The IMF wouldn’t give them a credit unless they stopped forcing people to accept Bitcoin as payment, which almost no one was using anyway.
officials ensure that the government will continue betting on this cryptocurrency, whose price currently exceeds $100,000.
I think that’s why El Salvador is dropping it. They never really forced people to use Bitcoin, US Dollar was also the legal tender and unlike Bitcoin, also the money of account.
But really though, can you call for IMF to stop lending to countries which buy Bitcoin using state funds when the issuer of Dollars, the U.S. has a President who has run multiple crypto/NFT scams and wants to use Government money to pump up crypto prices?
Bitcoin isn’t good for making little purchases, firstly because it takes so long to get confirmations, if each block is 10 minutes and you need like 3 blocks to consider it confirmed that’s 30 minutes. But that ties into the second issue which is that you probably don’t want millions of tiny transactions on the Blockchain, you want them processed off-chain and then settled in bulk (to the Blockchain) periodically as a single transaction.
Bitcoin is great for little transactions if you use the lightning network. Sending on the lightning network means instant payments with no confirmation required and absolutely tiny fees. And the only thing that shows up on the blockchain is the transactions to initially start using lightning network and to take your coins back off the lightning network. Transactions made over the lightning network aren’t recorded anywhere other than maybe by the people transacting.
Finally someone who knows what theyre talking about, with an actual valid criticism.
That’s the same way as the economic system works though
Each bank and creditor keeps track of if what they owe each other and then they settle the balancebetween them periodically (depends on the country)
If assume you could do something similar with bitcoin, but you would need an overlay
Let’s not get astray here.
The reason El Salvador stopped using Bitcoin as a legal tender is not because it’s some sort of failed experiment (it had issues, but still), but due to continuous pressure of IMF interested in maintaining a US dollar-centric economy.
El Salvador is reliant on US dollars in its economy, which puts it under heavy US influence. Knowing Salvadoran currency wouldn’t be strong, Nayib Bukele suggested an alternative option - risky, volatile, but free from pressure of other countries and strongly appreciating in the long run. IMF didn’t like it, and that’s where we are.
So, when you cheer Bitcoin not being legal tender anymore, you also cheer US and IMF projecting power over the country.
Exactly. The title is misleading af
They were forced to stop using Bitcoin as legal tender by external parties. The question people should be asking is why? And the answer is not that it was a failed experiment.
Its even funnier. They just straight up promised them a billion dollar loan on the condition that they abandon bitcoin.
In December, the government struck a $1.4 billion loan deal with the International Monetary Fund (IMF) that scaled back its bitcoin embrace after the lender urged officials to limit its exposure. The lender specifically advocated making acceptance of bitcoin voluntary for the private sector, which is spelled out in the hastily-approved law.
WOAH what a surprised maybe it’s because half of the fucking country lacks electricity or internet? Really good job Bukele.
i remember laughing at crypto nerds about this a few years ago, but who’s laughing now?
me, still
El Salvador apparently invested about $270 million in bitcoin since 2021 and that investment is worth about half a billion bucks now. Oh my god, ha, what idiots!
That feels incredibly off. Bitcoin is around 100k now while back then it topped out at ~65k or so?
They didn’t buy it all at once. The price dropped between then and now and they were buying. Wikipedia has an entry on it.
I’m not an expert on El Salvador’s bitcoin, I just know you all sound like a bunch of sore losers.
Just because you had luck doing something incredibly stupid doesn’t mean it was a good decision
You’re all mad because you lost money investing in bitcoin when it was pumping and then selling during a crash. Don’t worry, it’s safe with me.
I know you’d like to characterize it as dumb luck because that would make you feel better. The reality is that I’ve been making small monthly bitcoin purchases for the better part of a decade as a part of a much larger retirement fund.
When the btc price hit $100k, I sold most of the initial investment so that now I’m just risking losing part of my gains.
You can call it lucky and incredibly stupid. I can call it calculated risk.
now do nvidia
I can’t say I understand the bitcoin hate in this thread. I have very real, realized gains.
