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A Week of Failing to Pay with Bitcoin in El Salvador
- deleted 2y ago[deleted]
- npoc 2y agoThe fact is that bitcoin's current primary use-case is long term store of value. To use bitcoin is to simply hold it for years, protecting yourself from the dilution of value that occurs in any other liquid asset in the world, of which fiat currencies are the worst. Once you stop looking at the world through the fiat lens, things make far more sense. For example, house prices are currently the lowest they've been in 40 years, if you use gold as your unit of account.
- mcmcmc 2y agoIllicit trade and money laundering are the only real use cases for crypto. Full stop.
- PCalvanelli 2y agoCash is primarily used for illegal transactions, tax evasion, and illicit activities. There’s little legitimate reason for people to use it.
- ronsor 2y agoOnline anonymity only allows bad actors to spread propaganda and misinformation. There's no reason to have it.
- XorNot 2y agoI mean that's literally true though? The reason we have cash is (1) we used to not have widespread electronic instant settlement systems and (2) because you still generally need some type of physical fallback system because we energy sources and communications networks aren't always up. Bitcoin is bad at 1 - 7 transactions per second (something something lightning network), and completely fails at (2) because it can't settle transactions without the internet, and electricity.
- SilasX 2y agoThat may be what you think of as the core reason for cash to exist, but you shouldn't speak for others, who may see the privacy as a more relevant upside.
- BriggyDwiggs42 2y agoBuying illegal drugs is often legitimate imo.
- aorloff 2y agoWhat about government services that only take cash ? Private transactions of a non-criminal nature ? Legal wagers made in casinos ? Your imagination is lacking my friend.
- catlikesshrimp 2y agoIt is not like crime depends on cash. Panama papers, tax paradises etc. Cash enables some illegal activity, but at least for me the benefits FAR outweight the obvious consequences
- mcmcmc 2y agoThis is false. Cash is legal tender.
- JumpCrisscross 2y agoNot what that means.
- mcmcmc 2y agoWas responding to this > There’s little legitimate reason for people to use it. Cash is “legal tender, for all debts public and private”. Pretty sure that’s a legitimate use.
- Shosty123 2y agoIf you know a way to pay someone across the world in seconds for cents in transaction fees, I’m open for alternatives.
- Tesl 2y agoI pay people globally through HSBC all the time. Works instantly. I never understand this argument anyway. If you can't send funds instantly that isn't because the currently itself can't be transferred instantly - it's because for whatever reason you don't have access to a provider that will provide that service. That's a separate problem and can be solved without having to build an entirely new currency / financial system.
- rendall 2y ago>> Illicit trade and money laundering are the only real use cases for crypto. Full stop. > HSBC... Also a conduit for illicit trade and money laundering. https://www.bbc.com/news/business-59689581 https://www.bbc.com/news/business-59689581
- Shosty123 2y agoI highly doubt your claim. There is no mechanism to send money internationally (at least in Canada) that is both near-instant and free or near-free.
- cj 2y agoYou can't pay someone "in seconds" with Bitcoin. Oftentimes it takes up to 5 minutes just for the transaction to begin, and usually more than 20 minutes for the transfer to complete.
- Shosty123 2y agoRight, I use SOL, not Bitcoin. Transactions are pretty much instant and cost a couple cents.
- HWR_14 2y agoVISA/MC work well. Banks seems to also be able to send the money trivially.
- bwestergard 2y ago"house prices are currently the lowest they've been in 40 years, if you use gold as your unit of account." Houses prices are also very low compared to 40 years ago if you use Grade A Eggs as your unit of account. So what? Bitcoin seems like a pretty bad store of value because it's more volatile than most index funds.
- MuffinFlavored 2y agoI think a lot of people are waiting for this BTC fad to be over, its current round of manipulation to run dry, and for it to fall to obscurity.
- conductr 2y agoI've been waiting for that since that one time it shot up to ~$30 and then crashed to ~$5, I thought it was the blow it needed to kill it... jokes on me I guess
- samatman 2y agoMarkets can stay rational longer than you can stay insolvent.
