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Those arguments could be levelled against any currency. Typically uptake is only 100% because the government has a "thou shalt accept this" policy. If it was pr

by roenxi 2y ago

Those arguments could be levelled against any currency. Typically uptake is only 100% because the government has a "thou shalt accept this" policy. If it was practically voluntary then a bunch of businesses would operate on a barter system or private scrip. Even with the insistence of the tax office it takes regular crackdowns to stop alternatives springing up. And it is even easy to argue that normal currency is value destructive, all the flows of money into crypto are implicit "I'd rather be burning energy than using USD" announcements.

tptacek 2y ago
"Nobody used it and the costs didn't justify the usage" is a complaint you can level at any currency?
- roenxi 2y ago
  Yes. Using any particular currency generally isn't voluntary. If El Salvador had mandated everyone use only bitcoin then it everyone would have been using it. If using USD was voluntary in the US a lot less people would use it. It isn't a particularly strong argument to say that everybody uses one thing that they are legally required to use, then compare it to a new alternative that didn't gain total dominance in a few years. Although in this case I am happy to agree it might be true despite being a weak argument, I can see a lot of good reasons why someone wouldn't want to use Bitcoin in practice. But the article didn't touch them when declaring a failure and the experiment wasn't run to a natural conclusion where the people involved decided it was not working.
  - tptacek 2y ago
    It feels like you're trying to say "Bitcoin was never really tried" because Bukeli didn't make it the exclusive currency of El Salvador.
    - ty6853 2y ago
      Paper money was first used in the West in Massachusetts Bay Colony in 1690, was used in limited fashion, became unpopular and then phased out. And that was the end -- paper money was a failure. Wait.... The currency was initially unpopular for anything except paying taxes, and was phased out. Within a few years, however, paper currency would return to Massachusetts. The Bank of England began issuing banknotes in 1695, also to pay for war against the French, and they became increasingly common throughout the 18th Century.
  - ramchip 2y ago
    > If using USD was voluntary in the US a lot less people would use it. I'm curious what makes you think so, and what the alternatives would be. My impression is actually that if shops weren't forced to accept USD, 100% would still do so.
    - roenxi 2y ago
      Obviously we can't be truly certain without running an experiment or few, but... 1) If they're being forced to do something, that suggests someone doesn't believe they would do it voluntarily. Nobody more suspicious than the person who forces others to do things for their own good. 2) Businesses are invariably blamed for inflation. Every single time the subject comes up organically somebody pipes up to blame "greedy businesses"; it is basically a meme. Some business owners would start up a non-inflating currency just to escape that. They don't want to be political scapegoats. 3) You can spot a bunch of banking crisises coming a mile away, the financial system seems to be mathematically guaranteed to collapse from time to time as I understand it. If given the choice a bunch of people would rather sign up for alternative systems that only enter a crisis state unexpectedly. That includes small business owners. Would they still accept USD? In the US, probably. But a bunch of alternatives would crop up and it is by no means guarenteed that the USD would be competitive. The US Fed manages the currency and they do a terrible job.
      - quesera 2y ago
        > If they're being forced to do something, that suggests someone doesn't believe they would do it voluntarily But wait. US retail shops are not forced to accept USD. They can, if they choose, accept payment only in smiles. Or CAD, or good vibes. (Taxes, however, must be paid in USD). In practice, US retail wants USD, for obvious reasons. There are no viable widespread alternatives (but there are countless insignificant local currencies!).
        Ferret7446 2y ago
        It's funny that you mention it, because quite a few digital storefronts accept crypto. Particularly, the ones that have been censured by the financial oligarchies (Visa, Mastercard et al)
crazygringo 2y ago
No, this was very specific to crypto: > The IMF was wary of lending to El Salvador while bitcoin was legal tender. Its volatile price posed a risk to financial and fiscal stability. Government currencies don't have the price volatility of Bitcoin. You simply can't reliably manage an economy with that kind of volatility.
- ty6853 2y ago
  You also can't print to oblivion while sending your hard money overseas if the plebs operate and pay taxes in Bitcoin.
- john_texas 2y ago
  [dead]
- roenxi 2y ago
  Why not? Government currencies are volatile too, people just tend to ignore that or blame price changes on greedy businesses. Prices change continuously. You can never be sure what the price of anything is going to be next week.
  - crazygringo 2y ago
    > Government currencies are volatile too Nowhere near to the same extent. Just over the past year BTC has gone between $54K and $104K. Currencies are subject to inflation, but in a well managed economy that is generally a single digit yearly percentage and fluctuates slowly, and the currency changes value in a single direction only. Normal government currencies don't gain or lose 10% of their value over a few days in purchasing power, as regularly happens with Bitcoin.
    - Xen9 2y ago
      The distinction between government and crypto currencies is wrong one to make. I fail to see how gold-pegged, gasselized (demurraged at constant rate until they vanish down to UBI limit, except from government/CB wallets, with other assets also demurraged when sold/bought via cap gains style taxes), constant supply cryptocurrency would not be in fact better than the dollar and the euro and the yen, and it would be both inflation & deflation resistant.
SpicyLemonZest 2y ago
The Salvadoran government did have a "thou shalt accept this" policy, in addition to exempting bitcoin holdings from capital gains tax. It worked to drive initial interest, with a quarter of Salvadorans using Bitcoin for at least some transactions in 2021, but adoption fell sharply over time. I haven't studied it in depth, but my vague understanding is that many businesses couldn't actually figure out how to practically accept Bitcoin despite being theoretically required to.
- Ferret7446 2y ago
  Which isn't surprising. Bitcoin is unfortunately not well suited for petty transactions, even though it shines as a truly neutral platform for larger transactions. They should have tried to implement something like Lightning nationwide; some of Lightning's flaws could be overcome with government investment/buy-in.
- roenxi 2y ago
  And we can see the IMF got on that lickity split before anyone figured it out how to make the system convenient. 4 years to detect and act on this sort of international action is commendably speedy. I'd expect that the experiment would fail. The IMF probably expected it would fail. But we can also observe that the IMF moved with the speed of bankers worried that it might succeed.

