El Salvador to adopt Bitcoin as legal tender.

Hamsterchops wrote: »

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...?

Hamsterchops wrote: »

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.

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?

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

85603 wrote: »

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

Hmmmmm I wonder

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.

Abominable Dr. Phibes wrote: »

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.

Ads by Google wrote: »

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.

Ads by Google wrote: »

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.

Ads by Google wrote: »

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.

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.

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.

Ads by Google wrote: »

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.