and I would 'win' those arguments. OTOH,
| all my crypto crazed associates have trouble doing that same
| thing today. For years, the argument ended up being "I got in
| early and now my 'investment' is worth X amount." It has been
| an end justifies the means proposition.
|
| In the end, the Internet was judged by its exponential growth
| and adoption. There was a mad rush of, arguably, useful
| activity going on... for years. Everything I wished for and
| pushed for back in the day has come true -- monkey paw curse
| and all. Bitcoin's use has actually gone down afaict, the
| market value of it is the only metric people care about.
| everfree wrote:
| > However, at the time I was able to articulate all the
| ways moving X, Y and Z to the Internet would make things
| better -- for hours on end -- and I would 'win' those
| arguments. OTOH, all my crypto crazed associates have
| trouble doing that same thing today.
|
| I find that most crypto-crazed enthusiasts don't have the
| foggiest idea about how it works, beyond some broad vague
| ideas. People who can articulate its benefits exist, but
| they tend to get drowned out. Many of them are building
| companies instead of bothering to prosthelytize or argue on
| forums.
| bitxbitxbitcoin wrote:
| > In the end, the Internet was judged by its exponential
| growth and adoption. There was a mad rush of, arguably,
| useful activity going on... for years. Everything I wished
| for and pushed for back in the day has come true -- monkey
| paw curse and all. Bitcoin's use has actually gone down
| afaict, the market value of it is the only metric people
| care about.
|
| Very very well put. Bitcoin's use as measured by total
| transactions has gone down. However, the total amount of
| cryptocurrency transactions across all chains is still
| growing exponentially.
| thedebuglife wrote:
| I value the insight of many that post here, so I would like to
| ask: isn't there any valuable application for blockchain tech? I
| realize BTC is imperfect, but blockchain itself is just a
| technology.
|
| Being pretty young, everyone I know is involved in crypto in one
| way or another. I'm personally waiting on the sidelines, but
| there should be some beneficial middle ground between going all-
| in and completely discarding the tech.
| madacol wrote:
| Well, money is the biggest use-case of it all. If you don't
| care about inflation (solved via decentralization), then
| there's the use-case of verifyably programmable money
| (ethereum)
|
| Another one that I find fascinating is immutability, things
| like https://opentimestamps.org/ (uses bitcoin's blockchain),
| it allows you to proof that X piece of information existed
| prior to time Y.
|
| I know of 2 different paths of assumptions you need to verify
| that proof:
|
| 1. Somewhat trusting bitcoin block's timestamps and the
| immutability that proof of work provides to the chain of blocks
|
| 2. Having a higher bound estimate of your attacker's ability to
| generate proof of work, and then sum all the available proof of
| work (it is sequentially chained in the blockchain from the
| block's proof, till the latest block produced), and compute how
| much time the attacker needed to spend to fake that proof of
| work, and that's your proof of the minimum time that must have
| passed since X was conceived
| spreeker wrote:
| FIAT has proven time and time again to fail. Dollar world trade
| is unfair and benefits the USA unfairly.
|
| I would prefer a neutral crypto currency to be the new world
| reserve instead of a competing currency like the YUAN. Government
| should not have the power to print money out of thin air.
|
| The technology of blockchains is improving, for the example
| lightning network should make it very well possible. Just like
| with the invention of 'real' money there is a lot of failure in
| the crypto space.
|
| The subject of money and currencies is a much more complex issue.
| A government giving its "printing power" or in the case of
| Elsalvador, no longer wanting to be the victim of the printing
| power of the USA, is a very good thing.
| pessimizer wrote:
| https://en.wikipedia.org/wiki/Bancor
| thrwyoilarticle wrote:
| Bitcoin is fiat.
| asah wrote:
| Plus, fiat is too new to tell - it's only been 5,000 years! /s
| osigurdson wrote:
| What I don't like about this article is it is almost entirely
| focused on price. If bitcoin would have went up, it would have
| been a wise move according to the premise of the article. I think
| a longer timescale is needed.
|
| I'd like to see an analysis of the situation, assuming that the
| value goes neither up or down, but simply holds a constant value
| in an inflation indexed manner. Would it still be a bad idea in
| that situation?