by roenxi 2y ago

tptacek 2y ago

"Nobody used it and the costs didn't justify the usage" is a complaint you can level at any currency?

roenxi 2y ago
Yes. Using any particular currency generally isn't voluntary. If El Salvador had mandated everyone use only bitcoin then it everyone would have been using it. If using USD was voluntary in the US a lot less people would use it. It isn't a particularly strong argument to say that everybody uses one thing that they are legally required to use, then compare it to a new alternative that didn't gain total dominance in a few years. Although in this case I am happy to agree it might be true despite being a weak argument, I can see a lot of good reasons why someone wouldn't want to use Bitcoin in practice. But the article didn't touch them when declaring a failure and the experiment wasn't run to a natural conclusion where the people involved decided it was not working.
- tptacek 2y ago
  It feels like you're trying to say "Bitcoin was never really tried" because Bukeli didn't make it the exclusive currency of El Salvador.
  - ty6853 2y ago
    Paper money was first used in the West in Massachusetts Bay Colony in 1690, was used in limited fashion, became unpopular and then phased out. And that was the end -- paper money was a failure. Wait.... The currency was initially unpopular for anything except paying taxes, and was phased out. Within a few years, however, paper currency would return to Massachusetts. The Bank of England began issuing banknotes in 1695, also to pay for war against the French, and they became increasingly common throughout the 18th Century.
- ramchip 2y ago
  > If using USD was voluntary in the US a lot less people would use it. I'm curious what makes you think so, and what the alternatives would be. My impression is actually that if shops weren't forced to accept USD, 100% would still do so.
  - roenxi 2y ago
    Obviously we can't be truly certain without running an experiment or few, but... 1) If they're being forced to do something, that suggests someone doesn't believe they would do it voluntarily. Nobody more suspicious than the person who forces others to do things for their own good. 2) Businesses are invariably blamed for inflation. Every single time the subject comes up organically somebody pipes up to blame "greedy businesses"; it is basically a meme. Some business owners would start up a non-inflating currency just to escape that. They don't want to be political scapegoats. 3) You can spot a bunch of banking crisises coming a mile away, the financial system seems to be mathematically guaranteed to collapse from time to time as I understand it. If given the choice a bunch of people would rather sign up for alternative systems that only enter a crisis state unexpectedly. That includes small business owners. Would they still accept USD? In the US, probably. But a bunch of alternatives would crop up and it is by no means guarenteed that the USD would be competitive. The US Fed manages the currency and they do a terrible job.
    - quesera 2y ago
      > If they're being forced to do something, that suggests someone doesn't believe they would do it voluntarily But wait. US retail shops are not forced to accept USD. They can, if they choose, accept payment only in smiles. Or CAD, or good vibes. (Taxes, however, must be paid in USD). In practice, US retail wants USD, for obvious reasons. There are no viable widespread alternatives (but there are countless insignificant local currencies!).
      - Ferret7446 2y ago
        It's funny that you mention it, because quite a few digital storefronts accept crypto. Particularly, the ones that have been censured by the financial oligarchies (Visa, Mastercard et al)

