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by hnbad 1693 days ago
Except crypto isn't currency, it's an artificial resource with no inherent usefulness beyond exchange.

States won't give up their currencies because that would put all of them in the position of, say, Liberia, rather than the position of the US, EU or China who can literally print money to pay.

And even if all state currencies vanished over night, this would change nothing for individuals because the vast majority of wealth is claimed by a minority of individuals and the only thing guaranteeing their claim is the exact monopoly of violence of the state that also backs its currency.

You don't have a private yacht because the state guarantees the value of your money with violence against foreign nation state actors. You have a private yacht because the state will ruthlessly punish anyone other than itself trying to take it away from you.

The state may be holding a gun to your head to be able to take away what's yours at any time, but it also holds a gun to everyone else's head to prevent them from taking it first. This is why the extremely rich spend so much time, money and energy influencing politics. Not because they want to dismantle the state, but because they want to keep it from using the gun against them while still keeping it pointed at everyone else.

Without a state threatening violence to protect your claims on "private property" you'd literally have to raise your own private army to defend it. This is why leftists call anarcho-capitalism "feudalism with extra steps".

1 comments

States won't...

El Salvador is considered by many to be a state.

It's interesting that you didn't correct me on Liberia, which actually merely had its currency pegged to the US dollar temporarily. I must have mixed up Liberia with another country.

El Salvador is a fun case because they didn't exactly switch to the US dollar because their economy was doing so great but because it was either that or massively devaluing their already dodgy currency because they are a very small country and their economy heavily relies on international trade.

They introduced Bitcoin as "legal tender" on top of the US dollar against the will of the majority of their citizens but the law was part of a program to lure in foreign investments. This too followed earlier economic problems, so it's more of a cashgrab than a genuine interest in crypto currencies.

El Salvador replaced its currency with the US dollar. It did not replace its currency with Bitcoin. It also didn't replace the US dollar with Bitcoin, it just added it as a form of legal tender. It also suffered almost immediate consequences when the price of Bitcoin crashed and they had to dump additional money into it to compensate for this.

It's too early to say but at the moment this doesn't sound like a wise political move for El Salvador rather than a risky publicity stunt for the president.