El Salvador Is Now over 31% Down on Its Bitcoin Bet
cryptobriefing.com
cryptobriefing.com
> The truth is that its impossible to know how El Salvador's bitcoin gamble will ultimately play out.
But those are my taxes being gambled,
> most of the criticism being leveled at El Salvador right due to the pre-existing bias that many have against Bitcoin and crypto
So as a Salvadoran myself, I would like to see more transparency on this project.
A simple dashboard, like the one from Norway's oil fund homepage could help.
By putting some effort to displacing the US dollar, El Salvador gains negotiating power with the USA. The USA might provide incentives to end the bitcoin project all together, or some kind of anti-inflation guarantee to persuade El Salvador to hold dollars.
That extra power is what makes this a good gamble. It's a thing that you and I don't get on top of what a regular investor wins or loses.
If you know of a country where the government doesn't gamble its resident's taxes on risky schemes, or (even worse) just flat out waste billions bombing and invading countries on the other side of the world like mine does, please let me know so I can make my visa application!
>So as a Salvadoran myself, I would like to see more transparency on this project.
Couldn't agree more! More government transparency is always good, in every case, in every country, on every issue. It is far too lacking.
it's not unfounded - the system has worked for the past few hundred years.
(serious question, interested in studies on corruption)
Why would anyone bribe the Church tho? seems hilarious. Some kind of tax scams involving their tax-free status or they actually still have influence worth buying?
I’m surprised nobody has ever considered that Bitcoin is vulnerable to attacks. It hasn’t happened yet, but imagine if someone finds a way to do fraudulent transactions. Then it’s all over.
Snark aside, all risk is relative. Your bank account is also vulnerable to attack, and also a lot more vulnerable to human error and a bunch of other risks. Various instruments are good for various goals - as it happens, BTC is a pretty good value store. Not what anybody expected in the beginning, but there you go.
Organizing a bank run is illegal.. but not with crypto
Is it? I don't see why I shouldn't be able to withdraw my cash from a bank, nor be able to tell others that I'm doing so and why... So what part is illegal?
What you mean to say is that BTC is a pretty good speculative asset, and I would agree up until the point that people want to actually turn their speculative asset into tangible wealth. Then they are going through fiat, or an exchange, and all the issues with the traditional finance system come through full force on top of crypto volatility.
DeFi and all these attempts are reinventing the wheel but without the traditional protections put in place. If I forget my password and email with Chase I can still recover my assets. Not so with crypto, and if someone does get my wallet key there is nothing stopping them from draining it dry. My bank would probably freeze the account for suspicious activity.
I haven't even brought up malicious theft of crypto, which happens all the time. Mt Gox wasn't that long ago and what was it, 10% of all circulating Bitcoin at the time that went missing? Most users aren't using hardware wallets and I imagine even less know how to really audit a smart contract. These are all barriers to widespread adoption.
Don't you think somebody would notice something by now?
Anyways. Do you really think the network wouldn't do anything about it? Even quantum-proofing Bitcoin is a possibility, so why not fixing a bug?
I bet that the humans running the machines that run the Bitcoin network would simply update their Bitcoin-core and go on from the point just before the transaction that stole everyone's Bitcoin. A significant nuisance, but hardly a catastrophe.
It's hard to know sometimes if one is being sarcastic on HN, but at any rate, Bitcoin is quite possibly the most scrutinized piece of technology ever developed and there is an enormous amount of research, both academic, corporate, and even just random independent individuals looking for any kind of fault with it whatsoever.
Does that mean Bitcoin is infallible? Absolutely not, but to claim that nobody has considered that Bitcoin is vulnerable to attacks is just one of the most ridiculous claims I've read on HN, once again assuming you're not being sarcastic.
It would be caught after the fact, and the software patched, but money would be lost and confidence in Bitcoin's resistance to double spends would be shaken.
Bitcoin needs increase 100x or they need to buy why more.
[1] https://tradingeconomics.com/el-salvador/total-reserves-incl...
Not sure what is happening in el salvador with that.
What a terrible way to be paid - you get paid and then your salary may drop in price by 10% that day, and you have no idea whether it will happen or not. This is the sort of thing that starts revolutions.
Oracle pricing just determines how much bitcoin - already owned - will be sent for a payment at the time of purchase.
No more, no less.
But this won't help you if you're paid in bitcoin then it crashes, it will make it even worse than if things were priced in bitcoin where at least your spending power for the internal market would not change (even if external goods became more expensive).
yeah we covered this. buy puts to stay delta neutral. its not that hard.
Not going to happen.
I want a stable currency to transact in which isn't a get rich quick scheme and doesn't reward early holders more.
I'm curious why you wouldn't compare it to the direct measure, which is the value of the Argentine Peso.
Because if El Salvador had bought Argentine Peso instead and let's assume they bought them in September, when they first started buying Bitcoin (if I assume they bought the Peso gradually over the past 4 months like they did Bitcoin the Peso would look better since its value has only dropped over that period), they would have bought $88mm USD of Peso on September 1 at a price of 97.71 Peso per dollar, giving them a 8.598 billion Peso holding.
At today's price of 104.50 Peso per USD, that holding would now be worth $82.28mm USD.
Compare that to their BTC holdings of $60mm spending the same amount of USD to buy Bitcoin. Clearly $82.28 > ~$60mm, so they would have done a lot better with the Argentine Peso instead.
Of course, BTC is highly volatile and for all you know it may rise by 50% making their holdings more valuable than the Peso. However, what it does show is that BTC appears to be a poor currency, that specifically does not protect from inflation or currency risks.
It might be a great investment, as a lot of people appear to be treating it, but that in fact makes it a poor currency. An investment should appreciate over time. Whereas a good currency should depreciate over time (although slowly) because if it appreciates over time then that greatly reduces the incentive to spend/invest the resources that currency represents in actual productive endeavors, which damages the real economy, and means a country does not build as much infrastructure, grow as much food, or employ as many people, as it would with a slowly but consistently depreciating currency.
I'm sure a lot of people would like to see BTC totally fail but, as Monty Python said, "I'm not dead yet!"