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El Salvador to adopt Bitcoin as legal tender.

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  • Registered Users Posts: 17,828 ✭✭✭✭ Ads by Google


    How does a country adopt a currency that jumps by 20% if Elon Musk says something good or bad about it, with transaction fees and times that make it worthless as an actual currency, a fact which has been widely accepted since it's now branded an investment vehicle slash store of wealth. It's still entirely reliant on the traditional banking system as well.


  • Registered Users Posts: 14,306 ✭✭✭✭ jimmycrackcorm


    It's not a big deal but unlikely to have much effect.

    Put it this way, it would be the same as instituting the Venezuelan bolivar as legal tender.

    Day to day, you couldn't know how much they price of a bread loaf will go up or down.


  • Registered Users Posts: 3,442 ✭✭✭ ozmo


    El Salvador looks to become the world’s first country to adopt bitcoin as legal tender!

    The central American country is looking to introduce legislation that will make it the world's first sovereign nation to adopt bitcoin as legal tender...

    Interesting - I dont think bitcoin will make good legal tender though - its far too limited in the number of transactions per seconds to be used as currency.

    And do they know how much of a roller coaster ride Bitcoins value is when they say they are looking for something stable... Didnt it just almost half in value this month?
    "Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation"


    >I guess other countries will follow suit?

    Not sure- or maybe other countries might follow China and discourage or declare it banned due to the crazy high amount of electricity it drains from the countries networks to keep it going.

    If someone can make Bitcoin more power efficient and faster - then maybe...?

    “Roll it back”



  • Registered Users Posts: 65,402 ✭✭✭✭ Overheal


    You can bet if it’s a threat to the Petrodollar that there’s a US agency somewhere cooking up how to disrupt that deployment.


  • Registered Users Posts: 8,284 ✭✭✭ PlentyOhToole


    I can’t see the logic other than to encourage the criminal underworld to spend their ill gotten gains on the local economy - El Salvador is ravished by gangs and filled with corruption so Bitcoin seems like a good fit


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  • Registered Users Posts: 2,895 ✭✭✭ Hamsterchops


    As regards being 'legal tender', does that mean they are actually using Bitcoin paper notes and coins in El Salvador?


  • Registered Users Posts: 65,402 ✭✭✭✭ Overheal


    As regards being 'legal tender', does that mean they are actually using Bitcoin paper notes and coins in El Salvador?

    I assume it's not for cash transactions.


  • Registered Users Posts: 963 ✭✭✭ 85603


    Why would a cocainey south american country start using a difficult to trace crypto currency.


  • Registered Users Posts: 21,887 ✭✭✭✭ Roger_007


    With conventional currency there is always a central bank which controls the supply of that currency and is supposed to be based on certain indicators in the economy where the currency circulates.
    Who controls the supply of Bitcoin and what is its value based on?


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    As regards being 'legal tender', does that mean they are actually using Bitcoin paper notes and coins in El Salvador?




    Legal tender just means it is a legally sufficient way of paying money you owe.


    If I get you to do a days work baking bread for a promised tenner an hour, I can't pay you with 80 Euros worth of bread at the end of the day (unless of course you accept it)


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  • Registered Users Posts: 65,402 ✭✭✭✭ Overheal


    Roger_007 wrote: »
    With conventional currency there is always a central bank which controls the supply of that currency and is supposed to be based on certain indicators in the economy where the currency circulates.
    Who controls the supply of Bitcoin and what is its value based on?

    Presumably the hash rate controls the supply of Bitcoin and the value is based on what people are willing to pay for it. In 2010 Papa Johns transacted two pizzas for 10,000 BTC. It was the first recorded BTC transaction with an explicitly commercial purpose (ie. Not black market)

    As far as black market goes that’s another can of worms. Black marketeers will even use Valve trading cards and teamfortress in-game items to launder money. Bitcoin would be just another vehicle for it and it’s less a function of how many hats/coins are involved as it is a function of transacting the cash between illicit parties.

    https://www.polygon.com/features/2014/5/22/5590070/steam-valve-item-trading


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    Overheal wrote: »
    Presumably the hash rate controls the supply of Bitcoin and the value is based on what people are willing to pay for it. In 2010 Papa Johns transacted two pizzas for 10,000 BTC. It was the first recorded BTC transaction with an explicitly commercial purpose (ie. Not black market)

    As far as black market goes that’s another can of worms. Black marketeers will even use Valve trading cards and teamfortress in-game items to launder money. Bitcoin would be just another vehicle for it and it’s less a function of how many hats/coins are involved as it is a function of transacting the cash between illicit parties.

    https://www.polygon.com/features/2014/5/22/5590070/steam-valve-item-trading


    Open to correction but I don't think Papa John's transacted anything other than a credit card.

