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Bitcoin’s first day as El Salvador’s legal tender
- celticninja 5y agoIn other news, bitcoin is at the same price as it was 2 to 3 weeks ago. I'm also intrigued that this has 29 points and 0 comments.
- dustintrex 5y agoUnfortunate wording in the title. The price of Bitcoin "crashed" as in plummeted, and the Chivo wallet system they're trying to use in El Salvador "crashed" as in went offline. The Bitcoin network, of course, chugged merrily along, at its usual 4 or so txns/second.
- ninetenfour 5y agoWait, is BTC really only doing 4 transactions a second? I knew it was bad, but I didn't realize this bad. Bitcoin is like a 1960s mainframe computer in an old bank headquarters that runs everything but is an archaic relic.
- UncleMeat 5y agoYes. There was a big argument several years back about increasing transaction counts and the "more transactions please" advocates lost. BTC, by design, targets roughly this number of transactions per second regardless of how much energy is spent to mine.
- seanw444 5y agoIsn't this the reason for the Lightning network layer?
- Hammershaft 5y ago4 transactions a second!? I heard it was bad but that is absolutely pathetic, my local strip mall likely averages out to more then 4 transactions a second.
- letmeinhere 5y ago> chugged merrily along, at its usual 4 or so txns/second. who needs failure when this is what success looks like?
- frays 5y agoIs it still 4 txns/second even with the Lightning network?
- mort96 5y ago4 transactions per second is for the main chain, not side-chains. Nobody uses side-chains, so I don't think their capacity is the interesting number.
- qecez 5y ago> Nobody uses side-chains... I use LN every day. Also, have you heard the El Salvador news? This is just active, malicious disinformation - why are you doing this?
- qecez 5y agoLN blows away legacy payment rails by many orders of magnitude - you can do hundreds of millions of transactions per second, today.
- j_barbossa 5y agoOne argument critics bring in I don't understand is that Bitcoin is too volatile to be a currency. If a zoned market solely accept Bitcoin and a good costs say 1 BTC, why does it matter if the BTC-to-USD price is increasing or decreasing? For the zoned market it's still 1 BTC for said good.
- dustintrex 5y agoThat's a mighty big if though, since to a first approximation nothing except maybe ransoms is priced in Bitcoin. Most shops notionally accepting it actually set prices in USD and simply convert as needed.
- FabHK 5y agoThat. What is actually denominated in BTC?? For that, you’d need a substantial economy in which most factors of production (including wages) are denominated in BTC.
- oleganza 5y agoBitcoin is volatile not in relation to USD, but to "real prices". USD or EUR are just more stable in relation to those, so it's convenient to measure BTC in USD. You can't fix the prices in BTC because you'd soon find that you are overpricing or underpricing in relation to real supply and demand of all the stuff around.
- beervirus 5y agoThey don’t solely accept btc. They accept it in addition.
- ninetenfour 5y agoThat never holds. Arbitrage will cause prices for goods to be equal in USD and BTC. https://www.investopedia.com/terms/a/arbitrage.asp https://www.investopedia.com/terms/a/arbitrage.asp Unless you control the whole market via price controls but those eventually break as well. https://www.investopedia.com/terms/p/price-controls.asp https://www.investopedia.com/terms/p/price-controls.asp
- melbourne_mat 5y agoThere goes my Bitcoin investing brother's sanity
- oleganza 5y agoThis is the finest example of propaganda. Just look at the photo of a dude with a fire in the backdrop. 1. For most people in El Salvador Bitcoin does not matter and will not matter for quite some time. 2. "Bitcoin crashes" to a value a week or so ago. This is usually called a "correction". Even when it was crashing 80%, it was from some very short-living speculative highs and it's now trading close to all-time-high anyway.
- beervirus 5y agoCorrection relative to what fundamental value? And what’s the difference between a speculative high and the normal price?
- ninetenfour 5y agoHindsight? I am pretty sure that is what people are using for the definition. If the new high didn't hold, it was speculative, if it did hold and it went up further, it was its normal pricing.
- beervirus 5y agoWhat timescale defines the difference between fundamental value and speculation? A week? A decade? A century?
- ninetenfour 5y agoNo one knows... I was being facetious in my earlier comment.
- oleganza 5y agoWell, fundamental value is well over >$8T which is a rough estimate of the gold's monetization (because BTC is superior to gold in every respect as a store-of-value). BTC still has to climb 10x till there and all the dips on the way are corrections.
- wolframhempel 5y agoI appreciate this has been debated extensively already - but while crypto currency (especially stable coins) can be a worthwhile alternative to fiat money, bitcoin really isn't. A significant crash or surge happens every couple of weeks.
- oleganza 5y agoStable coins are not "crypto" currencies. They have black lists (similar to your bank's fraud department) and they are backed by deposited money (so there is trusted issuer who promises to redeem them for actual cash). So 2 key features of a crypto-currency are lacking in stablecoins: censorship-resistance and absence of centralized trusted parties. That you can move them on a blockchain (as long as permitted) with your private key is not much different from signing TLS connection in your Venmo. But with higher fees and latencies.
