It's not a failure because Bitcoin tanked (relatively), it's a failure because Bitcoin tanking was and will always be a significant risk. People who got rich from Bitcoin weren't savvy, they won the lottery. It's not a sound investment decision based on outcome. Investments are sound based on probability and risk beforehand.
El Salvador gambled which is stupid. Whether they won or lost at the lottery is inconsequential to its stupidity.
It's worse than a lottery for some. It rewarded incorrect thinking on how the financial industry works.
Speculative spikes can happen for a lot of reasons, but that Bitcoin would replace all currencies (as early advocates would have had you believe) was not one of those reasons.
The bet being made by El Salvador is to get the immense benefits of being an early adopter at the cost of short term volatility and risk of bitcoin failing.
Regardless of your opinion on this, you have to at least wait till the proposition plays out before passing judgement. You have to see if they can withstand the short term volatility and whether bitcoin succeeds or not.
Calling the experiment failure before the results is silly to say the least.
Its utility as a decentralised banking system for those who have no access to banking in poorer regions of the world is a clear benefit and has achieved what it wanted for the country.
> It's not a failure because Bitcoin tanked (relatively), it's a failure because Bitcoin tanking was and will always be a significant risk.
A lot of the risk can be hedged by custodians, so I don't agree.
The reason it should fail for transactions is because Bitcoin sucks for transactions. Few people will prefer slow, irreversible and expensive transactions.
I agree with you on the El Salvador part, but not on the investment part.
> Investments are sound based on probability and risk beforehand.
Investing in bitcoin had a limited downside (lose 100%), but a very high upside (reaches it's initial goals). For me, the potential gains outweighed the low probability.
I consider myself very lucky that I made some money (wasn't crazy to put all my money in there). But for me, when it would have gone to 0, I still feel it was worth the risk.
But of course, with such a high risk high reward investment, only invest a small % of your total money.
It is a failure because BTC has pivoted away from the Bitcoin whitepaper (p2p ecash), limited its blocksize and has taken the path of this strange "digital store of value" (lol). BTC's activity rose gradually up to 2017, and then topped off at 1MB and even dropped. [1]
If Bitcoin's momentum hadn't been dissolved, it wouldn't require people to be forced by State to accept it.
It isn't lucky to hold through multiple multi-year 80% drawdowns, it's called doing research and having a conviction. I didn't sell at 60k, I'm not selling now, because I have a strong conviction. You call this lucky, but it isn't. If you have a conviction and a span longer than four years you could get "lucky" too.
The policy only ever made a little sense. What El Salvador desperately wants is a currency it can inflate to pay for the stuff it can not afford. In this regard, it is no different than any other country.
What it had was a currency it does not print (US dollar) and for which there is an ongoing international shortage.
What El Salvador got with Bitcoin was yet another currency it does not print and for which there is currently an international surplus.
The thing the article does not mention, and the only reason the policy made any sense, is that ~50% of Salvadorans live abroad. So there is a substantial remittance market in El Salvador relative to GDP. Allowing remittances to flow through bitcoin cuts out companies like Western Union who scoop from the top.
Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own.
> Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own.
This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina.
What you really don't want as a layperson in Latin America, is for really any third party -- but especially government third parties, to have control of your money in any capacity during remittance.
I principly agree on all criticisms, especially the seemingly reckless investment.
However, the presupposed lack of adoption of Bitcoin as a means of payment is not supported by the source bar chart. The numbers are actually pretty impressive compared to card: ~25% of businesses accept card and 20% accept Bitcoin as payment. That is impressive adoption after 1 year by any standard in a country that primarily uses cash.
The businesses in question are not required to accept cards. However, they are legally required to accept Bitcoin. Given that, it is pretty low.
From the article:
> But Bukele wanted more. Making bitcoins legal tender meant a payee had to accept them. As the 2021 legislation stated, “every economic agent must accept Bitcoin as payment when offered to him by whoever acquires a good or service”.
Ja that is crazy... one wonder if they pick a different time (read long term market-regime) if the results would be any different for better or worse.
