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I think el-salvador is going down this path because their current path doesn't work. So instead, they are trying another monetary theory. Short term profits mi
by rocqua 5y ago
I think el-salvador is going down this path because their current path doesn't work. So instead, they are trying another monetary theory.
Short term profits might come, not from money laundering, but from bitcoin whales that are true believers and decide to come live there. Some of those whales might have gotten their bitcoin illegally, and are happy to avoid a fiat off-ramp. I suppose that might be money-laundering in some sense.
- NicoJuicy 5y agoThe core problem about this is that they don't have money. My statement about money laundering is their attempt to fix it partially. But Bitcoin by itselve won't fix their core issue. Another one is is connectivity ( to make faster payments and not take the bus), bitcoin won't fix that either. They are pushing internet access to help Bitcoin, but it creates a false dogma. Since Bitcoin was not the answer, it was internet access for all to make faster payments. PS. Africa has payments by text, this could have worked there too without Bitcoin: https://onereach.ai/what-the-u-s-can-learn-from-mobile-payments-in-africa/ https://onereach.ai/what-the-u-s-can-learn-from-mobile-payme...
- Clewza313 5y agoI don't think blockchains are particularly well suited for solving El Salvador's actual problems, like gang violence. There's a not entirely implausible theory that says Bukele is going for Bitcoin specifically because El Salvador uses the US dollar and is thus prevented from taking the typical path of printing more its own currency to "solve" problems. With Tether and various dodgy custom apps in the mix, they can now print money. https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-official-currency-printing-money/ https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-off...
- rocqua 5y agoPrinting money in bitcoin requires some really weird stuff to happen. Essentially, either you need to scam others with Tether, or you need your apps to literally lie to their users. Bitcoin was made to be deflationary. That means it was made not to allow anyone to print money. It would have made more sense for them to pick ethereum if they wanted the ability to print money. Really, the only thing I can imagine is using colored coins in bitcoin, or switching to some other currency later.
- lalaland1125 5y agoIf you look through the technical details this proposal, it 100% allows for money printing. El Salvador isn't actually giving people Bitcoin. It's giving people records in an SQL database that supposedly correspond to Bitcoin in a government wallet. The government can just edit that SQL database to print money.
- chucknthem 5y agoAnd become insolvent in a bank run?
- southerntofu 5y ago> Short term profits might come (...) from bitcoin whales I don't understand. How are you supposed to make money from wealth hoarders? The trickle-down fairy?
- rocqua 5y agoIf you convince them to move to the country / spend more time there, then they will spend more of their money in your economy.
- NicoJuicy 5y agoYou just explained the trickle down fairy he mentioned :)
- rocqua 5y agoTrickle down works for immigration. Immigration is not even close to zero sum. For wealth re-distribution within a country it starts of zero sum. And indeed, putting all the wealth concentrated does not help the poor. Making the wealthy wealthier without taking from the poor will help the poor some. Moreover, it will help the government a lot more.