7 ms·

El Salvador President says, ‘It’s game over for dollar, Bitcoin is future’

19 points by mgh2 5y ago

imtringued 5y ago
What is revolutionary about Bitcoin? It is just the digital equivalent of the gold standard and the gold standard (within a country) ended many times because of a lack of gold. The "Bitcoin standard" will end because of a lack of Bitcoin. It's exactly the same system with the same flaws. Some parameters are different which means it will just progress through the problematic stages faster than the good old dollar. >According to Bukele, the residents of Bitcoin city won’t have to pay any income, property, capital gains or even payroll taxes. The city would be built with attracting foreign investment in mind. Well, it would have been a good idea if this plan wasn't inherently based on speculation or resource exports (e.g. Bitcoin mining). It could still be a good one if he kept property taxes and only taxed land value.
- MisterSandman 5y ago
  > According to Bukele, the residents of Bitcoin city won’t have to pay any income, property, capital gains or even payroll taxes. The city would be built with attracting foreign investment in mind. More importantly, this has nothing to do with Bitcoin. You could just as easily make a city that is paid in normal currency, but has none of those taxes. It's literally why Dubai is how Dubai is (virtually no income tax)
  - ttfkam 5y ago
    Dubai has oil. And slaves.
    - fakedang 5y ago
      Dubai doesn't have oil. It's a tax haven that specifically focused on tourism, trade and finance (and now tech) because of a lack of oil. Compare that to Abu Dhabi which has massive oil reserves, is largely bureaucratic and is still long oil. On a tangential note, Dubai is heavily burdened with debt post 2008, largely to Abu Dhabi, so that's one data point going counter to the premise of the article.
- hndamien 5y ago
  How do you run out of something that is infinitely divisible?
  - kevkevinpal 5y ago
    Exactly, I'm totally pro bitcoin because once I've started to look at how the system works it is quite beautiful. The uses of energy to self regulate a system of decentralized workers is crazy
  - Arainach 5y ago
    Divisibility has nothing to do with it. A currently standard backed by an asset depends on how much of that asset is in reserves.
  - PlanckMeasure80 5y ago
    A gold IOU is also infinitely divisible
    - hndamien 5y ago
      So you won’t run out of them. But they are not knowably finite or trustless, so not inherently great money.
- el-salvador 5y ago
  Hi! I used to live in El Salvador. > It could still be a good one if he kept property taxes and only taxed land value. El Salvador's central government does not charge yearly property taxes. Property taxes are paid when a property is sold or transferred. There is also a monthly "fee" [1] payable to the local government (county/alcaldía) based on the area of the property, for providing local services like garbage collection, road lightning, CCTV, and annual local festival of each town. The difference between tax and fee is something particular from El Salvador law. Only the central government can charge taxes (impuestos), while local governments (like a city or town) can charge fees (tasas). I'm not a lawyer, so I may not be 100% correct, but I think the difference is that "fees" are paid for services directly provided, while taxes are not linked to an specific service.
- olliej 5y ago
  > What is revolutionary about Bitcoin? the carbon footprint
- grepfru_it 5y ago
  >lack of bitcoin so just submit a pull request https://github.com/bitcoin/bitcoin/blob/feedb9c84e72e4fff489810a2bbeec09bcda5763/src/chainparams.cpp#L67 https://github.com/bitcoin/bitcoin/blob/feedb9c84e72e4fff489... i'm half joking and half not :)
- mycall 5y ago
  Bitcoin the word is an overloaded term. I think when people say Bitcoin, they really mean all cryptocurrencies taken together. You can watch all cryptos go up and down relative to what bitcoin is doing. So, in that respect, there is no upper cap to "Bitcoin" since there are tons of coins and they all tend to balance out (of their relative worth).
- halpert 5y ago
  I think there are fair number of revolutionary things that you discount: 1) You can send it to anyone, anywhere without involving a middleman or needing financial infrastructure. How can you do this with gold? 2) You can "program" it via smart contracts to execute fairly complicated logic without trusting individual actors to carry out their part of the deal. How can you do this with gold?
