BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to see how broadly 'bitcoin' is interpreted.
The CGT exemption will be of interest to crypto whales and entrepreneurs and may attract some, but organized crime is a concern given the nature of the asset.
What doesn’t work? I’ve only skimmed some LN search results, and it looks like there are a bunch of services using it, including strike [0] which was mentioned in a comment of the big thread here [1]. This would have the same problem (proprietary network) you mentioned, but it seems to be working still?
[0]: https://strike.me/
To send to someone who's offline the recipient either has to run their own always-on node, or use a custodial service.
Routing small payments (one of the goals of Lightning) is unreliable with a high chance of failure. See http://essay.utwente.nl/82015/1/Satcs_BA_EEMCS.pdf
For reference I'd like to refer to https://1ml.com/ There is currently > 1450 BTC network capacity on the lightning network, if it wouldn't work why would people provide network capacity exceeding 45 million USD.
edit Typo.
It's easier for San Salvador to disappear Bitcoin into cronies' pockets than U.S. dollars. For this purpose, Bitcoin's deeper liquidity makes it the best choice. Less cynically, Bitcoin has brand recognition. That makes it politically palatable in a unique way.
Bitcoin isn't a great currency. But it is a competitive store of value. El Salvador doesn't have a trusted domestic market of financial assets. This is an experiment in replacing a domestic market for assets with Bitcoin.
I wonder, does HN hate the "Bitcoin Cash" fork as much as BTC? It's the closest to the technical specification that made me interested in BTC in the first place.
Meaning you can open a channel, but if you want to sell real-world goods in exchange for anything that happens in that channel, then you'd better trust the other parties in the channel to close it properly.
tldr; Lightning is indeed super fast, but it's not as secure.
Alternatives like XLM, SOL, ATOM could also be an option.
That hasn't been my experience. I agree it is a "complex" system and has its own limitations, but when I took some time to test it, it worked well.
Who would want to spend Bitcoin in a stable country. 4,5€ transaction costs for daily purchases is not what it's intended for.
Musk is right on this one: https://twitter.com/elonmusk/status/1401251430015582209?s=21
Unlike fiat money, BTC is not an accounting tool for value exchange.
Unlike actual land, it doesn’t have any intrinsic value.
I’m very curious to see an elite class whose core virtue is based on being an early adopter.
People play along when they benefit too. When they no longer benefit, they take action to take it down.
The problem is that BTC gained it's intangible value differently from a normal fiat currency and it can loose it again. See https://bitcoin.isnot.money
> I’m very curious to see an elite class whose core virtue is based on being an early adopter.
How do you think the elite class became elite? How do queens and kings get their power? By having some ancestor in the right place at the right time take advantage of an opportunity before other people tried.
They fought and murdered the competition. Their offsprings continue doing that until they no longer had the intelligence or power and got exterminated and their wealth redistributed.
This is very, very different than stumbling upon something.
For land, you can say that even in the case that society collapses it is still valuable. Or is it?
What exactly is the assumption that deems BTC's intrinsic value zero and land's value more than zero?
Gold has a very little intrinsic value. Decorative and tool making value due to its physical properties are there but they are minor comparatively.
BTC has none. That doesn’t mean it doesn’t have a value, of course but it’s simply a value within a certain ecosystem.
For me the easiest way to determine if something has intrinsic value is ask yourself what would happen if you owned all of it (and couldn't be forced to give it up).
If you owned all the Bitcoin in the world, we wouldn't accept its use, and would just create another currency with identical properties.
If you owned all the land in the world, people would come to you to buy or rent it. You can't build a house or a factory unless someone is willing to sell or lease you the land. That's what makes it valuable.
In many ways, this is why we have the word "priceless". Things become priceless when, in certain contexts (for certain people at certain times), they will not be sold for any price. Land can be priceless because I can have a sentimental attachment to a particular place. Its value isn't derived from how many $'s people will pay for it.