The best alternative payment system I have seen myself is M-Pesa in Kenya [0]
It's THE payment system in Kenya everything runs of it in terms of commence for the "ordinary man". It has a somewhat unique starting point, since Kenya (Africa) (I'm from there myself), was not "modern enough" for the everyday man to make use of traditional banking services. But even the "low tech man" had a cellphone.
I hope to see more examples like this in the future, and I'm sure many a BigCorp is doing just that, I do wish the next-gen version of these services will be more community-driven and less bigcorp. Oh gosh I almost described the original vision of bitcoin :)
This is a great point most people from the US and Europe can't understand.
Much like Africa, all of SE Asia went directly to cell service and skipped all landlines because they were so far behind. The same goes for banking in these parts of the world and India.
The people there will skip over the traditional banking system which is massively undeserving the population and adopt a digitally native banking system. The masses will go with the flow and accept the CBDC, but many already understand the implications and limitations.
Prediction: El Salvador will look genius in the next Bitcoin cycle. Other emerging market central banks will proceed to copy their model creating the next cycle’s peak. Once they stop buying, the market will crash again creating either a global depression or a bailout of the btc economy by USG, causing a repeat of the bank bailout that spawned btc in the first place.
I admire your optimism, but I can't get on board. It would be naive to deny the growth of cryptocurrencies over the last few years, but it seems like the people who were meant to make money have since cashed out, that everything's peaked and turned a corner and the general public have turned against it (due in no small part to a few many shitcoins, rugpulls, scams, BAYC, and a couple of defunct exchanges). I'm sure crypto will live on in some form, but it won't explode again like it did before. I don't know who is left to fuel the next bubble.
They invested US$100 million (and currently that's around US$50 million). The next bond payment (2023 note that they are trying to buy back now) is due in January and that alone is US$800 million. So, their investment should yield really high returns for it to even make a decent dent into the first bond.
From all the fanfare around them, I was sure they had to invest more. But after looking up the numbers, this looks like a publicity stunt more than any serious investment. Also 20% adoption when it's mandatory to support it, is quite interesting too.
If El Salvador looks like a genius and their poorest citizens come around and get on board, the next crash will cause a humanitarian crisis: the poorest of the world will literally have given money to the rich who were able to get out of the market fast enough.
Let's be clear about this, unless El Salvador is in a debt crisis. They won't own any crypto by the next BTC cycle because they'll have gone bankrupt, sold off any crypto assets they've got, taken significant bailout money from places like the IMF. They don't have the luxury of sitting on BTC and riding the wave, they are bankrupt. They have $100m of BTC and they need to pay $800m by Jan 2023. And their debt is trading at something like 30 cents on the dollar because no one believes they can pay.
This was implemented poorly (and bitcoin was a poor choice), but it's not crazy to want a currency that is decoupled from the US government. Especially in Central America where the US government has a pretty shady track record.
That's the thing. No-one wondered why they might want Crypto, the question was always "Why Bitcoin"?
There are many deep subtle questions about Economics, even with stablecoins but the choice of Bitcoin was way off base, the only possible reason to use it was because it was the only one most people had heard of.
Bitcoin is totally nonsensical for low-value high volume transactions and by the time the money gets paid to the seller for already bought goods, they could be making a loss. At least inflation in normal currency is only (usually) a few percent per year.
This isn't a problem though, countries issue their own currencies all the time. The problem is when you need to run a trade deficit, you need to buy more stuff than you sell internationally. It drives down the value of your currency. But crypto doesn't solve that. And borrowing against the national debt to buy risky crypto assets (which is what El Salvador did) makes that problem worse, not better. They will default on this debt.
I like it for the criminal options it facilitates. I don’t personally agree with being unable to import affordable medicine (non-domestic brand generics which weren’t produced in an FDA-approved facility) from India/Turkey/etc and I use bitcoin to facilitate buying the medicines I need from pharmacies which don’t require doctors prescriptions. It saves me a boatload of money and helps me greatly in managing my health. Or to get around the current widespread pharmaceutical shortages which continue since Hurricane Maria destroyed a lot of pharmaceutical production infrastructure in Puerto Rico (e.g. bacteriostatic water).