  - Proven 5y ago
  - Kbelicius 5y ago
    1) You can't send it to someone without a btc address. You can't send it to somewhere without internet, or rather, someone somewhere without internet can not use their newly received btc. Every transaction requires a middleman that you pay and you can't even choose which one you would like to use. Gold: can send it to anybody with an address, doesn't need internet. Can actually be used without middleman and in instances where you want one you can actually choose which one you want to use. Also doesn't need financial infrastructure. On paper gold seems better. 2) This only works for on chain stuff. Want to program a smart contract that pays out building contractors as they finish stuff around your house? Congratulations, now you have additional work of programming the smart contract. Simpler to use gold.
    - halpert 5y ago
      You cannot send gold securely to anyone with an address. Even in advanced, stable countries, mail theft is common. In countries with high corruption, you are very likely to have your gold stolen. Sure, you need the internet to send BTC, but that’s not that big of an ask in this day and age. Regarding smart contracts, yes they only work for on chain stuff. What do programmatic contracts using gold work on? Answer: nothing. Even if you used tradition contracts, you would need to hire a lawyer and still worry about how they’re written. You’d also need a strong legal system to enforce them. Your criticisms are weird. You’re like “yes btc enables new things, but they aren’t 100% perfect so we should keep using this old thing despite its limitations.”
quocanh 5y ago
I want to know how much Bitcoin this guy has.
vanusa 5y ago
See also: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin. https://foreignpolicy.com/2021/12/06/bitcoin-city-el-salvador-nayib-bukele/ https://foreignpolicy.com/2021/12/06/bitcoin-city-el-salvado...
- NicoJuicy 5y ago
  Not only that, users are reporting missing funds from the chivo wallet: https://cointelegraph.com/news/some-salvadorans-claim-funds-are-missing-from-their-chivo-wallets/amp https://cointelegraph.com/news/some-salvadorans-claim-funds-... I think the solution is to buy more Bitcoin! That seems to be the answer to everything in El Salvador. They only lost like 20% by now and I think Mr. Bukele doesn't think there's enough hype for it. 4 December - https://mobile.twitter.com/nayibbukele/status/1467000621354135555?lang=en https://mobile.twitter.com/nayibbukele/status/14670006213541... 26 November - https://mobile.twitter.com/nayibbukele/status/1464307422793715716?lang=en https://mobile.twitter.com/nayibbukele/status/14643074227937... 27 October - https://mobile.twitter.com/nayibbukele/status/1453461587948445697 https://mobile.twitter.com/nayibbukele/status/14534615879484... 20 September - https://mobile.twitter.com/nayibbukele/status/1439815012642611203?lang=en https://mobile.twitter.com/nayibbukele/status/14398150126426... His latest purchases seem to be less in value but more frequent. What a mess. The real victims is the population of El Salvador :(
daly 5y ago
SWIFT (https://www.swift.com/ https://www.swift.com/) is an international arrangement to transfer money. It deals in all-electronic cash, just like Bitcoin. It keeps records of all transfers, just like Bitcoin. It handles a trillion (U.S.) dollars a day. Unlike Bitcoin it is used by all countries. I'm not sure that all of the distributed Bitcoin journals can handle the volume. Imagine your Bitcoin journal trying to clear a (U.S.) billion transactions a day.
vr46 5y ago
Sounds like it's game over for El Presidente soon - technology aside, the entire strategy is sketchy as hell, to my knowledge. Everything around Chivo appears to be classified, including who holds the Bitcoin. Nobody in financial regulation or central banking is prepared to talk about it - why? I have spent only a little time there, I drove across it twice, and it's staggeringly beautiful, but my key takeaway was that the country has very strong reasons to not trust their government. The current leader has been demonstrating all the classic power moves of a dictator and "creating a volcano-powered Bitcoin city" is one hell of a dead cat story.
impendingchange 5y ago
Seems the same thing is happening in Turkey: https://www.coindesk.com/policy/2021/12/24/turkey-president-erdogan-to-send-crypto-law-to-parliament-report/ https://www.coindesk.com/policy/2021/12/24/turkey-president-...