crazygringo 2y ago

No, this was very specific to crypto: > The IMF was wary of lending to El Salvador while bitcoin was legal tender. Its volatile price posed a risk to financial and fiscal stability. Government currencies don't have the price volatility of Bitcoin. You simply can't reliably manage an economy with that kind of volatility.

ty6853 2y ago
You also can't print to oblivion while sending your hard money overseas if the plebs operate and pay taxes in Bitcoin.
john_texas 2y ago
[dead]
roenxi 2y ago
Why not? Government currencies are volatile too, people just tend to ignore that or blame price changes on greedy businesses. Prices change continuously. You can never be sure what the price of anything is going to be next week.
- crazygringo 2y ago
  > Government currencies are volatile too Nowhere near to the same extent. Just over the past year BTC has gone between $54K and $104K. Currencies are subject to inflation, but in a well managed economy that is generally a single digit yearly percentage and fluctuates slowly, and the currency changes value in a single direction only. Normal government currencies don't gain or lose 10% of their value over a few days in purchasing power, as regularly happens with Bitcoin.
  - Xen9 2y ago
    The distinction between government and crypto currencies is wrong one to make. I fail to see how gold-pegged, gasselized (demurraged at constant rate until they vanish down to UBI limit, except from government/CB wallets, with other assets also demurraged when sold/bought via cap gains style taxes), constant supply cryptocurrency would not be in fact better than the dollar and the euro and the yen, and it would be both inflation & deflation resistant.

SpicyLemonZest 2y ago

The Salvadoran government did have a "thou shalt accept this" policy, in addition to exempting bitcoin holdings from capital gains tax. It worked to drive initial interest, with a quarter of Salvadorans using Bitcoin for at least some transactions in 2021, but adoption fell sharply over time. I haven't studied it in depth, but my vague understanding is that many businesses couldn't actually figure out how to practically accept Bitcoin despite being theoretically required to.

Ferret7446 2y ago
Which isn't surprising. Bitcoin is unfortunately not well suited for petty transactions, even though it shines as a truly neutral platform for larger transactions. They should have tried to implement something like Lightning nationwide; some of Lightning's flaws could be overcome with government investment/buy-in.
roenxi 2y ago
And we can see the IMF got on that lickity split before anyone figured it out how to make the system convenient. 4 years to detect and act on this sort of international action is commendably speedy. I'd expect that the experiment would fail. The IMF probably expected it would fail. But we can also observe that the IMF moved with the speed of bankers worried that it might succeed.