- _nhynes 5y agoWhat about algorithmic stable coins like Dai, Terra, Fei, USDN, or cUSD? You still move them using your private key, but at least there's no centralized blocklist.
- oleganza 5y agoThe trusted party there are price oracles. Plus, matters are muddied by the "governance" usually built-in which adds another trusted parties who are supposed to do emergency interventions (like Fed does ;-) I don't mean to be mean, but if you have a fundamental security issue, "solving" it with a complicated protocol that still has the same security issues deep at the core, sounds like "scam" to me. Venmo, PayPal and Bitcoin are fair in their offerings: you know who you trust with what and that's the security model without any sugarcoating.
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- q1w2 5y agoOne day, some crypto somewhere will figure out a way to implement a distributed mechanism to dynamically adjust the money supply to maintain a reasonable 0.5%-1% inflation rate per year.
- bufferoverflow 5y agoIt's normal BTC behavior, BTC spikes up and goes down all the time. 10-15% per day moves happen regularly. Open the price chart and look at it.
- ninetenfour 5y agoWhich is why BTC is an asset and not a currency. Currencies need stability of value so that everyone doesn't have to update their prices ever few hours: https://simplicable.com/new/money https://simplicable.com/new/money But maybe in the new world, all prices can be in digital and thus ever changing?
- alias_neo 5y agoWould pricing in another unit cause more issues or solve issues? If customers paid a conversion to some unit each time, and conversion is determined at point of sale. One customer may pay 100pBTC for a loaf of bread, and another may pay 101pBTC. Does that help, or make things worse?
- ninetenfour 5y agoYou want stability. There are many ways to achieve that. Your example above shows a 1% swing -- which is nothing. Yesterday BTC dropped by 14-18% depending on how you define it. Imaging buying a Tesla and you budgeted for $40K but today it jumped $45K. That would throw off your plans and you wouldn't probably buy it, hoping for things to change. This means that the thing you are using for the transaction is actually preventing commerce because now timing matters. This is a hinderance to commerce and those using it will not have the liquidity/dynamic economy as compared to those using a stable currency. This is a sign you are not using a currency for the transaction but rather an asset. Now USD is stable in parts because it is accepted widely and everything is denominated in it. If everything was denominated in BTC, then it would have similar stability. Basically the more things are denominated in a particular currency/asset, the more stable it becomes.
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- patchtopic 5y ago"crash" not very accurate choice of words... exchange rate dip maybe better?
- ninetenfour 5y ago"Crash" of an asset/currency is always against other assets/currency -- you need to define what its comparable otherwise you can not measure it. Was it a "crash" though in scope? Black Friday in 1987 was a 22% drop in the stock market. Yesterday was a 14% to 18% drop depending on how you calculate it. Close to what was considered a prototypical "crash": https://en.wikipedia.org/wiki/Black_Monday_(1987) https://en.wikipedia.org/wiki/Black_Monday_(1987) Basically BTC is highly volatile, thus it probably crashes all the time based on standard definitions.
- dtech 5y agoIf any fiat currency would go down 15% we'd call it a crash. USD/GBP fell 19% after the brexit-referendum, that was an abnormal noteworthy event with quite far-reaching consequences. For BTC it's a daily occurence...
- jdhn 5y agoPretty interesting how the day that it become legal tender in a country, the price goes down by 10%. The more conspiracy minded would say that this was done on purpose to convince people not to use it.
- ethbr0 5y agoIt loses (or gains) 10%+ every few weeks. No conspiracy needed. Other than, you know, regular and systemic market manipulation by large holders of trading capital... the sort of thing the SEC prevents.
- celticninja 5y agoBuy the rumours, sell the news. It was bought up in anticipation of this news. Then sold off, once someone starts selling enough to move the price down a few thousand, others pile in and drive it further down. Then those that sold at the beginning buy back their coins, with a nice profit.
- WalterSear 5y agoIt was done to cream leveraged punters who thought it would be a sure thing.
- docflabby 5y agoGold as well as Crypto crashed accoss the board except for Solana which gained so I don't think this says anything about Bitcoin in particular.
- k__ 5y agoIf you ignore the last few days, not much changed with the BTC price.
- teekert 5y agoThe timing is almost too convenient for large parties that are afraid of defi.
- GhostVII 5y agoWhen the majority of the country doesn't have internet access, a "currency" that you can only transact in via the internet seems like a poor choice. It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet, which I'm sure is convenient for them. My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD.
- Torwald 5y ago> When the majority of the country doesn't have internet access, a "currency" that you can only transact in via the internet seems like a poor choice. If the shops have WiFi that's enough. Also, public WiFi. Still, your point stands to a certain extend, connected to your next line: > It makes it a lot easier for the government to track people There is indeed a danger to the democratic process here. But I don't know if the solution is to just not do crypto. I don't know what would be best. > My guess is that most people in El Salvador will download the wallet, get their $30, and then abandon it and just continue to use USD. My guess BTC takes off over there.