Your meme should say, “I love working for minimum wage at Wendy’s”
they could have bought rolling 16x futures on gold in or 5x on cacao beans in 2021, just saying, with better success chance and lower risk. The fact that you won (allegedly) in casino doesn’t make you smart, it makes you lucky, it’s bonkers to do for a country
You seem pretty smart. They should probably put you in charge.
thanks 😉
El Salvador apparently invested about $270 million in bitcoin since 2021 and that investment is worth about half a million bucks now. Oh my god, ha, what idiots!
… Okay just to clarify, you’re saying they invested $270,000,000 and now it’s worth about $500,000?
Is there a typo in your comment or something?
Yes, there was. Thank you.
Ok, can they sell it then? What’s the use of Bitcoin? Why are you valuing it in Dollars? Countries accumulate Dollars and other first world currencies to be able to import more (and in case of El Salvador, spend more domestically). Bitcoin is sitting there doing nothing.
Same applies to massive foreign exchange reserves like in the case of China. But still, atleast forex reserves can be quickly used to stabilize the exchange rates.
Also keep in mind even if they sell it and assuming there is enough liquidity, $300m one time isn’t a lot of money even for a country like El Salvador.
Yes, he could sell it.
It’s commonly used as a store of value. When people invest in gold, what’s the use of that? They’re not going to actually use the gold for its physical properties.
I’m American and the unit of value that I’m most familiar with is dollars. We could convert it into any currency that you’d like. I could have also said simply that their investment had about doubled in value and roughly had the same initial value as about 10,000 economy cars.
Sovereigns aren’t the same as individuals. For sovereign, at the macro level, spending drives consumption and creates employment of real resources.
If El Salvador had its own currency, they could tax and spend that instead. But no, they use US Dollars.
What’s the point you’re trying to make here? You seem mad about el salvador’s bitcoin experiment. They made a little of money on their little investment.
They make no money from the investment you mentioned unless they sell for Dollars. Your stock portfolio gets you no money in form of capital gains unless you liquidate it for Dollars. Same with gold.
Is El Salvador budget denominated in gold or bitcoin? No, it’s denominated in Dollars.
El Salvador should first stop using a foreign currency, the dollar. Then worry about trying to attract capital inflows.
I agree. No currency or store of value has any true value until you go to spend or exchange it. It only has potential value.
You do realize that Dollars also are also constantly changing in value.
Source?
Womp womp
The thing we all knew would happen, did happen. Crypto is only useful to commit financial crimes and even for that it’s bad.
Crypto is a massive scam. It has no value. It is just used to obscure fraud.
I mean neither does FIAT currency, U.S. currency is based on taxes , there is nothing that backs it. Majority of GDP is just finance. We need more education on what and how a currency actually works.
This is good for bitcoin
“This is good for bitcoin.”
Honestly with the Trump government right now and the pending trade war, this might be good for Bitcoin. It’s supposed to be a store or wealth that you use to buy other cryptos like monero to spend.
This is not good for the environment because crypto mining is second only to AI model training in useless expendenture of natural resources and pollution.
But ironically, and I say this with no joy. This could be good for Bitcoin and that’s bad for us all.
The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency. According to the National Bitcoin Office, El Salvador has 6,050 bitcoins worth $634.8 million. “President Bukele continues buying bitco
They are still keeping the mass reserves just not forcing it to be accepted as legal tender in stores. Before if someone wanted to pay in Bitcoin you had to accept it, now you don’t have to.
an extremely volatile speculative asset primarily used for buying drugs, gambling, and illegal pornography doesn’t work as an actual currency?
who would have guessedHalf of El Salvador doesn’t have electricity or internet, Bukele is just a far-right weirdo who probably thought this would attract Techbros to invest in his regime.
The problem with any new kind of currency no matter what it is will always be controlled and manipulated by the wealthiest individuals who will flood their wealth into that new system.
If he were smart, he would bring back the Colon and stop using US Dollars. But noo he had to do stupid shit like Bitcoin.
He’s just a US puppet, Trump literally called him a dictator and said that the Salvadoran people areremoveds and murderers, and Bukele is still licking the US boot. Just like South America’s failson dictator wannabe Daniel Noboa and Captain Ancap in Argentina.
Captain Ancap in Argentina.
And note not even he wants to do crypto
lol
