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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 3 comments | 04 Feb 25 00:00 UTC | HN request time: 0.025s | source
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ptero ◴[04 Feb 25 00:17 UTC] No.42925410[source]▶
That's heavy editorializing:

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.

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yalogin ◴[04 Feb 25 00:46 UTC] No.42925759[source]▶
Looks like a fair take to me. They are not forcing people to accept it anymore because it didn’t work. It was never supposed to work.

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.

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paulgb ◴[04 Feb 25 02:04 UTC] No.42926628[source]▶
The trouble is, it needs to be more than that if it is to survive. Since inception, mining has mostly been subsidized by new bitcoin, which is capped by design (and about 95% distributed).

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.

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1. rsynnott ◴[04 Feb 25 11:53 UTC] No.42931214[source]▶
> The trouble is, it needs to be more than that if it is to survive.

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.

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2. paulgb ◴[04 Feb 25 13:23 UTC] No.42931975[source]▶
I’m not talking about losing mindshare, I mean in the literal sense that transaction volume is necessary for Bitcoin to avoid an attack on the network. The incentive system that secures it is designed to increasingly rely on transaction fees increasing over time to make up for the diminishing pool of unmined Bitcoin that currently subsidize network security.

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).

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3. rsynnott ◴[04 Feb 25 13:29 UTC] No.42932039[source]▶
Yeah, but what I mean is, if bitcoin went away tomorrow, why would anyone care? Advocates of cryptocurrency as currency, I think, have largely already gone beyond bitcoin in any case at this point, and the speculators could just move on to the next speculative asset.