Most active commenters
  • AnthonyMouse(5)
  • roenxi(4)
  • motorest(4)
  • dragonwriter(3)

←back to thread

927 points smallerfish | 25 comments | | HN request time: 0.002s | source | bottom
Show context
portaouflop ◴[] No.42926658[source]
IMF gave them 1.4 billion to abandon the “experiment”:

> 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

replies(30): >>42926697 #>>42926752 #>>42926769 #>>42926916 #>>42927021 #>>42927075 #>>42927122 #>>42927290 #>>42927312 #>>42927357 #>>42927505 #>>42927532 #>>42927536 #>>42927642 #>>42927745 #>>42927985 #>>42928058 #>>42928513 #>>42928720 #>>42928756 #>>42928806 #>>42929654 #>>42929949 #>>42930337 #>>42930726 #>>42930753 #>>42930779 #>>42930984 #>>42934734 #>>42935466 #
stephen_g ◴[] No.42926769[source]
Despite that interference, from everything I’ve read though it’s hard to describe the bitcoin experiment as anything else than a massive failure…
replies(4): >>42926864 #>>42926901 #>>42927899 #>>42933006 #
roenxi ◴[] No.42927899[source]
If I could convince someone to give me 1.x billion to change my behaviour, I would consider that behaviour a massive success without much further thought. It isn't a huge amount of money at the scale of a national economy but >$1 billion for nothing is a win.

Although of course it is unknowable how much of that money was bribe and how much El Salvador would have gotten without additional leverage.

replies(6): >>42927976 #>>42928079 #>>42928081 #>>42928332 #>>42928428 #>>42928763 #
1. dragonwriter ◴[] No.42928079[source]
> If I could convince someone to give me 1.x billion to change my behaviour

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.

replies(2): >>42928131 #>>42956485 #
2. roenxi ◴[] No.42928131[source]
There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find.
replies(4): >>42928245 #>>42928251 #>>42928316 #>>42928595 #
3. tw04 ◴[] No.42928245[source]
The thing they have in exchange is millions of citizens that the entire globe doesn’t want to see starve to death and the US in particular doesn’t want to deal with mass amounts of illegal migrants when their economy collapses.
replies(1): >>42928748 #
4. pajko ◴[] No.42928251[source]
The IMF are tough guys, countries do not want to owe them, but usually don't have better options. They don't give "loans" and impose rather strict policies on everything. https://actionaid.org/publications/2023/fifty-years-failure-...
replies(1): >>42928852 #
5. The_Colonel ◴[] No.42928316[source]
IMF is the lender of last resort, their loans pretty much always come with strings attached which provide some assurance that the loan will be repaid.
6. motorest ◴[] No.42928595[source]
> There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find.

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.

replies(3): >>42928792 #>>42929008 #>>42929102 #
7. watwut ◴[] No.42928748{3}[source]
I don't think current US leadership thinks more then 5 days in advance or cares about people dying.
replies(1): >>42928968 #
8. roenxi ◴[] No.42928792{3}[source]
>_> Cheeky FYI, but cognitive dissonance is the "mental disturbance people feel when they realize their cognitions and actions are inconsistent or contradictory" [0]. While I'm certainly not above that, in this case I don't think I even made and defended enough claims here for them to be contradictory in principle and you don't seem to be arguing that. Consider going with the more straightforward "I disagree!" or "That isn't correct!".

[0] https://en.wikipedia.org/wiki/Cognitive_dissonance

replies(1): >>42936294 #
9. AnthonyMouse ◴[] No.42928852{3}[source]
The IMF are an arm of the US "diplomatic" apparatus. The charitable interpretation of how they operate looks like this:

  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.
The uncharitable interpretation of "2)" is "the country is doing alright so the US overtly or covertly causes problems for them so they become in trouble".

Basically, the IMF money is the carrot you get for bending the knee. The stick can be the CIA or other things.

replies(3): >>42928980 #>>42930629 #>>42933968 #
10. labster ◴[] No.42928968{4}[source]
US Leadership is focused on getting us to Mars, all of that takes long-term planning. Sure, a few of us will die in the process, but come on, a flag on Mars! There is a Planet B!
11. warkdarrior ◴[] No.42928980{4}[source]
So your claim is that US administration through the IMF is forcing El Salvador to drop Bitcoin as a national currency. The same US administration that proposed creating a "national digital asset stockpile"??!? (per https://www.cnbc.com/2025/01/23/trump-signs-executive-order-... )
replies(2): >>42929013 #>>42929467 #
12. AnthonyMouse ◴[] No.42929008{3}[source]
> 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.

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.

replies(1): >>42936193 #
13. AnthonyMouse ◴[] No.42929013{5}[source]
The IMF agreement requiring them to do this was from December, i.e. the prior US administration.
replies(2): >>42929052 #>>42933988 #
14. roenxi ◴[] No.42929052{6}[source]
And, regardless, "you do this, we do that" in no way unusual for the US's foreign policy. Eg, the US military insists on democracy onshore and is mildly opposed to democracy in the middle east. Neutral at best. Any democracy they like in the ME as long as it never votes for any policy that inconveniences the nearest US general.
15. seviu ◴[] No.42929102{3}[source]
Why are you guys saying adopting Bitcoin was a failure? Because the wallet used by its citizens is too complex and nobody uses it?

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.

replies(1): >>42936362 #
16. rvba ◴[] No.42929467{5}[source]
USA's own stockpile talk is to pump Doge and help the oligarchs get richer.

El Salvador's cryptocurrency was helping other people (not sure if actual citizens), so it had to go.

17. _Algernon_ ◴[] No.42930629{4}[source]
That is also (to a rough approximation) how all foreign aid works. It's not specific to the US.
18. dragonwriter ◴[] No.42933968{4}[source]
> The IMF are an arm of the US "diplomatic" apparatus.

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.

19. dragonwriter ◴[] No.42933988{6}[source]
The IMF isn't run by the US any more than it is run by Russia or any of the other major members (those that have their own executive-director rather than being in a group that together shares one.)
replies(1): >>42940065 #
20. motorest ◴[] No.42936193{4}[source]
> This is essentially the other way around. It's volatile if it's predominantly used for speculation rather than as a currency, (...)

It's predominantly used for speculation. Back in the real world, it's the only purpose it has. There is no way around it.

replies(1): >>42939659 #
21. motorest ◴[] No.42936294{4}[source]
It is a textbook case of cognitive dissonance. For example, you are somehow trying to hold contradictory claims on how Bitcoin's clear failure as a currency is somehow a sign of it's success.

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.

22. motorest ◴[] No.42936362{4}[source]
> Why are you guys saying adopting Bitcoin was a failure?

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.

https://en.wikipedia.org/wiki/Bitcoin_in_El_Salvador

23. AnthonyMouse ◴[] No.42939659{5}[source]
That it's predominantly used for speculation is the reason it has had high volatility, which is the point. Increased use as a currency would cause the volatility to decline, because when the majority of the value is held by a hundred million people each holding three-digit numbers of dollars worth, they don't try to predict the market and dump their holding of pocket money. So volatility not only doesn't preclude use as a currency, wider use as a currency solves the volatility.

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.

24. AnthonyMouse ◴[] No.42940065{7}[source]
"Large international banking things have strong ties to large governments" is kind of a weird thing to dispute.

Try starting an independent one if you think otherwise.

25. derangedHorse ◴[] No.42956485[source]
> it wasn't an incentive to change the behavior, it was a loan to deal with the problems caused by the behavior.

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.