Comment by arcticbull | Hacker News Reader

Comment by arcticbull | Hacker News Reader

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Do they though? Because that's not really what I'm hearing.

Strike is, in the US, a custodial US dollar wallet. You give them dollars and they keep them as dollars. You send them to another person in the US and they just amend their internal ledger.

When you try and send them to El Salvador things go pear shaped. They:

(1) Buy Bitcoin with those dollars.

(2) Use a private LN network that they don't let anyone else onto because it made it totally un-workable according to their CEO.

(3) To send those Bitcoin between their own two accounts.

(4) And then buy Tether with them in El Salvador. You remember, the dollars that are actually 3% dollars.

Strike is somehow the absolute worst case for the people of El Salvador. Centralized, permissioned, censorable (it's not available in Hawaii or New York) and backed by Tether. Not a coin that's likely to have the money (USDC) but Tether, who admits they don't.

El Salvador by the way, is a dictatorship mandating their citizens use of Bitcoin.

Where's the win exactly?

[1] https://davidgerard.co.uk/blockchain/2021/06/11/el-salvador-...

>(2) Use a private LN network that they don't let anyone else onto because it made it totally un-workable according to their CEO.

This is a strange statement to make. It still runs on the same LN network as everyone else, it's just that they won't peer with anyone. I wouldn't exactly call that a "private LN network" in the same way I wouldn't characterize verizon as operating a "private internet" because they don't have an open peering policy.

As for the bit about using tether, I wholeheartedly agree that something like USDC would be much more suited. The only explanation I can come up with is that USDC has orders of magnitude less volume than USDT. According to cryptowatch USDT has 24hr volume of 73.3B whereas USDC only has 0.60B.

Not sure why trading volume would matter, they can simply be an authorized participant of USDC. They after all are receiving real dollars.

[edit] Complete speculation, but if I had to guess, Tether's ability to create ersatz dollars is really important to the Salvadoran scheme. After all El Salvador cannot print currency, because it's a USD economy. I know someone who's got an unlimited wildcat money printer (and the reckless abandon to use it) - his name is Paolo.

If I were a criminal mastermind operating in plain sight with about $60B shortfall on my books due to counterfeiting, the best way I could think of to keep myself out of trouble would be to make a poor nation dependent on its continued existence. Literally too big to fail. Again, purely speculative.

Remember, frauds have to keep getting bigger out of necessity.

You don’t have to use Strike, all lighting wallets are interoperable, and no need to exchange to Fiat since Bitcoin is legal tender.

Strike is the government sanctioned one, however, so saying options exist is a bit inconsequential. After all people on HN can barely keep abreast of why Tether is bad - I hardly expect the average Salvadoran. A government-endorsed Tether wallet is awful.

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