> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency
Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.
replies(10):
Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.
Wasn’t El Salvador supposed to be Balaji’s first “Network State”? What happened to strike wallet and that whole crypto grifter crew?
If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems.
Like a lot of people, I probably fall into severe errors which would be bread and butter for "bad economics" reddit groups but truly, I can't see how this wasn't forseen and expected. It was about WHEN, not IF.
They even have their own tracker, https://bitcoin.gob.sv/
Among all the crypto shills I know I'm probably the only one who has used it for trade (0.25ish Bitcoins for a computer on caseking.de in late 2017 and few goodies on local bitcoin in the same year).
By the way all the comments in a thread like this will look like bots
Under the new rules, bitcoin is no longer considered "currency," though it remains "legal tender."
https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...
El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it.
But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status.
Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.
https://apnews.com/article/bitcoin-elsalvador-bukele-musk-tr...
It even seems that the above is a very minor change that in no way changes the outcome here. El Salvador did well and looks to continue to do well with its bitcoin policies.
Surely, if a government wants the people in the country to use a novel cryptocurrency, it has a lot of levers of control which some distributed libertarian minded community simply doesn't.
There is a strong sentiment around bitcoin in El Salvador and it can make them money; but the experiment around it being a legal tender, well, failed.
> Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024.
I would say this points to an actual failed experiment, if true.
Edit to add a quote from your preferred link:
“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.”
If I can't pay my taxes with a token of economic exchange, and people aren't required to accept my tokens of economic exchange, the only remaining sense I can make of it being “legal tender” is that it is not illegal to use it, but that's not what “legal tender” means.
--https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...
Sounds pretty failed to me.
It's not just expensive, it's difficult, slow, error-prone and offers 0 convenience over standard means of payments.
I don't follow it closely, but that idea seems to have faded and now it's just an asset to buy and hold while it magically goes up forever.
This makes as much sense as saying that Walmart has no obligation to accept Visa cards anymore, but that they're still a "valid method of payment at Walmart" -- except of course that "Legal Tender" has an explicit legal definition (apparently even in El Salvador).
This sounds like a really badly written piece of legislation. Perhaps there are shady dealings going on where someone powerful stands to lose a lot of money (or BTC) triggered by "if it ceases to be Legal Tender", but also apparently pressure was too great to abolish that legal tender status in practice, so this ridiculously-written law was passed to attempt to have it both ways.
Any new thing needs to be better than the current thing at least in one domain, if it wants to grow users. Fiat currencies work so well, that the only niches cryptocurrencies can find is crimes really, avoiding financial sanctions, etc.
Like China for example bans their citizens to trade the chinese currency for foreign currency (above small limits). Then buying bitcoin domestically makes sense if they don't trust the chinese government to keep their own currency valuable.
Of course, all the exchanges operating in countries where there is reasonable laws require KYC to be in place. Cryptocurrencies are also in many ways more trackable than non-crypto currencies. So for crime it makes no real sense to use most crypto currencies.
[1] https://finance.yahoo.com/news/el-salvador-changes-bitcoin-r... [2] https://www.msn.com/en-us/money/financial-regulation/el-salv...
As for “magically,” there’s nothing magic about its increase in value as it replaces legacy technology, chiefly gold as a store of value.
For instance, my native country, in an effort to digitize the economy has passed a law that if you pay digitally or with a card at a restaurant you pay only 5% sales tax instead of 16% if you pay via cash. Some government wanting to encourage the adoption of a cryptocurrency can take similar measures. Governments have options that Vitalik Buterin does not.
It is permissionless, very liquid asset that the governments cannot dilute. For many people this is a very big deal. A significant part of the world population lives under regimes where the governments control the money flow, heavily dilute savings in the single local fiat currency and can confiscate savings under a guise of money reform.
While not nearly as bad, most democratic, developed countries dilute their fiat to the tune of 5-7% a year. Would I buy bitcoin if I have an easy access to a convenient currency with no (or at least significantly under the average GDP growth) debasement? Hell no! Otherwise, I will (together with gold, income-generating stocks, real estate, etc.) as an insurance against government spending run amok. My 2c.
Presumably they require their loan to be repaid in fiat because of their internal charter. If Bitcoin adoption eventually removes El Salvador's ability to issue fiat, their loan can't be repaid.
Do you see the absurdity?
Bitcoin tried for 15-20 years to find a use case but now it’s just an asset class like gold and nothing else, it will never be more than that.
not taking loans from them…
The IMF (or its donor nations) aren’t forcing anyone to take loans from them. Countries do that because the IMF offers much cheaper rates they can get anywhere else and is willing to forgive those loans far more easily than any other entity.
In return it expects certain good governance changes that are stated upfront as conditions to receive the loans you could very well get from anywhere else in the world.
Don’t like what they consider good governance? Don’t take a loan from them. Go get in the private market or the variety of nations willing to lend at far more onerous terms.
So I wouldn't call it a "failed experiment" per se - more like a publicity stunt that has achieved publicity.
I love that they are innovating and experimenting and trying their own things, and don't let the stuffy pompous status quo hold them back.
That reminds me of Hong Kong, where I used to live and which maintains a large sovereign wealth fund to ensure its currency is pegged to the US dollar.
While various US think tanks ranked it well on their checklists of "economic freedom", they tended to gloss over the rest of the recipe that made it work. Not just the huge sovereign wealth fund, but also how half the housing is government-run or subsidized and you don't really own land, you just rent it for a very long term from the government.
At best it will work as long as few enough people are doing it that the government doesn't care.
I suspect that the trend would be impressive either way, you'd just lose the "safer than New Zealand" line.
This is probably economically a good idea, absent something like georgist land taxes. It eliminates some or all of the incentive to speculate in land, which is of course the whole problem El Salvador ran into with bitcoin as currency.
So whilst politically I agree, practically I am unsure there is no land speculation: A waterfront view remains valuable in and of itself, no matter what.
The point of legal tender is that it reduces in value slowly over time, so you don't just hoard it under your bed. If someone paid me in BTC, I wouldn't spend it, I would hang on to it. That's not how currency works. Currency is the thing you want to spend, not hand on to.
https://www.imf.org/en/Blogs/Articles/2021/07/26/blog-crypto...
For example, about 1 hour ago they bought 1m in BTC: https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f...
The address is : 32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo
Alright so let's have a look at these progressive/creative approaches: https://en.wikipedia.org/wiki/Crime_in_El_Salvador
(a) Mass arrests of anyone who merely had a gang tattoo, (b) Jailing of children, (c) Security cameras everywhere, (d) Inhumane treatment of prisoners.
Trashing human rights is always effective but hardly creative nor progressive.
Trump Calls for Wealth Fund in Executive Order https://www.nytimes.com/2025/02/03/us/politics/sovereign-wea...
The other concept is that it is a good medium of exchange. I think that is not so true because 1) its neither cheap nor easy to buy a lot of things with it 2) a thing that goes up in value is not a good medium of exchange because people don't want to spend it, they want to hoard it.
If you accept that BTC is a reasonable investment, but not a great medium of exchange then what is happening makes sense.
I am not saying that a decentralized token couldn't be a good medium of exchange -- honestly I don't know. But so far BTC is not that.
In a place where people (who have on average very low incomes) were given $30 worth of bitcoin by their government just for signing up to a wallet app, so a very, very large proportion of the populous (compared to any other country on Earth) already had an app and wallet set up and ready to go. That's not a lot. That's a clear indication that the experiment simply didn't work.
Technically cryptocurrencies were meant to be held and exchanged directly, without an exchange.
Of course that isn’t convenient for non-enthusiasts…
How fortunate we are that crypto exchanges, run by private companies with little government regulation, operate out of the goodness of their heart /s…
That doesn't sound like a soverign wealth fund. Foreign currency reserves are not the same thing as a soverign weath fund.
I don't know if that is good or bad but I have heard smart economists argue both sides.
On a much smaller scale, your dollar goes up by 5% every year but you still use it everyday because all your monies are in dollars. If all your monies are in btc, you'd have to sell to buy things.
Many of those people are now likely in worse shape effectively renting a cage sized bed, but now paying the governments cut on top of whatever black market shenanigans goes on in both the slum housing and kowloon.
The cool thing about leases is that you can change the cost of the lease periodically, which ensures that the value of the land does not accrue purely to the person occupying it.
I contrast that to places like the USA and Canada that have huge amounts of area but policies that encourage inefficient land usage.
The IMF wants to feel that El Salvador (a) will likely be able repay the debt, (b) in a currency that is unlikely to devalue too much. For that reason, the debt would probably be in USD or some other prominent world currency (letting the debt be in El Salvador's local currency would risk them printing money to devalue it, threatening (b)).
So the IMF would probably make the debt in USD. In theory, bitcoin can be exchanged for USD, so in theory, El Salvador could exchange some of their bitcoin into USD to pay the IMF back. But what if bitcoin's value drops precipitously? Or if it becomes illiquid?
It seems the IMF thinks bitcoin is hype, so it expects its value to drop to near zero eventually. That would make it very difficult for a country that has large bitcoin reserves (instead of large reserves of a more stable currency) to repay the loan.
The problems are wholly on the supply side, where either
- there are bad laws that lead to any of the following, or - developers legally or illegally cooperate to suppress supply
- landlords cooperate to push up rents or reduce quality.
- investors use land or housing units as speculative assets
- normal people want to use their primary residence as a way to build wealth, so politically support measure that artificially inflate their property values. Individually, this is not a problem, but when everyone does it, the system breaks.
The goal is to design a system where all of the above doesn't happen. A very big task.
P.S. I don't know anything about HK.
All the things that make bitcoin a pain to buy a pizza are irrelevant if your goal is to hide $100m in your shoe. Nothing can do that better than bitcoin and there is a demonstrated need.
If you assume the reason to use bitcoin isn't going away and the wealth of the world goes up-- while the supply of bitcoin is pretty constant-- it can keep going up without magic.
And I certainly can claim that their policies on crime are progressive. They are prioritizing the rights of the many law abiding people who have a fundamental human right to live unmolested and unterrorized by criminals. I think that is very progressive and quite a radical departure from the status quo. I don't think I have ever heard "human rights advocates" and UN types opine and lament the human rights of people who have to endure this type of criminal society and I think it is brave and progressive to fight for them. I absolutely understand that it has required concessions and weakening of rights in other areas, and I don't say that is a good thing, but everything is a tradeoff right? If they continued conservative status quo the tradeoff would have been other peoples rights continuing to be violated.
Just because it's not "progressive" as exactly defined by an elite ruling class in the "international community" and think-tanks and academia, and the leftist intelligentsia at large, does not mean it is not progress in social reform and improvement for the greater good. To the actual people who have to live in El Salvador, approval for Bukele's reforms are staggering. I'm sure a lot of the "experts" who assured everybody they would never work are upset about it because they have a lot of egg on their face now, but fortunately the country has a bright young progressive leader who cares about the people more than the elitists say.
At the end of the day they abandoned the policy because they believe it will help the economy to abandon it (indirectly via the loan). I certainly wouldn't call that a success.
We argued against the complexity of SegWit and Lightning Network.
I think greed and politics won rather than engineering or economics good sense - people didnt want cheaper transactions, it now costs around $15 USD per BTC transaction.
Despite the proliferation of alt-coins using essentially the same code-base, with shorter block-times and larger buffers.. and more programmability - ultimately proof-of-stake might be a better implementation of the block minting process, than proof-of-work.
(And that’s before we start dissecting the bribery and corruption of those who wield this power.)
Were you alive in the mid to late 90s? A string of balanced budgets and surpluses. There are new problems and no dot com bubble right now but most Americans were alive the last time we had balanced budgets. It is quite possible.
Is your position that no innocent people were convicted of crimes before the reforms, or that innocent people do not get caught in the crimes that have been reduced so dramatically?
> How many thousands of young people are worth incarcerating indefinitely and without legal recourse for the benefit of society?
And how many young people are not killed or maimed or dragged into a life of crime indefinitely and without recourse in the alternative?
As I said, I acknowledge the issues with it, but no social policy is perfect and all social policy is a balance. You can't pull out "human rights" as a trump card to say Bukele's policies are bad or worse than before. Because you are confining and defining human rights in a very narrow specific way, and that does not account for many other rights of many other classes of people.
To me it looks more like my bank mandating I carry certain kinds of insurance in the terms of my mortgage than a political bias, but I am not an expert.
This. Bitcoin proponents often claim that eventually everyone will use Bitcoin for payments ("Finally no more governments or central banks!") and that's why it will increase in value, so everyone should invest in BTC.
