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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 2 comments | 04 Feb 25 00:00 UTC | HN request time: 0s | source
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ggm ◴[04 Feb 25 00:12 UTC] No.42925329[source]▶
Speculative asset class fails as non-speculative legal tender class.

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.

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codethief ◴[04 Feb 25 01:39 UTC] No.42926355[source]▶
> Speculative asset class fails as non-speculative legal tender class.

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.

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aydyn ◴[04 Feb 25 02:24 UTC] No.42926867[source]▶
What currency is stable in value? Certainly not the U.S. dollar.
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mystified5016 ◴[04 Feb 25 02:44 UTC] No.42927043[source]▶
The USD doesn't frequently lose all or nearly all value as we see from cryptocoins. My $10 today will be worth $10 tomorrow barring nuclear war or an apocalypse.
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1. zomglings ◴[04 Feb 25 05:19 UTC] No.42928346{3}[source]▶
And 1 bitcoin in your possession today will be worth 1 bitcoin in your possession tomorrow, barring a successful and very expensive attack on the network.

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.

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2. acdha ◴[04 Feb 25 18:34 UTC] No.42936645[source]▶
This is only true to the extent that your debts are denominated in Bitcoin. Until people want it for purposes other than speculation what matters is the exchange rate because that’s what everyone uses for their expenses.