Those clones have almost no one mining with it, thus limited hashing power, thus no ability to secure transactions on the network. The amount of hashing power + number of nodes makes the protocol decentralized and secure, and thus far only Bitcoin has that and none of the clones.
There's a bunch of people that have little to no knowledge about the space coming in and buying new coins believing it will make them rich, but they're usually clueless about the underlying technology.
If we were on the gold standard, gold would be legal tender, even though it isn’t fiat.
How's the Internet infrastructure in El Salvador?
* Wireless data can be spotty in rural areas due to many hills and mountains. We would need an MVNO for rural areas coverage, as it wouldn't be cost effective for the four mobile networks to place a tower in every rural corner.
* Wireless coverage in cities was limited/overloaded for about 5 years due to lack of new frequencies. This was a regulatory issue fixed about 2 years ago and wireless service is finally improving
* Some companies stopped providing wired service in rural areas about 15 years ago due to copper theft. Not sure if this has improved
Also the volatility piece will be hard to manage in anything other than instant transactions. If it's legal currency will people have to denominate larger assets (e.g. cars, houses) in BTC and commit to a price where there could be considerable shift before settlement? I know they mention that stability fund in the article but I could see this getting more complex than that.
What the policy will be where BTC appreciates before settlement will be interesting too, so in a bull run will a buyer have to hand over the number of coins they committed to, and will the gov. get the excess, or the merchant?
So I'm just some guy. Someone owes me money and says, nah I'll repay it with Bitcoin. Not only is that mega-volatile, most people have no idea how to use it. Also it's easy to fall for a scam if you don't know how it works.
And further, you can typically accept anything as debt repayment if you so like. Cash, art, pretty shells, or indeed, Bitcoin. Making it legal tender actually funnels people into having to accept Bitcoin.
https://twitter.com/nayibbukele
Just have a look at it. The profile pic with laser eyes. I wonder how much of this is motivated by personal profit motives.
Edit: The biggest thing of this is that every commercial actor MUST accept Bitcoin if a customer wants to pay in Bitcoin. See Art. 7
* This is an analysis of what was actually passed. It's a big deal as far as "legal tender" goes: https://twitter.com/robustus/status/1402456274340442113 For an discussion on what "legal tender" can mean, see: https://www.coindesk.com/el-salvador-bitcoin-legal-tender-ko...
* For those that don't know, the US Dollar was El Salvador's previous only legal tender. For a list of some other countries that use USD or are pegged to USD: https://en.wikipedia.org/wiki/List_of_countries_by_exchange_... - note of those, the Marshall Islands has previously announced plans for a CBDC (working w/ Algorand) and politicians in Ecuador has also brought up the possibility of introducing Bitcoin as legal tender. Many LatAm politicians (many that have been pegged to USD) have announced support for cryptocurrencies. Perhaps domino theory is back in play? https://twitter.com/balajis/status/1402279912623464458
* The plan for the merchant/end-user use case is apparently to use Strike https://strike.me/ , which is a custodial service built on the Lightning Network - see also https://www.businesswire.com/news/home/20210605005045/en/Str... (Technically it's opt-in and you can use any wallet, but I'll just leave this recent thread here as an example of why this isn't really an option: https://threadreaderapp.com/thread/1376286470256873475.html )
* Anyway, that last detail is I believe is getting sidetracked from the main point, which is that as a (to my mind) clear direct consequence/reaction to current US monetary policy, and a shot across the bow of USD's reserve currency status. One doesn't have to look further than the numbers for foreign holding of US Treasury Bills to see how the wind has been blowing: https://ycharts.com/indicators/increase_in_foreign_holdings_... but of course, you can also listen to much smart people than me opine about this: https://youtu.be/ScAeHsXIUqI?t=528
(It appears that El Salvador plans hold $150mm USD in a fund that will slowly convert into BTC, assuming price volatility risk for merchants that want USD)
I think the trade-deficit between El Salvador and the rest of the world[0] will mean this is just a gimmick in the end.
[0] https://tradingeconomics.com/el-salvador/balance-of-trade
... should I stay or should I go?