But this argument is fundamentally flawed: A currency, in order for it to work (in order for people to be able to trust it), needs to be stable in value. Which contradicts it being an investment vehicle and drastically varying in value over time.
> The Exchange Fund of Hong Kong is the primary investment arm and de facto sovereign wealth fund of the Hong Kong Monetary Authority.
https://en.wikipedia.org/wiki/Exchange_Fund_(Hong_Kong)
It's also 10th-largest on:
https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_...
The buildings that do exist are ~50 stories even though that's not optimal because of the typhoon situation. So constructive cost is high because government does not release enough land for development.
The rents are high because someone wants it that way. It's not a land scarcity problem IMO.
Also the government and the upcoming merge with China is strange in itself.
b - I'm not sure what you think you're reading but that article points to the scourge of gangs and their impact on children. I only skimmed it but I couldn't see anything in that article about detaining children.
c - So?
d - Gang members in places like El Salvador victimise communities. They are a scourge. I will not accept the humanizing of them - they are parasites. I absolutely support Bukele's policies to rid the country of them. I hope he keeps going.
In this regard, crypto currency is not really a currency that people can use for their daily lives without worry and risk from volatility
Still holds its value though, the economy does not care if people understand why the price signals are so.
How are tough on crime policies "against the conservative status quo"?
e: and i’m no crypto obsessive really, i don’t think it was usable even 3 years ago but it’s pretty handy now, can easily send $20 in usdc on base or use it to purchase carbon offsets or use it on election/sports betting or use it to purchase deepseek r1 credits…
Satoshi’s paper assumed that transaction costs would make up for the exponentially declining subsidy, but that hasn’t really happened since it never lived up to his “digital cash” vision.
From day one, I knew it wasn’t going to work.
That’s when I flew back to Miami, went back to the drawing board, and stopped being a Bitcoin maxi.
Then it was 100x more.
Now 10x more is the best people can dream of. The possibility of getting super rich from Bitcoin is now gone unless you're already rich to start with. Turning $100 into a million dollars made the whole world interested. Turning 100k into a million isn't anything interesting and it's out of reach of most normal people, and those who can throw 100k into something are already investing in other things with similar returns. As a normie, putting in $100 with the hopes of Bitcoin reaching a million would only get you $1000. That's not much different than a couple scratch off lottery tickets.
It'd be much smarter to find the new secret thing that costs $5 now and will net you a million dollars ten years down the road. There's loads of stuff out there that people aren't paying attention to yet. Crypto isn't one of those things.
> The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described.
—-
I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself
So... traditional money is good because it forces poor people to spend it? Rich people have no problem converting cash into assets that go up in value and holding onto them converting back at need. It's only poor people that have to hold comparatively high percentage of their assets in something that loses value.
You can care deeply about victims and not believe in a surveillance state or arresting people simply because they look a certain way. History has shown it’s a slippery slope that ends up hurting everyone.
For example, in Argentina (2001), President Fernando de la Rúa followed the IMF’s austerity policies despite mass protests. The economy collapsed, and he fled the country via helicopter. But the elites who benefited from privatization kept their wealth while everyday citizens suffered
Value oscillating against some golden reference by a factor of 4? Many will likely take that if it means avoiding their own government shenanigans. I saw a currency reform which turned savings to zero. My parents lived through two such devaluations. As did my grandparents. Buying dollars or another hard currency, if found, meant prison. In this setup a permissionless, anonymous store of value, warts and all, is very valuable.
Imagine I wanted to loan your car company 100M to build out a factory because I believe in the product. I'm told that your company keeps all its reserves in bitcoin and its possible that even if the factory is successful that the loan wont be repaid if bitcoin falls.
I think if you are obsessed with bitcoin its easy to see this as conspiratorial, but the reality is no bank is going to loan a (company, person, country) money in cash if they are told the loan may default if bitcoin falls.
El Salvador to scale back Bitcoin dreams to seal $1.3B IMF deal
The people who argued for increasing the block size were making a tradeoff between decentralization and "low" transaction fees. Increasing the block size makes the chain grow faster which causes several problems: the time to sync new blocks goes up, initial chain download time goes way up, and block verification takes more CPU.
The parameters were initially set so that anyone could run a full node for as many years as possible which is the most important part of the ecosystem by far. If you make it harder for the average person to run a node it doesn't matter how cheap the transactions are if ultimately a small group of people are capable of running it. You could argue that doubling or quadrupling the block size doesn't hurt decentralization, and maybe you're right, but that also doesn't move the needle much for transaction throughput either at least not enough to make a difference for adoption.
Bitcoin can and should be scaled in layers. The detractors are just impatient.
Firstly, they are adamant that "tough on crime" policies do not work, they were adamant that Buekele's reforms would not work. Now sure there are probably ways they may fail and situations where they don't apply, it has now been proven by counter-example that they are wrong. They still refuse to accept it.
They now address their little El Salvador embarrassment by claiming it has caused calamitous violations of "human rights". This is a sneaky tool they use to win a debate and end the conversation, but when you look behind the curtain, really they are the ones who defined what human rights are and what is important for society, and they make no attempt to really weigh any of the multitide of very complicated issues as a whole. They just pick some human rights and some classes of people and say they were violated and that's the end of it. They would have the poor people of El Salvador live with gangs running rampant and murder rates hundreds of times higher than the rich areas of the wealthy countries they live in, and it would be worth it if only it could prevent one accused criminal having their human rights violated. It's just absolutely ludicrous, especially when you see the outcomes of these policies and they're still raging against Bukele for them and refusing to admit they don't have all the answers.
That is why they are conservative. Again, not conservative in their definitions, but conservative according to the dictionary. They hold to their views and work to maintain the status quo in terms of social and governance theories and practices.
Again I don't disagree with having strong individual rights against the justice system, and "tough on crime" policies sure can be pushed where they are not effective for political gain. But it's not black and white, it is many shades and countless inter-related moving parts. Very limited powers of police and very strong rights for accused in a justice system is a wonderful thing to have. In a society stricken by violence and crime and ruled by gangs and on the brink of collapse, it is not always possible to have without violating more rights of more people.
And if El Salvador continues long enough and keeps making progress reducing crime and breaking gangs and lifting people out of generational crime, they will actually eventually would likely to be in a much better position to implement stronger individual rights against the justice system.
What is actually important in a society is how they choose to be governed, their right to self-determination, including what rights they decide should be important and how those should be weighed and traded off among one another. Not some fixed, rigid decrees by an elitist ruling class of mostly foreigners with their lists of rights developed decades ago by and for different countries, missing many rights, and no real framework to make adjustments or make value judgements between conflicting rights, they are just used as a hammer to shut down debate that is awkward for their conservative and outdated views.
> History has shown it’s a slippery slope that ends up hurting everyone.
You don't need to look far back into history when you can look at the real world right now. When things are so bad that they can't get worse, there's no point of arguing about a slippery slope.
All in all, billionaires are a bad example of holding legal tender, because that just doesn't happen.
Why do you need "diversity of assets to transact with"? Go to any store in almost any country and they usually accept a single currency. Maybe in some they take local + USD. You're arguing for something the market doesn't seem to care about outside of speculative trading for fiat gains.
And even if you really want stablecoins they've been added to bitcoin via the lightning network and taproot assets. Tether for example can be used via bitcoin [2]. There's a reason Bitcoin makes up well over 50% of the total crypto market.
----
2. https://www.coindesk.com/business/2025/01/30/tether-brings-i...
These are well-known historical facts.
Additionally BTC isn't "over 50% of the market", it's over 50% of the market capitalization, which is a huge difference. BTC doesn't have the raw TX speed to make up 50% of actual market activity.
It was a terribly dangerous move for a sovereign country, worse than surrender to the Euro.
The "massive risk" the IMF sees is that without central banks or even less influential central banks the IMF existence would be threatened.
They needed the loan. The original thesis was taxes on crypto bros’ business and tourism would increase revenues while crypto-based lending would provide an alternative to the IMF. Neither panned out. This was a failure of Bitcoin to provide any of the international benefits of the dollar financial system.
Lots of billionaires manage their portfolios conservatively. Your equating currency with liquid assets is unnecessary and tanks your argument. Almost nobody holds billions of dollars in legal tender other than those who have to, e.g. sanctioned countries and criminals.
If the U.S. needed a bailout, the dollar would become a trash currency.
The reality is, Bitcoin and similar, are not being used to actually purchase things. Not at any notable percentage. You're "best bet" is to horde it, and that doesn't make a good currency.
There were maybe a half a dozen other networks that might have made a more plausible and interesting experiment in testing crypto as a day to day currency.
Even when the entire world started selling off their gold to the US in the 30s and 40s it became obvious by the 70s that there wasn’t enough gold mining capacity on earth to sustain a global asset-backed currency.
[1]: https://vitalik.eth.limo/general/2024/10/23/futures4.html
>The Kowloon Walled City was exempt and remained under the control of Qing China.
https://www.thecollector.com/kowloon-walled-city-lawlessness...
https://en.wikipedia.org/wiki/999-year_lease https://en.wikipedia.org/wiki/999-year_leases_in_Hong_Kong#V...
[0]: but also too quickly, hence all the breaches and 8-figure heists
Nobody starved to death in "famines" like the so-called Lancashire Cotton Famine. By contrast, in the Finnish famine starting the next year, almost 10% of the population of Finland died. As it turns out, that was the last famine in Finland because it became capitalist over the following decades.
https://www.reuters.com/markets/currencies/el-salvadors-bitc...
The exchange fund also (and somewhat controversially) runs additional portfolios (with foreign shares and bonds, and private equity, real estate etc.) in the manner of a sovereign wealth fund.
Solving real problems is hard. Being distracted by snake oil salesmen, whether they sell digital scarcity or AGI only makes things worse.
Bitcoin has only failed so far as a replacement for Visa and Mastercard. So no, nobody's using it to buy coffee.
To me, Bitcoin seems way more like an asset class, rather than a currency. (Despite the name which is a HUGE misnomer for the average layperson.)
Nobody invested in Bitcoin believes you should be ordering pizzas or using it as an actual currency. Bitcoin is a long-term play.
You can't make a currency out of something that's fluctuating by more than 10,000 USD in a 24-hour period.
But most of the comments are about how stable currency and stores of wealth are actually bad! It kind of sounds like we think bitcoin is working.
If USD is inflating and Gold is staying still, is gold “deflating”?
Real currencies circulate so the same dollar is spent by many people, benefiting each of them while you’re still holding onto your Bitcoin hoping it’ll reach $110k next. You do not want to live in a country where people are staying out of the local economy.
If the fees were lower I'd use it for plenty of other things too.
This way, they get to control unlimited assets without paying any tax.
Personally, I don't think that's so great "for the economy", because I actually don't care about the economy...
I care about people, and having 500 billionaires owning everything and charging everyone to use it is not the economy I want for people.
I'd rather that everyone pays tax, especially the super-rich.
Presumably if quantum computers (or better DLP algorithms on classical computers) start breaking keys, that will become a priority.
So I think there's an excellent chance that even if the math is solved Bitcoins will retain their value. Perhaps even without many of them getting stolen in the process. This is a big difference from many other uses of cryptography; if someone breaks IDEA 20 years from now, they can decrypt your PGP messages from the 20th century, and there's nothing you can do now to prevent that.
somehow everyone forgets that wars don't make sense and shouldn't really be financeable... and yet they are.
BTC can burn orders of magnitude more energy if it makes financing wars just twice as hard as it is today...
The dollar down vs itself by 20ish percent.
The median home price is up 30ish percent.
Oil is up 45ish percent.
Gold and the SP500 are each up 80ish percent.
Bitcoin is up 1000ish percent.
If you snooze through the day-by-day, season-by-season noise, the volatility of Bitcoin is a fun and relaxing rocket to ride. You just have to ignore all discussion focused on time frames of less than four years.
The currency itself can be used independently of its base-layer network, which is intentionally slow and costly (functioning primarily as a settlement layer). This separation is enabled by off-chain or layer 2 systems, such as the Lightning Network or custodial platforms. These solutions retain Bitcoin's monetary benefits - like a predictable money supply, off/on ramping through the base layer - while enabling fast, cheap transactions. The tradeoff is that you must trust an intermediary, but this mirrors the same compromise inherent to digital USD payment systems (Venmo, credit cards, PayPal, etc.).
In fact, USD lacks a true "base layer" altogether. The closest equivalent would be the Federal Reserve Bank’s ledger, but accounts there are restricted to large financial institutions, not individuals.