| onlyrealcuzzo wrote:
| > I'd like to see an analysis of the situation, assuming that
| the value goes neither up or down, but simply holds a constant
| value in an inflation indexed manner. Would it still be a bad
| idea in that situation?
|
| Why? BTC has zero history of doing this.
| osigurdson wrote:
| Without this type of analysis, the entire discussion is based
| on the current price and nothing else. Therefore if the price
| was up significantly we would have to conclude he was a
| genius. For now, we can conclude that he is not. However, if
| we are being intellectually honest, our opinion needs to be a
| function of the current price.
| gillesjacobs wrote:
| I principly agree on all criticisms, especially the seemingly
| reckless investment.
|
| However, the presupposed lack of adoption of Bitcoin as a means
| of payment is not supported by the source bar chart. The numbers
| are actually pretty impressive compared to card: ~25% of
| businesses accept card and 20% accept Bitcoin as payment. That is
| impressive adoption after 1 year by any standard in a country
| that primarily uses cash.
| slowmotiony wrote:
| 20% of business accepting bitcoin is just crazy high. Living in
| Germany it seems that 20% of business don't even accept regular
| credit cards yet.
| el-salvador wrote:
| > 20% of business accepting bitcoin is just crazy high.
| Living in Germany it seems that 20% of business don't even
| accept regular credit cards yet.
|
| The numbers may be be higher in places that cater to bitcoin
| tourists, like beach hotels and restaurants, but for day to
| day locals the transactions is lower.
|
| During peak bitcoin usage I asked a few cashiers how many
| transactions have been in bitcoin, and the answer was none in
| normal stores, and 1-3 in the largest supermarket in the
| fanciest part of San Salvador.
|
| Even the largest bank in El Salvador, only processed 7500
| bitcoin transactions on their payment gateway from october
| 2021 to december 2021. That would be like 80 por day.
|
| "mas de 7,500 transacciones [..] en el 2021 [...]n pago con
| bitcoin." [1]
|
| [1] https://www.bancoagricola.com/salaprensa/notas-de-
| prensa/ban...
| espadrine wrote:
| The businesses in question are not required to accept cards.
| However, they are legally required to accept Bitcoin. Given
| that, it is pretty low.
|
| From the article:
|
| > _But Bukele wanted more. Making bitcoins legal tender meant a
| payee had to accept them. As the 2021 legislation stated,
| "every economic agent must accept Bitcoin as payment when
| offered to him by whoever acquires a good or service"._
| ww520 wrote:
| Why would anyone adopt a deflationary asset that people hog as a
| currency?
|
| You want a currency that encourages usage in the economy, not one
| being buried in vaults.
| spaghettiToy wrote:
| simple-thoughts wrote:
| Prediction: El Salvador will look genius in the next Bitcoin
| cycle. Other emerging market central banks will proceed to copy
| their model creating the next cycle's peak. Once they stop
| buying, the market will crash again creating either a global
| depression or a bailout of the btc economy by USG, causing a
| repeat of the bank bailout that spawned btc in the first place.
| bastawhiz wrote:
| If El Salvador looks like a genius and their poorest citizens
| come around and get on board, the next crash will cause a
| humanitarian crisis: the poorest of the world will literally
| have given money to the rich who were able to get out of the
| market fast enough.
| SilverBirch wrote:
| Let's be clear about this, unless El Salvador is in a debt
| crisis. They won't own any crypto by the next BTC cycle because
| they'll have gone bankrupt, sold off any crypto assets they've
| got, taken significant bailout money from places like the IMF.
| They don't have the luxury of sitting on BTC and riding the
| wave, they are bankrupt. They have $100m of BTC and they need
| to pay $800m by Jan 2023. And their debt is trading at
| something like 30 cents on the dollar because no one believes
| they can pay.
| jinzo wrote:
| They invested US$100 million (and currently that's around US$50
| million). The next bond payment (2023 note that they are trying
| to buy back now) is due in January and that alone is US$800
| million. So, their investment should yield really high returns
| for it to even make a decent dent into the first bond.