- samatman 2y agoOh hey, all time high, right on schedule.
- vdvsvwvwvwvwv 2y agoBitcoin is a bad store of value because there is no value. If you look at Bitcoin as in game tokens, but one where tokens are given away to people who prove they have burned cash, you see it is a negative sum system. Even Gold as store of value is questionable. It is a commodity. But we are entering naked empiror territory and I will avoid that hill. Back to Bitcoin: it is basically a bet on mass adoption. If that mass adoption doesn't happen it is a ponzi. If it does the price should stabilize, even then not sure if it is a store of value. Disclaimer. I actually own some.
- henning 2y agoConsidering how Bitcoin's price has been manipulated in the past and how concentrated it is in the hands of a small cabal of whales and miners, this is total bullshit.
- p1necone 2y agospeculation is the primary use case. Nobody is using their Bitcoin wallet like a regular bank, they're using it like an extremely volatile share portfolio hoping it keeps going up.
- npoc 2y agoThis is meaningless. You are using a bank speculating that it will not suffer a bail-in/bail-out/hyperinflation.
- JumpCrisscross 2y ago> You are using a bank speculating that it will not suffer a bail-in/bail-out/hyperinflation You’re confusing speculation with taking a risk. If people are putting money in a bank with the expectation of profiting from its government guarantee, we’re in a credit crisis. The system is working as intended. Most of the time, the money in there is expected to stay still. Most crypto buyers are buying with the expectation of appreciation.
- npoc 2y agoBoth are speculating. Both are taking on risk whether they understand it or not. I would argue that the risk of bitcoin being a lower value in ten years is tiny, and also that chance of the dollar's value halving or worse over the same period, is almost certain. You might speculate the opposite.
- nkrisc 2y agoI suspect my offer of several pounds of gold will likely need to exceed competing cash offers by a significant degree to be accepted by the seller of the house I’m trying to buy.
- carlosjobim 2y agoIt's not any different than having your savings in a more reliable foreign currency: you can quickly exchange it to local currency without any such premium. The same for gold or Bitcoin. Any El Salvadorian saving up for a house would be wiser to save in gold or bitcoin, than local fiat.
- TaurenHunter 2y agoSee Gresham's Law: https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
- larrysalibra 2y agoThis was in line with my experience in El Salvador in June of this year as well…if you don’t specifically seek out a business because you already know it accepts bitcoin, it’s not going to take Bitcoin. Of the businesses in El Salvador marked on a map as supposedly accepting bitcoin (in bitcoin hotpots like Bitcoin beach), ~1/3 wouldn’t actually accept it for some reason or another. That said, Bitcoin acceptance in El Salvador was still much better than I expected (perhaps my expectations were too low). With a bit of planning, patience and persistence it is possible to have an entire trip in El Salvador using only Bitcoin
- seltzered_ 2y ago" Yet my trip to El Salvador revealed a gap between the promise and the reality. At restaurants, hotels, and shops, my attempts to pay with bitcoin were met with confusion or outright rejection. Despite a 2021 law requiring businesses to accept bitcoin, every establishment I visited turned it down." There were protests around this back in 2022. See https://moneyontheleft.org/2022/07/16/bitcoin-in-el-salvador/ https://moneyontheleft.org/2022/07/16/bitcoin-in-el-salvador...
- patrickhogan1 2y agoIt’s smart for El Salvador to hold bitcoin. It scares the IMF into handing them concessions and it acts as a great store of value in the meantime.
- deleted 2y ago[deleted]
- cj 2y agoWith its price volatility, Bitcoin is a terrible store of value. (It's a speculative investment, not a store of value) It has nearly doubled in the past year. Which is great if you're holding it as a speculative asset. Not great if you simply want a stable price "store of value" Edit: Feel free to downvote or disagree, although if so I'm curious what your definition of "store of value" is and how price volatility factors in if at all.
