26 ms·

El Salvador abandons Bitcoin as legal tender

927 points by smallerfish 2y ago

mkoubaa 2y ago
PSA: If you don't like Bitcoin you might want to read the article before you post your knee-jerk reaction to avoid embarrassment.
- k__ 2y ago
  Yes. I'm not a Bitcoin fan, but that title seems a bit misleading.
modeless 2y ago
Hmm, sounds more like an IMF requirement than something the government wanted to do. It's not news that the IMF is opposed to the use of Bitcoin as legal tender.
Mengkudulangsat 2y ago
> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.
- ggm 2y ago
  Investment is not legal tender, its moved from a functional role to a high risk investment strategy, would be my take. They're different buckets of money/value and expectations.
- sealeck 2y ago
  [flagged]
- a1371 2y ago
  Imagine you have 6,050 bitcoins but they didn't work out for you the way that you hoped. The most reasonable thing to do is to still advertise a bullish position because otherwise you are devaluing your own asset. There is a strong sentiment around bitcoin in El Salvador and it can make them money; but the experiment around it being a legal tender, well, failed.
  - readthenotes1 2y ago
    They only doubled and tripled in value. Gotta wonder what you think they expected
    - Torn 2y ago
      It to be a viable currency? Not a speculative asset?
  - FollowingTheDao 2y ago
    That’s called a rug pull IRL.
- do_not_redeem 2y ago
  That's probably why OP chose a highly editorialized "Tico Times" article as the source for this. What's even funnier is it's a Costa Rican newspaper. So one Central American country publishes an article smearing another Central American country, and then HN sees the bias-confirming headline and tries to glean some economic lesson from it. Classic.
  - wontondisregard 2y ago
    [flagged]
- the_af 2y ago
  From the article: > Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024. I would say this points to an actual failed experiment, if true.
  - yreg 2y ago
    8% is quite a lot though.
    - the_af 2y ago
      Depends for what. What were Bukele's stated goals? Only with this in mind can we decide whether 8% is high or low.
    - mvdtnz 2y ago
      8% of people used it at least one time in an entire year. In a place where people (who have on average very low incomes) were given $30 worth of bitcoin by their government just for signing up to a wallet app, so a very, very large proportion of the populous (compared to any other country on Earth) already had an app and wallet set up and ready to go. That's not a lot. That's a clear indication that the experiment simply didn't work.
    - throwaway314155 2y ago
      This "everything's going great as long as you squint hard enough" stuff is why people don't give cryptocurrency proponents the time of day. At some point admitting you've lost actually better preserves your ability to be heard at the next debate.
      - yreg 2y ago
        When I consider 8% to be high and you don't, that makes me more skeptical of mainstream adoption as a currency than you are.
- cwillu 2y ago
  “Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” --https://reason.com/2025/02/03/el-salvador-walks-back-its-bitcoin-law/ https://reason.com/2025/02/03/el-salvador-walks-back-its-bit... Sounds pretty failed to me.
  - desumeku 2y ago
    They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.
    - kjs3 2y ago
      'Withholding'...well how dare they. So how many IMF bailout loans must be dispersed, without condition of course, before this BTC economy will magically work?
    - sitkack 2y ago
      [flagged]
      - RabbiNoseberg 2y ago
        [dead]
      - addicted 2y ago
        Yeah, the all so powerful IMF that can be thwarted by the incredibly difficult task of…checks notes…. not taking loans from them… The IMF (or its donor nations) aren’t forcing anyone to take loans from them. Countries do that because the IMF offers much cheaper rates they can get anywhere else and is willing to forgive those loans far more easily than any other entity. In return it expects certain good governance changes that are stated upfront as conditions to receive the loans you could very well get from anywhere else in the world. Don’t like what they consider good governance? Don’t take a loan from them. Go get in the private market or the variety of nations willing to lend at far more onerous terms.
- deleted 2y ago
  [deleted]
- iforgot22 2y ago
  Better article: https://www.reuters.com/world/americas/lawmakers-el-salvador-rush-new-bitcoin-reform-after-imf-deal-2025-01-30/ https://www.reuters.com/world/americas/lawmakers-el-salvador...
- raincole 2y ago
  The recurring theme is people will keep explaining why bitcoin has failed and will fail. And bitcoin will keep hitting all time high.
- rsynnott 2y ago
  It's no longer legal tender; merchants will no longer be forced to accept it. That's the key point; if the state wants to indulge in speculation, that's its business (though you'd question whether a state which needs to take IMF loans, which are kind of a last resort, should really be engaging in this...)
sebmellen 2y ago
All for a mere $1.4B in international loans from the (supposedly evil and corrupt) IMF… Wasn’t El Salvador supposed to be Balaji’s first “Network State”? What happened to strike wallet and that whole crypto grifter crew?
- xiphias2 2y ago
  Bukele realized that it's more profitable to leave the legal tender and get a loan and buy Bitcoin from it instead.
- rozap 2y ago
  > What happened to strike wallet and that whole crypto grifter crew? They always seem to get out before the prices tumble.
- deleted 2y ago
  [deleted]
- hackernudes 2y ago
  Do you mean Chivo wallet? It will probably shut down. Strike is still operating (in many countries including the US and El Salvador) and has a physical office in El Salvador.
ggm 2y ago
Speculative asset class fails as non-speculative legal tender class. If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems. Like a lot of people, I probably fall into severe errors which would be bread and butter for "bad economics" reddit groups but truly, I can't see how this wasn't forseen and expected. It was about WHEN, not IF.
- Terr_ 2y ago
  > sovereign wealth fund That reminds me of Hong Kong, where I used to live and which maintains a large sovereign wealth fund to ensure its currency is pegged to the US dollar. While various US think tanks ranked it well on their checklists of "economic freedom", they tended to gloss over the rest of the recipe that made it work. Not just the huge sovereign wealth fund, but also how half the housing is government-run or subsidized and you don't really own land, you just rent it for a very long term from the government.
  - jaggederest 2y ago
    > you don't really own land, you just rent it for a very long term from the government. This is probably economically a good idea, absent something like georgist land taxes. It eliminates some or all of the incentive to speculate in land, which is of course the whole problem El Salvador ran into with bitcoin as currency.
    - ggm 2y ago
      It hasn't entirely stopped rents in HK being untenably high, for many people. It has rent controls, but the system permits some very untenable outcomes which if left unchecked would re-create Kowloon Walled City. So whilst politically I agree, practically I am unsure there is no land speculation: A waterfront view remains valuable in and of itself, no matter what.
yuppiemephisto 2y ago
Unsurprised. I got the impression Bukele picked bitcoin in a sort of manic ADHD moment and no one pushed him on it, figuring it was their president’s personal indulgence.
- kylebenzle 2y ago
  Actually it was the for profit corporation that hijacked the Bitcoin GitHub repo a decade ago, Blockstream, that pushed the idea, Samson Mow specially is the one who deserves most blame.
wyck 2y ago
They have made just over 300 Million off the initial BTC purchase, and as of 15 minutes ago, continue to buy BTC everyday. They even have their own tracker, https://bitcoin.gob.sv/ https://bitcoin.gob.sv/
- rounce 2y ago
  Seems a bit dodgy to refer to state assets as if they were the personal possessions of Bukele in the way which that site does.
  - wyck 2y ago
    I pasted the wrong link, corrected the above with .gov.sv domain .
- lern_too_spel 2y ago
  I'd be surprised if DPRK doesn't already have access to the wallet and is just waiting to get the most out of it.
  - desumeku 2y ago
    I highly doubt their BTC reserve is connected to the internet.
    - wyck 2y ago
      It's likely in cold storage , but the tracker is using the wallet address. For example, about 1 hour ago they bought 1m in BTC: https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f0e47d9cc261c75ba9f9621b0add2b1 https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f... The address is : 32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo
    - lern_too_spel 2y ago
      It's just a private key. You don't "connect" private keys to the Internet. You just have poor processes keeping it hidden while not losing it. I'm surprised you think El Salvador can do that.
epolanski 2y ago
Nobody wants to spend it anyway, just hoard or sell it to the next sucker willing to shell more $. Among all the crypto shills I know I'm probably the only one who has used it for trade (0.25ish Bitcoins for a computer on caseking.de in late 2017 and few goodies on local bitcoin in the same year).
- dmix 2y ago
  Mostly because transferring BTC is very expensive. Every time I’ve done it I’m shocked at the fees that sites like Bitbuy requires. So if you’re going to do it then it has to be for a good reason.
  - epolanski 2y ago
    I still remember getting mocked because "lighting network is coming"...8 years ago. Still doesn't work. It's not just expensive, it's difficult, slow, error-prone and offers 0 convenience over standard means of payments.
    - deleted 2y ago
      [deleted]
    - max51 2y ago
      >Still doesn't work I've been using LN regularly for over a year. It works fine and it's extremely cheap.
  - xp84 2y ago
    This is fascinating to me because we were told 15 years ago (ish) that one of the main things that made crypto special (besides it being guaranteed finite unlike fiat) was that unlike say, Visa, it would be economic to use, even for small transactions, because The Big Banks wouldn't take their ~3% cut of every transaction. We all assumed that cut was determined by greed, but if Bitcoin is expensive to transact in now, it could be that in free market terms, that there is actually a certain value people place on the ability to move funds around, and if Bitcoin were much cheaper, that there is room for middlemen to take margin and push the effective cost of using crypto closer to the fees we hate being charged by banks to use the card networks.
AnotherGoodName 2y ago
“Bitcoin success in El Salvador nets country $600million as bitcoin gains value.” https://apnews.com/article/bitcoin-elsalvador-bukele-musk-trump-5be81d375da5bbce883008b0799c0c1a https://apnews.com/article/bitcoin-elsalvador-bukele-musk-tr... It even seems that the above is a very minor change that in no way changes the outcome here. El Salvador did well and looks to continue to do well with its bitcoin policies.
- deleted 2y ago
  [deleted]
justo-rivera 2y ago
Should have used monero, virtual cash with a little less privacy By the way all the comments in a thread like this will look like bots
k__ 2y ago
"if someone owes you money and wants to pay you in bitcoin, you can refuse to be paid in bitcoin, but you cannot refuse if it’s legal tender" Wat