|
| From all the fanfare around them, I was sure they had to invest
| more. But after looking up the numbers, this looks like a
| publicity stunt more than any serious investment. Also 20%
| adoption when it's mandatory to support it, is quite
| interesting too.
| el-salvador wrote:
| > They invested US$100 million (and currently that's around
| US$50 million). We are a small country, for comparison the
| largest public hospital budget is about US$60 million per
| year.
|
| > The next bond payment (2023 note that they are trying to
| buy back now) There are two bonds which they are buying. The
| 2023 one at 91 cents per dollar, and the 2025 one at 51 cents
| per dollar.
|
| > this looks like a publicity stunt more than any serious
| investment.
|
| El Salvador has a very good PR team. So many announcements
| have their own publicitiy students. Teven produce different
| material targeting different foreign countries. It's always
| interesting to see what each to see what PR message each
| country gets.
|
| For example: Targeting those who didn't agree on vaccine
| mandates in English Speaking Countries (Australia/Canada/UK):
|
| https://twitter.com/CanAlbertaHuman/status/14784727600660725.
| ..
|
| https://twitter.com/LowCard_Hunger/status/148358166523034010.
| ..
|
| Targeting those who wanted vaccines in neighboring countries
| (Honduras):
|
| https://twitter.com/radioamericahn/status/140378336359768474.
| ..
|
| https://twitter.com/gotvhonduras/status/1402268608068268041
| smcl wrote:
| I admire your optimism, but I can't get on board. It would be
| naive to deny the growth of cryptocurrencies over the last few
| years, but it seems like the people who were meant to make
| money have since cashed out, that everything's peaked and
| turned a corner and the general public have turned against it
| (due in no small part to a few many shitcoins, rugpulls, scams,
| BAYC, and a couple of defunct exchanges). I'm sure crypto will
| live on in some form, but it won't explode again like it did
| before. I don't know who is left to fuel the next bubble.
| scotty79 wrote:
| > it seems like the people who were meant to make money have
| since cashed out, that everything's peaked and turned a
| corner and the general public have turned against it
|
| Every 4 years it looks like that. And yet the next greed
| fueled ascension comes around like a clock. Each next one
| smaller than the last one.
|
| Next one will come around 2025 but this time it's going to be
| just few hundred percent.
| smcl wrote:
| Eh there might be another bump. But as long as it's a space
| for scammers, pump-and-dump schemes, shitcoins and
| bullshitters it's just not for me. A pretty ridiculous
| amount of money has been sunk into making cryptocurrencies
| _look like_ a big thing, instead of actually solving the
| problems that prevented people from actually _using_ them.
| That makes me think that deep down the cryptocurrency
| people aren 't that serious about their projects becoming
| actual currencies, and that they simply see them as a way
| to get rich quick by selling something they know to be
| ultimately worthless. Quite a few people have gotten rich
| (hello, Do Kwon!) so there's a chance it could work for
| those founders. But as a potential end-user, nahh no thanks
| I've seen enough
| anonymouswacker wrote:
| The "space" for a cryptocurrency is a Venn Diagram solely
| occupied by one circle: Bitcoin. We're seeing a culling
| of these shitcoin also-rans, which took the money from
| the late-coming naive while enriching the early wave of
| speculators, like any other common pyramid scheme.
| smcl wrote:
| Amazing. When the crypto world get bored of minting apes
| and such maybe they'll try to actually bother to try
| making bitcoin into something that can be used day-by-
| day. I don't think they will though. I think it'll remain
| only a speculative asset whose price jumps erratically
| to-and-fro until people get bored and move on to the next
| shiny thing.
| ericmcer wrote:
| My Coworker said this exact thing to me in 2019, that now
| was the time to buy because not many were talking about
| crypto and many had written it off, but that it worked in 4
| year spikes. Wish I had listened to him then haha.
| mattmanser wrote:
| Unfortunately I don't think the public will stay turned
| against it.
|
| Pyramid and MLM schemes exist and thrive today despite
| widespread knowledge of them and how they work.
|
| So I think shitcoins will have their day again, they'll just
| have new branding.