- TacticalCoder 2y agoDepends for who. There are hundreds of millions of people living in countries where their currencies is way more "volatile" than Bitcoin. Like Turkey and Venezuela these last years, for example. I put "volatile" between quotes because it's only ever volatile one way: inflating into irrelevancy. To me it's simple and all that is needed to go is to look at the message Satoshi put in the genesis Bitcoin block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" This makes it clear Bitcoin is first and foremost a political statement. It's a giant middle finger to governments that do always manage, one way or another, to ever print more money and to grow their public debt ever bigger. That Bitcoin managed to get in this month of October both the FED and the ECB to synchronize publications saying it's time to think about banning Bitcoin shows Satoshi's middle finger worked.
- lenerdenator 2y ago> It's a giant middle finger to governments that do always manage, one way or another, to ever print more money and to grow their public debt ever bigger. This is still better than a currency which is deflationary by nature, which BTC is. Deflationary currency doesn't get spent. What fool would hand his Bitcoin over for some bread now, when he could buy twenty loaves of bread if he just waits until the last BTC is mined?
- catlikesshrimp 2y agoIt has to be noticed that technological implementations in Central America are very poor. I don't mean cheap - inexpensive. I mean terribly executed. There is usually an "international company" selling the "core technology" at a very inflated price, then there is the required middleman who is THE friend of the government and is in practice the one anointing the "tech company", and finally a government which has No Idea what problem they want to solve. Remember since launch Chivo had high downtime, bugs and even easy system abuse like stealing people's entry bonuses. And the local Chivo network was an already more reliable than its integration with bitcoin. The main feature for the target population was to streamline receiving money from their relatives who worked abroad.
- fijiaarone 2y agoI believe everything the media tells me. So I'm going to dismiss this "anecdote" because the plural of reality is not data.
- senectus1 2y agoone of the promises of bitcoin was lower to no fees. The few transactions I've used BTC for have had some hefty transaction fees.. and order of magnitude higher than CC/EFTPOS etc and yes I tend to choose the slowest transaction speed to lower the costs. For online service.. a $80 purchase costs at least $2.00 For a online purchase for computer hardware I paid over $45 for a $2k purchase. BTC fails hard in the real world as far as I'm concerned. The little I have left from mining while the sun was up, I'll use for just silly purchases online.
- hackernudes 2y agoHow about the second layer lightning network? There are trade-offs but fees are low and payments are much more anonymous.
- janalsncm 2y agoIf we’re going to centralize transactions why not just use Visa? Instantaneous, fairly low transaction fees, non-public. It’s also reversible and doesn't have a fluctuating exchange rate with local currency.
- Yizahi 2y agoThe tradeoff is centralization. Basically you now have the worst parts of tokens and money combined together with none of the benefits. Using Lightning is like using an unregulated and uninsured private bank. BTC at least have some semblance of decentralization, unlike Lightning IOUs. Another issue is that it takes millenias to even onboard every adult to the L2, because every such transaction needs to be done on L1. So ti will take between 15 to 20 years just to onboard everyone on L2 without even doing any other transaction. Same 15 to 20 years to move back to L1 if needed. Next issue is idiotic architecture of Lighting. It requires people to open a bidirectional tunnel from their L2 wallet to every single peer they will transact with and and lock inside the channel the amount of tokens in excess of all transactions with this peer. You want to buy a coffee - go open a tunnel with a cafe and lock 5$ in it until transaction is completed. You want to buy 50$/m subscription? Open 600/1200/1800$ tunnel to the provider in advance, or open a tunnel for every transaction. And every tunnel creation and every destruction is an L1 transaction, which is limited to 5-6 tps for the whole world. Then L2 need to solve NP=hard problem for every transaction, and the difficulty will scale exponentially with the number channels. All this, plus atrocious technical implementation, where a lot of transactions just fail due to bugs and instability leads to the worst monetary system I have ever heard about.
- TacticalCoder 2y ago[flagged]
- lenerdenator 2y agoWhataboutism isn't a valid defense. Also, if the US national debt were to be denominated in Bitcoin, the change in debt every 100 days would be 1 trillion, then 5 trillion, then 500 billion, then 750 billion...