What I'm I missing? I keep on reading about how bitcoin is going to ruin El Salvador. The country has bought a number of bitcoins and bitcoin has plummeted in value but the loss is small relative to the country's balance sheet. I also get that they should have invested the money on a safer investment. It's a a legal currency but it's one of 2. People are free to use the dollar. But even if it goes to zero the country will be fine.
The chaotic budget management by the government is way more likely to bankrupt the country.
It doesn't seem so much that it is a legal currency, but all the chaos and suffering the push to make it the primary currency is causing. When headlines talk about bitcoin mining hubs using geothermal energy, people are reading energy price hikes and worsening deficit as more energy is imported, and that they don't get to benefit because they don't get to own the miners. And a 'small loss relative to the country's balance sheet' would make an absolutely huge difference if that loss had instead been spent on education or health. The discretionary spending in most countries is 'small relative to the country's balance sheet'.
"It doesn't seem so much that it is a legal currency, but all the chaos and suffering the push to make it the primary currency is causing."
Ok, I get it. Making it a legal currency was not a genius move given its volatility. But I understand it as a way to stay ahead of the curb. Whatever people think, bitcoin has a future since there will always be people that believe in it. It's cult like. They won't hear anything but the positive.
But making it the primary currency for a whole country makes no sense at this time. It's a big gamble. It will be to hard for people to deal with the extreme fluctuation. I wish them luck.
> And a 'small loss relative to the country's balance sheet' would make an absolutely huge difference if that loss had instead been spent on education or health.
Definitely. Bitcoin purchases are larger than any public hospital anual budget for example.
One of the topics that hasn't been talked about here and is mentioned by the article is how the Salvadoran government detained one of El Salvador's most known developers for openly talking about bitcoin before the adoption.
> loss is small relative to the country's balance sheet
The bigger question is, in which of El Salvador's government institution's balance sheet are those bitcoin accounted for?
I mean, from government announcements we know that there is a company that runs the state wallet that also runs a subsidized pet hospital using bitcoin profits.
But we no longer have any way to ask about that kind of stuff, because the well-functioning FOIA equivalent we had in El Salvador no longer works as it did before.
Did I mention that the Congress' president actually told journalists to run away an ask asylum in other countries because they were unwanted in El Salvador? While presiding congress, live on our CSPAN equivalent.
> But even if it goes to zero the country will be fine.
El Salvador had never had an unstable currency in its history. I mean we never were Argentina/Colombia/Venezuela or other Latin American countries where exchange rates look like a roller coaster. Never before in history we had had a local currency losing 50% of its value in months. For many, that sharp drop in value was a first time experience.
El Salvador is in no danger of defaulting on its debt. It has offered to buy back its debt maturing before 2025.
Mario Gómez was briefly detained by police in El Salvador on suspicion of being involved in a phishing scam and then released. There are many vocal critics of President Bukele and his bitcoin policy in El Salvador's Assembly and the legacy press. None have been jailed.
> Mario Gómez was briefly detained by police in El Salvador on suspicion of being involved in a phishing scam and then released.
But weren't those suspicions just some tweets by one of the president's parties congress members that were deleted afterwards? And amplified by government aligned social media (:
> There are many vocal critics of President Bukele and his bitcoin policy in El Salvador's Assembly and the legacy press. None have been jailed.
Not jailed, just "kindly" invited to ask for asylum in other countries by the president of the legislative assembly (:
>In 2001, with the economy still reeling from the U.S.-sponsored civil war, El Salvador’s right-wing government adopted the U.S. dollar
>El Salvador’s politics were dominated by two parties rooted in the Cold War: One was the conservative ARENA party, which has its origins in U.S.-backed death squads
>...six people in his cabinet have been sanctioned by the U.S. government for ... undermining democracy.
>El Salvador’s politics were dominated by two parties rooted in the Cold War: One was the conservative ARENA party, which has its origins in U.S.-backed death squads
Not exactly. ARENA was never the same organization as death squads. There may have been some people who simpathized with both or were member with both. But ARENA never had an armed branch.
In contrast, the armed guerrilla though, was actually converted to a political party as part of the peace traty. This was actually something very remarkable that has not happend often in the world. In which an armed resistance is converted to a party. Switching from bullets to ballots. Something quite remarkable actually :)
The chaotic budget management by the government is way more likely to bankrupt the country.