- mikeyouse 2y ago
  Under the former law where bitcoin was legal tender, if someone owed you money, they could insist that you accept bitcoin to settle the debt. Most people wanted nothing to do with bitcoin so they removed the legal tender designation.
  - coliveira 2y ago
    Who would want to receive payment in a currency that can lose 20% of its value in an afternoon? Only speculators are interested in this.
sarcasmatwork 2y ago
Misleading. Under the new rules, bitcoin is no longer considered "currency," though it remains "legal tender." https://reason.com/2025/02/03/el-salvador-walks-back-its-bitcoin-law/ https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...
- josu 2y ago
  They literally removed the term "moneda de curso legal", which translates as "legal tender", from Article 5. https://x.com/monicataher/status/1884971499129610322 https://x.com/monicataher/status/1884971499129610322
- cwillu 2y ago
  “The reform eliminated the word “currency” when referring to bitcoin, but says it is “legal tender.” Despite the lack of clarity, it lifts, as required by the IMF, the obligation to accept it in transactions or debt payments, a key condition for it to be “legal tender,”” Edit to add a quote from your preferred link: “Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” If I can't pay my taxes with a token of economic exchange, and people aren't required to accept my tokens of economic exchange, the only remaining sense I can make of it being “legal tender” is that it is not illegal to use it, but that's not what “legal tender” means.
- xp84 2y ago
  this article, though appearing pretty machine translated, points out that the law removes the obligation for anyone to accept Bitcoin as payment of a debt, while not (for some reason) removing the "legal tender" language -- which is a complete contradiction. This makes as much sense as saying that Walmart has no obligation to accept Visa cards anymore, but that they're still a "valid method of payment at Walmart" -- except of course that "Legal Tender" has an explicit legal definition (apparently even in El Salvador). This sounds like a really badly written piece of legislation. Perhaps there are shady dealings going on where someone powerful stands to lose a lot of money (or BTC) triggered by "if it ceases to be Legal Tender", but also apparently pressure was too great to abolish that legal tender status in practice, so this ridiculously-written law was passed to attempt to have it both ways.
ptero 2y ago
That's heavy editorializing: El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it. But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status. Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.
- p_j_w 2y ago
  >Now the businesses are free to accept it or not instead of being required to accept it. That's all. Right, so it's no longer legal tender.
  - antihipocrat 2y ago
    Legal tender does not have to be a mandatory means of exchange.
    - abduhl 2y ago
      That is actually the defining characteristic of legal tender: “money that is legally valid for the payment of debts and that must be accepted for that purpose when offered” https://www.merriam-webster.com/dictionary/legal%20tender https://www.merriam-webster.com/dictionary/legal%20tender
      - antihipocrat 2y ago
        Thanks, you're right and I was totally wrong. I'd delete my comment if I could
      - rsynnott 2y ago
        Its status in El Salvador was actually a bit more than _just_ legal tender; merchants were _required_ to accept it. For instance, the euro is legal tender in the eurozone. I can pay a tax bill or a bank loan with 10cent coins, and technically they have to accept that (though note that some countries do have special rules around whether small change is legal tender). However, a merchant is not required to take my wheelbarrow full of 10cent coins in exchange for goods and services; no debt exists before the purchase. El Salvador was forcing the merchant to take the wheelbarrow.
abdullahkhalids 2y ago
In the 15 years since Bitcoin went viral, has someone proposed a reasonable social, legal and financial protocol for how a society can adopt a novel cryptocurrency without getting stuck in the phase where the cryptocurrency becomes a speculative asset rather than a common medium of exchange? By novel, I mean not using an existing cryptocurrency that is already stuck in the speculative asset phase. Surely, if a government wants the people in the country to use a novel cryptocurrency, it has a lot of levers of control which some distributed libertarian minded community simply doesn't.
- est31 2y ago
  Customers use currencies if it lets them buy stuff. Shops accept currencies if people come and want to buy stuff with that currency. In touristy places, it's common to see people list their prices using currencies from common originating countries, regardless of the legal currency in that country. Any new thing needs to be better than the current thing at least in one domain, if it wants to grow users. Fiat currencies work so well, that the only niches cryptocurrencies can find is crimes really, avoiding financial sanctions, etc. Like China for example bans their citizens to trade the chinese currency for foreign currency (above small limits). Then buying bitcoin domestically makes sense if they don't trust the chinese government to keep their own currency valuable. Of course, all the exchanges operating in countries where there is reasonable laws require KYC to be in place. Cryptocurrencies are also in many ways more trackable than non-crypto currencies. So for crime it makes no real sense to use most crypto currencies.
  - abdullahkhalids 2y ago
    > Any new thing needs to be better than the current thing at least in one domain For instance, my native country, in an effort to digitize the economy has passed a law that if you pay digitally or with a card at a restaurant you pay only 5% sales tax instead of 16% if you pay via cash. Some government wanting to encourage the adoption of a cryptocurrency can take similar measures. Governments have options that Vitalik Buterin does not.
- wmf 2y ago
josu 2y ago
While it is true that adoption remained relatively low, the reason why they abandoned it is that the IMF made it a condition for the Salvadorian government to be able to receive a 1.4B loan.
- rsanek 2y ago
  Why did they need the loan so bad they had to change their currency?
  - wmf 2y ago
    Because they're broke.
    - EdwardDiego 2y ago
      Yes, but why.
  - josu 2y ago
    They didn't, the IMF just offers better terms than the free market. And they are still doing their Bitcoin thing, this was just a small concession they were willing to make.
    - el-salvador 2y ago
      El Salvador has had limited or very expensive access to the bond market for the past years. I thinkneed it, otherwise they wouldn't have made a law to loan money from El Salvador's pension funds with 0% interest.
ionwake 2y ago
[flagged]
ks2048 2y ago
Do pro-bitcoin people still talk about goals of bitcoin being a currency that people use daily? I don't follow it closely, but that idea seems to have faded and now it's just an asset to buy and hold while it magically goes up forever.
- desumeku 2y ago
  For daily usage, Bitcoin is simply inferior to Ethereum and other blockchains.
  - block_dagger 2y ago
    That opinion is not shared by those who think Proof of Stake and no ceiling to supply are bugs vs features.
    - desumeku 2y ago
      Those issues are not really relevant when it comes to factors like transaction speeds and the diversity of assets available to transact with, such as stablecoins, as well as DeFi platforms to actually use those assets on.
      - verdverm 2y ago
        When most people hear daily usage, they think groceries, bills and paycheck, not day trading on an exchange, defi or centralized. In this regard, crypto currency is not really a currency that people can use for their daily lives without worry and risk from volatility
        whimsicalism 2y ago
        yes it is, just use stables. frankly it is a much more convenient way to move money if the other person has it as well e: and i’m no crypto obsessive really, i don’t think it was usable even 3 years ago but it’s pretty handy now, can easily send $20 in usdc on base or use it to purchase carbon offsets or use it on election/sports betting or use it to purchase deepseek r1 credits…
josu 2y ago
Here is the retained purchasing power of each of the coins since the law was passed in September 2021: Legal tender 1: -15% Legal tender 2: +115% Guess which one has been deemed a "Failed experiment".
- gameman144 2y ago
  I would guess "Legal tender 2" was deemed a failed experiment, since rapid deflation is extremely undesirable in a currency.
  - toenail 2y ago
    > since rapid deflation is extremely undesirable in a currency What do you mean, why should my money NOT go up in value?
    - Unearned5161 2y ago
      if you genuinely are interested in an answer to your question, I recommend this blog post by Matt Ranger: https://singlelunch.com/2020/10/21/badeconomics-putting-400m-of-bitcoin-on-your-company-balance-sheet/ https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
      - toenail 2y ago
        That's a long post that seems to tell me it's bad for the economy. It's not my job to help the economy. Again, why should I use a money that loses value?
        Unearned5161 2y ago
        That's an odd take. What's bad for the economy is, for the most part, bad for you. But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but its giving you different things. Now imagine you don't have a hot potato, you work and you get paid in... idk, something you don't want to get rid of. You struggle with letting go with your currency and so it costs you when you're trying to do exchanges. Similarly, if you're a shop owner or something, people are more hesitant to give you their currency as well. Things get slower, and darker, like a mechanical flashlight that you're spinning slower and slower.
65 2y ago
BTC doesn't work as legal tender since it's deflationary, has high fees, and is slow. Bukele got lucky gambling on BTC, perhaps now would be a good time to cash out.
- kylebenzle 2y ago
  The only reason BTC doesn't work as legal tender (but original Bitcoin did) was the GitHub repo was hijacked by Blockstream and several hacks injected to corrupt the project.
twothreeone 2y ago
I don't particularly like BTC (as it senselessly burns huge amounts of energy, thereby actively contributing to the destruction of our biosphere), but this news post is intentionally misleading. As reported by many other outlets (e.g. [1,2]), El Salvador abandons BTC to qualify for an IMF loan - so the IMF is pressuring them towards this move (presumably for political reasons). [1] https://finance.yahoo.com/news/el-salvador-changes-bitcoin-rules-164742636.html https://finance.yahoo.com/news/el-salvador-changes-bitcoin-r... [2] https://www.msn.com/en-us/money/financial-regulation/el-salvador-quickly-approves-bitcoin-law-to-comply-with-the-imf-s-deal/ar-AA1y6S8s https://www.msn.com/en-us/money/financial-regulation/el-salv...
- RabbiNoseberg 2y ago
  [dead]
- wyager 2y ago
  The resource usage is not senseless; it's the core aspect of Bitcoin that makes its security model so trustworthy.
- the_af 2y ago
  In general, resorting to the IMF is not a good sign to begin with. What were Bukele's goals with his policy of adopting bitcoin?
- bawolff 2y ago
