El Salvador to offer residence and no capital gains tax to Bitcoin investors

I can’t tell whether you don’t understand how it works, or you are criticizing security guarantees which are not at all given. The hardness of the discrete logarithm problem is the guarantee for transaction integrity. The various other protocol mechanisms are the protections against double-spending.

No legal system has any relevance at all to discrete log, and very little to do with chain integrity. It may have something to do with availability or censorship, but not remotely as much as any other security or deposit. You may be talking about the markets that give it value denominated in fiat currency. This can also be done entirely securely without legal protection. The only relevant thing here for the legal system is the framework giving value to the fiat currency itself. The physical protection of mining equipment is relevant, but minimal in comparison to any other form of property. The supply of electricity, however, is extremely vulnerable, and requires a lot of physical protection. Yet, I don’t see anybody calling for removal of electricity tariffs for Bitcoin mining, so I can’t see the contradiction here. It would also be wonderful if the government would provide any asset protection or civil recourse for theft, loss, or fraud in cryptocurrency like they do for any other security. Crypto holders and speculators would love to pay for that. Sadly, no such protection is offered.

This is actually the biggest point. They don’t have any of the investor protections of legal instruments. All the politicians and courts and judges and lawyers and police and armies and aircraft carriers and nuclear warheads on earth can’t do anything for a crypto holder when something bad happens. Absolute zero.

I can’t see what your angle is. Where is this ‘regulatory capture’ coming from? Which bureaucrat is benefiting from this, and who is bearing the cost? Naively, we can assume that El Salvador believes they get more benefit by mere presence of Bitcoin holders than it costs them. Further, they believe that the benefit is so great, and the cost so little, that they should actually spend money trying to get them there instead of taxing them at whatever rate they could get out of them. I would love to see any facts that show how wrong they are, and how right you are, specifically how much it costs El Salvador to host Bitcoin holders in their country, versus the economic benefit from their spending.

But yeah, I get it, you don’t like crypto. I too have criticisms.

It's interesting to see this argument framed as piggybacking off the state. The state creates nothing and the protection they can provide has already been paid for. There is no piggybacking, only expecting something that's already been paid for.