Remember that guy who spent 100BTC on a pizza? It’s a funny story but that’s why nobody uses Bitcoin for normal transactions.
Food, medicine, transportation, education, and everything else at or near the bottom of Maslow's pyramid of needs still cannot be directly purchased with bitcoin.
The other punchline to the Bitcoin joke is that it's finite. In 120 years it will begin to evaporate from existence as more and more wallets are simply lost to time.
this should all be added to that 3% card fees.
US dollars are also not legal tender outside the US, with a few exceptions (I think including both El Salvador and Ecuador.)
It's funny to have to explain basic government loan mechanics to this comment, given the derisive comment about "crypto people" needing basic financial concepts explained.
https://restofworld.org/2022/el-salvador-chivo-bitcoin-walle...
This is how insane that sounds
and they both can share the same unit of account.
The Unadulterated Gold Standard articles have a more detailed discussion of this.
are you talking about a trade deficit (the US operated at a trade deficit virtually the entire time it grew from 13 former colonies to the post WWII economic colossus. Lending money to a growing economy so it can turn around and purchase the equipment you are selling which it will use to be more productive is the secret sauce of a growing economy)
or are you talking about a budget deficit? many countries around the world operate with budget deficits; "socialist" governments generally have higher deficits as they spend to maintain living standards whether the economy justifies it or not. The size of the deficit (they will grow all the time) does not matter, what matters is "as a %age of GDP".
none of this, btw, has much to do with monetary policy, the maintenance of the currency.
"strong" or "weak" currency really makes no difference. The strength/weakness of the currency how the books are balanced after the fact of what has happened in the actual economy. A country with a strong currency will find imports inexpensive, and will have trouble selling its goods, and citizens will be incented to buy imports. A country with a weak currency will have difficulty importing goods, but will have less trouble exporting. It's the currency that balances these books.
Is this really the general sentiment on HN?
+ By allowing 8x larger blocks (unless it's even larger now?), if in widespread use with full blocks, the blockchain would be 8x larger. Bitcoin's blockchain is already the better part of 1TB, though you can still fit that on a cheap SSD. Imagine if it were 8 and growing fast.
+ Because BCH uses the same hash algo as Bitcoin, but is much less popular, it's at risk of 51% attack.
+ Because there is no pressure on block sizes, fees are very low, which means that as halvings continue the block rewards for BCH will get extremely small. This will result in hashrate continuing to decrease, putting it at even greater risk of 51% attacks. Bitcoin's high fees allow it to remain profitable for miners even without inflation. Miners have to be paid to keep the network secure, and that's either going to come from tx fees or from inflation. BCH aims to have neither and that puts it at risk.
And anyway, there are much better solutions for day to day payments, such as Monero and Ethereum.
From this article in 2024: https://markets.businessinsider.com/news/stocks/warren-buffe...
There is additional context there explaining why Berkshire holding cash reserves is unique to their needs, and historically has only represented 17.5% of their total assets.
Billionaires and large firms are not sitting on piles of cash Scrooge McDuck style, because holding cash is costly.
And IIRC it wasn't a "scam", it was a bug in a smart contract.
You lost me at stable currency. BTC is a speculative asset. Gold is a speculative asset. Neither are stable currencies.
If you'd like to speculate and INVEST in BTC, go ahead. But I'm quite frankly tired of people claiming it to be a currency.
If Elon Musk wanted to turn his Tesla holdings into cash, then his estimated net worth of $436 billion dollars would very rapidly not be worth anywhere near that much (i.e. probably by at least an order of magnitude).
Debased currency - a problem every large state eventually faced - is a consequence of deflation.
Therefore during 2024 people having or obtaining it tend to keep it instead of spending it. Is it surprising?
(This is where China swoops in and gives a loan at lower interest rates with shadow contracts to get the resources or assets)
IMF loans often come with the stipulation that you need to reign in wild and speculative financial policies
Saying you meant conservative in the sense that it's the opposite of radical, rather than conservative as in right-wing politics, would have sufficed.
Anyway, Bukele's treatment of the gang situation in El Salvadore can simultaneously be a flagrant violation of human rights while also being an effective measure to curtail untenable levels of gang violence.
I'm glad El Salvadore is safer. I don't love how Bukele handled things. And I don't know that I'd necessarily say he made the wrong call either; the net effect may be overwhelmingly positive for the vast majority of El Salvadorians.
Still, I don't think leaving people to rot in incredibly inhumane jails, without proper course for appeal, or the possibility of rehabilitation is humane. His handling of the situation has certainly made it more difficult if not impossible to determine innocence, or just sentencing for those who may have had very little criminal involvement prior to the emergency mobilization of El Salvador's police and military forces.
And it's certainly created more corruption in the "official" system with regards to respect for El Salvadorian and/or international laws, as is common with dictatorships. Corruption which cements his dictatorship with an iron fist while reigning un-checked.
I'm not convinced this iron fist move was the only answer either, but can at least accept the possibility that it was the only appropriate response to extreme level of gang violence they were facing.
It's not illegal to move money out of your investment accounts, it's just reported so that yes, you can have a tax liability.
I too, would like tax-free investments and funds.
You might think about the long game where no more bitcoin is issued and only transaction fees are awarded to the miners. How much energy will bitcoin consume then? There will be an equilibrium somewhere between energy prices and transaction fees.
I'm not even saying we should abolish fiat currency, or that the USD has to be fully backed by a hard asset. Individuals will hold whatever asset/currency/whatever they think will be the best choice for them.
Seriously, that's all I got.
Hint: cause and effect. You did miss the point and still do probably.
You can actually do the math for that. If the number of innocent people harmed by the gangs is more than the number of innocent people caught in the legal cross-fire then it is worth it.
Although of course it is unknowable how much of that money was bribe and how much El Salvador would have gotten without additional leverage.
So why is the IMF so against bitcoins that they'd rather pay to eliminate it? Or are the IMF scared that bitcoin can actually succeed, in a way which prevents IMF members from asserting monetary pressure in ways that benefits them?
This is why, aside from speculation, purchase of illicit goods and ransom payments, Bitcoin has had little traction as a currency.
Inflation in the monetary supply, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.
Edit: I'd remembered wrong. It was silver, not gold, that Spain experienced an influx of.
Aye, there's the rub.
With all due respect, why not Bitcoin Cash or some other coin? Bitcoin Cash is the exact same thing as Bitcoin - same protocol, same 21 million coin limit, same Satoshi whitepaper, same everything, except bigger blocks and thus, much lower fees. If you are using a coin as an actual currency, and not as a speculator, why stick with high-fee Bitcoin?
Otherwise it's just fiat all over again
This is one of the reasons that dollar-dependent economies have a hard time managing fluctuations.
The term "Billionaire" refers to a person who has total assets over a billion. In most cases those assets are shares in some company (or companies). It's not like they have a billion in their sock drawer.
By contrast, when at rest in my wallet, bitcoin is "dormant". It's not earning any interest and other not circulating in the economy. The only "growth" is capital growth.
That growth is predicted on demand outstripping supply. Or on "bigger fools". When the fools run out you're left with tulips.
It not being "used" in this context is referring to it not being used as legal tender. The law that was walked back was one which had made bitcoin legal tender throughout the country. As others have mentioned, it seems to have largely failed in being adopted as such, as surveys seem to indicate that less than 10% of people in the country had used it as legal tender in the previous year.
Cryptocurrency bros are literally speedrunning the entirety of monetary system failures. All of them. You’d think, maybe after the first couple they’d read a book or something?
Heck no! YOLO!
(Or a hardfork, if your changes have to apply to all transactions, though this would be extremely tricky.)
I think you need to refresh your understanding of the difference between a loan and a gift; it wasn't an incentive to change the behavior, it was a loan to deal with the problems caused by the behavior.
No, that's not debasement - in fact it was the opposite, the huge supply of silver (not so much gold) meant those Spanish coins were good-quality bullion. Inflation happened, and while that can commonly be caused by debasement, that wasn't the cause in this instance.
I wouldn’t say nobody (fools exist), but, sure, only a fool would deny the statement “gold cannot form a good monetary system”.
But... Isn't that the opposite of your Bitcoin claim?
That "other people's wealth" you're talking about is everyone's wealth.
Billionaires stole the profits of our work from us, and they didn't do it fairly.
I feel you underestimate how much a billion dollars is.
https://mkorostoff.github.io/1-pixel-wealth/
Nobody in history has ever worked hard enough to earn a billion dollars fairly.
It's crazy to me that you'd defend these people who have corrupted and degraded the entire system - the government, the finance sector, the media - to only favor holding everyone else to ransom. Not producing but holding. Societal wealth stolen without paying tax to benefit society. People didn't choose this.
I'm not starving, sure. And I'd be absolutely fine paying significantly more tax than I am now.
But I'm not about to voluntarily donate while I am still forced to work towards retirement, and there are people controlling literally 10,000 times more assets than I am that pay zero tax.
Do you not see the inevitable outcome of that?
You and your children, and their children, will own nothing because the super-rich will outbid you and everyone else for everything.
Food, houses, cars, travel, hotels, healthcare, medicine. EVERYTHING.
You will be poor. The rich is a tiny club and you're not in it.
Everyone, even the wealthy ones here on hn will eventually succumb. You will be outbid for everything.
You will have to sell your house to afford necessities while all your work goes towards luxuries for oligarchs.
There must be some mechanism to limit wealth or that is the inevitable outcome.
Here's a little thought experiment...
It's a hot day and everyone's thirsty. You have $9. There's a bottle of water on the table that you want to buy and the price on it is $10.
I give you $1. You can almost feel your thirst satiated.
Then I give the person next to you $1,000. How do you feel now?
Well our current system is like that, but multiplied by 100.
I do not agree that society should exist solely for the benefit of a handful of super-rich freeloaders.
On the desert island, they would starve and/or be eaten. That's not my definition of a useful member of society.
It says a lot about the popularity of Bitcoin, no?
However, “Bitcoin the currency” and “USD the currency” work perfectly for daily use if you route them through trusted intermediaries (Strike, Cash App, PayPal, etc.). These third parties abstract away the base layer and offer fast, cheap, and reversible transactions.
2. That statement refers to government holding bitcoin as reserves. Which has little relation to use of Bitcoin in the country as legal tender.
It's just a question about updating the source code.
The fundamental appeal of bitcoin is the lack of ability to change the protocol without buy-in from a sufficient fraction of the community.
I really want this in my currency.
Bitcoin might be a Ponzi scheme, but fiat currencies are even more so.
I also think there will be a gold rush of hacking old wallets one day when the encryption is broken. Not sure if that will happen before or after btc failure though. You can’t upgrade security on lost wallets.
That's why anyone can afford to live there. Actual property leases are incredibly expensive - in the 10s of millions of HKD.
Hong Kong functions as a free-trade market by socializing large parts of its basic economy.
This has always felt like a completely weaksauce argument to me. Even with Bitcoin, very few people other than dedicated miners download a full blockchain (like it or not). 1TB is already too large to keep on your phone or laptop, but 8TB is at most a minor inconvenience on a server or dedicated mining rig. What's the demographic where a measly factor of 8 makes a difference?
I think you need to check up with reality because your scenario has nothing to do with the one reported in the article. If you read the report, you'll understand thay El Salvador reached out to the IMF, a lender of last resort, asking for funding to finance their reform agenda. Among the long list of requirements designed to improve financial health, Bitcoin ceases to be an official currency.
You have little assurance that the buying power of $10 today will be the buying power of $10 tomorrow. If the tariffs had gone through as initially advertised, that would certainly not have been the case.
This is time value of money. If I wait 20 years instead of buying a house, I can have more money. But that’s 20 years of my life I didn’t live in the house I wanted.
I could invest more in S&P and not go on vacation, but then I won’t have as much time to go on vacations.
Goods and services now can be more valuable than money later, and that’s why people sell. And that’s why deflationary currency is fine.
Money: Whence It Came, Where It Went. John Kenneth Galbraith. (1975)
He had a very interesting life.
Japan already has houses worth $0 because Japan has run out of population growth to keep the demand for houses growing.
The same issue will occur in other countries that have low population growth. In New Zealand we have been importing people so house prices have been appreciating. However my impression is that other countries are competing for immigrants (NZ seems to be slowly relaxing our filters).
Also if you ever had a mortgage then you had a leveraged investment (often dangerously leveraged).
> With a deflationary currency, the incentive is to put off purchases as long as possible as your currency will buy more tomorrow than it does today.