  Its not like IMF had a gun to their head. They could have refused the loan. At the end of the day they abandoned the policy because they believe it will help the economy to abandon it (indirectly via the loan). I certainly wouldn't call that a success.
- attila-lendvai 2y ago
  and USD senselessly burns up entire countries... e.g. most recently that giant, and very destructive money loundering operation in ukraine... somehow everyone forgets that wars don't make sense and shouldn't really be financeable... and yet they are. BTC can burn orders of magnitude more energy if it makes financing wars just twice as hard as it is today...
exabrial 2y ago
Bitcoin has a lot of flaws as a currency. Don't worry.... there are at least 100,000 other "coins" to choose from. /s
- EVa5I7bHFq9mnYK 2y ago
  In fact, there are 11 million coins, 10k new are created every day. Still, 57% of all the value is in only one coin, guess which one.
ddtaylor 2y ago
As a cryptocurreny enthusiast I think the execution here and it's goals weren't aligned to begin with. It was nothing more than a custodial wallet and it was not implemented or deployed in any meaningful way. You can't write any useful smart contract to "do" anything and without any of that it doesn't compete for shit against centralized digital payment systems in terms of efficiency or simplicity.
sporkydistance 2y ago
Nothing says stability like a "currency" that swings +/-1000% in value.
- wwwtyro 2y ago
  How does anything swing -1000%?
outside1234 2y ago
Who could have predicted this
lacker 2y ago
By branding itself as "crypto-friendly", El Salvador managed to get Tether to relocate there. That seems like a pretty big deal for a country that otherwise would never attract any sort of tech company. So I wouldn't call it a "failed experiment" per se - more like a publicity stunt that has achieved publicity.
NonEUCitizen 2y ago
"Failed Experiment" is euphemism for "IMF pressure."
- the_af 2y ago
  Well, if you're successful you don't need an IMF loan...
starspangled 2y ago
It's interesting and nice to see how progressive and creative El Salvador has been. Some failures are perfectly understandable when one is willing to try new things. Their approach to crime is another thing that comes to mind that was lambasted and ridiculed by the "international community" and "experts". Yet in the space of a single decade they went from murder capital of the world to safer than New Zealand (in terms of homicide rate), which is just staggering. I love that they are innovating and experimenting and trying their own things, and don't let the stuffy pompous status quo hold them back.
- BryantD 2y ago
  Note that their official homicide numbers no longer include bodies found in unmarked graves (as of 2021), people killed in conflicts between police and gangs (as of 2022), and people killed in prison. These are arguably reasonable decisions but unless you backfit the old numbers, you don't have the real trend. I suspect that the trend would be impressive either way, you'd just lose the "safer than New Zealand" line.
  - starspangled 2y ago
    Well there's no need to suspect, homicide rates were dropping like a rock before 2021. Perhaps faster than has been achieved by any other social reform on record.
- EA-3167 2y ago
  This is... a strange and jarring thing to read. My kneejerk response was that yes, they are innovating and experimenting with oppressive and corrupt governance, but that is ultimately uncharitable. A more balanced response is that while you may personally think of Bitcoin as progressive (I can't imagine why) you certainly can't claim that Bukele's El Salvador is progressive. You may like the gang crackdown, you may appreciate the suspension of habeus corpus, but you can't claim that's a progressive position.
  - starspangled 2y ago
    I don't think "bitcoin" is progressive, bitcoin is a technology. I think the idea of trying a decentralized electronic currency is progressive. Whether they implemented it well or should have seen the problems with using it as a currency is one thing, but in the idea of trying something new sure I think it was good. I don't think it caused grave harm to try. And I certainly can claim that their policies on crime are progressive. They are prioritizing the rights of the many law abiding people who have a fundamental human right to live unmolested and unterrorized by criminals. I think that is very progressive and quite a radical departure from the status quo. I don't think I have ever heard "human rights advocates" and UN types opine and lament the human rights of people who have to endure this type of criminal society and I think it is brave and progressive to fight for them. I absolutely understand that it has required concessions and weakening of rights in other areas, and I don't say that is a good thing, but everything is a tradeoff right? If they continued conservative status quo the tradeoff would have been other peoples rights continuing to be violated. Just because it's not "progressive" as exactly defined by an elite ruling class in the "international community" and think-tanks and academia, and the leftist intelligentsia at large, does not mean it is not progress in social reform and improvement for the greater good. To the actual people who have to live in El Salvador, approval for Bukele's reforms are staggering. I'm sure a lot of the "experts" who assured everybody they would never work are upset about it because they have a lot of egg on their face now, but fortunately the country has a bright young progressive leader who cares about the people more than the elitists say.
dgfitz 2y ago
I hope this is the domino that tips crypto over the edge.
- LAMike 2y ago
  Yes I think this is going to be the end of Bitcoin, we'll never hear about it again after this year
  - do_not_redeem 2y ago
    Good riddance, we can finally put this bitcoin nonsense behind us. Let's add this article to the bitcoin is dead site, I'm sure it's finally the end this time! https://bitcoindeaths.com/ https://bitcoindeaths.com/
m3kw9 2y ago
How a currency increase or decrease in price so fast will affect how people spends it. It’s a bull market, yeah let’s wait for it to go up before buying that.
whimsicalism 2y ago
because the imf demanded it of them. not much has changed from the structural adjustment era of IMF fiat, despite all the controversy
fode 2y ago
I spent three months in El Salvador before the Bitcoin Legal Tender law passed, then another three months after it was enacted. From day one, I knew it wasn’t going to work. That’s when I flew back to Miami, went back to the drawing board, and stopped being a Bitcoin maxi.
- arthurbrown 2y ago
  Can you speak more to the difference between the two experiences?
portaouflop 2y ago
IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself
- kristjansson 2y ago
  Conversely if that’s all it takes to induce them to give up it tells you something about the benefits they felt were accruing from BTC.
  - syndicatedjelly 2y ago
    Is that really the message?
  - wongarsu 2y ago
    Keep in mind that El Salvador is tiny. This is like 14 days of El Salvador's entire GDP. Or scaled to GDP, it's like giving a $1.2 Trillion loan to the USA.
  - hammock 2y ago
    El Salvador has been in the IMF debt trap since 1949. It’s not just a billion dollar loan we’re talking about. Although scaled to GDP it’s quite a lot
  - olalonde 2y ago
    They're not giving up on Bitcoin. In fact, it's likely that they'll use the loan to buy more Bitcoin. https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/ https://www.reuters.com/markets/currencies/el-salvadors-bitc...
    - 2y ago
wnevets 2y ago
this is good for bitcoin
hsuduebc2 2y ago
This is not really a surprise.
strangescript 2y ago
Shouldn't they be loaded right now with all the BTC they bought when it was low?
EGreg 2y ago
Here's my take on it: https://community.intercoin.app/t/el-salvador-abandons-bitcoin-as-legal-tender/2915 https://community.intercoin.app/t/el-salvador-abandons-bitco...
ChrisArchitect 2y ago
Is there a new development here or same news as the IMF deal requirements 2 months ago: El Salvador to scale back Bitcoin dreams to seal $1.3B IMF deal https://news.ycombinator.com/item?id=42372064 https://news.ycombinator.com/item?id=42372064
Jimmc414 2y ago
El Salvador invested approximately $269.74 million to acquire 5,900 bitcoins ($595 million) and secure $1.4 billion in IMF loans. I hope they can recover from this failed experiment.
9cb14c1ec0 2y ago
Sorry bitcoin enthusiasts. This was always the most likely outcome.
FreeTrade 2y ago
Bitcoin (BTC) was hijacked and oriented away from use as cash. It was quite obvious BTC was no longer capable of functioning this way and that the LN wouldn't help. There were maybe a half a dozen other networks that might have made a more plausible and interesting experiment in testing crypto as a day to day currency.
twodave 2y ago
Didn’t we learn back in the 1500s that asset-backed currencies are unsustainable? Bitcoin will never, ever be able to take the place of a fiat currency because it carries with it many of the same problems as Spanish silver the conquistadors were traveling all the way to SOUTH AMERICA to mine half a millennium ago. It was essentially a very difficult proof of work. The only real advantage bitcoin has is that it’s easy to carry. Even when the entire world started selling off their gold to the US in the 30s and 40s it became obvious by the 70s that there wasn’t enough gold mining capacity on earth to sustain a global asset-backed currency.
- olalonde 2y ago
  https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ might temper your enthusiasm towards modern fiat currency.
  - twodave 2y ago
    I’m not sure what exact point or points you want me to care about, but none of these charts seem to suggest _why_ we and every other country moved to fiat. I’ll admit I didn’t look at them all, you didn’t give me nearly the effort in your comment that you’re asking from me…
    - toenail 2y ago
      We moved to fiat because politicians like the indirect taxation through inflation. It's free money for them, what's not to like?
      - twodave 2y ago
        That is not why we moved to fiat. It may be a consequence, but there are also seriously consequential checks against doing it too freely.
  - Unearned5161 2y ago
    ooo, read this! https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfhappenedin1971/ https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfh...
openrisk 2y ago
Imagine if the amount of ingenuity that went into building the elaborate speculative digital game that is crypto was actually used to lift underdeveloped countries from their misery. Fighting corruption, enabling healthier local economies, reducing the siphoning of wealth to offshore centers, improving financial literacy etc. etc. Solving real problems is hard. Being distracted by snake oil salesmen, whether they sell digital scarcity or AGI only makes things worse.
- coliveira 2y ago
  Especially when to maintain their Ponzy scheme, crypto players need to use an enormous amount of electricity that could be used to benefit humanity. It is a huge waste or energy and time.
  - desumeku 2y ago
    Bitcoin is the only large crypto that still uses Proof of Work. Almost all competitors use Proof of Stake, which uses almost no energy in comparison.
adamtaylor_13 2y ago
This was never going to work. To me, Bitcoin seems way more like an asset class, rather than a currency. (Despite the name which is a HUGE misnomer for the average layperson.) Nobody invested in Bitcoin believes you should be ordering pizzas or using it as an actual currency. Bitcoin is a long-term play. You can't make a currency out of something that's fluctuating by more than 10,000 USD in a 24-hour period.