19 points by mgh2 5y ago

What is revolutionary about Bitcoin? It is just the digital equivalent of the gold standard and the gold standard (within a country) ended many times because of a lack of gold. The "Bitcoin standard" will end because of a lack of Bitcoin. It's exactly the same system with the same flaws. Some parameters are different which means it will just progress through the problematic stages faster than the good old dollar. >According to Bukele, the residents of Bitcoin city won’t have to pay any income, property, capital gains or even payroll taxes. The city would be built with attracting foreign investment in mind. Well, it would have been a good idea if this plan wasn't inherently based on speculation or resource exports (e.g. Bitcoin mining). It could still be a good one if he kept property taxes and only taxed land value.

MisterSandman 5y ago
> According to Bukele, the residents of Bitcoin city won’t have to pay any income, property, capital gains or even payroll taxes. The city would be built with attracting foreign investment in mind. More importantly, this has nothing to do with Bitcoin. You could just as easily make a city that is paid in normal currency, but has none of those taxes. It's literally why Dubai is how Dubai is (virtually no income tax)
- ttfkam 5y ago
  Dubai has oil. And slaves.
  - fakedang 5y ago
    Dubai doesn't have oil. It's a tax haven that specifically focused on tourism, trade and finance (and now tech) because of a lack of oil. Compare that to Abu Dhabi which has massive oil reserves, is largely bureaucratic and is still long oil. On a tangential note, Dubai is heavily burdened with debt post 2008, largely to Abu Dhabi, so that's one data point going counter to the premise of the article.
hndamien 5y ago
How do you run out of something that is infinitely divisible?
- kevkevinpal 5y ago
  Exactly, I'm totally pro bitcoin because once I've started to look at how the system works it is quite beautiful. The uses of energy to self regulate a system of decentralized workers is crazy
- Arainach 5y ago
  Divisibility has nothing to do with it. A currently standard backed by an asset depends on how much of that asset is in reserves.
- PlanckMeasure80 5y ago
  A gold IOU is also infinitely divisible
  - hndamien 5y ago
    So you won’t run out of them. But they are not knowably finite or trustless, so not inherently great money.
el-salvador 5y ago
Hi! I used to live in El Salvador. > It could still be a good one if he kept property taxes and only taxed land value. El Salvador's central government does not charge yearly property taxes. Property taxes are paid when a property is sold or transferred. There is also a monthly "fee" [1] payable to the local government (county/alcaldía) based on the area of the property, for providing local services like garbage collection, road lightning, CCTV, and annual local festival of each town. The difference between tax and fee is something particular from El Salvador law. Only the central government can charge taxes (impuestos), while local governments (like a city or town) can charge fees (tasas). I'm not a lawyer, so I may not be 100% correct, but I think the difference is that "fees" are paid for services directly provided, while taxes are not linked to an specific service.
olliej 5y ago
> What is revolutionary about Bitcoin? the carbon footprint
grepfru_it 5y ago
>lack of bitcoin so just submit a pull request https://github.com/bitcoin/bitcoin/blob/feedb9c84e72e4fff489810a2bbeec09bcda5763/src/chainparams.cpp#L67 https://github.com/bitcoin/bitcoin/blob/feedb9c84e72e4fff489... i'm half joking and half not :)
mycall 5y ago
Bitcoin the word is an overloaded term. I think when people say Bitcoin, they really mean all cryptocurrencies taken together. You can watch all cryptos go up and down relative to what bitcoin is doing. So, in that respect, there is no upper cap to "Bitcoin" since there are tons of coins and they all tend to balance out (of their relative worth).
halpert 5y ago
I think there are fair number of revolutionary things that you discount: 1) You can send it to anyone, anywhere without involving a middleman or needing financial infrastructure. How can you do this with gold? 2) You can "program" it via smart contracts to execute fairly complicated logic without trusting individual actors to carry out their part of the deal. How can you do this with gold?
- Proven 5y ago
- Kbelicius 5y ago
  1) You can't send it to someone without a btc address. You can't send it to somewhere without internet, or rather, someone somewhere without internet can not use their newly received btc. Every transaction requires a middleman that you pay and you can't even choose which one you would like to use. Gold: can send it to anybody with an address, doesn't need internet. Can actually be used without middleman and in instances where you want one you can actually choose which one you want to use. Also doesn't need financial infrastructure. On paper gold seems better. 2) This only works for on chain stuff. Want to program a smart contract that pays out building contractors as they finish stuff around your house? Congratulations, now you have additional work of programming the smart contract. Simpler to use gold.
  - halpert 5y ago
    You cannot send gold securely to anyone with an address. Even in advanced, stable countries, mail theft is common. In countries with high corruption, you are very likely to have your gold stolen. Sure, you need the internet to send BTC, but that’s not that big of an ask in this day and age. Regarding smart contracts, yes they only work for on chain stuff. What do programmatic contracts using gold work on? Answer: nothing. Even if you used tradition contracts, you would need to hire a lawyer and still worry about how they’re written. You’d also need a strong legal system to enforce them. Your criticisms are weird. You’re like “yes btc enables new things, but they aren’t 100% perfect so we should keep using this old thing despite its limitations.”

