[jollybean]

I think all of this is completely upside down.

It's a wildly irresponsible financial move.

1) It only takes a bare minimum of competence to create a currency that has integrity, and is stable.

2) Extending that digitally, should not be a hard.

3) Using energy supplies to calculate made up numbers seems like a giant waste of energy - that energy could be used to heat homes and power other things.

4) BTC is wildly unstable, since El Salvador depends on imports - and - nobody accepts BTC for payment - it's going to be a wild ride.

5) Nobody is going to be issuing debt in BTC so that part is moot.

6) BTC is inappropriate for 'unbanked' people - they're going to be the target of hackers worldwide. Sure, you could make a 'government wallet' that protects them from that ... but then why not just do regular banking.

6) For a currency ... if for some reason you can't do #1 ... the best option, by far, is to use USD. Prices in USD are stable. They're accepted globally. You don't have to issue debt in USD, but you can if you want. You can also digitally bank in USD if you want, it's not that hard.

7) If you really think that the best way to leverage volcanic heat is to mine BTC ... then fine. Do that - and exchange it for whatever currency you need.

This whole concept is fairly insane, regular people I feel are going to pay a heavy price.

Lastly - the problem is not 'finances' - it's the fools managing the country. If they acted with a modicum of responsibility, you'd be able to have all of the normal things other countries do i.e. a currency, basic banking. None of that is actually that hard.

A better solution would be to approach an established bank somewhere: US, Canada, Brazil, UK, Germany and ask them to provide online banking for your citizens, probably in USD or a mix of USD and local currency.

Do the BTC mining if you really want to, but as a secondary thing.

Final Note: this already has the stench of corruption. My bet is that the leadership already has a big stake in BTC and are 'Doing a Musk' by propping it up and they will be grafting off the top of the mining activity.

[pocoloco]

I'm afraid that if I try to retort to each point we may end up talking past each other.

But I will say this, I think that your assumption in point 1 is wrong. I think that the mismanagement of the financial system worldwide has proven that there is no country currency invulnerable to manipulation.

Jeff Booth talks about this towards the end of this interview which is great in it's entirety IMO.

How Inflation Is Stealing Your Wealth | Jeff Booth | Pomp Podcast #572 https://www.youtube.com/watch?v=RuCqFjU9Wi4

[jollybean]

There are over 150 nations, most of them tiny that have a currencies, it's not rocket science.

A nations currency will have the integrity and competency of the governing class, so El Salvador will be able to have a basic currency when they are not corrupt.

Frankly, this whole thing stinks of corruption, my bet is that the leadership are already speculating on BTC and are making big statements like Musk to drive it up, and that their fingers will be in the pot of the BTC volcanic mining.

But it may be moot: you can't force people to use BTC and businesses, esp. those that import will balk at it, and citizens likely won't adopt it.

Ask a US, Canadian, UK, Brazilian bank to provide basic financial services for citizens and they'd do it in a heartbreat.

The 'currency problem' in El Salvador is just a symptom of underlying problems.

[lowkey]

> so El Salvador will be able to have a basic currency when they are not corrupt.

Ok, so I’m going to straight-up ask you to either retract this racist statement or justify your position with evidence.

I want to see your proof that the government of El Salvador is corrupt. This link seems to indicate the opposite [1].

To help you see the light, let me highlight the fact that El Salvador lost their own currency after a bloody 12 year long civil war that was funded by an interventionist US government that raised an army of child soldiers in the 1980s.

Per Wikipedia [2], the Carter and Reagan administrations spent $1-2 million per day in 1980 dollars to raise and train this army of child soldiers.

Tell me again why El Salvador is corrupt and that is why they lost their currency?

[1] https://www.transparency.org/en/cpi/2020/index/slv

[2] https://en.m.wikipedia.org/wiki/Salvadoran_Civil_War

[lowkey]

How stable are those national currencies to inflation over time though?

Notably, the British Pound Sterling is named such because 1 British pound originally represented a pound of Sterling Silver. Today it takes over 400 British pounds to buy 1 pound of sterling silver.

Twenty US Dollars were worth 1 oz of gold until 1933. Today it is nearly 2000 USD per oz.

I challenge your statement that it is easy for a government to manage a currency over the long term. In fact it seems impossible for politicians and central bankers to resist the temptation to inflate their currencies to infinity.

Why haven’t the US, Canadian, UK or Brazilian banks provided services to the 70% of El Salvadorans today? What are were they waiting for all this time? I believe it simply wasn’t profitable enough for them.