zombiwoof 2y ago
What about $MELANIA
donohoe 2y ago
The writing was on the wall way back in 2022. The launch was a dud. People were more likely to use the national wallets for stable-dollar coins then Bitcoin. https://restofworld.org/2022/el-salvador-chivo-bitcoin-wallet/ https://restofworld.org/2022/el-salvador-chivo-bitcoin-walle...
bzmrgonz 2y ago
Maybe they put the cart before the horse. I understand some countries in Africa are having wonderful success with e-wallets. Perhaps El Salvador should have started with e-wallets before crypto to acclimatize the population.
natmaka 2y ago
Bitcoin's value: from mid-2022 to the end of 2023 it hovered between 20k and 30k USD, then 57k to 70k from February 2024 to October 2024, then from 90k to 110k since. Therefore during 2024 people having or obtaining it tend to keep it instead of spending it. Is it surprising?
dhosek 2y ago
Structurally, Bitcoin is a lousy idea for a currency as it is intrinsically deflationary (i.e., even without the speculative inflating of the cost of a Bitcoin, the structure of the coin is such that coins become increasingly scarce and expensive as time goes by). You do not want this in your currency. The ideal is a low-level of inflation which provides an incentive to spend sooner rather than later. With a deflationary currency, the incentive is to put off purchases as long as possible as your currency will buy more tomorrow than it does today. Deflation ends up being economically disastrous, as Japan’s battles with deflation over most of the twenty-first century have shown. This is why, aside from speculation, purchase of illicit goods and ransom payments, Bitcoin has had little traction as a currency.
- ripped_britches 2y ago
  Maybe more importantly even, you need a currency which you can tune in real-time via a central bank. This is one of the reasons that dollar-dependent economies have a hard time managing fluctuations.
- aboardRat4 2y ago
  >You do not want this in your currency. I really want this in my currency. Bitcoin might be a Ponzi scheme, but fiat currencies are even more so.
  - shortrounddev2 2y ago
    [flagged]
  - creato 2y ago
    > I really want this in my currency. A deflationary currency that you own a disproportionate amount of is great. For you.
    - not_really 2y ago
      did the person you are responding to say that he owns a lot of a given currency? How do you know?
october8140 2y ago
Has anyone in this thread used Bitcoin to buy anything in the last month? What was it?
saranshsharma 2y ago
[dead]
pkrulz101 2y ago
They just added 11 BTCs to their reserves?
kernal 2y ago
Bitcoin as a currency was always going to fail. It’s a speculation instrument that wildly fluctuates. Satoshi sealed its fate by limiting it to 21000 coins.
ggm 2y ago
For anyone else who enjoyed this tree, I enjoyed reading this book by Galbraith many years ago. I don't say you have to agree with him politically or economically, but as a basic introduction to the idea of money, and national economies, it's a great read. Money: Whence It Came, Where It Went. John Kenneth Galbraith. (1975) He had a very interesting life.
ipaddr 2y ago
I heard they will be accepting American prisoners in exchange for money from the US. They will also hold US deportees from any country.
seinecle 2y ago
Read the story as if from the Onion and it actually fits
WhereIsTheTruth 2y ago
The people behind bitcoin perhaps thought of creating technologies for their respective CBDC But for the common mortal, cryptocurrencies are not about replacing anything, it's a highly volatile speculative playground, digital gangsters who want to make a quick buck Nobody cares about the ideology Bitcon as legal tender? lol
jongjong 2y ago
Bitcoin is a lousy currency but I'm glad it's valuable because it shows how much of a scam the fiat system is. It's ALL a scam. ALL OF IT. What part of 'ALL' don't you people understand? When Bitcoin, a currency with a measly transaction throughput of 4 transactions per second max and which consumes more electricity than all of Argentina will be worth $1 billion per coin and every rich person around us will be a complete imbecile and every intelligent person will be broke, people will still not comprehend that the fiat system itself is the scam! Einstein was right, human stupidity is infinite. Bitcoin has been growing from strength to strength for almost 15 years now and worth almost 2 trillion market cap... Even if you think it's a bubble, then what's to stop everything else from being a bubble too? Nothing, that's what, it is a BUBBLE it is ALL a bubble and nothing but a bubble and a scam. Consider a system which can support a 2 trillion dollar scam for 15 years straight and ruin an entire generation of young people... What do you call such a system? That's not a sound system. How can you trust such system? What kind of gullible fool you have to be to trust such an obvious scam system? It's like the system found all the most gullible people on the planet then bribed them to the eyeballs, gave them access to global media platforms, so now they run everything and can force their delusions on everyone else. Did you people even hear about the recent USAID scandal or did it bounce right off your thick skulls? It's all a scam; whether you realize it or not; you're a scammer, your spouse is a scammer, your mum is a scammer, your dog is a scammer. We're all dealing in counterfeit money. I've been saying this over and over again for like 10 years straight. Every year what I'm saying is increasingly obvious, but people still don't get it. People's skulls have been getting thicker faster than the information could penetrate it.
throwccp 2y ago
[dead]
riknos314 2y ago
An overview of a subset of the myriad issues that contribute to bitcoin being a very bad currency: https://github.com/theborakompanioni/bitcoin-spring-boot-starter/blob/master/docs/FALSEHOODS.md https://github.com/theborakompanioni/bitcoin-spring-boot-sta...
- the_clarence 2y ago
  That's an interesting link but it's more about trivia than an argument against bitcoin. If you want to have a serious conversation I'm here for you: Bitcoin is slow, not user friendly (utxo model vs account model), wastes energy, and is barely programmable (scripting language is extremely limited)
- riknos314 2y ago
  These are much more technical and don't even mention the more obvious issues: Block settling time: If a transaction isn't complete until 1 (or n) blocks have been committed, and mining a block takes meaningful time, then this places significant constraints on spending. If I go to the store, and buy something with bitcoin, but it takes 20 minutes for the next block to be mined, does the store need to hold the goods in escrow until the transaction clears leaving me stuck waiting for 20 minutes? There's also no guarantee that my transaction ends up in the next block being mined, so I may need to wait an indeterminate amount of time before I can walk out with my paper towels - horrible UX. Lack of physical cash: if the power is out, how do we do business? Tension between wallet security and convenience of spend.
  - john_minsk 2y ago
    Didn't you get the news: BTC is no longer new money. It is new gold now.
sub7 2y ago
They can buy 100 Lummis-es and 100 El Salvadors and bitcoin still won't have a use case outside of fraud and more suckers = number go up
bogota 2y ago
[flagged]
ArtTimeInvestor 2y ago
This could be the IMF fighting fire with gasoline. The IMF is afraid of Bitcoin because it threatens the Dollar. The IMF bribes El Salvador to reduce their support for Bitcoin. El Salvador uses the bribe to buy more Bitcoin. If Bitcoin catches on around the world and the IMF is fighting it by throwing money at it, that could lead to an accelerated adoption curve.
ffjffsfr 2y ago
IMF forced them to drop, but if they want to use crypto as legal tender, why use BTC which has high transaction fees? Why not something with low or zero fees and efficient chain? There is million of crypto out there and most open source, so govt could even launch their own coin on top of existing chains.
- pavlov 2y ago
  3rd world currency is often barely worth the paper it’s printed on. Making it crypto removes even that value. Seriously though, the reason is that they can do digital currency without crypto just fine. For example there are many popular payment operators in Africa who provide money transfers and micro-payments on phones. M-PESA launched in 2007 and has tens of millions of users: https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa These successes don’t usually get reported because they lack the exciting novelty of crypto, even though they are much more popular and usable. They are actual free market solutions, not coin casinos built around libertarian dogma. And for that reason lots of people don’t want to know.
- 127 2y ago
  The lower the transaction fees, the lower the decentralization, security and usage. There has been no new breakthrough that gives "efficiency" without sacrificing other important factors.
127 2y ago
I once bought video games from Steam with Bitcoin. Those were some expensive video games. Bitcoin is a completely new economic tool. It just doesn't seem to work that great as a traditional currency for day to day purchases.
zidad 2y ago
Does anyone know how/if using BTC as daily currency works in practice? Can El Salvadorians just add it to their Google Wallet? I don't know much about cryptocurrencies but there seems to be a scaling issue, last thing I read it can only handle 7 transactions/s, is that still valid? If so, then how would this scale to a country-wide payment system?
Smithalicious 2y ago
Bleh. Seems like the IMF, which was against this for blatantly selfish reasons, basically strongarmed them into this. This is essentially a continuation of colonialism by other means.
seltzered_ 2y ago
Related: https://news.ycombinator.com/item?id=42014013 https://news.ycombinator.com/item?id=42014013 (discussion of 'A Week of Failing to Pay with Bitcoin in El Salvador')
ein0p 2y ago
Bukele says on Twitter they're still buying Bitcoin.
tim333 2y ago
Bitcoin as legal tender, as in something you are legally required to accept as a debt payment, is kind of a terrible idea. What if the person owed money has no idea how to muck around with private keys, not getting hacked and so on? Does your average small law firm who has to deal with legal stuff have any idea how to do that?
- mab122 2y ago
  What if the person owed money has no idea how to check if a bill is not a counterfeit, doesn't want to learn about really small security prints on every note, what if somebody robs their wallet?
  - tim333 2y ago
    I'm not saying the current system is perfect but most people owed money can receive money in a bank account while most probably don't have a bitcoin wallet. Physical cash while legal is fading from use for large transactions.
bigbacaloa 2y ago
[dead]
kkfx 2y ago
The reason why BTCs are not much an usable currency for a whole economy is that they are a deflationary currency like gold, meaning the more time passes the less new BTC are created till the end with no creation at all. This means they will always more interesting to be stockpiled then spent. Also they can't decrease nor increase "as needed" the BTC base, meaning that if you are short of natural resources you can't reduce their usage tightening the number of circulating money. The idea behind BTC is very valid, but they can be more like the old ECU or CFA/CFP not money you normally use for day to day stuff.