- avnigo 5y ago> When the majority of the country doesn't have internet access The Chivo application works for free over cellular data without the need for a data plan. WiFi public hotspots aren't hard to come by either, especially in stores. If anything, getting more people online would be a good thing. > It makes it a lot easier for the government to track people though given that they are getting their citizens to download the government-sponsored wallet It should be noted that you don't have to use the government-sponsored wallet, but that is how they're distributing the $30 drop. For all intents and purposes, you could get the drop and delete the application.
- rich_sasha 5y agoIt will be interesting to see how they go along. The only valid argument I have seen for a wide adoption of crypto is in countries where the local currency is unusable: corrupt central bank, hyperinflation, high rates of counterfeits, low access to banks. I actually see that then some form of crypto is preferred. So yes, watching that closely!
- Torwald 5y agoI love the entrepreneurial spirit the shopkeeper keeps in all of this: "When others see a crisis though, I see an opportunity."
- boomboomsubban 5y agoI'm not a huge proponent of bitcoin, and am unsure how great of a move this was, but man is this article ridiculous. >The price of Bitcoin on Tuesday crashed to its lowest in nearly a month, The lowest value in nearly a month is "crashing?" And saying that caused the country to lose $3 million pretends they sold all the bitcoint that day. Using a picture of protestors in front of a massive fire implies there's some huge movement, not "about 1000 protestors." >It says bitcoin could save the country $400m a year in transaction fees on funds sent from abroad. However, using data from the World Bank and the government, the BBC calculates this to be closer to $170m. Saving $170m is still "up to $400m" and more than anything is being optimistic about future growth. And they are saying "however they'll only save $170m" as if the move would somehow not be worth saving $170m. Finally, they interview a random shopkeeper and the opposition leader to show we got both sides of the issue. What a fair debate there.
- frays 5y agoTake reporting done by mainstream media on cryptocurrencies with a grain of salt. I'm not a cryptocurrency proponent, but the standard of news regarding this space is atrocious. That's why many cryptocurrency followers focus so much on Twitter.
- shapefrog 5y agoTake reporting done by ANY media on ANYTHING with a grain of salt. It is totally redundant to add mainstream or bitcoin into that statement.
- krasi0 5y agoThis is your typical modern "objective" journalism today. The only thing not clear is whoose financial and / or political interests they are trying to boost today. Follow the money / power, I guess?
- neither_color 5y agoAs someone who set up a Chivo wallet from outside of El Salvador last night, I knew these comments were going to be highly negative and schadenfreude-ic. I'm going to ignore all of it and dive right into the experience of the app itself. Chivo's servers went offline temporarily in the morning in order to fix some bugs and add more capacity, according to tweets from the president. As far as major software product launches outside of Silicon Valley go, having your product work smoothly for millions of people on day one was unlikely, but within a few hours all was working. This is the first high profile app to come from El Salvador, and I thought the app itself worked better than expected. It was the smoothest onboarding experience I've seen so far in a legal financial app, ever. El Salvador has a national ID called a DUI (Documento Unico de Identidad). When you first open the app, you type in your ID number and date of birth. Then you scan the front of your DUI card, the back, and take a selfie. You wait a bit for it to validate and then you're done. It knows your name already, there is no email/account registration, there are no address forms or weird credit check challenge questions to fill out. Easier than coinbase, venmo, or paypal to get onboarded and running. It takes seconds to get your $30 "drop", which did fluctuate a few cents in real time throughout the evening. This really shows what's possible with a national ID system IMO. The app has basic functions to scan to send or request payments, and has instant convertibility between USD and BTC. I was able to transfer .001 BTC from a non-affiliated wallet into Chivo and it showed "recibiendo" within minutes. I know I know, not your keys not your crypto, but nobody is obligated to use it. This is the national wallet made for ease of use and friction-less for retail purchases. If any Salvadoran wants to send or receive with any other wallet they are free to do so. They are also free to not use crypto at all and keep using USD.
- sofixa 5y ago> El Salvador has a national ID called a DUI (Documento Unico de Identidad). When you first open the app, you type in your ID number and date of birth. Then you scan the front of your DUI card, the back, and take a selfie. You wait a bit for it to validate and then you're done. It knows your name already, there is no email/account registration, there are no address forms or weird credit check challenge questions to fill out. Easier than coinbase, venmo, or paypal to get onboarded and running... This really shows what's possible with a national ID system IMO That's nothing revolutionary, neobanks in the EU have been doing this ( or an older school version where there's a video call with a real person that inspects your face and if it matches your ID) for some time now. Yes, having a national ID is some pretty basic "how to government 101" stuff. The reluctance by Americans for anything resembling that is baffling.
- em3rgent0rdr 5y agoIf taxpayers can pay taxes in bitcoin, then there is less need to convert to a fiat currency intermediary when buying and selling goods and services with bitcoin. That might add stability to BTC's value.
- chemmail 5y agoIt seems like everything Nayib Bukele is doing is working. He is using the name bitcoin to legally assimilate everyone digitally and probably using it as a way to launder money. The headlines are eating it up like something progressive. Genius.