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I’m super into crypto, but I don’t see how this will help anyone in Salvador at all. In fact it seems to me that it will likely just aid corrupt elements in the

by sprafa 5y ago

I’m super into crypto, but I don’t see how this will help anyone in Salvador at all. In fact it seems to me that it will likely just aid corrupt elements in the country. I just can’t think of a reason for them to do this.

bethecloud 5y ago
Why do you say this? How does bitcoin = corruption – it's simply PKI-based ownership of DLT data. If anything the restriction on money-printing should abet corruption, no?
- blitzar 5y ago
  Why do you say this? How does money-printing = corruption?
  - bko 5y ago
    Yes. Money printing is a hidden tax that hits especially hard on those that don't have a lot of savings or the ability to invest in appreciating assets. As technology advances, things should naturally become cheaper. A gallon of milk today is not comparable to a gallon of milk produced 20 years ago due to technological advances. So it should naturally get cheaper. Of course it doesn't because there is more money in circulation. Think of the extreme, electronics. These do get cheaper for the same capabilities because the technological advancement is so much faster than the technological advancements of milk production. It's fine if you want to increase taxes to fund public expenditures, but this should be done explicitly through taxes, rather than hidden through increasing the monetary base. I believe a lot of waste and corruption would be rooted out if we were honest about what we're funding and how we're funding it. If everyone saw their tax bills go up a few hundred dollars a year to fund foreign interventionists policies, I don't think it would be politically feasible. Money printing is a way to fund expenditures without being honest about how much its actually costing us.
    - frankbreetz 5y ago
      >>Money printing is a hidden tax that hits especially hard on those that don't have a lot of savings Wouldn't inflation hurt people with a lot of cash savings, the most? Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? Isn't their a student debt crisis, that can be helped out by inflation. The only people I really see getting hurt by inflation are those hoarding cash, which there is a ton of ways to put that money to work. You can buy fractional stocks for less then a dollar. I haven't ever heard anyone say cash is good store of value, so when coiners present this argument it feels like a real strawman. The dollars value comes from its predictability, unless some catastrophe happen affecting food supply,I know next year food will be about the same as it is right now. I have no idea how much bitcoin it will cost could be 10x or could be 10%, this makes it hard to plan and hard to run an economy.
      - Sohcahtoa82 5y ago
        > Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? This is only true if wages keep up with inflation. Many will claim they haven't.
      - bko 5y ago
        > Wouldn't inflation hurt people with a lot of cash savings, the most? Almost no one with a vast amount of wealth keeps their wealth in cash. > Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? Not necessarily. The poorest households hold less than their fair share of mortgage debt, but they hold more than their share of consumer debt. The bottom half of households by wealth hold almost 54% of consumer debt. Consumer debt includes credit cards, student loans and car loans. That distribution isn’t a surprise, either [0]. If you rely on debt for every day purchases (credit card revolving debt), higher prices don't help you out. If you have inflation in the form of home valuations and you own a home (perhaps w/ a mortgage), you're better off in that regard > Isn't their a student debt crisis, that can be helped out by inflation. Inflation doesn't necessarily mean your salary goes up. Salaries for low wage workers is fairly sticky. > The only people I really see getting hurt by inflation are those hoarding cash, which there is a ton of ways to put that money to work. You can buy fractional stocks for less then a dollar. If you're on a fixed salary, or your salary doesn't go up by at least the inflation amount you're worse off. And if you have a large percentage of your income go to pay for every day living expenses, you're also worse off. The dollar value is predictable until it's not. There are plenty of examples of hyperinflation that turned a country on its head. [0] https://www.barrons.com/articles/rich-borrow-mortgates-consumer-debt-credit-cards-federal-reserve-fred-51573509617 https://www.barrons.com/articles/rich-borrow-mortgates-consu...
  - mgh2 5y ago
    I have read a lot of crypto articles recently, and yet the community cannot answer this: How do you account for the global population growth (and consequently GDP growth) that is constantly in need for a relatively stable exchange medium for value of goods produced? Cycle: More people > more production > more money Money is a tool to fuel production. Controlled inflation/devaluation fuels growth, as long as it is backed by actual production (tied to economic output). Contrast this with popular crypto examples: Germany (WWI), Venezuela, Greece, Argentina, Lebanon, etc. countries that dramatically devalued their currency without an increase in production = corruption of value. The problem with any limited supply is that it benefits and incentivizes hoarders and non-producers, having nonbeneficial effects for society as a whole. Is the US really that corrupt? Or is the entire crypto narrative a marketing scheme by speculators & scammers? https://m-g-h.medium.com/in-data-we-trust-2978dacc8c22 https://m-g-h.medium.com/in-data-we-trust-2978dacc8c22
el-salvador 5y ago
The lightning network could make small sized cross border money transfers cheaper. (Transfers less than $100).
- realPubkey 5y ago
  It can do the same without having bitcoin as legal tender.
  - rfd4sgmk8u 5y ago
    Not exactly. Legal tender changes the calculus. Because bitcoin is legal tender, there are no capital gains or investment tax in El Salvador. You can spend received the funds with no tax implication. This is a big deal for a country with so many folks unbanked and use international remittance services.
    - realPubkey 5y ago
      Thank you, that makes sense of course.