I also am largely okay with people using it for personal quantities of controlled substances, even though I do not use it for that personally. Sometimes these are for legitimate medicinal purposes as well (for example, schedule 2 TRT and HRT drugs)
What is more likely is that you would wake up in a world where Bitcoin may not exist, but is completely dominated by crypto nonetheless. Within a generation or two, I predict that all asset ownership will be crypto-backed. Property. Automobiles. Artwork. Securities. And of course, currency. Fiat itself will become a cryptocurrency once more millennials are in charge.
I reserve judgement as to whether or not this will be a net benefit for society. I suspect not, but our present ignorance is far too great to make such a prediction - I just think it's gonna happen whether we want it to or not, so get used to the idea of crypto-everything.
The rats flee a burning building and move into the next rat's nest. Its nice to know what the current grift is. Although, it would be refreshing to see dumb money and hype thrown in a new direction.
What I don't like about this article is it is almost entirely focused on price. If bitcoin would have went up, it would have been a wise move according to the premise of the article. I think a longer timescale is needed.
I'd like to see an analysis of the situation, assuming that the value goes neither up or down, but simply holds a constant value in an inflation indexed manner. Would it still be a bad idea in that situation?
> I'd like to see an analysis of the situation, assuming that the value goes neither up or down, but simply holds a constant value in an inflation indexed manner. Would it still be a bad idea in that situation?
> simply holds a constant value in an inflation indexed manner
Gold and currencies backed by gold come very close to this, with historical evidence to back it up. The purchasing power of gold -- that is, its convertibility to goods and services you might wish to consume -- have remained remarkably stable over time.
Countries stopped issuing currencies backed by gold for a few different reasons, but its ability to hold constant value over time wasn't one of them.
After so many cycles, Bitcoin has become one of the most respectable pyramid schemes available to the general public (only behind real estate speculation maybe).
I think we'll see another even worse cycle unfortunately within the next 10 years.
My theory behind this is there are many BTC holders with cap gains (or assets acquired through illegal methods) that can't easily cash out, and El Salvador's BTC support was a grab at capturing tourist revenue through state sponsored money laundering.
Through that lens, it would be interesting to see if there was any anomaly in GDP, luxury goods sold, real estate sales, or tourism in the country.
Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic.
If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
My best guess at why the average person is hesitant to use bitcoin as a primary currency is: where do I go when it goes wrong? If the system holding my money is hacked, or I get scammed in some way, where is my legal recourse? Legal recourse is typically something provided by a state. But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency. I'm not up to scratch on the details in El Salvador, so curious to know whether they have solved this issue.
If you're not keeping a substantial "float" in the currency, you have to buy more every time you want to use it. So you've just inserted an extra, riskier step into your ecommerce or international wire transfer.
Within El Salvador, the policy behaves like dollarisation with all its advantages and disadvantages, with an extra disadvantage that the currency has fallen by a third against the dollar.
> If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher
Interestingly, that is also the analysis that most central banks make. Their monetary policy sets a positive target inflation rate for this exact goal.
However, that monetary policy is often a large part of why people use Bitcoin.
"If there was some crypto without any incentives of hodling long term, "
The opposite.
Cryptos that are anchored to USD have no appeal. They're less useful than USD, and, there's no 'get rich quick' aspect. So what's the point.
The Ponzi Mania is what drives people into BTC and to talk about it incessantly on the Internet etc.. Without the mania, it's not going to spread.
An institutionalized crypto, like one by the government, and which had some kind of stability (i.e. central banked) would probably get critical mass and therefore have some utility.
El Salvador leader is basically criminally derelict, he should be jailed.
There's Tether and USDC, plus a handful of others.
The critical thing at the moment is to be "sophisticated" enough to make the right choice.