    It was one dude on a message board that transferred a load of bitcoin to another fella in return for second fella ordering and paying for his pizza


  • Registered Users Posts: 11,611 ✭✭✭✭ MadYaker


    85603 wrote: »
    Why would a cocainey south american country start using a difficult to trace crypto currency.

    Hmmmmm I wonder


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    El Salvador is a very poor country which presumably doesn't have very good financial infrastructure. Those are the regions that blockchain can actually help. Even simple things such as keeping a record of ownership etc.


  • Moderators, Social & Fun Moderators, Society & Culture Moderators, Regional North Mods, Regional West Moderators Posts: 81,470 Mod ✭✭✭✭ biko


    This isn’t El Salvador’s first move into bitcoin. In March, Strike launched its mobile payments app there, and it quickly became the number one downloaded app in the country.

    If the current currency is unstable then something like bitcoin may sound promising.

    Same for Venezuela.


  • Registered Users Posts: 1,502 ✭✭✭ Abominable Dr. Phibes


    El Salvador is a very poor country which presumably doesn't have very good financial infrastructure. Those are the regions that blockchain can actually help

    How so? How can ‘the blockchain’ help poor countries?


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    How so? How can ‘the blockchain’ help poor countries?




    In countries like Ireland, we have robust systems and records of simple things like ownership of property.



    In other countries, there might not be the same thing. So you see where a big company moves in and pushes small farmers off land where their families have been for generations. But they have no proof of anything. There might be no centralised land registry etc. They don't have that infrastructure. It works fine for generations but then it doesn't.


  • Registered Users Posts: 17,828 ✭✭✭✭ Ads by Google


    An immutable blockchain is far more open to abuse than a traditional system, and a small country leaving its land registry in the hands of a technology that can be outcompeted by malicious actors deserves a revolution. If it going to go to the effort of modernising itself, there are countless better options.

    I feel sorry for anyone who actually believes all this hype. If our banks used blockchain, transactions couldn't be reversed. Mistakes not corrected. Fat fingers actually ruin lives. Absolute stupidity.


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    An immutable blockchain is far more open to abuse than a traditional system, and a small country leaving its land registry in the hands of a technology that can be outcompeted by malicious actors deserves a revolution. If it going to go to the effort of modernising itself, there are countless better options.

    I feel sorry for anyone who actually believes all this hype. If our banks used blockchain, transactions couldn't be reversed. Mistakes not corrected. Fat fingers actually ruin lives. Absolute stupidity.




    Bad actors need a combined computing power greater than the legitimate actors combined in order to corrupt the blockchain.


    What would be considerably easier for your corrupt company/individual would be to bribe a local official to fake some record/deed where there is no centralised infrastructure of records.


  • Registered Users Posts: 17,828 ✭✭✭✭ Ads by Google


    Bad actors need a combined computing power greater than the legitimate actors combined in order to corrupt the blockchain.

    No, you just need a corrupt official to enter the data on the blockchain. If your response is that it can be reversed with an updated record, then what's the point of a blockchain. It's an expensive database.

    And yes, it is feasible that bad actors could outcompute the good actors. If it is a state-run blockchain, they have to continue putting power into it forever. If it is a global one, they have to rely on it being profitable enough for others to mine, because if they stop, the bad actors can take it over.

    Bitcoin will stop being mined before the last coin is created. The reward drops so much, while the power consumption continues to increase, that it is simply not worth the effort to mine. Then bitcoin dies.


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  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    No, you just need a corrupt official to enter the data on the blockchain. If your response is that it can be reversed with an updated record, then what's the point of a blockchain. It's an expensive database.

    And yes, it is feasible that bad actors could outcompute the good actors. If it is a state-run blockchain, they have to continue putting power into it forever. If it is a global one, they have to rely on it being profitable enough for others to mine, because if they stop, the bad actors can take it over.

    Bitcoin will stop being mined before the last coin is created. The reward drops so much, while the power consumption continues to increase, that it is simply not worth the effort to mine. Then bitcoin dies.




    I wasn't talking about bitcoin in this context. I was talking about potential uses for blockchain technologies in countries that don't have existing robust infrastructure.


    Mining company moves into the area. Pushes out locals. They eventually get access to some kind of court and the mining company produces a receipt of purchasing the land from Paddy Murphy and an associated document showing his ownership. There is of course no centralised record of same so the court proceeds based on the "evidence" in front of it.


    The reason for your bitcoin reward dropping so much is by design in order to limit the forever supply of those tokens. That is not an inherent characteristic of blockchain.


  • Registered Users Posts: 17,828 ✭✭✭✭ Ads by Google


    I wasn't talking about bitcoin in this context. I was talking about potential uses for blockchain technologies in countries that don't have existing robust infrastructure.