by sprafa 5y ago

bethecloud 5y ago

Why do you say this? How does bitcoin = corruption – it's simply PKI-based ownership of DLT data. If anything the restriction on money-printing should abet corruption, no?

blitzar 5y ago
Why do you say this? How does money-printing = corruption?
- bko 5y ago
  Yes. Money printing is a hidden tax that hits especially hard on those that don't have a lot of savings or the ability to invest in appreciating assets. As technology advances, things should naturally become cheaper. A gallon of milk today is not comparable to a gallon of milk produced 20 years ago due to technological advances. So it should naturally get cheaper. Of course it doesn't because there is more money in circulation. Think of the extreme, electronics. These do get cheaper for the same capabilities because the technological advancement is so much faster than the technological advancements of milk production. It's fine if you want to increase taxes to fund public expenditures, but this should be done explicitly through taxes, rather than hidden through increasing the monetary base. I believe a lot of waste and corruption would be rooted out if we were honest about what we're funding and how we're funding it. If everyone saw their tax bills go up a few hundred dollars a year to fund foreign interventionists policies, I don't think it would be politically feasible. Money printing is a way to fund expenditures without being honest about how much its actually costing us.
  - frankbreetz 5y ago
    >>Money printing is a hidden tax that hits especially hard on those that don't have a lot of savings Wouldn't inflation hurt people with a lot of cash savings, the most? Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? Isn't their a student debt crisis, that can be helped out by inflation. The only people I really see getting hurt by inflation are those hoarding cash, which there is a ton of ways to put that money to work. You can buy fractional stocks for less then a dollar. I haven't ever heard anyone say cash is good store of value, so when coiners present this argument it feels like a real strawman. The dollars value comes from its predictability, unless some catastrophe happen affecting food supply,I know next year food will be about the same as it is right now. I have no idea how much bitcoin it will cost could be 10x or could be 10%, this makes it hard to plan and hard to run an economy.
    - Sohcahtoa82 5y ago
      > Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? This is only true if wages keep up with inflation. Many will claim they haven't.
    - bko 5y ago
      > Wouldn't inflation hurt people with a lot of cash savings, the most? Almost no one with a vast amount of wealth keeps their wealth in cash. > Also, Wouldn't people with a lot of debt welcome inflation. Don't poor people tend to have the most amount of debt relative to their networth? Not necessarily. The poorest households hold less than their fair share of mortgage debt, but they hold more than their share of consumer debt. The bottom half of households by wealth hold almost 54% of consumer debt. Consumer debt includes credit cards, student loans and car loans. That distribution isn’t a surprise, either [0]. If you rely on debt for every day purchases (credit card revolving debt), higher prices don't help you out. If you have inflation in the form of home valuations and you own a home (perhaps w/ a mortgage), you're better off in that regard > Isn't their a student debt crisis, that can be helped out by inflation. Inflation doesn't necessarily mean your salary goes up. Salaries for low wage workers is fairly sticky. > The only people I really see getting hurt by inflation are those hoarding cash, which there is a ton of ways to put that money to work. You can buy fractional stocks for less then a dollar. If you're on a fixed salary, or your salary doesn't go up by at least the inflation amount you're worse off. And if you have a large percentage of your income go to pay for every day living expenses, you're also worse off. The dollar value is predictable until it's not. There are plenty of examples of hyperinflation that turned a country on its head. [0] https://www.barrons.com/articles/rich-borrow-mortgates-consumer-debt-credit-cards-federal-reserve-fred-51573509617 https://www.barrons.com/articles/rich-borrow-mortgates-consu...
- mgh2 5y ago
  I have read a lot of crypto articles recently, and yet the community cannot answer this: How do you account for the global population growth (and consequently GDP growth) that is constantly in need for a relatively stable exchange medium for value of goods produced? Cycle: More people > more production > more money Money is a tool to fuel production. Controlled inflation/devaluation fuels growth, as long as it is backed by actual production (tied to economic output). Contrast this with popular crypto examples: Germany (WWI), Venezuela, Greece, Argentina, Lebanon, etc. countries that dramatically devalued their currency without an increase in production = corruption of value. The problem with any limited supply is that it benefits and incentivizes hoarders and non-producers, having nonbeneficial effects for society as a whole. Is the US really that corrupt? Or is the entire crypto narrative a marketing scheme by speculators & scammers? https://m-g-h.medium.com/in-data-we-trust-2978dacc8c22 https://m-g-h.medium.com/in-data-we-trust-2978dacc8c22

el-salvador 5y ago

The lightning network could make small sized cross border money transfers cheaper. (Transfers less than $100).

realPubkey 5y ago
It can do the same without having bitcoin as legal tender.
- rfd4sgmk8u 5y ago
  Not exactly. Legal tender changes the calculus. Because bitcoin is legal tender, there are no capital gains or investment tax in El Salvador. You can spend received the funds with no tax implication. This is a big deal for a country with so many folks unbanked and use international remittance services.
  - realPubkey 5y ago
    Thank you, that makes sense of course.