| drekipus wrote:
| Finally, my time to jump on the bandwagon of wealth
| distribution
| px43 wrote:
| Recognize that every two years for the past 10 years someone
| has posted basically the exact same thing as what you just
| posted.
|
| https://www.youtube.com/watch?v=XbZ8zDpX2Mg
| smcl wrote:
| If a snarky YouTuber doing the "this one time at bandcamp"
| voice is the best argument, I dunno what to tell you. To
| borrow his condescending tone, he is making the argument
| "you think line go down, but line go up!" the latter half
| of which is the title of Dan Olsen's high-profile video of
| the cryptocurrency boom.
|
| Unless it becomes practical to pay for something with
| cryptocurrencies (which for me should be the primary use
| case of _any_ currency) they basically seem used by people
| who want to time buys and sells according to the current
| boom /bust or pump/dump cycle.
| [deleted]
| px43 wrote:
| For millions of people, crypto-currencies are the most
| convenient way to buy lots of things. I've been buying
| things regularly with cryptocurrencies since 2011. Domain
| names, video games, hosting, consumer electronics,
| clothing, airfare, etc.
|
| 2017 marked a pivotal point where Bitcoin specifically
| abandoned catering to the brick and mortar and e-commerce
| use cases, and started focusing on large scale financial
| services. It was a frustrating development for sure, but
| people all over the world are using various smaller
| cryptocurrencies to buy groceries every day.
|
| Cryptocurrencies might not be useful for you
| specifically, and that's fine. Maybe you're not one of
| the various under-served target demographics. Complaining
| about that though is a bit like complaining that Yen is
| useless because you live in the US and none of the
| businesses you frequent accept Japanese currency. It's
| undeniably a trillion dollar global economy that provides
| a massive amount of value to millions.
| [deleted]
| smcl wrote:
| Well that's kind of a bad comparison, since Yen isn't my
| local currency and yet it _has been_ useful to me when I
| was visiting Japan. I could buy it for a reasonable price
| in my current country, in basically any airport or bureau
| de change around the world. I could easily withdraw Yen
| from an ATM when in Japan, could buy things _anywhere_ in
| the country with Yen and then switch back the couple-
| thousand I couldn 't spend at Duty Free when I returned
| home.
|
| Hearing that crypto may not be for me is quite
| surprising. It is advertised to me all over the place and
| the various stereotypical "cryptobros" seem curiously
| keen on people like me buying into the ecosystem, and
| appear to be very generously interested in helping me go
| "to the moon" etc. I've no idea how you're doing those
| things with crypto. I guess you have to go pretty far out
| of your way to buy, for example, airfare with a
| cryptocurrency or make otherwise really inconvenient
| trade-offs. I guess you might be semi-forced to use it
| due to, for example, living in a country with a currency
| which is _more_ unpredictable than BTC then I think that
| 's more of an black mark against the local currency than
| it is a feather in BTC's cap...
| jimcsharp wrote:
| People talk about crypto cycles like they talk about metal
| cycles and I'm not sure how to distinguish the two (and
| that's why I'm not invested in either).
| strangescript wrote:
| It's almost as if all publicly traded markets are ponzi-
| schemes on some level, but with better regulation.
| benj111 wrote:
| On some level yes. If you're day trading.
|
| But you are actually buying a slice of a company and its
| future earnings. With bitcoin what are you actually
| buying?
| WHATDOESIT wrote:
| What are you actually buying while Forex trading?
|
| (I'd really like to know. To me, BTC trading and Forex
| trading sound exactly the same.)
| smcl wrote:
| I mean on some level if you're doing this kind of trading
| then yeah BTC/ETH/etc trading is similar to trading real
| currencies. I think the difference is that the real
| currencies have a well-known utility at the moment -
| they're a means of exchange for goods and services. If
| you're selling EUR to someone, the chances are they're
| using that EUR to pay for these in the eurozone. If
| you're buying USD, you're also likely to need that to buy
| USD-denominated things.
|
| If you're a forex trader, you're trying to make money
| from people's need to _use_ these currencies.