quocanh 5y ago

I want to know how much Bitcoin this guy has.

vanusa 5y ago

See also: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin. https://foreignpolicy.com/2021/12/06/bitcoin-city-el-salvador-nayib-bukele/ https://foreignpolicy.com/2021/12/06/bitcoin-city-el-salvado...

NicoJuicy 5y ago
Not only that, users are reporting missing funds from the chivo wallet: https://cointelegraph.com/news/some-salvadorans-claim-funds-are-missing-from-their-chivo-wallets/amp https://cointelegraph.com/news/some-salvadorans-claim-funds-... I think the solution is to buy more Bitcoin! That seems to be the answer to everything in El Salvador. They only lost like 20% by now and I think Mr. Bukele doesn't think there's enough hype for it. 4 December - https://mobile.twitter.com/nayibbukele/status/1467000621354135555?lang=en https://mobile.twitter.com/nayibbukele/status/14670006213541... 26 November - https://mobile.twitter.com/nayibbukele/status/1464307422793715716?lang=en https://mobile.twitter.com/nayibbukele/status/14643074227937... 27 October - https://mobile.twitter.com/nayibbukele/status/1453461587948445697 https://mobile.twitter.com/nayibbukele/status/14534615879484... 20 September - https://mobile.twitter.com/nayibbukele/status/1439815012642611203?lang=en https://mobile.twitter.com/nayibbukele/status/14398150126426... His latest purchases seem to be less in value but more frequent. What a mess. The real victims is the population of El Salvador :(

daly 5y ago

SWIFT (https://www.swift.com/ https://www.swift.com/) is an international arrangement to transfer money. It deals in all-electronic cash, just like Bitcoin. It keeps records of all transfers, just like Bitcoin. It handles a trillion (U.S.) dollars a day. Unlike Bitcoin it is used by all countries. I'm not sure that all of the distributed Bitcoin journals can handle the volume. Imagine your Bitcoin journal trying to clear a (U.S.) billion transactions a day.

vr46 5y ago

Sounds like it's game over for El Presidente soon - technology aside, the entire strategy is sketchy as hell, to my knowledge. Everything around Chivo appears to be classified, including who holds the Bitcoin. Nobody in financial regulation or central banking is prepared to talk about it - why? I have spent only a little time there, I drove across it twice, and it's staggeringly beautiful, but my key takeaway was that the country has very strong reasons to not trust their government. The current leader has been demonstrating all the classic power moves of a dictator and "creating a volcano-powered Bitcoin city" is one hell of a dead cat story.

impendingchange 5y ago

Seems the same thing is happening in Turkey: https://www.coindesk.com/policy/2021/12/24/turkey-president-erdogan-to-send-crypto-law-to-parliament-report/ https://www.coindesk.com/policy/2021/12/24/turkey-president-...