In US law, an investor has to prove they have means (money to spare) to do risky things. They are "sophisticated" investors and can afford losses. (This word is used in the law)
The rest don't get to play. So the rest don't know the rules and don't understand contract law.
If you read a contract it defines the rules. Most people don't want to or don't know to do this and, right now, the government isn't stopping them from making these decisions about investment in crypto.
Many people talk about crypto without acknowledging the fundamental nature of investments, because the don't invest (i.e. not "sophisticated"). They want something like their bank. Somebody to make sure they don't mess up and take care of them if things go sour.
If that person is you, leave your opinions aside and keep your money in bonds and mutual funds
> If there was some crypto without any incentives of hodling long term
There are some that strongly discourage speculation by having a purely linear emission, which after n years still has a yearly supply inflation of 1/n and takes a whole century to get down to 1%. Offering the same rewards to later generations helps avoid concentration of wealth that most cryptocurrencies, especially premined ones, suffer from.
This last cycle, many people bought Bitcoin to use as collateral for loans, which was a novel and even smarter use of it. Use your money to make money.
I asked a group of visiting college students from El Salvador about the situation with the Chivo wallet. They all uniformly believed the U.S. had put sanctions against the country's official exchange, making it hard to send money between the two countries. I could not find any evidence that such sanctions had actually occurred, but they all believed it was true. I wonder how they got this idea, how common it is, and whether it's had any effect.
tl;dr: you can have big positive impact but 'fail' financially.
The inverse is also true: you can have little impact but attain big wealth/success.
Moreover, due to competitive pressures this lack of correlation happens is quite common. If impact requires a mix of skill+luck+timing and success requires skill+luck+timing, then impact+success is (mathematically speaking) exponentially harder.
If he had invested in a corrupt opaque investment that by design lost $50M into the pocket of a wealthy supporter, everyone would've shrugged and said "business as usual".
In what multiverse is achieving 20% adoption among customers and sellers in only a year a "failure"? Also, no shit the IMF is going to rattle off dire-sounding warnings; the IMF has a vested interest in keeping countries like El Salvador dependent on the legacy financial system.
It's way too early to declare El Salvador's Bitcoin experiment a failure (or, for that matter, a success). Adopting a new currency (let alone an entire alternative financial system) doesn't happen overnight.
I value the insight of many that post here, so I would like to ask: isn't there any valuable application for blockchain tech? I realize BTC is imperfect, but blockchain itself is just a technology.
Being pretty young, everyone I know is involved in crypto in one way or another. I'm personally waiting on the sidelines, but there should be some beneficial middle ground between going all-in and completely discarding the tech.
Well, money is the biggest use-case of it all. If you don't care about inflation (solved via decentralization), then there's the use-case of verifyably programmable money (ethereum)
Another one that I find fascinating is immutability, things like https://opentimestamps.org/ (uses bitcoin's blockchain), it allows you to proof that X piece of information existed prior to time Y.
I know of 2 different paths of assumptions you need to verify that proof:
1. Somewhat trusting bitcoin block's timestamps and the immutability that proof of work provides to the chain of blocks
2. Having a higher bound estimate of your attacker's ability to generate proof of work, and then sum all the available proof of work (it is sequentially chained in the blockchain from the block's proof, till the latest block produced), and compute how much time the attacker needed to spend to fake that proof of work, and that's your proof of the minimum time that must have passed since X was conceived
Estonia uses a blockchain to act as an immutable way to store timestamped hashes of government data for security and verification purposes - they started building this a year before the Bitcoin whitepaper was released in fact. That's the only valuable use for blockchains I've seen.
While I'm certainly not on the Bitcoin train but I would argue it's too early to say it's a failure from an investment standpoint, and there's too little evidence to say it's a failure from a policy standpoint. I would presume the goal was to become less dependent on foreign currency/other nations, which seems successfull
FIAT has proven time and time again to fail. Dollar world trade is unfair and benefits the USA unfairly.
I would prefer a neutral crypto currency to be the new world reserve instead of a competing currency like the YUAN. Government should not have the power to print money out of thin air.