    Mining company moves into the area. Pushes out locals. They eventually get access to some kind of court and the mining company produces a receipt of purchasing the land from Paddy Murphy and an associated document showing his ownership. There is of course no centralised record of same so the court proceeds based on the "evidence" in front of it.


    The reason for your bitcoin reward dropping so much is by design in order to limit the forever supply of those tokens. That is not an inherent characteristic of blockchain.

    In a country where these problems were actually relevant, the switch over to the blockchain would be the land grab and time when people lose their property through same lack of evidence.

    Mining company puts in claim on area. Locals have to fight it when they might not even know about it.


  • Registered Users Posts: 14,260 ✭✭✭✭ Donald Trump


    In a country where these problems were actually relevant, the switch over to the blockchain would be the land grab and time when people lose their property through same lack of evidence.

    Mining company puts in claim on area. Locals have to fight it when they might not even know about it.




    And a move to a centralised paper-based system would not have those problems?


    The issue is that some countries don't have the infrastructure to move to that centralised system at the minute and won't have at any time in the future. Even if they did, they might not have the political stability to guarantee systems of recognition.

    With no records of property ownership there are no strong property rights and that greatly hinders investment - especially inward investment. A western company might be hesitant to move into a country with such issues. Strong property rights are highly correlation with the development stage of a country. If you don't have them, there is only so far that you can get to. Would you be a little more hesitant to pour your money in Russia when you hear about how Sean Quinn's shennanigans actually led to him allegedly losing control of a large investment over there to bad actors? You probably wouldn't have the same hesitancy to invest in Germany or the UK.



    I can't remember the name off the top of my head but there is a term for the scenario where a country jumps a stage of normal development. Like when Haiti (and much of Africa) etc. went straight to mobile phones after not having proper landline systems. The newer technology was just easier to implement from where they were starting. Mobile phones are of course less reliable than fixed cables but it was far more beneficial to jump straight there for the benefits rather than not doing so because there were some issues.


  • Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 88,928 Mod ✭✭✭✭ Capt'n Midnight


    El Salvador looks to become the world’s first country to adopt bitcoin as legal tender!

    The central American country is looking to introduce legislation that will make it the world's first sovereign nation to adopt bitcoin as legal tender, alongside the U.S. dollar.

    Link: https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html

    Not sure how bitcoin works myself, but this looks like a moment in history. I guess other countries will follow suit?
    Cryptocurrency is literally like an eight-year-old's concept of an evil businessman. He just plugs his pollution machine in and gets money for it.


    At the other end of the food chain the maximum number of Bitcoin transactions per second is seven. At current world population the average person would have to wait 35 years.

    Places like China are developing their own magic currencies instead.


  • Registered Users Posts: 7,664 ✭✭✭ Fann Linn


    Can't understand this move at all. Presumably there is a pound, shilling and pence currency for day to day transactions or else there is a state of the art WiFi/internet service for everyone to log into morning, noon and night wherever they are based and whenever they wish to make a transaction.


  • Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 88,928 Mod ✭✭✭✭ Capt'n Midnight


    Fann Linn wrote: »
    Presumably there is a pound, shilling and pence currency for day to day transactions or else there is a state of the art WiFi/internet service for everyone to log into morning, noon and night wherever they are based and whenever they wish to make a transaction.
    They use US dollars there.


  • Registered Users Posts: 18,805 ✭✭✭✭ Larbre34


    Considering El Salvador is a basket case nation and is a crossroads of Central and South American criminality, adopting crypto as legal tender is no surprise.


  • Banned (with Prison Access) Posts: 991 ✭✭✭ ineedeuro


    Drug fuelled country with nothing else going for it adopts currency that helps to sell drugs. Is anyone surprised.

    If anything that should decrease the value of bitcoin


  • Registered Users Posts: 1,130 ✭✭✭ Del Griffith


    No, you just need a corrupt official to enter the data on the blockchain. If your response is that it can be reversed with an updated record, then what's the point of a blockchain. It's an expensive database.

    And yes, it is feasible that bad actors could outcompute the good actors. If it is a state-run blockchain, they have to continue putting power into it forever. If it is a global one, they have to rely on it being profitable enough for others to mine, because if they stop, the bad actors can take it over.

    Bitcoin will stop being mined before the last coin is created. The reward drops so much, while the power consumption continues to increase, that it is simply not worth the effort to mine. Then bitcoin dies.

    Im such a scenario if miners drop off en masse the rewards split between remaining miners would naturally increase making it "worth the effort" again. So, no it doesn't die.


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  • Registered Users Posts: 65,402 ✭✭✭✭ Overheal


    Open to correction but I don't think Papa John's transacted anything other than a credit card.

    It was one dude on a message board that transferred a load of bitcoin to another fella in return for second fella ordering and paying for his pizza

    Maybe, but still means 10k BTC was sold for two pizzas.


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