927 points by smallerfish 2y ago

PSA: If you don't like Bitcoin you might want to read the article before you post your knee-jerk reaction to avoid embarrassment.

k__ 2y ago
Yes. I'm not a Bitcoin fan, but that title seems a bit misleading.

modeless 2y ago

Hmm, sounds more like an IMF requirement than something the government wanted to do. It's not news that the IMF is opposed to the use of Bitcoin as legal tender.

Mengkudulangsat 2y ago

> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.

ggm 2y ago
Investment is not legal tender, its moved from a functional role to a high risk investment strategy, would be my take. They're different buckets of money/value and expectations.
sealeck 2y ago
[flagged]
a1371 2y ago
Imagine you have 6,050 bitcoins but they didn't work out for you the way that you hoped. The most reasonable thing to do is to still advertise a bullish position because otherwise you are devaluing your own asset. There is a strong sentiment around bitcoin in El Salvador and it can make them money; but the experiment around it being a legal tender, well, failed.
- readthenotes1 2y ago
  They only doubled and tripled in value. Gotta wonder what you think they expected
  - Torn 2y ago
    It to be a viable currency? Not a speculative asset?
- FollowingTheDao 2y ago
  That’s called a rug pull IRL.
do_not_redeem 2y ago
That's probably why OP chose a highly editorialized "Tico Times" article as the source for this. What's even funnier is it's a Costa Rican newspaper. So one Central American country publishes an article smearing another Central American country, and then HN sees the bias-confirming headline and tries to glean some economic lesson from it. Classic.
- wontondisregard 2y ago
  [flagged]
the_af 2y ago
From the article: > Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024. I would say this points to an actual failed experiment, if true.
- yreg 2y ago
  8% is quite a lot though.
  - the_af 2y ago
    Depends for what. What were Bukele's stated goals? Only with this in mind can we decide whether 8% is high or low.
  - mvdtnz 2y ago
    8% of people used it at least one time in an entire year. In a place where people (who have on average very low incomes) were given $30 worth of bitcoin by their government just for signing up to a wallet app, so a very, very large proportion of the populous (compared to any other country on Earth) already had an app and wallet set up and ready to go. That's not a lot. That's a clear indication that the experiment simply didn't work.
  - throwaway314155 2y ago
    This "everything's going great as long as you squint hard enough" stuff is why people don't give cryptocurrency proponents the time of day. At some point admitting you've lost actually better preserves your ability to be heard at the next debate.
    - yreg 2y ago
      When I consider 8% to be high and you don't, that makes me more skeptical of mainstream adoption as a currency than you are.
cwillu 2y ago
“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” --https://reason.com/2025/02/03/el-salvador-walks-back-its-bitcoin-law/ https://reason.com/2025/02/03/el-salvador-walks-back-its-bit... Sounds pretty failed to me.
- desumeku 2y ago
  They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.
  - kjs3 2y ago
    'Withholding'...well how dare they. So how many IMF bailout loans must be dispersed, without condition of course, before this BTC economy will magically work?
  - sitkack 2y ago
    [flagged]
    - RabbiNoseberg 2y ago
      [dead]
    - addicted 2y ago
      Yeah, the all so powerful IMF that can be thwarted by the incredibly difficult task of…checks notes…. not taking loans from them… The IMF (or its donor nations) aren’t forcing anyone to take loans from them. Countries do that because the IMF offers much cheaper rates they can get anywhere else and is willing to forgive those loans far more easily than any other entity. In return it expects certain good governance changes that are stated upfront as conditions to receive the loans you could very well get from anywhere else in the world. Don’t like what they consider good governance? Don’t take a loan from them. Go get in the private market or the variety of nations willing to lend at far more onerous terms.
deleted 2y ago
[deleted]
iforgot22 2y ago
Better article: https://www.reuters.com/world/americas/lawmakers-el-salvador-rush-new-bitcoin-reform-after-imf-deal-2025-01-30/ https://www.reuters.com/world/americas/lawmakers-el-salvador...
raincole 2y ago
The recurring theme is people will keep explaining why bitcoin has failed and will fail. And bitcoin will keep hitting all time high.
rsynnott 2y ago
It's no longer legal tender; merchants will no longer be forced to accept it. That's the key point; if the state wants to indulge in speculation, that's its business (though you'd question whether a state which needs to take IMF loans, which are kind of a last resort, should really be engaging in this...)

sebmellen 2y ago

All for a mere $1.4B in international loans from the (supposedly evil and corrupt) IMF… Wasn’t El Salvador supposed to be Balaji’s first “Network State”? What happened to strike wallet and that whole crypto grifter crew?

xiphias2 2y ago
Bukele realized that it's more profitable to leave the legal tender and get a loan and buy Bitcoin from it instead.
rozap 2y ago
> What happened to strike wallet and that whole crypto grifter crew? They always seem to get out before the prices tumble.
deleted 2y ago
[deleted]
hackernudes 2y ago
Do you mean Chivo wallet? It will probably shut down. Strike is still operating (in many countries including the US and El Salvador) and has a physical office in El Salvador.

ggm 2y ago

Speculative asset class fails as non-speculative legal tender class. If king for the day with a sovereign wealth fund I wouldn't forbid investment choices like this on risk grounds, I mean you need risk assets as well as boring ones, right? But I have problems with the moral quality: it's like state investing in the casino business. Monaco? works fine. Anywhere else? It's got problems. Like a lot of people, I probably fall into severe errors which would be bread and butter for "bad economics" reddit groups but truly, I can't see how this wasn't forseen and expected. It was about WHEN, not IF.

Terr_ 2y ago
> sovereign wealth fund That reminds me of Hong Kong, where I used to live and which maintains a large sovereign wealth fund to ensure its currency is pegged to the US dollar. While various US think tanks ranked it well on their checklists of "economic freedom", they tended to gloss over the rest of the recipe that made it work. Not just the huge sovereign wealth fund, but also how half the housing is government-run or subsidized and you don't really own land, you just rent it for a very long term from the government.
- jaggederest 2y ago
  > you don't really own land, you just rent it for a very long term from the government. This is probably economically a good idea, absent something like georgist land taxes. It eliminates some or all of the incentive to speculate in land, which is of course the whole problem El Salvador ran into with bitcoin as currency.
  - ggm 2y ago
    It hasn't entirely stopped rents in HK being untenably high, for many people. It has rent controls, but the system permits some very untenable outcomes which if left unchecked would re-create Kowloon Walled City. So whilst politically I agree, practically I am unsure there is no land speculation: A waterfront view remains valuable in and of itself, no matter what.

yuppiemephisto 2y ago

Unsurprised. I got the impression Bukele picked bitcoin in a sort of manic ADHD moment and no one pushed him on it, figuring it was their president’s personal indulgence.

kylebenzle 2y ago
Actually it was the for profit corporation that hijacked the Bitcoin GitHub repo a decade ago, Blockstream, that pushed the idea, Samson Mow specially is the one who deserves most blame.

wyck 2y ago

They have made just over 300 Million off the initial BTC purchase, and as of 15 minutes ago, continue to buy BTC everyday. They even have their own tracker, https://bitcoin.gob.sv/ https://bitcoin.gob.sv/

rounce 2y ago
Seems a bit dodgy to refer to state assets as if they were the personal possessions of Bukele in the way which that site does.
- wyck 2y ago
  I pasted the wrong link, corrected the above with .gov.sv domain .
lern_too_spel 2y ago
I'd be surprised if DPRK doesn't already have access to the wallet and is just waiting to get the most out of it.
- desumeku 2y ago
  I highly doubt their BTC reserve is connected to the internet.
  - wyck 2y ago
    It's likely in cold storage , but the tracker is using the wallet address. For example, about 1 hour ago they bought 1m in BTC: https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f0e47d9cc261c75ba9f9621b0add2b1 https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f... The address is : 32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo
  - lern_too_spel 2y ago
    It's just a private key. You don't "connect" private keys to the Internet. You just have poor processes keeping it hidden while not losing it. I'm surprised you think El Salvador can do that.

epolanski 2y ago

Nobody wants to spend it anyway, just hoard or sell it to the next sucker willing to shell more $. Among all the crypto shills I know I'm probably the only one who has used it for trade (0.25ish Bitcoins for a computer on caseking.de in late 2017 and few goodies on local bitcoin in the same year).

dmix 2y ago
Mostly because transferring BTC is very expensive. Every time I’ve done it I’m shocked at the fees that sites like Bitbuy requires. So if you’re going to do it then it has to be for a good reason.
- epolanski 2y ago
  I still remember getting mocked because "lighting network is coming"...8 years ago. Still doesn't work. It's not just expensive, it's difficult, slow, error-prone and offers 0 convenience over standard means of payments.
  - deleted 2y ago
    [deleted]
  - max51 2y ago
    >Still doesn't work I've been using LN regularly for over a year. It works fine and it's extremely cheap.
- xp84 2y ago
  This is fascinating to me because we were told 15 years ago (ish) that one of the main things that made crypto special (besides it being guaranteed finite unlike fiat) was that unlike say, Visa, it would be economic to use, even for small transactions, because The Big Banks wouldn't take their ~3% cut of every transaction. We all assumed that cut was determined by greed, but if Bitcoin is expensive to transact in now, it could be that in free market terms, that there is actually a certain value people place on the ability to move funds around, and if Bitcoin were much cheaper, that there is room for middlemen to take margin and push the effective cost of using crypto closer to the fees we hate being charged by banks to use the card networks.