The technology of blockchains is improving, for the example lightning network should make it very well possible. Just like with the invention of 'real' money there is a lot of failure in the crypto space.
The subject of money and currencies is a much more complex issue. A government giving its "printing power" or in the case of Elsalvador, no longer wanting to be the victim of the printing power of the USA, is a very good thing.
croon|3 years ago
El Salvador gambled which is stupid. Whether they won or lost at the lottery is inconsequential to its stupidity.
afterburner|3 years ago
Speculative spikes can happen for a lot of reasons, but that Bitcoin would replace all currencies (as early advocates would have had you believe) was not one of those reasons.
jollybean|3 years ago
edwnj|3 years ago
Regardless of your opinion on this, you have to at least wait till the proposition plays out before passing judgement. You have to see if they can withstand the short term volatility and whether bitcoin succeeds or not.
Calling the experiment failure before the results is silly to say the least.
ploppyploppy|3 years ago
Its utility as a decentralised banking system for those who have no access to banking in poorer regions of the world is a clear benefit and has achieved what it wanted for the country.
MomoXenosaga|3 years ago
hackerlight|3 years ago
A lot of the risk can be hedged by custodians, so I don't agree.
The reason it should fail for transactions is because Bitcoin sucks for transactions. Few people will prefer slow, irreversible and expensive transactions.
koonsolo|3 years ago
> Investments are sound based on probability and risk beforehand.
Investing in bitcoin had a limited downside (lose 100%), but a very high upside (reaches it's initial goals). For me, the potential gains outweighed the low probability.
I consider myself very lucky that I made some money (wasn't crazy to put all my money in there). But for me, when it would have gone to 0, I still feel it was worth the risk.
But of course, with such a high risk high reward investment, only invest a small % of your total money.
donatj|3 years ago
I went from living very comfortably to living paycheck-to-paycheck in about 6 months. Holding my value in USD has become a significant risk.
mtrycz2|3 years ago
If Bitcoin's momentum hadn't been dissolved, it wouldn't require people to be forced by State to accept it.
[1] https://bitinfocharts.com/comparison/size-btc-ema14.html#all...
Kathula|3 years ago
yuan43|3 years ago
What it had was a currency it does not print (US dollar) and for which there is an ongoing international shortage.
What El Salvador got with Bitcoin was yet another currency it does not print and for which there is currently an international surplus.
The thing the article does not mention, and the only reason the policy made any sense, is that ~50% of Salvadorans live abroad. So there is a substantial remittance market in El Salvador relative to GDP. Allowing remittances to flow through bitcoin cuts out companies like Western Union who scoop from the top.
Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own.
hailwren|3 years ago
This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina.
What you really don't want as a layperson in Latin America, is for really any third party -- but especially government third parties, to have control of your money in any capacity during remittance.
aeternum|3 years ago
Second best is a currency that no country can print.
Third best is a currency that another country prints (since that country can easily devalue your holdings).
thehappypm|3 years ago
gillesjacobs|3 years ago
However, the presupposed lack of adoption of Bitcoin as a means of payment is not supported by the source bar chart. The numbers are actually pretty impressive compared to card: ~25% of businesses accept card and 20% accept Bitcoin as payment. That is impressive adoption after 1 year by any standard in a country that primarily uses cash.
espadrine|3 years ago
From the article:
> But Bukele wanted more. Making bitcoins legal tender meant a payee had to accept them. As the 2021 legislation stated, “every economic agent must accept Bitcoin as payment when offered to him by whoever acquires a good or service”.
slowmotiony|3 years ago
rawoke083600|3 years ago
The best alternative payment system I have seen myself is M-Pesa in Kenya [0]
It's THE payment system in Kenya everything runs of it in terms of commence for the "ordinary man". It has a somewhat unique starting point, since Kenya (Africa) (I'm from there myself), was not "modern enough" for the everyday man to make use of traditional banking services. But even the "low tech man" had a cellphone.
