El Salvador President: 1% of BTC invested would increase GDP by 25%(twitter.com)
twitter.com
El Salvador President: 1% of BTC invested would increase GDP by 25%
https://twitter.com/nayibbukele/status/1401335885497524226
7 comments
When I checked 6 days ago, the median Bitcoin transaction fee in the last block was US$0.25, so it looks like you picked an unreliable source for your transaction-fee information: https://news.ycombinator.com/item?id=27337189
(Also, there were transactions in that block that paid much lower fees than that, but some of them might be CPFP or something.)
That comment also explains how people in poor and middle-income countries use Bitcoin in practice, at least in some cases, even though transaction fees are usually higher than that. If you read it, you will understand the answer to your question to some degree.
(Also, there were transactions in that block that paid much lower fees than that, but some of them might be CPFP or something.)
That comment also explains how people in poor and middle-income countries use Bitcoin in practice, at least in some cases, even though transaction fees are usually higher than that. If you read it, you will understand the answer to your question to some degree.
The Strike app uses Lightning network and uses open source protocols. I believe this is the app they are promoting. I think this will be a good experiment because everyone is talking out of their ass - either this will help El Salvador, hurt them, or be neutral. Let’s wait a few years and see what happens.
So they want the citizens to not actually have access to their funds and instead rely on a government promoted private business to run all of their banking for them.
Well unless the financial institution is state-run then everyone uses a private business. I assume any private business could enter the space, but Strike spearheaded the laws / regulations. In the US I can’t park my funds with the federal reserve.
> #Bitcoin has a market cap of $680 billion dollars.
> If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
You can’t invest market cap. It’s just a figure you arrive at by multiplying two numbers: number of currency units/price per currency unit. It doesn’t exist anywhere.
If I found a pebble on the beach and sold it to someone for 10 cents, and if we assume there are a trillion pebbles on this planet, then the market cap of pebbles would be $100 billion. But you wouldn’t be able to use this “value” anywhere, because it doesn’t exist.
> If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
You can’t invest market cap. It’s just a figure you arrive at by multiplying two numbers: number of currency units/price per currency unit. It doesn’t exist anywhere.
If I found a pebble on the beach and sold it to someone for 10 cents, and if we assume there are a trillion pebbles on this planet, then the market cap of pebbles would be $100 billion. But you wouldn’t be able to use this “value” anywhere, because it doesn’t exist.
No, market cap is determined by liquidity in a marketplace. So if there is a pebble market, you can make a claim as to the size of that market. Gold happens to be a very shiny pebble that has a $10T plus market cap. That figure is based on a guess of how many ounces of gold there are in circulation (not including not-as-of-yet mined gold buried in Earth's crust) multiplied by spot price.
Agreed you can't invest marketcap. But could you attract $6.8B worth of economic activity into a country based on recognizing a new asset class and encouraging the development of that asset class in the country? I would argue that yes, yes you could.
Agreed you can't invest marketcap. But could you attract $6.8B worth of economic activity into a country based on recognizing a new asset class and encouraging the development of that asset class in the country? I would argue that yes, yes you could.
The president of a country publicly admits on Twitter that 70% of his population doesn't have bank account and they work in grey/black economy? Dude, that's your problem right there, and BTC is not a solution.
I’ll bite. What is the solution if not Bitcoin? Maybe they should wait until the bottom 70% of their citizens have enough money to entice the big banks?
The solution is to get their economy in order, reduce corruption and establish a functioning banking system.
In 1993, my home country had inflation of 313 000 000 % per month (yes, that's millions and yes that's per month). Average salary was $10/month. More than 50% of people worked in black economy. We had only national (public) banks, all of them were totally non-functional. Corruption was so high it's almost unimaginable for "normal" people in the west - if you needed to visit a doctor, you'd have to bribe him, if you had a traffic ticket you'd just bribe cops, if your kid needed good grades you'd bribe teacher...
28 painful years later - almost 80% of people work regularly, i.e. they are legally employed, inflation is far less than 10% per year, almost everybody has a bank account which costs like $3/month (but almost all banks are now private), averagy salary is $400/month or so, by corruption we're at least in the upper 40% of the world...
In 1993, my home country had inflation of 313 000 000 % per month (yes, that's millions and yes that's per month). Average salary was $10/month. More than 50% of people worked in black economy. We had only national (public) banks, all of them were totally non-functional. Corruption was so high it's almost unimaginable for "normal" people in the west - if you needed to visit a doctor, you'd have to bribe him, if you had a traffic ticket you'd just bribe cops, if your kid needed good grades you'd bribe teacher...
28 painful years later - almost 80% of people work regularly, i.e. they are legally employed, inflation is far less than 10% per year, almost everybody has a bank account which costs like $3/month (but almost all banks are now private), averagy salary is $400/month or so, by corruption we're at least in the upper 40% of the world...
I’m with you on the answer being to root out corruption and for the country to get its affairs in order. As for establishing a new banking system, isn’t that exactly what they are doing - albeit using Bitcoin and Lightning instead of fiat. El Salvador is a poor country and 70% of it’s citizens lack a bank account (but most have a phone.) The reason most don’t have bank accounts is that there isn’t enough profit for the bankers at the moment. Bitcoin and Lightning fixes this with better technology.
I don’t see how giving the citizens of your country the option to save their wealth in a peer-to-peer alternative to traditional currency, powered by a hard inflation policy that cannot be manipulated by any politician or central banker impedes that solution. If anything giving the citizenry a Plan Bitcoin option would seem like a honking good idea to fight inflation. Just look at Venezuela, Libya, Syria et al for recent examples of how Bitcoin helped citizens of those countries.
Is the argument that Bitcoin won’t help them at all or that Bitcoin alone is not the whole solution. (I agree with the latter)
I don’t see how giving the citizens of your country the option to save their wealth in a peer-to-peer alternative to traditional currency, powered by a hard inflation policy that cannot be manipulated by any politician or central banker impedes that solution. If anything giving the citizenry a Plan Bitcoin option would seem like a honking good idea to fight inflation. Just look at Venezuela, Libya, Syria et al for recent examples of how Bitcoin helped citizens of those countries.
Is the argument that Bitcoin won’t help them at all or that Bitcoin alone is not the whole solution. (I agree with the latter)
Yup, that's exactly what I meant. BTC (or any other cryptocurrency) alone is not a solution, but it might be a part of it. But I also think it will not be the biggest nor the most important part.
There are two problems.
1. Where are those $6.8 billion supposed to come from?
2. Market cap is a measure of wealth, GDP measures cash flow for one year. How is an investment into an asset that doesn't produce revenue going to increase GDP over the long term? Even if your Bitcoin go up you can only sell them once, therefore you should delay the sale as much as possible.
1. Where are those $6.8 billion supposed to come from?
2. Market cap is a measure of wealth, GDP measures cash flow for one year. How is an investment into an asset that doesn't produce revenue going to increase GDP over the long term? Even if your Bitcoin go up you can only sell them once, therefore you should delay the sale as much as possible.
Does the guy know GDP is a measure of annual return and a one off investment in a non-yielding asset doesn't create a perpetual return?
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- Whose minimum wage is between $113-$242 dollars per month [1]
- Where 26% of the population is living on less than $5.50 per day [2]
Wants to use a digital store of value, as a means of exchange, whose transaction fees have ranged from $6-$60 in the past 2 months [3]
How is this anything except an attention/headline seeking PR move?
[1] https://www.minimum-wage.org/international/el-salvador
[2]https://www.macrotrends.net/countries/SLV/el-salvador/povert...
[3]https://ycharts.com/indicators/bitcoin_average_transaction_f...