AnotherGoodName 2y ago

“Bitcoin success in El Salvador nets country $600million as bitcoin gains value.” https://apnews.com/article/bitcoin-elsalvador-bukele-musk-trump-5be81d375da5bbce883008b0799c0c1a https://apnews.com/article/bitcoin-elsalvador-bukele-musk-tr... It even seems that the above is a very minor change that in no way changes the outcome here. El Salvador did well and looks to continue to do well with its bitcoin policies.

deleted 2y ago
[deleted]

justo-rivera 2y ago

Should have used monero, virtual cash with a little less privacy By the way all the comments in a thread like this will look like bots

k__ 2y ago

"if someone owes you money and wants to pay you in bitcoin, you can refuse to be paid in bitcoin, but you cannot refuse if it’s legal tender" Wat

mikeyouse 2y ago
Under the former law where bitcoin was legal tender, if someone owed you money, they could insist that you accept bitcoin to settle the debt. Most people wanted nothing to do with bitcoin so they removed the legal tender designation.
- coliveira 2y ago
  Who would want to receive payment in a currency that can lose 20% of its value in an afternoon? Only speculators are interested in this.

sarcasmatwork 2y ago

Misleading. Under the new rules, bitcoin is no longer considered "currency," though it remains "legal tender." https://reason.com/2025/02/03/el-salvador-walks-back-its-bitcoin-law/ https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...

josu 2y ago
They literally removed the term "moneda de curso legal", which translates as "legal tender", from Article 5. https://x.com/monicataher/status/1884971499129610322 https://x.com/monicataher/status/1884971499129610322
cwillu 2y ago
“The reform eliminated the word “currency” when referring to bitcoin, but says it is “legal tender.” Despite the lack of clarity, it lifts, as required by the IMF, the obligation to accept it in transactions or debt payments, a key condition for it to be “legal tender,”” Edit to add a quote from your preferred link: “Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” If I can't pay my taxes with a token of economic exchange, and people aren't required to accept my tokens of economic exchange, the only remaining sense I can make of it being “legal tender” is that it is not illegal to use it, but that's not what “legal tender” means.
xp84 2y ago
this article, though appearing pretty machine translated, points out that the law removes the obligation for anyone to accept Bitcoin as payment of a debt, while not (for some reason) removing the "legal tender" language -- which is a complete contradiction. This makes as much sense as saying that Walmart has no obligation to accept Visa cards anymore, but that they're still a "valid method of payment at Walmart" -- except of course that "Legal Tender" has an explicit legal definition (apparently even in El Salvador). This sounds like a really badly written piece of legislation. Perhaps there are shady dealings going on where someone powerful stands to lose a lot of money (or BTC) triggered by "if it ceases to be Legal Tender", but also apparently pressure was too great to abolish that legal tender status in practice, so this ridiculously-written law was passed to attempt to have it both ways.

ptero 2y ago

That's heavy editorializing: El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it. But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status. Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.

p_j_w 2y ago
>Now the businesses are free to accept it or not instead of being required to accept it. That's all. Right, so it's no longer legal tender.
- antihipocrat 2y ago
  Legal tender does not have to be a mandatory means of exchange.
  - abduhl 2y ago
    That is actually the defining characteristic of legal tender: “money that is legally valid for the payment of debts and that must be accepted for that purpose when offered” https://www.merriam-webster.com/dictionary/legal%20tender https://www.merriam-webster.com/dictionary/legal%20tender
    - antihipocrat 2y ago
      Thanks, you're right and I was totally wrong. I'd delete my comment if I could
    - rsynnott 2y ago
      Its status in El Salvador was actually a bit more than _just_ legal tender; merchants were _required_ to accept it. For instance, the euro is legal tender in the eurozone. I can pay a tax bill or a bank loan with 10cent coins, and technically they have to accept that (though note that some countries do have special rules around whether small change is legal tender). However, a merchant is not required to take my wheelbarrow full of 10cent coins in exchange for goods and services; no debt exists before the purchase. El Salvador was forcing the merchant to take the wheelbarrow.

abdullahkhalids 2y ago

In the 15 years since Bitcoin went viral, has someone proposed a reasonable social, legal and financial protocol for how a society can adopt a novel cryptocurrency without getting stuck in the phase where the cryptocurrency becomes a speculative asset rather than a common medium of exchange? By novel, I mean not using an existing cryptocurrency that is already stuck in the speculative asset phase. Surely, if a government wants the people in the country to use a novel cryptocurrency, it has a lot of levers of control which some distributed libertarian minded community simply doesn't.

est31 2y ago
Customers use currencies if it lets them buy stuff. Shops accept currencies if people come and want to buy stuff with that currency. In touristy places, it's common to see people list their prices using currencies from common originating countries, regardless of the legal currency in that country. Any new thing needs to be better than the current thing at least in one domain, if it wants to grow users. Fiat currencies work so well, that the only niches cryptocurrencies can find is crimes really, avoiding financial sanctions, etc. Like China for example bans their citizens to trade the chinese currency for foreign currency (above small limits). Then buying bitcoin domestically makes sense if they don't trust the chinese government to keep their own currency valuable. Of course, all the exchanges operating in countries where there is reasonable laws require KYC to be in place. Cryptocurrencies are also in many ways more trackable than non-crypto currencies. So for crime it makes no real sense to use most crypto currencies.
- abdullahkhalids 2y ago
  > Any new thing needs to be better than the current thing at least in one domain For instance, my native country, in an effort to digitize the economy has passed a law that if you pay digitally or with a card at a restaurant you pay only 5% sales tax instead of 16% if you pay via cash. Some government wanting to encourage the adoption of a cryptocurrency can take similar measures. Governments have options that Vitalik Buterin does not.
wmf 2y ago

josu 2y ago

While it is true that adoption remained relatively low, the reason why they abandoned it is that the IMF made it a condition for the Salvadorian government to be able to receive a 1.4B loan.

rsanek 2y ago
Why did they need the loan so bad they had to change their currency?
- wmf 2y ago
  Because they're broke.
  - EdwardDiego 2y ago
    Yes, but why.
- josu 2y ago
  They didn't, the IMF just offers better terms than the free market. And they are still doing their Bitcoin thing, this was just a small concession they were willing to make.
  - el-salvador 2y ago
    El Salvador has had limited or very expensive access to the bond market for the past years. I thinkneed it, otherwise they wouldn't have made a law to loan money from El Salvador's pension funds with 0% interest.

ionwake 2y ago

[flagged]

ks2048 2y ago

Do pro-bitcoin people still talk about goals of bitcoin being a currency that people use daily? I don't follow it closely, but that idea seems to have faded and now it's just an asset to buy and hold while it magically goes up forever.

desumeku 2y ago
For daily usage, Bitcoin is simply inferior to Ethereum and other blockchains.
- block_dagger 2y ago
  That opinion is not shared by those who think Proof of Stake and no ceiling to supply are bugs vs features.
  - desumeku 2y ago
    Those issues are not really relevant when it comes to factors like transaction speeds and the diversity of assets available to transact with, such as stablecoins, as well as DeFi platforms to actually use those assets on.
    - verdverm 2y ago
      When most people hear daily usage, they think groceries, bills and paycheck, not day trading on an exchange, defi or centralized. In this regard, crypto currency is not really a currency that people can use for their daily lives without worry and risk from volatility
      - whimsicalism 2y ago
        yes it is, just use stables. frankly it is a much more convenient way to move money if the other person has it as well e: and i’m no crypto obsessive really, i don’t think it was usable even 3 years ago but it’s pretty handy now, can easily send $20 in usdc on base or use it to purchase carbon offsets or use it on election/sports betting or use it to purchase deepseek r1 credits…

josu 2y ago

Here is the retained purchasing power of each of the coins since the law was passed in September 2021: Legal tender 1: -15% Legal tender 2: +115% Guess which one has been deemed a "Failed experiment".

gameman144 2y ago
I would guess "Legal tender 2" was deemed a failed experiment, since rapid deflation is extremely undesirable in a currency.
- toenail 2y ago
  > since rapid deflation is extremely undesirable in a currency What do you mean, why should my money NOT go up in value?
  - Unearned5161 2y ago
    if you genuinely are interested in an answer to your question, I recommend this blog post by Matt Ranger: https://singlelunch.com/2020/10/21/badeconomics-putting-400m-of-bitcoin-on-your-company-balance-sheet/ https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
    - toenail 2y ago
      That's a long post that seems to tell me it's bad for the economy. It's not my job to help the economy. Again, why should I use a money that loses value?
      - Unearned5161 2y ago
        That's an odd take. What's bad for the economy is, for the most part, bad for you. But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but its giving you different things. Now imagine you don't have a hot potato, you work and you get paid in... idk, something you don't want to get rid of. You struggle with letting go with your currency and so it costs you when you're trying to do exchanges. Similarly, if you're a shop owner or something, people are more hesitant to give you their currency as well. Things get slower, and darker, like a mechanical flashlight that you're spinning slower and slower.

65 2y ago

BTC doesn't work as legal tender since it's deflationary, has high fees, and is slow. Bukele got lucky gambling on BTC, perhaps now would be a good time to cash out.

kylebenzle 2y ago
The only reason BTC doesn't work as legal tender (but original Bitcoin did) was the GitHub repo was hijacked by Blockstream and several hacks injected to corrupt the project.

twothreeone 2y ago

I don't particularly like BTC (as it senselessly burns huge amounts of energy, thereby actively contributing to the destruction of our biosphere), but this news post is intentionally misleading. As reported by many other outlets (e.g. [1,2]), El Salvador abandons BTC to qualify for an IMF loan - so the IMF is pressuring them towards this move (presumably for political reasons). [1] https://finance.yahoo.com/news/el-salvador-changes-bitcoin-rules-164742636.html https://finance.yahoo.com/news/el-salvador-changes-bitcoin-r... [2] https://www.msn.com/en-us/money/financial-regulation/el-salvador-quickly-approves-bitcoin-law-to-comply-with-the-imf-s-deal/ar-AA1y6S8s https://www.msn.com/en-us/money/financial-regulation/el-salv...