I hope to see more examples like this in the future, and I'm sure many a BigCorp is doing just that, I do wish the next-gen version of these services will be more community-driven and less bigcorp. Oh gosh I almost described the original vision of bitcoin :)
[0]https://en.wikipedia.org/wiki/M-Pesa
upsidesinclude|3 years ago
Much like Africa, all of SE Asia went directly to cell service and skipped all landlines because they were so far behind. The same goes for banking in these parts of the world and India.
The people there will skip over the traditional banking system which is massively undeserving the population and adopt a digitally native banking system. The masses will go with the flow and accept the CBDC, but many already understand the implications and limitations.
simple-thoughts|3 years ago
smcl|3 years ago
jinzo|3 years ago
From all the fanfare around them, I was sure they had to invest more. But after looking up the numbers, this looks like a publicity stunt more than any serious investment. Also 20% adoption when it's mandatory to support it, is quite interesting too.
bastawhiz|3 years ago
SilverBirch|3 years ago
__MatrixMan__|3 years ago
lbriner|3 years ago
There are many deep subtle questions about Economics, even with stablecoins but the choice of Bitcoin was way off base, the only possible reason to use it was because it was the only one most people had heard of.
Bitcoin is totally nonsensical for low-value high volume transactions and by the time the money gets paid to the seller for already bought goods, they could be making a loss. At least inflation in normal currency is only (usually) a few percent per year.
SilverBirch|3 years ago
moomoo11|3 years ago
Remove grifters, acquire actual progress.
runnerup|3 years ago
I also am largely okay with people using it for personal quantities of controlled substances, even though I do not use it for that personally. Sometimes these are for legitimate medicinal purposes as well (for example, schedule 2 TRT and HRT drugs)
pdntspa|3 years ago
Crypto can keep them, it's nice to not have to deal with the noise
lake_vincent|3 years ago
I reserve judgement as to whether or not this will be a net benefit for society. I suspect not, but our present ignorance is far too great to make such a prediction - I just think it's gonna happen whether we want it to or not, so get used to the idea of crypto-everything.
jayd16|3 years ago
pjkundert|3 years ago
bitxbitxbitcoin|3 years ago
Remove grifters, acquire actual progress.
I wonder if there were people in the 80s that said that.
osigurdson|3 years ago
I'd like to see an analysis of the situation, assuming that the value goes neither up or down, but simply holds a constant value in an inflation indexed manner. Would it still be a bad idea in that situation?
onlyrealcuzzo|3 years ago
Why? BTC has zero history of doing this.
prottog|3 years ago
Gold and currencies backed by gold come very close to this, with historical evidence to back it up. The purchasing power of gold -- that is, its convertibility to goods and services you might wish to consume -- have remained remarkably stable over time.
Countries stopped issuing currencies backed by gold for a few different reasons, but its ability to hold constant value over time wasn't one of them.
mihaic|3 years ago
I think we'll see another even worse cycle unfortunately within the next 10 years.
pessimizer|3 years ago
triceratops|3 years ago
mostly_harmless|3 years ago
Through that lens, it would be interesting to see if there was any anomaly in GDP, luxury goods sold, real estate sales, or tourism in the country.
can16358p|3 years ago
If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.
n4r9|3 years ago
pjc50|3 years ago
Adoption for what purpose though?
If you're not keeping a substantial "float" in the currency, you have to buy more every time you want to use it. So you've just inserted an extra, riskier step into your ecommerce or international wire transfer.
Within El Salvador, the policy behaves like dollarisation with all its advantages and disadvantages, with an extra disadvantage that the currency has fallen by a third against the dollar.
espadrine|3 years ago
Interestingly, that is also the analysis that most central banks make. Their monetary policy sets a positive target inflation rate for this exact goal.
However, that monetary policy is often a large part of why people use Bitcoin.
jollybean|3 years ago
The opposite.
Cryptos that are anchored to USD have no appeal. They're less useful than USD, and, there's no 'get rich quick' aspect. So what's the point.
