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Remittances, things like wire transfers, account for 22% of their GDP. Bitcoin will give that money back to the people with the way lower cost of transfers, es
by dadoge 5y ago
Remittances, things like wire transfers, account for 22% of their GDP.
Bitcoin will give that money back to the people with the way lower cost of transfers, esp through the Lightning Network that is planned to be widely used.
Elizabeth Stark boldly said 7 yrs ago and Bitcoin is like TCP and needs an http, and then built Lightning on top of Bitcoin and this is super exciting to see.
EDIT: removed “fees”, it’s just remittance based
- gjulianm 5y agoIf I'm not mistaken, that 22% is not fees, but the actual wire transfers from people abroad [1,2]. IMHO, it doesn't indicate that transfers are too expensive, but that a lot of people can't find enough work or support in El Salvador and they need to rely on family/friends that emigrated. I don't know how that is going to be solved by Bitcoin. 1: https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=SV https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?lo... 2: https://www.imf.org/external/pubs/ft/bop/2005/05-09.pdf https://www.imf.org/external/pubs/ft/bop/2005/05-09.pdf
- dadoge 5y agoThey will literally have more money in their pockets. Good things happen when people have more money in their pockets - people save more, invest more, build more.
- ceejayoz 5y agoI have a sneaking suspicion the folks with "more money in their pockets" from this are most likely to be President Bukele and his friends.
- dadoge 5y agoPayPal charges in to 10% for transfers of USD to Eur in Spain. Check you financia privilege before making comments like that
- ceejayoz 5y agoWhy would you use PayPal for remittances?
- dadoge 5y agoJust one example, PayPal is also for peer-2-peer transfers
- deleted 5y ago[deleted]
- ceejayoz 5y agoThe World Bank provides a table of remittance fees to El Salvador. https://remittanceprices.worldbank.org/en/corridor/United-States/El-Salvador https://remittanceprices.worldbank.org/en/corridor/United-St... MoneyGram is free if you do it to a bank account. https://imgur.com/a/6B5G2ax https://imgur.com/a/6B5G2ax
- dadoge 5y agoToo bad 70% of the population does not have a bank acct there
- ceejayoz 5y agoThat sounds like an easier problem to solve than tapping a volcano to mine Bitcoin. Perhaps the President should focus on that?
- pietrovismara 5y ago> Perhaps the President should focus on that? If his actual goal was to improve people's lives, perhaps...
- kerng 5y agoBitcoin gives them a free bank account. A bank account most can't have or afford.
- garydevenay 5y ago> the folks with "more money in their pockets" I would argue that the population who can now operate and opt-out of a USD system where their money is being debased by 20%+ in the last year by a foreign government will be quite a bit better off.
- ceejayoz 5y ago> opt-out of a USD system where their money is being debased by 20%+ in the last year You know Bitcoin has taken a 40% tumble in the last month, right?
- garydevenay 5y agoValuation and debasement are two very very different things with very different effects. The US created 20% of all the dollars that have ever been created, ever– last year. This is infinitely more harmful than a reduction in price compared to another currency.
- bogota 5y agoThis seems to be a more and more common “argument” these days. X is happening and it has benefits for Y but it probably has more benefits for Z who i don’t like so its bad. Additionally ill ignore your point completely and only address Z now.
- defgeneric 5y agoNo, it's a growth-oriented move designed to attract capital to the country.
- gjulianm 5y ago> They will literally have more money in their pockets. That's a big if. Bitcoin transfer fees might be cheaper, but you need to add the cost of converting dollars to bitcoin, plus the volatility of the coin, plus any fees from intermediaries and Lightning nodes. > Good things happen when people have more money in their pockets High amount of remittances are not a cause, but a symptom of underlying problems. Would you be as cavalier about the effects of this on ES economy if it was, say, Western Union saying they'd reduce 10% their transfer fees? It's always the same thing with Bitcoin, apparently it's such a great technology that it can change anything despite the fact that the only "new" thing it can do is to be decentralized. Somehow the argument always ends up being that decreased transfer fees will revolutionize everything (despite the fact that transfer fees might not be lower, and that we've had continuously decreasing transfer fees for years and yet that didn't seem to bring any revolution).
- dadoge 5y agoSooo… do you think it’s better to have higher transfer fees? Seems like a no-brainer win though? Even if it doesn’t revolutionize the country
- TomSwirly 5y ago> Sooo... do you think it’s better to have higher transfer fees? So many conversations with Bitcoin advocates involve them putting ridiculous statements into the mouths of others. No one said that or anything like it.
- gjulianm 5y agoObviously I prefer lower fees. But integrating Bitcoin is not a guarantee that actual, practical fees will be lower. Given the risks of adopting Bitcoin (volatility, fixed economic policy, complexity, difficulty of use), I think potential benefits must be higher than “we maybe get lower transfer fees, or not”.
- danso 5y agoYour original comment claimed that El Salvador spends 22% of its GDP on transfer fees. You've since corrected it to say that the 22% estimate is for the remittances themselves. So why are you acting as if "higher transfer fees" is an accepted premise?
- thehappypm 5y agoIs it actually cheaper to send BTC than it is to wire money directly?
- dougk16 5y agoGood analogy with http. But keep going. After http people realized the importance of https. Sending credit card numbers and passwords in cleartext over the Internet was clearly a bad idea. So what is https in this analogy? Monero, PirateChain, Aeon, Wownero are the major contenders.
- Tenoke 5y agoMonero yes, the other 3 do not seem like all that serious contenders. LTC with mimblewimble would be a way better example. Of smaller ones, SCRT which is a whole privacy-focused smartchain would be my other pick.
- thehappypm 5y agoI've never heard smartchain before, that's terrific marketing, I bet it's gonna fool a ton of people.
- dougk16 5y agoInteresting I had not heard of SCRT. The others I've vetted pretty deeply but of course I could be missing something. Everyone do your own research of course and it'll be interesting to see which one(s) win.
- ArkanExplorer 5y agoYour Abuela isn't going to be able to take her .05 Btc down to the local Bodega and buy groceries. El Salvador already uses the US Dollar as its official currency. A migrant worker in the USA is going to face a lot more fees, scams, and difficulty to buy and send BTC than just wiring the same currency he earns to to a relative who can then spend in the same currency. This Bitcoin thing is a marketing ploy from the corrupt Salvadoran president, and an attempt to get a few crypto whales to move to the country and cash out, and buy real estate.
- dadoge 5y agoA lot more fees That couldn’t be more wrong. Look into The Lightning Network
- oh_sigh 5y agoAre you familiar with transfer fees for remittances? I sent $1000 to a friend in Ecuador and paid $1014 total. Will the transfer fees be below 1.4%?
- jollybean 5y agoPeople in the US sending USDs to El Salvador would be much more efficient than any other scheme.