RabbiNoseberg 2y ago
[dead]
wyager 2y ago
The resource usage is not senseless; it's the core aspect of Bitcoin that makes its security model so trustworthy.
the_af 2y ago
In general, resorting to the IMF is not a good sign to begin with. What were Bukele's goals with his policy of adopting bitcoin?
bawolff 2y ago
Its not like IMF had a gun to their head. They could have refused the loan. At the end of the day they abandoned the policy because they believe it will help the economy to abandon it (indirectly via the loan). I certainly wouldn't call that a success.
attila-lendvai 2y ago
and USD senselessly burns up entire countries... e.g. most recently that giant, and very destructive money loundering operation in ukraine... somehow everyone forgets that wars don't make sense and shouldn't really be financeable... and yet they are. BTC can burn orders of magnitude more energy if it makes financing wars just twice as hard as it is today...

exabrial 2y ago

Bitcoin has a lot of flaws as a currency. Don't worry.... there are at least 100,000 other "coins" to choose from. /s

EVa5I7bHFq9mnYK 2y ago
In fact, there are 11 million coins, 10k new are created every day. Still, 57% of all the value is in only one coin, guess which one.

ddtaylor 2y ago

As a cryptocurreny enthusiast I think the execution here and it's goals weren't aligned to begin with. It was nothing more than a custodial wallet and it was not implemented or deployed in any meaningful way. You can't write any useful smart contract to "do" anything and without any of that it doesn't compete for shit against centralized digital payment systems in terms of efficiency or simplicity.

sporkydistance 2y ago

Nothing says stability like a "currency" that swings +/-1000% in value.

wwwtyro 2y ago
How does anything swing -1000%?

outside1234 2y ago

Who could have predicted this

lacker 2y ago

By branding itself as "crypto-friendly", El Salvador managed to get Tether to relocate there. That seems like a pretty big deal for a country that otherwise would never attract any sort of tech company. So I wouldn't call it a "failed experiment" per se - more like a publicity stunt that has achieved publicity.

NonEUCitizen 2y ago

"Failed Experiment" is euphemism for "IMF pressure."

the_af 2y ago
Well, if you're successful you don't need an IMF loan...

starspangled 2y ago

It's interesting and nice to see how progressive and creative El Salvador has been. Some failures are perfectly understandable when one is willing to try new things. Their approach to crime is another thing that comes to mind that was lambasted and ridiculed by the "international community" and "experts". Yet in the space of a single decade they went from murder capital of the world to safer than New Zealand (in terms of homicide rate), which is just staggering. I love that they are innovating and experimenting and trying their own things, and don't let the stuffy pompous status quo hold them back.

BryantD 2y ago
Note that their official homicide numbers no longer include bodies found in unmarked graves (as of 2021), people killed in conflicts between police and gangs (as of 2022), and people killed in prison. These are arguably reasonable decisions but unless you backfit the old numbers, you don't have the real trend. I suspect that the trend would be impressive either way, you'd just lose the "safer than New Zealand" line.
- starspangled 2y ago
  Well there's no need to suspect, homicide rates were dropping like a rock before 2021. Perhaps faster than has been achieved by any other social reform on record.
EA-3167 2y ago
This is... a strange and jarring thing to read. My kneejerk response was that yes, they are innovating and experimenting with oppressive and corrupt governance, but that is ultimately uncharitable. A more balanced response is that while you may personally think of Bitcoin as progressive (I can't imagine why) you certainly can't claim that Bukele's El Salvador is progressive. You may like the gang crackdown, you may appreciate the suspension of habeus corpus, but you can't claim that's a progressive position.
- starspangled 2y ago
  I don't think "bitcoin" is progressive, bitcoin is a technology. I think the idea of trying a decentralized electronic currency is progressive. Whether they implemented it well or should have seen the problems with using it as a currency is one thing, but in the idea of trying something new sure I think it was good. I don't think it caused grave harm to try. And I certainly can claim that their policies on crime are progressive. They are prioritizing the rights of the many law abiding people who have a fundamental human right to live unmolested and unterrorized by criminals. I think that is very progressive and quite a radical departure from the status quo. I don't think I have ever heard "human rights advocates" and UN types opine and lament the human rights of people who have to endure this type of criminal society and I think it is brave and progressive to fight for them. I absolutely understand that it has required concessions and weakening of rights in other areas, and I don't say that is a good thing, but everything is a tradeoff right? If they continued conservative status quo the tradeoff would have been other peoples rights continuing to be violated. Just because it's not "progressive" as exactly defined by an elite ruling class in the "international community" and think-tanks and academia, and the leftist intelligentsia at large, does not mean it is not progress in social reform and improvement for the greater good. To the actual people who have to live in El Salvador, approval for Bukele's reforms are staggering. I'm sure a lot of the "experts" who assured everybody they would never work are upset about it because they have a lot of egg on their face now, but fortunately the country has a bright young progressive leader who cares about the people more than the elitists say.

dgfitz 2y ago

I hope this is the domino that tips crypto over the edge.

LAMike 2y ago
Yes I think this is going to be the end of Bitcoin, we'll never hear about it again after this year
- do_not_redeem 2y ago
  Good riddance, we can finally put this bitcoin nonsense behind us. Let's add this article to the bitcoin is dead site, I'm sure it's finally the end this time! https://bitcoindeaths.com/ https://bitcoindeaths.com/

m3kw9 2y ago

How a currency increase or decrease in price so fast will affect how people spends it. It’s a bull market, yeah let’s wait for it to go up before buying that.

whimsicalism 2y ago

because the imf demanded it of them. not much has changed from the structural adjustment era of IMF fiat, despite all the controversy

fode 2y ago

I spent three months in El Salvador before the Bitcoin Legal Tender law passed, then another three months after it was enacted. From day one, I knew it wasn’t going to work. That’s when I flew back to Miami, went back to the drawing board, and stopped being a Bitcoin maxi.

arthurbrown 2y ago
Can you speak more to the difference between the two experiences?

portaouflop 2y ago

IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

kristjansson 2y ago
Conversely if that’s all it takes to induce them to give up it tells you something about the benefits they felt were accruing from BTC.
- syndicatedjelly 2y ago
  Is that really the message?
- wongarsu 2y ago
  Keep in mind that El Salvador is tiny. This is like 14 days of El Salvador's entire GDP. Or scaled to GDP, it's like giving a $1.2 Trillion loan to the USA.
- hammock 2y ago
  El Salvador has been in the IMF debt trap since 1949. It’s not just a billion dollar loan we’re talking about. Although scaled to GDP it’s quite a lot
- olalonde 2y ago
  They're not giving up on Bitcoin. In fact, it's likely that they'll use the loan to buy more Bitcoin. https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/ https://www.reuters.com/markets/currencies/el-salvadors-bitc...
  - 2y ago

wnevets 2y ago

this is good for bitcoin

hsuduebc2 2y ago

This is not really a surprise.

strangescript 2y ago

Shouldn't they be loaded right now with all the BTC they bought when it was low?

EGreg 2y ago

Here's my take on it: https://community.intercoin.app/t/el-salvador-abandons-bitcoin-as-legal-tender/2915 https://community.intercoin.app/t/el-salvador-abandons-bitco...

ChrisArchitect 2y ago

Is there a new development here or same news as the IMF deal requirements 2 months ago: El Salvador to scale back Bitcoin dreams to seal $1.3B IMF deal https://news.ycombinator.com/item?id=42372064 https://news.ycombinator.com/item?id=42372064

Jimmc414 2y ago

El Salvador invested approximately $269.74 million to acquire 5,900 bitcoins ($595 million) and secure $1.4 billion in IMF loans. I hope they can recover from this failed experiment.

9cb14c1ec0 2y ago

Sorry bitcoin enthusiasts. This was always the most likely outcome.

FreeTrade 2y ago

Bitcoin (BTC) was hijacked and oriented away from use as cash. It was quite obvious BTC was no longer capable of functioning this way and that the LN wouldn't help. There were maybe a half a dozen other networks that might have made a more plausible and interesting experiment in testing crypto as a day to day currency.

twodave 2y ago

Didn’t we learn back in the 1500s that asset-backed currencies are unsustainable? Bitcoin will never, ever be able to take the place of a fiat currency because it carries with it many of the same problems as Spanish silver the conquistadors were traveling all the way to SOUTH AMERICA to mine half a millennium ago. It was essentially a very difficult proof of work. The only real advantage bitcoin has is that it’s easy to carry. Even when the entire world started selling off their gold to the US in the 30s and 40s it became obvious by the 70s that there wasn’t enough gold mining capacity on earth to sustain a global asset-backed currency.

olalonde 2y ago
https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ might temper your enthusiasm towards modern fiat currency.
- twodave 2y ago
  I’m not sure what exact point or points you want me to care about, but none of these charts seem to suggest _why_ we and every other country moved to fiat. I’ll admit I didn’t look at them all, you didn’t give me nearly the effort in your comment that you’re asking from me…
  - toenail 2y ago
    We moved to fiat because politicians like the indirect taxation through inflation. It's free money for them, what's not to like?
    - twodave 2y ago
      That is not why we moved to fiat. It may be a consequence, but there are also seriously consequential checks against doing it too freely.
- Unearned5161 2y ago
  ooo, read this! https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfhappenedin1971/ https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfh...

openrisk 2y ago

Imagine if the amount of ingenuity that went into building the elaborate speculative digital game that is crypto was actually used to lift underdeveloped countries from their misery. Fighting corruption, enabling healthier local economies, reducing the siphoning of wealth to offshore centers, improving financial literacy etc. etc. Solving real problems is hard. Being distracted by snake oil salesmen, whether they sell digital scarcity or AGI only makes things worse.

coliveira 2y ago
Especially when to maintain their Ponzy scheme, crypto players need to use an enormous amount of electricity that could be used to benefit humanity. It is a huge waste or energy and time.
- desumeku 2y ago
  Bitcoin is the only large crypto that still uses Proof of Work. Almost all competitors use Proof of Stake, which uses almost no energy in comparison.

adamtaylor_13 2y ago

This was never going to work. To me, Bitcoin seems way more like an asset class, rather than a currency. (Despite the name which is a HUGE misnomer for the average layperson.) Nobody invested in Bitcoin believes you should be ordering pizzas or using it as an actual currency. Bitcoin is a long-term play. You can't make a currency out of something that's fluctuating by more than 10,000 USD in a 24-hour period.