|
| If you're doing that for crypto, you're doing that but
| for people who are just also buying and selling crypto -
| not actual goods or services.
| MrMan wrote:
| well if you extend the analogy between crypto coins and
| FX, a long-only strategy makes as little sense in crypto
| as FX. Why would I hold dollars or yen long-term, instead
| of investing in assets which are productive like equites
| or bonds.
| benj111 wrote:
| Well I don't do Forex trading but you are buying a
| currency backed by a government. My understanding is it's
| closely linked to interest rates.
| WHATDOESIT wrote:
| So you're buying into trust of that government. With BTC
| you're buying into trust of the technology and other
| network participants. Is it really so different? I don't
| trust governments so much - my local currency is
| currently facing 25% YoY inflation. I bought Bitcoin.
| benj111 wrote:
| I wouldn't say trust. But an entire nation is required to
| accept it so there is a market for it. Plus with interest
| rates nations are paying you to hold it.
|
| I don't do Forex trading so I'm not particularly
| defending it. The currency I hold is the one that has
| utility to me. It's the one I'm paid in, the one I pay
| taxes in. I don't particularly want it jumping up or down
| 100s of %. I want it to be stable.
|
| If bitcoin is more stable than your local currency go for
| it, (although if inflation is 'only' 25% it still doesn't
| seem to meet that bar). But that says more about your
| currency than the bitcoin and it still doesn't make it an
| investment. Your case would seem to be better served by
| holding USD though.
|
| My first post pointed out it wasn't a very good
| investment. You seem to be buying it as a store of value,
| but it isn't very good at that either. So all were left
| with is a distrust of government. But the cure is worse
| than the disease.
| cuteboy19 wrote:
| It's much simpler. People want $ for PS for education
| tourism etc. Successful forex traders are just middlemen
| for these txns. The make sure that you can always sell $
| even if there is no one to buy them at that exact moment.
| WHATDOESIT wrote:
| Well, and isn't it the same for BTC then? In the city
| where I live, there's tons of Bitcoin ATMs everywhere -
| and people using them, pretty clearly to go around their
| everyday business, as if it was a bank ATM.
| cuteboy19 wrote:
| Differences:
|
| 1. No one needs btc for education tourism etc. So there
| is no underlying demand that the general btc holder can
| middleman onto
|
| 2. You aren't supposed to hodl any kind of forex pair
| hoping it goes up forever.
|
| Also I forgot to stress that forex is trading and not
| investment
| WHATDOESIT wrote:
| These people I see around here need to go to a BTC ATM to
| have cash for the coffee stand right next to it. What's
| so different? The scale, OK, but anything else? Actually,
| people are buying land/houses and cars with BTC here,
| also the largest local web shop (a large EU seller too) -
| the local Amazon let's say - accepts it, and they claim
| it's used for a small but not insignificant chunk of the
| sales.
| guywithahat wrote:
| While I'm certainly not on the Bitcoin train but I would argue
| it's too early to say it's a failure from an investment
| standpoint, and there's too little evidence to say it's a failure
| from a policy standpoint. I would presume the goal was to become
| less dependent on foreign currency/other nations, which seems
| successfull
| dilap wrote:
| Bram Cohen had an interesting twitter thread on this
|
| https://twitter.com/bramcohen/status/1567173122289442824
| asah wrote:
| tl;dr: you can have big positive impact but 'fail' financially.
|
| The inverse is also true: you can have little impact but attain
| big wealth/success.
|
| Moreover, due to competitive pressures this lack of correlation
| happens is quite common. If impact requires a mix of
| skill+luck+timing and success requires skill+luck+timing, then
| impact+success is (mathematically speaking) exponentially
| harder.
| poulpy123 wrote:
| mostly_harmless wrote:
| My theory behind this is there are many BTC holders with cap
| gains (or assets acquired through illegal methods) that can't
| easily cash out, and El Salvador's BTC support was a grab at
| capturing tourist revenue through state sponsored money
| laundering.
|
| Through that lens, it would be interesting to see if there was
| any anomaly in GDP, luxury goods sold, real estate sales, or
| tourism in the country.
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