The Ponzi Mania is what drives people into BTC and to talk about it incessantly on the Internet etc.. Without the mania, it's not going to spread.
An institutionalized crypto, like one by the government, and which had some kind of stability (i.e. central banked) would probably get critical mass and therefore have some utility.
El Salvador leader is basically criminally derelict, he should be jailed.
upsidesinclude|3 years ago
There's Tether and USDC, plus a handful of others.
The critical thing at the moment is to be "sophisticated" enough to make the right choice.
In US law, an investor has to prove they have means (money to spare) to do risky things. They are "sophisticated" investors and can afford losses. (This word is used in the law)
The rest don't get to play. So the rest don't know the rules and don't understand contract law.
If you read a contract it defines the rules. Most people don't want to or don't know to do this and, right now, the government isn't stopping them from making these decisions about investment in crypto.
Many people talk about crypto without acknowledging the fundamental nature of investments, because the don't invest (i.e. not "sophisticated"). They want something like their bank. Somebody to make sure they don't mess up and take care of them if things go sour.
If that person is you, leave your opinions aside and keep your money in bonds and mutual funds
tromp|3 years ago
There are some that strongly discourage speculation by having a purely linear emission, which after n years still has a yearly supply inflation of 1/n and takes a whole century to get down to 1%. Offering the same rewards to later generations helps avoid concentration of wealth that most cryptocurrencies, especially premined ones, suffer from.
latchkey|3 years ago
karaterobot|3 years ago
jonathan-adly|3 years ago
dilap|3 years ago
https://twitter.com/bramcohen/status/1567173122289442824
asah|3 years ago
The inverse is also true: you can have little impact but attain big wealth/success.
Moreover, due to competitive pressures this lack of correlation happens is quite common. If impact requires a mix of skill+luck+timing and success requires skill+luck+timing, then impact+success is (mathematically speaking) exponentially harder.
taffronaut|3 years ago
Macha|3 years ago
yellowapple|3 years ago
It's way too early to declare El Salvador's Bitcoin experiment a failure (or, for that matter, a success). Adopting a new currency (let alone an entire alternative financial system) doesn't happen overnight.
ww520|3 years ago
You want a currency that encourages usage in the economy, not one being buried in vaults.
hammyhavoc|3 years ago
tb_technical|3 years ago
thedebuglife|3 years ago
Being pretty young, everyone I know is involved in crypto in one way or another. I'm personally waiting on the sidelines, but there should be some beneficial middle ground between going all-in and completely discarding the tech.
madacol|3 years ago
Another one that I find fascinating is immutability, things like https://opentimestamps.org/ (uses bitcoin's blockchain), it allows you to proof that X piece of information existed prior to time Y.
I know of 2 different paths of assumptions you need to verify that proof:
1. Somewhat trusting bitcoin block's timestamps and the immutability that proof of work provides to the chain of blocks
2. Having a higher bound estimate of your attacker's ability to generate proof of work, and then sum all the available proof of work (it is sequentially chained in the blockchain from the block's proof, till the latest block produced), and compute how much time the attacker needed to spend to fake that proof of work, and that's your proof of the minimum time that must have passed since X was conceived
spiralx|3 years ago
https://e-estonia.com/wp-content/uploads/2020mar-nochanges-f...
guywithahat|3 years ago
__pache__|3 years ago
Cypher|3 years ago
bannedbybros|3 years ago
[deleted]
spaghettiToy|3 years ago
[deleted]
poulpy123|3 years ago
[deleted]
spreeker|3 years ago
I would prefer a neutral crypto currency to be the new world reserve instead of a competing currency like the YUAN. Government should not have the power to print money out of thin air.
The technology of blockchains is improving, for the example lightning network should make it very well possible. Just like with the invention of 'real' money there is a lot of failure in the crypto space.
The subject of money and currencies is a much more complex issue. A government giving its "printing power" or in the case of Elsalvador, no longer wanting to be the victim of the printing power of the USA, is a very good thing.
asah|3 years ago
pessimizer|3 years ago
thrwyoilarticle|3 years ago