What I hear from this is that people think twice before making a purchase, that is, they use their money more wisely. Seems like a bonus to me. Regardless of this, people will still need to buy things to conduct their lives, and there will still be people who are reckless with their money. So this seems like a non-issue.
> Deflation ends up being economically disastrous, as Japan’s battles with deflation over most of the twenty-first century have shown.
Any other example or it's only Japan? Because honestly it's not the country one associates with economic disaster, on the contrary, they were for quite a long time the 2nd world's economy, and if you visit it's a lovely place all around.
On the other hand, the list of countries that have had to contend with inflation is much much longer, as far as I can tell, and the problems stemming from inflationary currencies orders of magnitude more severe. If you put both prospects on a balance and weighing the evidence, deflation seems like a much better problem to have.
> This is why, aside from speculation, purchase of illicit goods and ransom payments, Bitcoin has had little traction as a currency.
It has had little traction as a currency because it's unusable. You have to pay exorbitant fees to move it around and it takes way too long to work for every day transactions. Not to mention another host of problems, which other cryptocurrencies fix, by the way.
If you’re asking if people would not use their deflating currency to buy lattes and sneakers, I disagree. People like sneakers and lattes more than money. They prove this everyday by buying them instead of s&p.
There is an issue of the cost of a transaction - which nis bad for btc and s&p. Nobody wants a tax form for buying a pizza. But the regulatory environment creating high selling costs is orthogonal to the deflationary property.
The argument simply is that exchange should be frictionless and deflationary currency will slow the velocity of money. I guess you agree this will lead to reduced prosperity and economic activity, though you call it frivolous purchases. Your comment about preferences doesn’t play into it; this is about mechanics of exchange, and a precious asset is an inefficient medium for commerce which would lead to reduced economic activity because not only do you have to factor in the opportunity cost of buying a good or buying some other good (sneakers or s&p), now you also have hodling, zero economic activity, as a 3rd option with its own expected return and opportunity cost to forgo. When I buy sneakers, the s&p 500, or btc, my dollars don’t disappear. A counterparty receives them and they stay in the economy. If you pay me in btc and I just hold it, then that money effectively does disappear from the economy.
And I’m not even mentioning all the macro issues of not being able to provide liquidity in the form of new capital in times of crisis.
Although I don't think I agree. Wouldn't a currency shortage be another way to say deflation? If your economy is producing more value than your currency represents, then your currency is more valuable.
I have also heard people say deflationary currencies inevitably lead to a catastrophic spiral where liquidity dries up because no one wants to spend (or loan) today what can be more valuable tomorrow. There's even a page on the Bitcoin wiki about it that has been there since 2010.
Also, a quick google brings me to the "Price revolution" page on Wikipedia (https://en.wikipedia.org/wiki/Price_revolution) where it says: "Generally it is thought that this high inflation was caused by the large influx of gold and silver from the Spanish treasure fleet from the New World; including Mexico, Peru, Bolivia and the rest of the Spanish Empire."
In the end... I don't really know. I appreciate you sharing your thoughts.
Largely because the only place the IMF can get your money is from you.
Currencies are public monopolies.
The problems always arise when a state starts issuing state backed liabilities in other denominations - as there is no way for a state to absolve itself of that debt without paying it back. It becomes a debtors prison.
Yeah I guess bitcoin is only allowed to go UP everything negative is always false! There's no way that virtual beanie-babies couldn't overcome the evil IMF!
But largely that's been abandoned for the "store of value"/"number go up" speculative use-case which is easily 99.99% of the point of Bitcoin today.
I think you need to take a pause and read what you wrote because there's some serious cognitive dissonance in your claims.
The IMF is a fund put together and ran by the majority of countries in the world as a lender of last resort. It serves as the world's insurance policy on stability. So when a country like El Salvador knocks on their doors, it's a kin to stating the world they are in trouble and they desperately need a hand. The IMF then provides help, but requires as a tradeoff that the country cleans up their act and actually corrects it's course as to mitigate or eliminate the root causes of their instability. For example, countries that are hugely indebted have to comply with demands to lower their sovereign debt down to manageable levels.
Looking at El Salvador, their populist and ill-advised policy to adopt Bitcoin as a currency was a fantastic failure with a tradeoff of being a huge risk factor. Even the most firebrand crypto bro is forced to acknowledge that crypto currencies like Bitcoin have a number of traits that renders them unusable as money, among which the most popular one is the core reason driving it's popularity: volatility. It's to no surprise that one of the basic requirements for stability is to not use a highly volatile and uncontrollable asset as the nation's currency.
I'll take that as a "thank you" :)
> Saying you meant conservative in the sense that it's the opposite of radical, rather than conservative as in right-wing politics, would have sufficed.
Yes I did, I did try to say that in the comment you replied to but on re-reading it could have been clearer and was probably a bit snarky.
> Anyway, Bukele's treatment of the gang situation in El Salvadore can simultaneously be a flagrant violation of human rights while also being an effective measure to curtail untenable levels of gang violence.
It can be that, but the previous government's treatment of the gang situation in El Salvadore be a flagrant violation of human rights of all the citizens who had been affected by crime and violence. The suffering endured by those people wasn't humane. That's the problem, right? I can see it's not a black and white situation, can you? Can you name a single "progressive" policy that has zero downsides, costs, unintended consequences, etc? No, on social scales and government policy, everything is a big mess of chaotic cause and effect and good and bad and statistical outcomes, so picking a narrow class of human rights for one class of people in a whole society and say "those are getting worse therefore it can't be progressive" is really reductionist and not even true because in the same way you can probably rule out anything being progressive.
I'm not going to respond to your points one by one because yet again I add the disclaimer that I think it is terrible things got so bad they came to such measures, and maybe not all measures were exactly right. But what is clear is that it is a bold and brave social reform that went against status quo and has been extraordinarily successful in restoring and defending human rights for many, and in many ways improving society for the better, for a huge majority of citizens. Safe to call it progressive, but really call it whatever you like I guess, but a flagrant violation of human rights I think lacks some understanding or nuance of the reality of the situation there.
There are cryptocurrencies that follow the original idea but they're not as popular because they haven't increased in proce as much as Bitcoin.
... although as a form of currency (as opposed to an investment) for El Salvador, it looks like it's a failure
I’m advocating for stable currency. Not bitcoin.
> you agree this will lead to reduced prosperity
I agree that it will reduce the velocity of money and maybe “GDP”. But not prosperity, individuals being able to save wealth into the future is a better life outcome than more goods changing hands.
> and a precious asset is an inefficient medium for commerce
You are conflating liquidity with deflation. To be a currency it has to be liquid, we agree. We also agree btc is not as liquid as cash. But deflation or stability is orthogonal from liquidity.
> now you also have hodling, zero economic activity,
Already addressed. People want money to buy goods.
> my dollars don’t disappear.
The value isn’t lost in the exchange but it’s lost everyday due to inflation. And by “lost” I mean transferred to government projects.
> that money effectively does disappear from the economy.
No it merely is saved for a future consumption date. If we average consumption needs of participants in the economy there is no reason to expect a monotonic hoarding effect. That would mean consumers are not satisfying their desires for goods.
Here is one last framing. The economy is not money, it’s goods and services. Money is just a tool for claiming them. So what does an inflationary currency do to help the economy? Does it cause more people to get out of bed and create new goods and services? No. It just transfers claims to resources to someone else.
But for the common mortal, cryptocurrencies are not about replacing anything, it's a highly volatile speculative playground, digital gangsters who want to make a quick buck
Nobody cares about the ideology
Bitcon as legal tender? lol
by no means am i excusing the violence that gang perpetuate, but i am unconvinced that enough people simply want to live the gangster lifestyle that gangs can sustain themselves outside situations of extreme poverty.
When Bitcoin, a currency with a measly transaction throughput of 4 transactions per second max and which consumes more electricity than all of Argentina will be worth $1 billion per coin and every rich person around us will be a complete imbecile and every intelligent person will be broke, people will still not comprehend that the fiat system itself is the scam! Einstein was right, human stupidity is infinite.
Bitcoin has been growing from strength to strength for almost 15 years now and worth almost 2 trillion market cap... Even if you think it's a bubble, then what's to stop everything else from being a bubble too? Nothing, that's what, it is a BUBBLE it is ALL a bubble and nothing but a bubble and a scam.
Consider a system which can support a 2 trillion dollar scam for 15 years straight and ruin an entire generation of young people... What do you call such a system? That's not a sound system. How can you trust such system? What kind of gullible fool you have to be to trust such an obvious scam system?
It's like the system found all the most gullible people on the planet then bribed them to the eyeballs, gave them access to global media platforms, so now they run everything and can force their delusions on everyone else.
Did you people even hear about the recent USAID scandal or did it bounce right off your thick skulls? It's all a scam; whether you realize it or not; you're a scammer, your spouse is a scammer, your mum is a scammer, your dog is a scammer. We're all dealing in counterfeit money.
I've been saying this over and over again for like 10 years straight. Every year what I'm saying is increasingly obvious, but people still don't get it. People's skulls have been getting thicker faster than the information could penetrate it.
There are plenty of bad actors in crypto but Bitcoin is at worst a very interesting experiment that can profoundly change the world for the better. Most is not all of the rest of crypto is basically hawk tuah coin with less obvious illegitimacy. In fact bitcoiners don't consider Bitcoin as "crypto"
I'm not going to defend the IMF here... they're sort of like sharks swimming in the national currency markets (look up "Our Brand is Crisis" and "Life and Debt" for more info, and then read Summers' "The Payment System" for the IMF's take on things.)
But... I think my point is... I don't think there's any more conspiracy going on here than normal IMF conspiracy. But the IMF is sort of open about it, so is it still a conspiracy? I don't think the IMF or WB care one whit about cryptocurrencies, they just don't even register.
EDIT: Oh, and "Confessions of an Economic Hit-Man" is also nice and conspiratorial. If half of the author's assertions are truthful, there's WAY more happening in Latin America vis a vis international banking cabals.
https://github.com/theborakompanioni/bitcoin-spring-boot-sta...
I’m not; you have a limited view of what inefficiency means. The currency can be liquid and still inefficient for exchange due to other kinds of overhead such as opportunity cost of spending the currency itself.
The economy is not money but a frictionless (opportunity cost wise NOT liquidity wise as you keep trying to divert to) currency is better for facilitating exchange and access to goods and services.
I think a perfectly stable currency could be OK too but that would require incredible management on the monetary side to maintain that equilibrium. And absent being able to hit that bullseye it’s been proven, as much as things like this can be, that a stable little bit of inflation with a fiat currency is much stabler and leads to more prosperity than a currency bound by finite resources external to the economy.
Isn’t it enough that you can buy gold or whatever or bitcoin with your depreciating dollars? Why the fixation on it being a currency?
1) A country is doing something the US doesn't like.
2) The country is in some trouble of their own making.
3) The IMF will come and bail them out if they would be inclined to start doing the things the US likes instead of the things it doesn't like.
Basically, the IMF money is the carrot you get for bending the knee. The stick can be the CIA or other things.
> Countries do redenominations all the time
That’s not really the same, in several fundamental ways.
I dont know what the future hodls but it’s looking pretty good for bitcoin so far
Block settling time: If a transaction isn't complete until 1 (or n) blocks have been committed, and mining a block takes meaningful time, then this places significant constraints on spending.
If I go to the store, and buy something with bitcoin, but it takes 20 minutes for the next block to be mined, does the store need to hold the goods in escrow until the transaction clears leaving me stuck waiting for 20 minutes? There's also no guarantee that my transaction ends up in the next block being mined, so I may need to wait an indeterminate amount of time before I can walk out with my paper towels - horrible UX.
Lack of physical cash: if the power is out, how do we do business?
Tension between wallet security and convenience of spend.
Actually I can't think of any fiat currency that hasn't at least halved in value?
This is essentially the other way around. It's volatile if it's predominantly used for speculation rather than as a currency, because "widespread use as a currency" is a big value sink that absorbs volatility. In other words, if more or larger countries used it as a currency it would be less volatile.
The IMF is afraid of Bitcoin because it threatens the Dollar.
The IMF bribes El Salvador to reduce their support for Bitcoin.
El Salvador uses the bribe to buy more Bitcoin.
If Bitcoin catches on around the world and the IMF is fighting it by throwing money at it, that could lead to an accelerated adoption curve.
Or because Bircoin more than doubled in Price since El Salvador started buying?
El Salvador will not sell its bitcoins and keep on adding them, maybe now as strategic reserve.