zombiwoof 2y ago

What about $MELANIA

donohoe 2y ago

The writing was on the wall way back in 2022. The launch was a dud. People were more likely to use the national wallets for stable-dollar coins then Bitcoin. https://restofworld.org/2022/el-salvador-chivo-bitcoin-wallet/ https://restofworld.org/2022/el-salvador-chivo-bitcoin-walle...

bzmrgonz 2y ago

Maybe they put the cart before the horse. I understand some countries in Africa are having wonderful success with e-wallets. Perhaps El Salvador should have started with e-wallets before crypto to acclimatize the population.

natmaka 2y ago

Bitcoin's value: from mid-2022 to the end of 2023 it hovered between 20k and 30k USD, then 57k to 70k from February 2024 to October 2024, then from 90k to 110k since. Therefore during 2024 people having or obtaining it tend to keep it instead of spending it. Is it surprising?

dhosek 2y ago

Structurally, Bitcoin is a lousy idea for a currency as it is intrinsically deflationary (i.e., even without the speculative inflating of the cost of a Bitcoin, the structure of the coin is such that coins become increasingly scarce and expensive as time goes by). You do not want this in your currency. The ideal is a low-level of inflation which provides an incentive to spend sooner rather than later. With a deflationary currency, the incentive is to put off purchases as long as possible as your currency will buy more tomorrow than it does today. Deflation ends up being economically disastrous, as Japan’s battles with deflation over most of the twenty-first century have shown. This is why, aside from speculation, purchase of illicit goods and ransom payments, Bitcoin has had little traction as a currency.

ripped_britches 2y ago
Maybe more importantly even, you need a currency which you can tune in real-time via a central bank. This is one of the reasons that dollar-dependent economies have a hard time managing fluctuations.
aboardRat4 2y ago
>You do not want this in your currency. I really want this in my currency. Bitcoin might be a Ponzi scheme, but fiat currencies are even more so.
- shortrounddev2 2y ago
  [flagged]
- creato 2y ago
  > I really want this in my currency. A deflationary currency that you own a disproportionate amount of is great. For you.
  - not_really 2y ago
    did the person you are responding to say that he owns a lot of a given currency? How do you know?

october8140 2y ago

Has anyone in this thread used Bitcoin to buy anything in the last month? What was it?

saranshsharma 2y ago

[dead]

pkrulz101 2y ago

They just added 11 BTCs to their reserves?

kernal 2y ago

Bitcoin as a currency was always going to fail. It’s a speculation instrument that wildly fluctuates. Satoshi sealed its fate by limiting it to 21000 coins.

ggm 2y ago

For anyone else who enjoyed this tree, I enjoyed reading this book by Galbraith many years ago. I don't say you have to agree with him politically or economically, but as a basic introduction to the idea of money, and national economies, it's a great read. Money: Whence It Came, Where It Went. John Kenneth Galbraith. (1975) He had a very interesting life.

ipaddr 2y ago

I heard they will be accepting American prisoners in exchange for money from the US. They will also hold US deportees from any country.

seinecle 2y ago

Read the story as if from the Onion and it actually fits

WhereIsTheTruth 2y ago

The people behind bitcoin perhaps thought of creating technologies for their respective CBDC But for the common mortal, cryptocurrencies are not about replacing anything, it's a highly volatile speculative playground, digital gangsters who want to make a quick buck Nobody cares about the ideology Bitcon as legal tender? lol

jongjong 2y ago

Bitcoin is a lousy currency but I'm glad it's valuable because it shows how much of a scam the fiat system is. It's ALL a scam. ALL OF IT. What part of 'ALL' don't you people understand? When Bitcoin, a currency with a measly transaction throughput of 4 transactions per second max and which consumes more electricity than all of Argentina will be worth $1 billion per coin and every rich person around us will be a complete imbecile and every intelligent person will be broke, people will still not comprehend that the fiat system itself is the scam! Einstein was right, human stupidity is infinite. Bitcoin has been growing from strength to strength for almost 15 years now and worth almost 2 trillion market cap... Even if you think it's a bubble, then what's to stop everything else from being a bubble too? Nothing, that's what, it is a BUBBLE it is ALL a bubble and nothing but a bubble and a scam. Consider a system which can support a 2 trillion dollar scam for 15 years straight and ruin an entire generation of young people... What do you call such a system? That's not a sound system. How can you trust such system? What kind of gullible fool you have to be to trust such an obvious scam system? It's like the system found all the most gullible people on the planet then bribed them to the eyeballs, gave them access to global media platforms, so now they run everything and can force their delusions on everyone else. Did you people even hear about the recent USAID scandal or did it bounce right off your thick skulls? It's all a scam; whether you realize it or not; you're a scammer, your spouse is a scammer, your mum is a scammer, your dog is a scammer. We're all dealing in counterfeit money. I've been saying this over and over again for like 10 years straight. Every year what I'm saying is increasingly obvious, but people still don't get it. People's skulls have been getting thicker faster than the information could penetrate it.

throwccp 2y ago

[dead]

riknos314 2y ago

An overview of a subset of the myriad issues that contribute to bitcoin being a very bad currency: https://github.com/theborakompanioni/bitcoin-spring-boot-starter/blob/master/docs/FALSEHOODS.md https://github.com/theborakompanioni/bitcoin-spring-boot-sta...

the_clarence 2y ago
That's an interesting link but it's more about trivia than an argument against bitcoin. If you want to have a serious conversation I'm here for you: Bitcoin is slow, not user friendly (utxo model vs account model), wastes energy, and is barely programmable (scripting language is extremely limited)
riknos314 2y ago
These are much more technical and don't even mention the more obvious issues: Block settling time: If a transaction isn't complete until 1 (or n) blocks have been committed, and mining a block takes meaningful time, then this places significant constraints on spending. If I go to the store, and buy something with bitcoin, but it takes 20 minutes for the next block to be mined, does the store need to hold the goods in escrow until the transaction clears leaving me stuck waiting for 20 minutes? There's also no guarantee that my transaction ends up in the next block being mined, so I may need to wait an indeterminate amount of time before I can walk out with my paper towels - horrible UX. Lack of physical cash: if the power is out, how do we do business? Tension between wallet security and convenience of spend.
- john_minsk 2y ago
  Didn't you get the news: BTC is no longer new money. It is new gold now.

sub7 2y ago

They can buy 100 Lummis-es and 100 El Salvadors and bitcoin still won't have a use case outside of fraud and more suckers = number go up

bogota 2y ago

[flagged]

ArtTimeInvestor 2y ago

This could be the IMF fighting fire with gasoline. The IMF is afraid of Bitcoin because it threatens the Dollar. The IMF bribes El Salvador to reduce their support for Bitcoin. El Salvador uses the bribe to buy more Bitcoin. If Bitcoin catches on around the world and the IMF is fighting it by throwing money at it, that could lead to an accelerated adoption curve.

ffjffsfr 2y ago

IMF forced them to drop, but if they want to use crypto as legal tender, why use BTC which has high transaction fees? Why not something with low or zero fees and efficient chain? There is million of crypto out there and most open source, so govt could even launch their own coin on top of existing chains.

pavlov 2y ago
3rd world currency is often barely worth the paper it’s printed on. Making it crypto removes even that value. Seriously though, the reason is that they can do digital currency without crypto just fine. For example there are many popular payment operators in Africa who provide money transfers and micro-payments on phones. M-PESA launched in 2007 and has tens of millions of users: https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa These successes don’t usually get reported because they lack the exciting novelty of crypto, even though they are much more popular and usable. They are actual free market solutions, not coin casinos built around libertarian dogma. And for that reason lots of people don’t want to know.
127 2y ago
The lower the transaction fees, the lower the decentralization, security and usage. There has been no new breakthrough that gives "efficiency" without sacrificing other important factors.

127 2y ago

I once bought video games from Steam with Bitcoin. Those were some expensive video games. Bitcoin is a completely new economic tool. It just doesn't seem to work that great as a traditional currency for day to day purchases.

zidad 2y ago

Does anyone know how/if using BTC as daily currency works in practice? Can El Salvadorians just add it to their Google Wallet? I don't know much about cryptocurrencies but there seems to be a scaling issue, last thing I read it can only handle 7 transactions/s, is that still valid? If so, then how would this scale to a country-wide payment system?

Smithalicious 2y ago

Bleh. Seems like the IMF, which was against this for blatantly selfish reasons, basically strongarmed them into this. This is essentially a continuation of colonialism by other means.

seltzered_ 2y ago

Related: https://news.ycombinator.com/item?id=42014013 https://news.ycombinator.com/item?id=42014013 (discussion of 'A Week of Failing to Pay with Bitcoin in El Salvador')

ein0p 2y ago

Bukele says on Twitter they're still buying Bitcoin.

tim333 2y ago

Bitcoin as legal tender, as in something you are legally required to accept as a debt payment, is kind of a terrible idea. What if the person owed money has no idea how to muck around with private keys, not getting hacked and so on? Does your average small law firm who has to deal with legal stuff have any idea how to do that?

mab122 2y ago
What if the person owed money has no idea how to check if a bill is not a counterfeit, doesn't want to learn about really small security prints on every note, what if somebody robs their wallet?
- tim333 2y ago
  I'm not saying the current system is perfect but most people owed money can receive money in a bank account while most probably don't have a bitcoin wallet. Physical cash while legal is fading from use for large transactions.

bigbacaloa 2y ago

[dead]

kkfx 2y ago

The reason why BTCs are not much an usable currency for a whole economy is that they are a deflationary currency like gold, meaning the more time passes the less new BTC are created till the end with no creation at all. This means they will always more interesting to be stockpiled then spent. Also they can't decrease nor increase "as needed" the BTC base, meaning that if you are short of natural resources you can't reduce their usage tightening the number of circulating money. The idea behind BTC is very valid, but they can be more like the old ECU or CFA/CFP not money you normally use for day to day stuff.