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My prediction. This won't be used hardly at all. Why use bitcoin when the USD is also legal tender and superior as a currency in nearly every way? About the on
by eloff 5y ago
My prediction. This won't be used hardly at all. Why use bitcoin when the USD is also legal tender and superior as a currency in nearly every way?
About the only thing you can do more easily with bitcoin is buy other cryptos and send it across borders - sometimes.
I would also predict that the failure here would finally get people to stop thinking it's a currency. But I doubt it.
- bubersson 5y agoIt's pain in the ass and quite extra bit of fees to send money from US to El Salvador. Even when the currency is the same. So using Bitcoin is presumably much better in this situation. 23% of El Salvador's GDP is from remittances, so this is a large use case.
- eloff 5y agoBitcoin is not cheap either to send, but it has an advantage here I think in fees. The volatility on the other hand could be problematic.
- JohnJamesRambo 5y agoUSD has this little problem and it hasn’t even begun to manifest yet. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL
- SantalBlush 5y agoThis chart only looks like a problem for those who don't understand what the Fed does.
- eloff 5y agoMaybe, maybe not. Time will tell. This has been happening since 2008 with no serious repercussions.
- rawtxapp 5y agoMy car's "check engine" light has been on for a while now, but it still runs with no serious repercussions, guess I can ignore it. You see how that logic would be flawed?
- imtringued 5y agoIn this case the check engine light has been on because you have been running your engine on too little oil (inflation).
- rawtxapp 5y agoWell if I keep running it like this for long enough, the engine might end up being destroyed beyond point of no return is the point I guess.
- eloff 5y agoMaybe it's just the light that's broken. The loose monetary policy might cause higher than desired inflation and the Fed might lose control of it. But we said that in 2008 and it didn't happen. We might be wrong again.
- PragmaticPulp 5y agoNo, that graph only shows a discontinuity because the definition of M1 money supply was changed on that date. They explained it fully here: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec... Sharing the graph without the context is misleading.
- deleted 5y ago[deleted]
- nairboon 5y agoBut the money was still printed as you see in the M2 supply: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
- atq2119 5y agoI seriously doubt that the money was printed. It's all electronic nowadays. There's so much confusion and cargo-culting around money, it would serve as well to use accurate language. The money was created, but not printed. This is significant because "printing" evokes a picture of the money being distributed to people who then spend it, which is not quite the case here.
- Acrobatic_Road 5y agoIt makes no difference whether the money was printed or "created".
- imtringued 5y agoIt makes a huge difference because creating money follows regulations, "printing money" means you are ignoring those regulations.
- SantalBlush 5y agoActually, it makes an enormous difference. The supply of money that is created by banks can be increased and decreased through Fed operations. That means when inflation becomes a threat, the Fed can reduce the money supply, thereby reducing the money in circulation and reducing inflation risks. Seriously, this is one of the Fed's primary tasks, to control inflation through monetary policy. It's sad how many people on HN fail to understand this.
- imtringued 5y agoIt's two charts stitched together. You can't really read anything into it. Yes, the chart is useless for periods spanning over Feb 2020 to Jun 2020 and it should make you suspicious but not because because of the actual information being presented, rather you should be suspicious because messing with the charts makes it difficult to see what is being hidden.
- MithrilTuxedo 5y agoUSD requires either a bank account or physical cash. This just needs a network connected device.
- splintercell 5y agoNot true. Strike requires KYC, just like a bank does.
- vidarh 5y agoStrike is not a requirement. The proposal is to allow Bitcoin payments, not specifically Strike.
- AlexandrB 5y agoIn practice, what potion of people store and manage their own wallet on their own hardware? Isn’t that usage pattern extremely rare? If so, what’s the difference between having a bank account and a Coinbase (or other exchange) account?
- cdiddy2 5y agowell according to this https://www.statista.com/statistics/1011424/el-salvador-bank-account-ownership-rate-type/ https://www.statista.com/statistics/1011424/el-salvador-bank... only 30% of adults have a bank account to begin with. Probably a lot easier to setup a bitcoin wallet
- NaturalPhallacy 5y agoIt's absolutely easier. It just requires a computer connected to the internet. There are billions of those. A bank account requires all kinds of state sanctioned proof which subjects you to authoritarian monitoring, which is by desing.
- eloff 5y agoWhat's wrong with either of those? And why are they harder than digital wallets and exchanges?
- Geee 5y agoThey want to limit their reliance on the US dollar. Also, 22% of their GDP is remittances, and remittance fees can be up to 50%. From the bill: - Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador - That in order to mitigate the negative impact from central banks, it becomes necessary to authorize circulation of a digital currency with a supply that cannot be controlled by any central bank and is only altered in accord with objective and calculable criteria
- tormeh 5y ago> [...] and send it across borders - sometimes What are the exceptions?
- Faaak 5y agoMy thoughts exactly. Who, in their sane mind, would buy a 2$ beer in bitcoin and pay 10$ in transaction costs ? It's crazy