Meanwhile Tether is moving to El Salvador.
Some people called Obama progressive and he definitely helped destroy Libya and Syria, ordered the extrajudicial execution of a US citizen under presidential immunity, droned poor brown people living on the other side of the planet, let Citi group pick his cabinet, etc. Nevertheless, the progressive things that Obama did do were still progressive.
Seriously though, the reason is that they can do digital currency without crypto just fine.
For example there are many popular payment operators in Africa who provide money transfers and micro-payments on phones. M-PESA launched in 2007 and has tens of millions of users:
https://en.wikipedia.org/wiki/M-Pesa
These successes don’t usually get reported because they lack the exciting novelty of crypto, even though they are much more popular and usable. They are actual free market solutions, not coin casinos built around libertarian dogma. And for that reason lots of people don’t want to know.
I'll nibble at the bait regardless:
Your comment of spending patterns is missing the forest for the trees. A modern, capitalist infused, economy works like a big cardiovascular system, or like an engine. That is to say, it's happiest when blood/oil is pumping through it. Therefore, you can compare to a certain extent the different states an economy can be in to its cardiovascular counterpart.
When an economy is struggling with deflation, you can imagine this as the heart pumping slowly. Slower pumps mean less blood going everywhere, means less performance. The less money circulates, the smaller its multiplying effect, the harder it is for suppliers to stay afloat, prices fall.
The opposite of this would be someone walking around with their heart rate through the roof nonstop. Too high, too much blood, too much pressure, dangerous. When money is flowing too quickly through an economy, its effects are magnified, and in a sense, you can think of it as harder for the consumer now, prices rise.
To aid the visualization, step into the shoes of a dollar for a moment, and imagine its journey in these different scenarios. It comes into someone's account from a paycheck, it stays for a while, goes to the candy store, sits there, goes to a supplier of the candy store, etc. Now multiply that journey countless times. See if you can spot the effect that more or less tendency to spend can have on these journeys.
So you see now, it's a pendulum. A delicate balance that must be struck. And there you have the job of the federal reserve and other central banks like it. They are in charge of modulating the accelerator of an economy and making sure that we're neither going too fast nor too slow. Right in the middle is where you get the most stable and efficient economies.
Bitcoin is unsuitable as a currency because it belongs to the same family as other tried and failed systems of _hard currency_, think gold, but now its worse. Due to its decentralized nature, it will never (by design) be controlled by a central bank. And so it will be at the whim of all the things fixed supply currencies are at the whim of. If you want examples of why this is bad, just take a look at basically anything before 1970's.
If you want a more thought out and perhaps entertaining debrief on this, I encourage you to check out this blog post by Matt Ranger:
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
I don't know much about cryptocurrencies but there seems to be a scaling issue, last thing I read it can only handle 7 transactions/s, is that still valid?
If so, then how would this scale to a country-wide payment system?
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
cryptocurrencies are a failure and net negative, and the longer we hold on to believing they aren't, the more damage we are doing
I get you can do something stupid in a rush but the longer you have time to reconsider, the higher the likelihood that you "didn't just fall for a dumb idea". Bitcoin is 15 years old.
> Also, the average person is smarter than about 4 billion people.
Bitcoiners are drawn from a normal distribution and not from the bottom part of the distribution, so that argument doesn't really work here.
Bitcoin experiences less inflation than regular currencies. Some coins get created now, but over time we know its character will become deflationary: no new coins will be created, and some will be lost at times due to poor wallet management.
As a result, people will chose to spend other currency in preference to spending bitcoin. This is self-reinforcing. The infrastructure will not be in place to use it on the odd occasion that someone wanted to.
You could create a blockchain currency which had a natural and continuous rate of inflation, to encourage people to spend it. You could bootstrap this by mutualising it across an industry. e.g. imagine if the largest datacentre groups got together to create ModestlyInflationaryCoin, and then said they would offer discounts to customers who paid in ModestlyInflationaryCoin, as a means of bootstrapping it. Other groups might start to use it, and it would stay in circulation because people would want to be rid of it once they had it.
Even if such a currency existed, it would probably be short-lived. /Once it was bootstrapped/, its stakeholders would have strong incentive to change its contract to be non-inflationary. Making that change would convert their holdings from Bad Money to Good Money, and as a result the character it would significantly increase its value.
But the datacentre groups could then mutualise a new currency in place of the old one. It is possible that there is a virtuous loop here, and that there will be a race to quality in currencies in our future, grown from how easy it is to create new currencies. We might start to see the identity of currencies a bit more like the way we see futures contracts in our current era.
But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but its giving you different things.
Now imagine you don't have a hot potato, you work and you get paid in... idk, something you don't want to get rid of. You struggle with letting go with your currency and so it costs you when you're trying to do exchanges. Similarly, if you're a shop owner or something, people are more hesitant to give you their currency as well. Things get slower, and darker, like a mechanical flashlight that you're spinning slower and slower.
That's an odd definition of money. The ancient Greeks already thought that money is medium of exchange AND a store of value, and throughout history people have preferred money that held its value. It's also circular reasoning. A medium of exchange should lose value, so you should use money that loses value.
> you can instead "buy" a savings, or "buy" an index fund
So money that loses value creates inefficiencies in the economy, because people have to waste time worrying about preserving their wealth, investing, etc.
> You struggle with letting go with your currency
I still need to eat, to live somewhere, I want to experience things, a money that increases in value does not destroy my desire to consume.
Whereas USD is ultimately bearer tokens. Yes, those tokens can be optimized away as entries on a balance sheet when held by a large entity. But USD is a token system, not a payment network. Bitcoin is the opposite.
https://acoup.blog/2025/01/03/collections-coinage-and-the-ty...
Sure that you can always point some exotic and rare exceptions to prove differently but even yourself don't use it on normal daily financial operations, and no, Lightning isn't even bitcoin so please don't argue with that.
There are more things backing up the value rise for that old tech. Just please diversify into other areas so you don't come out empty handed in some years from now.
Bitcoin's supply doesn't become inflationary or deflationary "structurally" based on the growth of x or y economies. The word inflation is used for both concepts but, structurally, Bitcoin will remain an inflationary system until around year 2140... then block subsidies are going to to stop, no new bitcoins are going to be emitted and then you (or more likely our descendants) can call Bitcoin a structurally deflationary money. Hence the use of the word disinflationary, it currently is in the process of becoming a deflationary system by progressively reducing the inflation of its own money supply (through "halvings" approx. every 4 years).
I'd much prefer a small amount of deflation to the massive inflation that USD is currently undergoing. And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable.
Your marriage is a speculative asset that your wife doesn't cheat on you in future and actually loves you.
S&P is a speculative asset that it will perform like it has been performing in last 30 years.
USD is a speculative asset on US not going bankrupt.
Your career is speculative asset that you don't get fired tomorrow and you can find another job if you do get fired.
Bitcoin is a speculative asset that a decentralized cryptocurrency is better than relying on coins issued by bankruptable nations.
You are a speculative asset of your ego.
Not unless you explicitly choose to. If you own a house to have a roof above you, to have a comfortable and safe place for you and your family, if you love and care about that place, then that's what you are getting out of the house. Its monetary value changes are "just" a side story.
But if you buy a house purely as an investment, then yeah.
The future always looks good right before a crash. You really don't want a currency as unstable as bitcoin as your legal ledger. we would have had 2 crashes already in this decade alone: the obvious 2020 dip and the dip in 2023.
All the DOGE/Trump shennaigans + the investigation on the Hawk Tuah coin will probably crash it again late this year.
The elected government serves the society of its citizens, while inventors and holders of unofficial currencies are individuals who ultimately serve only themselves.
Proof of Stake and no ceiling to supply are important if you are going to hold the thing for decades which is a different issue.
It is worth emphasising here: non-inflationary currency does not grow its value, so it would be unusual for people to want to put their wealth exclusively into store-of-value. Rather, most people will want a mix of inflationary-currency, store-of-value, and investment in growth-generating businesses.
When people talk about wanting to use bitcoin as a day-to-day currency, I feel like they are missing the best benefit if could offer us.
We already have effective day-to-day currencies. But we have not had a reliable store of value. The US, UK and Australia each have a history of denying ownership of gold when it suits them, which is when people need it most.
The lack of reliable store-of-wealth has made it too-easy for governments to fleece wealth-generating people in order to buy votes. This is not the long-term strategic path, but it creates a race-to-the-bottom due to short-term incentives. Perhaps blockchain will change that, by allowing the creation of an easily accessed utility that sits beyond the easy influence of the nation state.
To be effective it does not need to be perfect, just better than the options we have now. It has been encouraging to me to see the CCP struggling with blockchain, and then outlawing it because they cannot control it.
I'm also not sure that's a circular reasoning as I provide the reasons why you want a medium of exchange that loses value...
Hmmm... sure, I suppose you can look at it that way. In an inflationary-esque economy, you worry about saving your wealth, so you create instruments to do so: fractional reserve banking, mutual funds, etc. This is a problem with many solutions. On the other hand, in a deflationary-esque economy, you worry about spending your wealth, and perhaps more importantly, getting everyone around you to spend it as well. That problem has less solutions.
I said you struggle, you don't hold on forever, you struggle letting go. As in you eventually do let go, but not as quickly as if it had been depreciating. It functions as a brake on consumption, not a full stop. It slows things down. Slow is not good. Things start to go down when things slow.
I'm not intending to bait. Really I find the arguments against deflation insufficient. I get the picture that some inflation is good to keep the system running smoothly, however, the description of why inflation is desirable is lacking when explaining why deflation is necessarily bad, all things considered. I don't see a first principles argument against deflation, neither do I see a thorough comparative analysis between deflationary and inflationary economies. The only example given is Japan, which, as I said before, doesn't seem to have fared too badly. Moreover, the list of countries that have had problems with runaway inflation is very long. Inflation is a well established economic malaise. In fact, it is almost a maxim that all states are destined to at some point or another, debase their currency.
I think one has to weigh the economic arguments, whatever they may be, against the fact that humanity has never had sound money that can't be debased, and that isn't at the whims of some elite, however well intentioned and wise they may be -- which more often than not, they aren't.
Cryptocurrencies will continue being developed, the flaws will be solved, and the wrinkles ironed. We will have something that may work as sound money. And I say we let it compete fairly against fiat money, put our theories to the test, and see what kind of money if preferred by the people. If it turns out that sound money is finally achieved, I'm sure it'll be a momentous time in human history, and could very well become a new human right: the right to own and use sound money.
3000 years from now what would be the store of value would be the question to ask.
Deflation will kill that. Your loan will cost more over time instead of less. The assumption with inflation is loans will follow it. With deflation and loans not following then people who bought into the system might be well off but those who are not yet in are worse. Same thing with inflation and loans not following as is happening now.
The rest left me puzzled, can you elaborate? Why should the money holder do anything productive? Why getting richer and richer becomes something bad when we go crypto?
Oh I'm sorry, that was your shtick. Apologies!
Also, I'm not a crypto person, I made some gains and sold a long time ago. I just have to laugh that you think one pointing out that an argument is weak makes one a part of the opposite tribe.
https://www.france24.com/en/live-news/20250128-no-way-out-gr...
If he was killing them directly in gas chambers instead of letting them rot in prison, the population would be as safe, if not safer, forever.
Would that still be "progressive" for you?
Would you have supported Jonathan Swift's "Modest Proposal" too, at the time? Or sterilizing poor people? I mean, those are perfectly logical suggestions that would work, wouldn't they?
So I'd assume a small amount of predictable deflation would shrink an economy.
Anyone know more about this?
Next I transfer it to kraken, convert it to Monero and deposit it on my drug market of choice.
It used to be simpler but this is how I do it nowadays.
if there is, it’s poorly advertised
does seem like a huge swing and a miss for lightning to only have unstable value units of account going over it
the market clearly wants something else, and has that, on other networks at large volumes
"The program is anchored on improving the underlying primary balance by around 3½ percent of GDP over 3 years, to put the ratio of public debt to GDP on a firm downward path after peaking at 85 percent of GDP in 2024. High quality measures, worth 1½ percent of GDP in 2025, already included in the approved budget, will reduce the wage bill, spending on goods and services, and transfers to municipalities. To ensure fiscal sustainability and a further reduction in borrowing costs, reform efforts will center on strengthening the efficiency of the civil service, the viability of the pension system, and revenue mobilization. Fiscal consolidation will be conducted in a manner that strengthens support for the most vulnerable and protects priority public investment."
The assessment of their economy seems broadly positive
“The Salvadoran economy has steadily expanded since the pandemic, on the back of robust remittances and a remarkable pick-up in tourism, and amid an improved security situation, with climate shocks having only temporary negative effects. Meanwhile, the current account deficit has continued to narrow, and inflation has fallen further – supported also by lower global commodity prices. The fiscal situation continues to improve very gradually, and recent liability management operations have substantially lowered near-term financing needs, in the context of sharply lower sovereign spreads."
“Building on this progress, and recognizing El Salvador’s pending macroeconomic and structural challenges, the IMF-supported program aims to strengthen fiscal and external stability and help create the conditions for stronger and more inclusive growth."
It might be different if wages grew at the same rate as inflation, but they rarely do.
The standard target rate of 2% inflation does not take into account the deflationary effects of ever increasing technology / efficiency. So in reality, it's much higher then the 2% stated figures.
That's what the usa did to the entire south and middle America.
No other currencies without a state to promote it, and basically force it on their citizens, made it through yet Bitcoin did it.
More and more people are buying it, people are valuing it more and more, close to 100k$ now when it worth nothing a few years ago.
That's quite a success to me and and I believe part of it's success is because Bitcoin is by nature deflationary.
No one would willingly buy an inflationary currency, the only reason they success is because they are forced by gouvernement.
Well the point of money is to use it at some point, your theory is right if people were to live for the infinity but we don't so at some point you will spend all your hard earned Bitcoin because you just don't want to die rich but live rich.
That's the basic reason why all this nonsense about how bad having an deflationary economy is crap. People spend at some point their money, they don't hold on to it for ever.
At some point a balance between reward (money taking more value) and loss (time spent starving, not benefiting from your assets) is reached.
As a general rule it's not very convenient to do so though since the value can fluctuate. (Which naturally all currencies do, but it would be kind of like paying with USD in the EU. You could do that, but most stores are not interested in the extra hassle of keeping track of multiple currencies.)
It is also not uncommon for services like VPN or IPTV streaming ("pirate streaming") providers to accept crypto.
No, that is not what the quote says. It says it was a condition on a loan.
There is a huge difference between unsolicitedly saying “hey, I’ll give you money for you to stop betting on horses” or being asked for money and replying “OK, but if I do lend you the money you have to promise me you won’t spend it on horse betting; I want it back”.
This question works better the other way round. Why should people that do all the work and take all the investment risks to make the riches get continually decreasing returns on their efforts whilst the people that sit and HODL get continually increasing returns on doing nothing?
Far less so now, because they refused to listen to the dogma preached from these experts and institutions (significantly coming from those associated with or funded by the US), about how they should run their country.
Hardly. What made Bukele's presidency impressive is that many other governments had tried the "mano dura" approach before, but he was the first one to make it work, and nobody is sure why. There's evidence even he didn't expect it to work that well.
That's for the private sector to sort out - largely because they can go bankrupt and wipe out the debt when things inevitably go wrong.
A true economy of low friction btc transactions for pizza has never existed at the scale banks do pay wave. Its hypothetical frictionless, not actual. I'm willing to bet even legalised state coins will be tracked, frictive and taxed.
So I think I’m missing something. I feel like you’re suggesting that we should be more comfortable speculating because we do it all the time, but I’m not seeing how those are all the same.
For instance, the euro is legal tender in the eurozone. I can pay a tax bill or a bank loan with 10cent coins, and technically they have to accept that (though note that some countries do have special rules around whether small change is legal tender). However, a merchant is not required to take my wheelbarrow full of 10cent coins in exchange for goods and services; no debt exists before the purchase.
El Salvador was forcing the merchant to take the wheelbarrow.
But why is it necessary for it to survive? Like, I think even cryptocurrency true believers would acknowledge that there are better cryptocurrencies out there if you want a currency; bitcoin seems at this point of largely symbolic value.
I know that's what hardcore Bitcoiners have typically pushed for, but I personally disagree. To me, the most interesting thing about Bitcoin is its predictable and unmanipulatable money supply. The payment network is nice though because it can let you easily and permissionlessly take your Bitcoin wherever you want. Fees are actually not that exorbitant, certainly cheaper than SWIFT transfers. The current average transaction fee is around 1 USD and the first confirmation, which is sufficient for most kind of transactions, takes 10 minutes on average.
> Whereas USD is ultimately bearer tokens. Yes, those tokens can be optimized away as entries on a balance sheet when held by a large entity. But USD is a token system, not a payment network. Bitcoin is the opposite.
USD cash is (paper bills and coins), not digital USD. Bitcoin is a digital bearer token system. As a side note, it wouldn't be very hard to replicate a cash system for Bitcoin, if there was an entity responsible for emitting and redeeming cash for digital Bitcoin (a bit like the US Mint but for Bitcoin).
High inflation effectively front loaded loans that had fixed repayments (such as mortgage repayments) and the high interest rates that went with them (they move togeter - its called the Fisher Effect - https://moneyterms.co.uk/fisher-effect/ ) meant lenders were willing to lend a much lower multiple or income.
In most places (and definitely in the UK) house prices were much lower relative to incomes when we had 10% annual inflation.
I think it's objective truth to note that "Bitcoiners" are predominantly comprised of:
a) people conducting illegal affairs (don't read this as "illegal" in the sense of jaywalking)
b) technically illiterate people, down on their luck and hoping to get rich quickly
With those in mind, I would argue that "Bitcoiners" are instead drawn from the left side of most distributions.
Anyway, no matter how large the unity of dumbs is or how passionate they are about their goal, it won't make them smarter. What they can achieve, though, is making other people dumber than they are, so that they can appear relatively "smarter".
A counter-example: can you come up to a coffee shop with a gold collectible coin, chew a piece out, and use it to pay for your coffee directly? You need a proxy in form of a pawn shop for that.
Instruments are instruments, if it is not used for every day business transactions doesn't mean it is not heavily ab-used inside it's niche
I’m curious where the communities about this are, or are nowadays
I'm saying Bukele's policies aren't progressive. Furthermore, he doesn't consider them progressive. His allies in the Latin American ultra right wing don't consider them progressive. "Progressive" to them is an insult.
You don't know what will happen in any of the cases. You just choose to believe one more over the other based on what has happened in the past.
I have $1,000.
I believe that tomorrow, my $1,000 will be worth $2,000.
Why would I ever spend my money?
Hence, economy freezes.
This is so plainly obvious to everyone except crypto zealots I literally gasped seeing your comment.
Ergo, the exact reason it’s a horrible currency for the system.
It’s really just the infamous libertarian inability to consider the needs of the system as separate but still important and sometimes in tension with the desires of the individual.
It’s just a particularly goofy one because a deflationary currency very obviously cannot support an economy.
Spouses are not very fungible though, not that I've ever tried ! ...
I'm gonna have to ask for evidence on this one, I strongly believe most full nodes are not mining pools. http://bitdash.io/ says there are ~10,000 running full nodes, yet there are only ~100 mining pools that have produced a block in recent history: https://miningpoolstats.stream/bitcoin
> 1TB is already too large to keep on your phone or laptop
On your phone, sure. But my desktop already has a few TB of storage. But not 8. And Bitcoin Cash supporters usually seem to indicate that they'd increase it beyond 8 if the 8mb blocks filled up.
Is that sarcasm? It discourages any type of economic activity.
Why would someone invest into or try to start a business when you can become richer by just sitting on your money pile with no risk.
Artificially constricting the supply of money in a non static economy is a bad idea. Like the gold standard just much worse.
It’s hard to imagine a financial instrument that’s less suited to be used as an actual currency than bitcoin. Even going back to the gold standard would be a better idea.
That largely hasn’t happened; transaction fees have dropped as it became a store of value and moved less frequently (and increasingly moved off-chain in tradfi rails).
I suppose where I get lost is that, at least subjectively, I end up treating different anticipated return distributions differently. I want a mixture of risks, both in terms of their covariance and the absolute properties.
When I think of "speculation", I am intentionally shaping only a small portion of my personal portfolio toward high risk, high reward activities. And I only really feel comfortable doing that because a larger fraction of my personal risk is in safer vehicles.
Atop that, I also think a lot about liquidity time bounds. I want access to a reasonable amount of highly-liquid, low-risk investments. I need that flexibility to be safe in the event that I need to buy something.
To my eye at least, I qualitatively differentiate between speculative investments and these liquid/low risk ones. If I felt I only had one kind of risk, I would seek out the other in some proportion.
And I need to do this today or i’ll starve on the street.
I could delay buying a new laptop, but that’s a personal preference. I still need one at some point.
That’s why I would spend my money, because there are things I need or want.
One of them being that El Salvador lost affordable access to the international bond market for a good part of the past years due to higher country investment risk, there were multiple reasons for that that are too long for one comment.
Some for the consequences have been:
The government switched to funding their bonds locally, including a good chunk of the local banks deposits which then the banks had to refinance to a longer longer term.
The government has been taking a good chunk of the pension funds with no interest paid back. Few details about this deal are available because the pension fund administrators and government supervisors have stopped publishing most of the financial reports for months.
I wish I could have a $333m failure like that.
(edit - see also his approval rating - 91% https://x.com/stats_feed/status/1875573928250179666)
One thing i’ve always wondered: If something like Bitcoin was the only currency, then it would be like a direct mapping of 21 Million Bitcoin <-> all global economic activity and goods and services. In that case, shouldn’t its price be relatively stable, and might actually even go down sometimes? Like in big natural disasters increasing the cost of certain goods?
I’m not a crypto zealot, but I’m not a big believer in the idea that the economy needs to be stimulated and I need to be forced to spend my money before it loses its value. I just want to buy what I need or really want.
And in the hypothetical case of having a mapping of “all economic activity” <-> “21M payment units”, then the relative stability of this money might still make investments more lucrative than just hoping for my money to be worth slightly more tomorrow. In this hypothetical scenario it would be more like “my money is worth 1000 eggs today, next month it might be 1001 (if others grow the economy) or 999 (if something unforeseen happens halfway across the globe). So if an investment looks like it might yield the value of 1100 eggs there would still be people to take the risk of investing, no?
In any event, you could still make the case that prior to this bitcoin experiment, the people and economy of El Salvador still were benefiting from a human hand on the monetary tiller, it's just it was that of the US Fed rather than their own officials (elected or otherwise).
This is bad.
> Yet it results in more spending but on what?
Well near target inflation rates (which is a positive non-zero number) it results in a mix between consumption and investment.
This is good.
I used to believe in Bitcoin in the beginning, but the high fees make it impractical to use as everyday currency.
Bitcoin Cash is much closer to what I had hoped Bitcoin would become. It’s the same as Bitcoin, except that it ideologically split exactly for the reason that some people wanted it to behave more like an actual currency, while others invented the “digital gold” narrative.
The only ones who need to have full blockchain nodes are the miners, and for them it’s just another disk in their data center.
I sincerely don't know anything about monetary policy, but I can't imagine that sort of volatility in the value of your currency is considered a good thing.
Do you object to that?
First, if your money supply is the actual asset (and not just backed by it) then it’s even worse, since fluctuations in overall supply of that asset can cause very large valuation changes of the money you own. E.g. if we find a silver deposit 4x bigger than all the silver we already have, then suddenly all the coins people are carrying around are worth 1/5 their previous value. So it makes the currency unattractive to hold. On the other hand, if you run out of coins then as your economy or even just population grows then everything has to get cheaper because there’s only the same amount of coins to buy more stuff. And that encourages hoarding. These two things together make for financial disaster because nothing can really be relied on. And, this wasn’t as much of a problem before countries like the UK industrialized, which led to population explosions across the major powers.
Then again after WW2, when globalized markets became a thing, we saw another wave of industrialization and accompanying population growth, to the point that even asset-backed paper currency became problematic. There’s just not enough gold on the planet to back every other economic output. There’s only about 400 million pounds of the stuff worldwide. Assuming you could even get ahold of it all, you could only use it to back about $200 billion. Between 1950 and 1971 global trade expanded by a trillion dollars. And the global population nearly doubled. And we couldn’t just say “gold is worth more now”. There were treaties in place that defined the price of gold as $35 per ounce (which led to countries like France to try and destabilize our currency by buying up a bunch of our gold, but that’s another story).
But in a fiat system by adopting the currency you add your economic output to the overall system and your currency stability is now tied up in that economic output, so—your output goes down, your people’s belief in your ability to pay also goes down. This works super well in a rapidly-growing economy. There’s always more! More money-printing, more economic output, more debt… but the problem with this is—what happens in a world where things stop growing all the time? We have a few small examples and they aren’t pretty (Greece, COVID, and coming soon—China).
For money to work as a convenient way for people or companies to settle transactions, long-term inflation or deflation does not matter. If A wants cement and has mangoes, B wants pants and has mangoes and C wants mangoes and can do tooth fillings they just need something universally accepted to convert what they have into. And, a bit later, buy what they want. Most money satisfy this, but usually people want more features.
For money to also be a store of value it should maintain its purchasing power. This allows an individual to, say, pay for an education of a child when the child grows up: I can save in today's money and be fairly confident that when the time comes to pay it will cover the (future) cost. This feature is what people tend to refer to as "digital gold" as gold generally maintains its purchasing power over very long times.
For money to enable governments to stimulate society in different ways, money should be deflationary. Easy long term store of value makes people less responsive to short-term government stimuli. Without deflationary money a government cannot print extra money when it overspends or if not enough players want to lend to that government.
The last two tend to cause eternal strife between individualists (who want small government that does not do things people did not explicitly ask for) and progressivists (who want to push the society along the path they see as the best one).
There are more features of money (highly recommend reading "Broken Money" by Lyn Alden)
in fact short of wiring i have not found any service allowing me to send more than that in a day and certainly not with instant deposit
gpay takes 1-5 days to appear in account, i can spend the money i transfer here immediately
No, they aren't.
> The charitable interpretation of how they operate looks like this:
You misspelled “conspiratorial”, and it's not even the most reasonable conspiracy theory.
Tokenized stocks are coming this year.
What I think a lot of people don't realize is that the US government is not very interested in going after people who do tax evasion in the $5-50 m range. People like that can afford lawyers and representatives, it will take years, and never get any headlines. They love to go after people for $5-50k evasion because they just get paid.
When you take out a mortgage on a house its partly because someone took cash they received and deposited it in the bank. If they kept the cash the bank would not have reserves to loan.
This is bad.
In fact, you'll only ever invest in highly speculative investments because they're the only things that might possibly justify the opportunity cost of your currency just accruing value.
This is bad.
This is the same for any currency trading.
I see you.
of course you are just trolling ("LOL") and you are incurious to any evidence or argument that contradicts your straight-from-cable-news talking points.
They're billionaires because they own valuable companies, not because they have actual billions in the bank.
This seems like a very skewed perspective. You work for a salary, I imagine, and you freely agreed to take that job and in return get a salary, even if the company was losing money or its share price was plummeting. I.e. taking a salary because of the security of payments.
Lots of people who invest in businesses lose all their money. You can't point at the very very peak performers who a) didn't lose their money and b) made a really valuable company instead, and decide that they owe you something other than what you agreed you would work for. That's just not how agreements work, and it's also the apex fallacy[0].
Also thinking, since it's extremely difficult to regulate, was wondering if some very clever people with huge holdings have formed a cartel and are doing a lot of price manipulation to prevent it from fully collapsing (maybe even during a rise in price, causing it to drop early to prevent a major run up). But that's just a theory.
However, I find time and time again that HN crows is absolutely unaware of how useful crypto can be in everyday life, so I offer my perspective.
I don't personally believe this will ever happen. BTC has too much legacy cruft. The "digital gold" narrative won out. Day-to-day transactions will happen in a newer, perhaps not invented yet crypto.
Zeke Faux who wrote the book "Number Go Up", a George Plimpton-styled account which was released last year, went to El Salvador and tried to use crypto as currency.
https://www.wwno.org/2023-09-19/tales-from-the-world-of-cryp...
BECKER: ... But also, I just want to point out that in 2021, the president of El Salvador, Nayib Bukele, announced that his government was going to be betting on Bitcoin. And we actually have a bit of tape from him at that year's Bitcoin conference with a lot of cheers from crypto enthusiasts about his government's use of Bitcoin.
Let's listen.
NAYIB BUKELE: Next week, I will send to Congress a bill that will make Bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. And in the medium and long term, we hope that this small decision can help us push forward (CHEERS).
BECKER: And following that announcement, the government of El Salvador encouraged businesses to use Bitcoin. Zeke Faux, you traveled to El Salvador. What did you find out there?
FAUX: ... And people were literally, I was at this conference. People were, it was one of the first ones I went to, people were in tears, and I just, I was like, what is this weird world, and they all said, you got to go to El Salvador, you got to see, it's the future, it's going to help the poor, they're all using Bitcoin. And the listeners are probably asking themselves, "What does this even mean, how does this make sense?" And it doesn't make sense. I got there, and one of the first places I went to was this little roadside store.
And the president had passed this Bitcoin law, which meant that all businesses were supposed to accept Bitcoin as payment. The country's main currency is the dollar, and they didn't abandon that. But they're supposed to also use Bitcoin. And I went to the store, and I pulled, I grabbed, I asked for a bottle of water.
And the clerk gave it to me, so I'm holding the water. And then in my terrible gringo Spanish, I said, "Puedo pagar con Bitcoin, por favor?" And the clerk just said, "Basura!" Trash! And grabbed the water out of my hand, and just walked away. Get out of here, you dumb tourist. I don't want to use your Bitcoin.
And that was the attitude I got all over the place. Despite this huge push from the president, the currency was totally rejected by the people. Stores would only use it begrudgingly. And what using Bitcoin means is that they would have a special payment terminal and I could use an app on my phone to send my Bitcoins to them instead of using my credit card or my dollars, but the terminals never worked right.
They're very slow on there and people complained. "Hey, the price of Bitcoin goes up and down a lot. Why would I want to accept that for my surf lesson or to sell you a beer? How about you just give me some dollars?" So the ones that did accept that it was just as like a courtesy for the annoying Bitcoin tourists, which I became one of."
Right now they are at around 0.15$. That's too much IMO to go buy a 1$ coffee with bitcoin, but it would also be 0.15$ if you were buying a 2000$ macbook, a 60000$ car or a 2M$ house.
There were no famines in the USSR from 1947–1991, but there was a variety of considerations such as monarchy, civil war, 2 world wars, and anti-communist sanctions from the 1890-1947 period, so if anything, it appears that the evidence would imply communism ended the famines, not caused them.
Bitcoin (or any other commodity/crypto) being valued well and being a "good" investment is completely detached from its function as a national currency. One does not (and should not) imply the other.
You need something to exchange things with (currency), and you need things to exchange. The currency is the medium of exchange, the journey, not the destination.
Assad and Ghadaffi destroyed Syria and Lybia respectively being asshole dictators that caused revolutions and that attempted to stay in power by claiming over mountains of dead Syrians and Lybians. The west didn't interfere much in Syria so Assad was able to stay in power a while longer and kill many more of his own citizens. The west messed up the post revolution period but letting Gaddafi do what he wanted would have lead to a worse situation
It's predominantly used for speculation. Back in the real world, it's the only purpose it has. There is no way around it.
The mental disturbance angle is also compounded by the far-fetched conspiracy theories on how El Salvador ditched Bitcoin because "the man" wants to kill it.
Because it was a failure in each and every single thing it was claimed it would achieve, specially the fact that everyone in El Salvador ditched the system once they cached out their sign on bonus.
> You should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but it's giving you different things.
Now think of this on a large scale. You want hot potatoes going around. That means they'll be moving at a reasonably fast pace, changing hands and going places. You need your money to move so that it reaches all parts and doesn't stagnate places. That's not to say that savings, like the type you'd do at a bank, are bad for the economy, but that is to say that if everyone were to save a bunch of money under a mattress, that would be bad. That would mean that a solid chunk of currency in the economy is frozen and effectively useless to everyone but its owner until they decide to take it out and spend it.
https://en.wikipedia.org/wiki/Deflation#Historical_examples should give you some other examples of situations in which economies have been in deflation.
Again, controlled small inflation is the goal. Yes, this can, in the wrong hands, turn into too much inflation, but this is the same the other way too. These are not static states; they're highly dynamic systems that can spin out of control in either direction. And all things considered, it's easier to deal with high inflation than it is to deal with high deflation. It's playing with fire, but there is no other way, and if you find such a way, I and many others would be rather interested in hearing it.
Something to consider: economists' study, learn theory, and perform controlled experiments so that we can learn about these things. These are not unknowable truths of the economy that we can only roll the die and see what happens. And something that is often not considered by hard currency supporters is the results if things turn sour.
After all, you can have years upon years of nice solid performance of an economy built on whatever, for any sort of reasons, but the true assessment of that whatever as a means to serve as the currency for a nation, is how it performs under stress. Our modern fiat currencies and the ways we control them have been built on the ruins of previous methods and currencies. These ruins are costly and violent to a nations progress. This is not something you want to "wait and see". So instead of just thinking about the functions of bitcoin "during the day", while things are normal and people are behaving well, think also about that same currency at night. Think about what may happen if some exogenous shock hits the economy (not related to the currency itself), think oil embargo in the 70s. How will your economy deal with that? What are the tools at the government's disposal to get the economy repaired and back on track? Do they have any recourse? Do they have to just wait it out? This is beyond human lives at risk, this is human progress, human time.
Therefore, it's not about what people like, it's about what keeps the whole system as successful as possible for as long as possible. Economic systems are complex and unintuitive beasts, this is not an area that benefits from great civilian oversight and control. If your system works amazing for 20 years but then has a horrendous crash that wipes 10 years off of your progress, how good was it really?
In addition, the whole country ditched Bitcoin as a payment system as soon as they cached out their sign on bonus. How is a national currency depicted as a success if no one uses it at all once they cached out the free money?
Crypto bros need to stop moving the goal posts they themselves plant arbitrarily and against any reason.
You need to be functionally illiterate to draw that take from the announcement. Read the thing, be informed.
https://www.imf.org/en/News/Articles/2024/12/18/pr-24485-el-...
I think crypto proponents in general share this inability to understand the fact that one of the most basic traits of money is stability of it's value, and anything that fails to meet this basic requirement is simply useless as a currency.
I didn't even specify if I thought you were pro or anti crypto - I just find that most conversations around crypto are dominated by statements of "the other side of this just doesn't understand basic facts like I do" instead of actually stating what the facts are and how they apply to the situation that would help someone learn what's being discussed.
I may very well be the stupid one here, and you may be quite a bit smarter than me, but I don't know because I still don't know the point you're hinting at making.
The only thing that separates BTC from all the derivative shitcoins is hype and stories we tell about it. Bitcoin is itself interchangeable with an infinite number of related algorithms/schemes.
Gold extraction definitely has its problems, but it's a fundamental element of the universe.
In 100 years, I know which one will definitely still hold value.
It is very good that the default thing to do with excess money is invest it.
Alternatively, if transaction fees stay low, there might be very little incentive to secure the network with hash power and you could end up with fewer and fewer miners controlling the network and a 51% attack becomes quite feasible.
I'm really curious how this will play out over the next 100 years.
The community needs to self police and remove this problem if they ever want me to give it a third chance. There are several other fundamental issues in crypto, so not sure this will be enough on its own to reach mainstream adoption
For example, I don't want my transaction history on a public ledger, encrypted or not
I know that selling 23% of a company in one go would move the market, but a 90% haircut would be bonkers.
Or are you claiming TSLA is special, and the haircut would be 90% just for Elon and just for TSLA because that particular stock is super overvalued due to his celebrity and reality distortion field? That seems a little more believable, but this was a discussion on net worth of generic billionaires to start.
There is also a pretty obvious way to avoid the volatility in the interim when using it as a currency: Don't use it to specify prices and don't hoard large quantities of it. If you have a Bitcoin wallet with the equivalent of $100 in it, it doesn't matter that much if it goes down to $50 and then up to $150 and then back to $100 again over the course of a year, because +/- $50/year is not a big deal. Meanwhile we have computers now, so prices can be listed in US dollars or any other currency and then use the live exchange rate when paying in cryptocurrency, while still accepting it widely.
And "it has no other purpose" is a weird claim. It has an obvious purpose: It allows you to exchange value without permission or identity. The "it's a public ledger so there's no privacy" claim is silly; your wallet address is public but you can have arbitrarily many of them, there is nothing inherently tying them to your identity, and there are known implementations (e.g. Monero) that provide even stronger privacy. These are things the existing banking system doesn't provide, and from the perspective of countries that actually respect the privacy of their citizens (or any citizens who want their privacy protected), are features.
Try starting an independent one if you think otherwise.
But there still needs to be some mechanism to limit wealth inequality or we still get the inevitable conclusion.
The US minimum wage hasn't changed in 16 years!
Which means many of these peak performers are built on the back of poverty, people who don't have the luxury of "freely agreeing" to take their labor elsewhere.
It's just not fair at all. Governments are funneling money to the rich hand over fist. It's obvious who they represent and who they don't.
You have to agree that trickle down is not trickling down.
It was possible. That’s not the same as saying it is still possible at this debt level with the massive shortfalls in social security and other entitlements.
I do not think it’s possible without also seriously eroding the debt burden through sustained higher inflation. That horse has left the barn.
El Salvador wants to borrow money. The IMF is willing to lend it, but sees El Salvador's Bitcoin policies as a risk to getting their money back.
From the IMF's perspective it is a risk to El Salvador's economy and therefore the repayment of the IMF's loan.
~ You may want to review the Hacker News Guidelines for commenting. Your comment is out of line with a few of them. https://news.ycombinator.com/newsguidelines.html
The idea behind BTC is very valid, but they can be more like the old ECU or CFA/CFP not money you normally use for day to day stuff.
Why would someone invest into or try to start a business when you can become richer by just sitting on your _property_ pile with no risk.
Yeah, I guess.
If you own a disproportionate amount of INflationary currency, you are, you know, still a rich person who can afford investments, investment consultants, tax optimization experts, have preferential treatment from banks and personal relations with the government employees, so you're good anyway.
Whereas if you're poor, you don't even have a chance to save enough to invest a little bit, because whatever you save today becomes useless paper tomorrow, so you're forced to spend, thus enriching service and goods providers, that is the rich.
In a deflationary currency you actually have a chance to save some money for an investment, plan for tomorrow, or even next year, and not spend everything today while money still have today's value.
As far as deflation in the 1800s, are you referring to in 1818 after a credit collapse cratered England's economy and then spread to the US and put it into a recession; or maybe the Panic of 1837 which triggered a depression until the mid 1840s?; or do you mean the Panic of 1873 which triggered the Long Depression that lasted until 1899?
Which one of those are good examples we should look to?
BTC has shown itself magically profitable indeed, but its value could only be kept by the ability of holders to keep the asset. Most marriages and some jobs will endure even in the toughest times.
how could panics be what I'm talking about? we are talking about price levels, or I'm trying to at least.
It might. It would be significantly less likely. Basic economics. Unless you don’t think that most people are at least marginally rational..
> In that case, shouldn’t its price be relatively stable, and might actually even go down sometimes
That’s true only if there is no economic growth. Gold standard had a similar problem.
Well you're accepting payment for something people are expecting to hold value. Bitcoin only has value to a small subset of people with money. I'd definitely judge you for selling it if you have options for financial transactions via SWIFT.
The incentive design of Bitcoin assumed that it would be used as cash, so that transaction fees could take over as the main source of revenue for the miners that secure the network. As a “store of value”, it doesn’t generate enough transaction fees to secure the network.
The "store of value" trait of money has nothing to do with the investment angle. It literally means value you store. It's the assurance that it retains it's value so to allow you to use it in the future to purchase something just like you could do today.
This isn't about a decision to buy bread and milk for your breakfast. It's about the decision on whether you invest in a grocery store vs let your money sit in a bank. If doing nothing is more profitable than doing something then society as a whole will gravitate towards generating no economic activity. This has disastrous consequences because the majority of people in a society do not have the luxury of having investments to live off their dividends.
And you thought OKRs were bad! Ha ha ha, reports suck? Let's really make reporting consequential for individuals, like in China.
The irony is just that "reporting" is not a popular human activity, and why we have things like GAAP and try to enforce the rule of law...
Second, it is not even clear that any US citizens will be shipped off. Bukele is just offering it and Trump said he isn't sure if it will happen.
Third, US citizens are able to serve their sentence in a foreign country if they so choose since 1977 [1]. Obviously this situation is not the same, but the US does send its citizens to foreign prisons sometimes.
[1] https://travel.state.gov/content/travel/en/legal/travel-lega...
I don't mind this, because minimum wage is a national minimum. States (and even more fine-grained than that) need to have contextualised minimum wage, or it's just silly. That's why it hasn't changed. Minimum wage increases wages at the expense of reducing employment, for any job that isn't worth that wage. You can't increase the national US minimum wage to what would get you an apartment in California and expect jobs to exist in Appalachia.
Honestly, the national minimum wage seems almost pointless. States should handle it, as they can contextualise at least a bit better.
And it not changing isn't evidence of anything when state-level minimum wages exist.
> Which means many of these peak performers are built on the back of poverty, people who don't have the luxury of "freely agreeing" to take their labor elsewhere.
Thus I don't think it means that. And also - your false dichotomy of you're either a wealthy business owner or you're on national minimum wage is not helpful either. People are paid what they can negotiate. Companies pay what they can negotiate. Companies exist if they charge a low enough price for their level of service or product. It's a tri-party system. The existence of other companies in in-demand businesses is what drives up wages, as if you don't like your job you can move, and people do. That's why I would say where possible, things that stop new companies springing up should be removed. Thinking it's all about national minimum wage is honestly the wrong approach, in my opinion.
> You have to agree that trickle down is not trickling down.
I don't know what this means. I didn't mention anything trickling down.
I agree with your arguments about why some inflation is desired, it incentivizes people into spending their money, this makes it so that people engage in trade more often and, when voluntarily made on the basis of sound information, trade is beneficial to both parties. The net positive done in the world increases, at the small cost of some inflation, that is, the loss of some of your net worth if you rest on your laurels keeping your cash.
All this being said, for me there is a great asymmetry in the demonstrable harm done by inflation vs deflation. The list of people who have suffered the consequences of irresponsible governments is just too large, with you and me being at risk of suffering from them during our lifetime. The temptation is just too large to mishandle currency. While deflation is something that we will very hardly experience in our lifetime, barring some massive technological breakthrough that changes the means of production forever.
Moreover, there's no reason to believe that an economy can't work with deflation. Believe me, it CAN work with extreme inflation where calculation into the future is made very hard, it can surely work with deflation. Yes, some psychological aspects will be new, like people holding off purchases because their money will be worth more in the future, but that will not necessarily translate into a wide-scale halt in purchases. People will still want things more right now than the equivalent of their increasingly valuable currency. This new modality will introduce problems, no doubt, but these will be overcome by new adaptations. There is simply not enough evidence to ensure that a system like this can't work.
I agree that one ought to proceed with care in these matters because a system that seems to work in the beginning might fail catastrophically later on. However, as any change, one ought to weigh the negative risks against the benefits. With the promise of cryptocurrency we're entering a new world. One in which each individual will be more empowered and global commerce will be facilitated. The complexity of the world shows us that no matter how much optimism or pessimism you bake into your decisions, for some things, you will just never know for sure.
Lastly, another problem with inflation is that it favors the elites. Possibly, this is one of the biggest reasons why it's so widely disseminated. Those close to the central banks, those that understand about finance, those that seek power for themselves at the expense of others, among others. This kind of centralization of power motivates individuals at the top to sell the idea to the masses as if it's for their own good, and sometimes it is, but you can't deny that the incentives do not point to this being something that overwhelmingly favors the disenfranchised and the ignorant.
Does that mean they're smarter? I don't think so. It's a bet they're willing to take and time will tell who was right.
It's like saying - "if we have some money that keeps going up in value, we won't need to work anymore and unemployment figures will go up - that's terrible - we must not allow it to happen!"
Remind me, why is the target inflation rate 2-3% again? It couldn't be that it's the amount of money creation they can get away with without devaluing the currency so much that it destabilises into hyperinflation could it?
I'm just having fun - I'm sure I'm completely wrong
[1] Read this for a more comprehensive view of deflation from an economist who lived through it: https://www.amazon.com/Economic-Changes-Production-Distribut...
You're operating off a false premise. Do you think all economic activity would be less profitable than the interest rate offered by deflation?
The whole point of investing in any business is to make a return. Giving businesses competition in the form of deflationary currencies will not eradicate businesses from being formed, and there's no evidence to suggest these businesses will be less profitable than holding a deflationary currency.
We see this in various cryptocurrencies claiming to be deflationary with the concept of 'yield', which shows investing to be a function of their wealth, interest, and expectation of return. Inflation does not need to be in the equation for this type of development.
You are both incorrect in different ways. Bitcoin as legal tender in El Salvador was not a well-adopted initiative and thus they were okay with axing it. The loan was not to deal with the problems of their behavior, but to push more important things in El Salvador's agenda.
Because empirically it seems to yield a pretty sustainable mixture of consumption, investment, and savings, while also not risking a wage-price spiral.
You tell me what the target inflation rate should be and point to some moments in history informing that target so I can go read about them.
I was not implying that "you're either a wealthy business owner or you're on national minimum wage". You can safely substitute a "middle class" person, or even a "rich, but not super-rich" person, for "on national minimum wage", because in a few years I believe the middle class will completely cease to exist.
This is already happening and is actually the inevitable conclusion of all the funneling of money towards the super-rich and the subsequent increase in wealth inequality.
I wasn't even actually talking about business owners, but the super-rich that those business owners borrow money and pay interest to.
https://en.wikipedia.org/wiki/Trickle-down_economics
That's the trickling down I'm talking about, which you didn't mention because it appears you don't think that som trickling down is even necessary.
Some trickle down or other mechanism to limit the rich from owning everything is necessary if that inevitable outcome of a tiny group of people owning absolutely everything is to be avoided.
Do you disagree with that?
I believe you're alluding to some kind of nearly perfect system where large businesses have not created artificial regulatory and other moats to protect their business and hamstring competitors.
eg, imagine a large factory that employs most of the people in an area. Potential workers for that factory do not have the ability to negotiate a fair wage, and also don't have the mobility to uproot their entire life to move somewhere else. Also another company cannot reasonably expect to move in and out-compete for the workers in that area. Thus the fictional factory is in a massively favorable position to "negotiate" wages for its workers.
I think we have largely differing views on the fundamental fairness of a system where low-paid workers are expected to negotiate with multinational corporations that already have all the advantages in any negotiation.
Those corporations are also able to monetize the profits from those workers productivity to actively lobby governments for even more favorable conditions in those "negotiations".
I believe it is a very unfair system.
I doubt we will end up finding a middle ground here if you do not think a system where the super-rich are not limited in some way from accumulating wealth is unfair.
Starting again with a hard money, we would thrive, instead of being enslaved by a system that continuously stealthily, steals the value out of the fruits of our labour (at a rate of ~7% year) and gives it to the bankers and those closest to them.
Checking now :
https://ycharts.com/indicators/bitcoin_average_transaction_f...
This says, afaict, the average BTC transaction cost today is $1:40 USD
The 5yr chart shows it spiking at $128 in April 2024.
If BTC transactions reliably cost 15c per transaction, it might make for a viable electronic money... but that is clearly not the case, so I think my point stands.
https://www.hawaii.edu/powerkills/COM.ART.HTM has more details, and https://en.wikipedia.org/wiki/Category:20th-century_famines lists some other examples, along with the odd non-communist famine. But none in liberal capitalist economies.
Well that implies that you are more or less economically illiterate. I’m not talking about property and even renting residential/commercial property (as relatively safe as it is) does provide an actual service.
Anyway.. a very basic example, imagine you have $1000000, you can:
- keep it under your bed and lose 2% every year
- invest it into real estate etc. and make e.g. 4% every year.
- invest into the stock market and make 6%.
Now with a deflationary currency like bitcoin (or gold back in the mid to late 1800s) you can just hoard it and conservatively make 2-3% every year* invest into safe bonds and gain another 3-4%. Business would need to grow at an extremely fast pace to be able to attract much capital in such an environment.
* of course it’s only hypothetical. You’d need the economy to grow and productivity to increase YoY for this. That would be unlikely in any economy that used Bitcoin as its primary currency.
> Would you have supported Jonathan Swift's "Modest Proposal" too, at the time? Or sterilizing poor people? I mean, those are perfectly logical suggestions that would work, wouldn't they?
You have erected a startling number of straw men in your response. I'll ignore them.
We should do things that both work and benefit society. We should not do things that don't work. Here's a short an non-exhaustive list of "progressive" things that don't work: restorative justice, tolerating crime, allowing the destruction of the commons by the mentally ill and addicted, allowing criminals to be free and wreck society due to legal technicalities, bureaucracy, and corruption.
And thus, as I wrote previously, the word "progressive" seems to have fully inverted. Things that enable or create progress are called regressive, while things that are actually regressive and destructure are called progressive.
People are not paying into bitcoin expecting to redistribute their wealth to the insiders.