BTC legal tender in El Salvador

So what does this mean for btc? In the grand scheme of things probably not a huge amount but is a step forward in it’s legitimacy. What it does do is pose some really interesting questions.

Firstly, why is El Salvador choosing to add btc to it’s current legal tender, the almighty USD. Presumably they see risk of devaluation of the USD that is beyond their control resulting in the destruction of the wealth of their country. At this point it seems they are exchanging that for some pretty extreme volatility. Presumably one of the reasons the USD was adopted instead of a unique local currency is because of the stability provided.

Secondly, how are they going to adopt it. Is the intention to use btc as the security under an electronic payment system but maintain nominal pricing in USD and use them in tandem. This seems like the least disruptive option but opens up some interesting issues regarding exchange rate and the potential for peoples savings to fluctuate wildly in both directions along with the value of btc if large portions of it are stored in that system. The alternative of switching to pricing directly in btc would leave peoples savings untouched but would see prices of imports and exports fluctuate wildly instead, so is probably not significantly better from that point of view.

It also raises some further questions about the implementation. Whether the intention is to price in btc or USD the system will be a transaction system abstracted away from the underlying btc, much the same as EFTPOS abstracts AUD here, and the classic greenback did for gold back when it was still linked. And much like those it will become blindingly obvious that the system will still be perfectly capable of operating as a transactional currency if the underlying security was to be removed from it. Presumably another of the benefits of adopting the USD was it removed the ability for the local government to fiddle with the money supply, however the change to this system may provide potential for that to become possible again.

Ultimately I don’t know what is going to happen but it will be interesting to see the practical implementation when it is complete.

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Maybe you should buy a house in El Salvador like Max Keiser did.

Oh wait…

Screen Shot 2021-06-09 at 21.21.43.png



BJW, I actually think that there might be a kernel of truth there. what El Salvador is doing might create some opportunities (and perhaps incentives) for people with big balance sheets to try to exploit/assault the USD-BTC peg*.

*to the extent that their actions are creating a peg. They may not be. I’m too lazy to have checked the details.

We know from history that countries that are much more significant than El Salvador have not been able to defend pegs….

Who knows what their motivation for their actions are. May be as simple as getting limited monetary sovereignty. They (el Salvador gov) can’t print USD but they CAN mine BTC [in a tax-free and gov-subsidised environment]. May be a lot easier than doing exports.

Last edited 3 years ago by Peachy

I really don’t see how adopting as legal tender changes the equation regarding btc mining and it’s potential profitability.

i meant that this gives the El Salvador government the ability to create money. Not costlessly, like printing fiat, but quite reliably and without having to earn USD through trade.

Being the government, they don’t need to pay tax on the BTC they mine and they are probably also in a great position to buy any of the local grid’s excess power at cost (or requisition it for free). So they’re advantaged against other miners.

looks like El Salvador’s debt yields about 9% – mining Bitcoin or even borrowing Bitcoin is likely going to be cheaper

and this bit is important too, of course:

As mentioned in the article above, the government will be the only people accounting for the btc reserve so presumably can play shenanigans with the internal money supply as much as they want.


that is true. But:

  • last month mining BTC would seem like a loopy unhinged venture. Now any “loopiness” aspect has been subsumed in the legal tender announcement (& likely turned into a PR win)
  • Now they can mine BTC and use it to pay their public servants and local suppliers now. And they have to accept it 😀
Last edited 3 years ago by Peachy

I think we largely agree.

Anyhow, I think this will be an interesting experiment where BTC’s behaviour is tested in an environment with a boosted -fiat like- demand profile. As I had mused a few weeks ago:

there are digital tokens that don’t have the same supply flexibility (vulnerability). But yes, they suffer from poorer demand profiles – can’t be used directly to pay taxes, buy labour, groceries, etc. this may be solved in time, or not (personally – I think yes).


it may end up being a total disaster, as the wider use will test a whole bunch of potential vulnerabilities. In that sense it could be the thing that destroys BTC (kinda like the short-lived negative gearing prohibition in EZFKA all those years ago utterly destroyed that as a policy option for decades to come)

Or we may see the opposite – a great success as they get a country-wide lightning network humming. Proving the “it doesn’t scalers” wrong….


Not really sure what the excitement is over El Salvador adopting BTC as legal tender…. El Salvador comes in at 104 on the corruption index, so allowing a corrupt currency to be accepted as legal tender in a corrupt country isn’t particularly inspiring imho.

When the median daily income is around $5 a day and with transaction fees hitting $50 a transaction back in early May and still averaging $10 a transaction today, it would take the average El Salvadorian between 2 days and 2 weeks to be able to afford a single transaction.

What the recognition of BTC as ‘legal tender’ means that the elites who already have the power and wealth in El Salvador, have another means of operating outside of the existing financial framework and to an extent avoiding the repercussions of their own financial mismanagement that they will inflict on everyone who is still forced to use fiat.

Last edited 3 years ago by Stewie

That’s possible, but imho it would be an unmitigated disaster – the level of manipulation of BTC price is already nearly off the scale as a private currency still mainly held by geeks and moonboys, the incentive to manipulate it when whole nations economies depended on it for their reserves would be most worrying.


A cabal of public companies whose business model is around neutrally storing data and processing transactions, and whose identifiable Directors are answerable to both Shareholders and regulators – I suppose the possibility for nefarious collusion exists, but it is a public blockchain where any such manipulation should be apparent by design….

Last edited 3 years ago by Stewie

Most of BTC’s are in China – BSV’s largest miner is TAAL which is a Canadian based public company.

BTC ‘miners’ are basically Ant mining units doing little more than hashing – they store very little data, they process relatively few transactions.

TAAL just processed a half a gig block


“small blocks are slower but maintain the key advantages of decentralization and security because more nodes can join and maintain the network.”

Again, that is a Blockstream narrative – it wasn’t in the white paper, it wasn’t mentioned by Satoshi, who quite literally said the opposite.

‘Decentralisation’ does not make the transaction verification any more secure.

The vast majority of BTC’s transaction processing still occurs in authoritarian China among 6 main mining pools, some of which are controlled by unknown individuals, whose main BTC income producing assets are ANT miners that will depreciate by approx 50% per year, while housed in shipping containers in the middle of who-knows-where.

Yet having all of BSV’s transactions mined by ultimately a similar number of large miners, who as public companies operate large data farms on real property, secured by real leases and mortgages, and significant infrastructure, managed by identifiable directors who are liable to both shareholders and regulators in reasonably well run Western Democracies where the rule of law is relatively consistently applied, AND where anyone can still run a partial node and conduct their own independent verification, of any transaction at any time in order to check that the 5 or 6 large miners are acting honestly… is the less secure network.

Last edited 3 years ago by Stewie

The narrative that security is only afforded through decentralisation, like BTC and all its thousands of parasitic nodes, as opposed to work done, rule of law and creditable public companies in Western democracies is false.

It relies on limiting the definition of what provides security in distributed systems to simply one attribute, while specifically refuting the need or importance of other attributes that also provide system security.

It is a fake narrative, and can and will be disproven in an instant when Govts finally tire of crypto nonsense and regulate it up the wazoo.


Well speaking of facts I’d like to see you post a couple instead of straw manning my points, and summarily dismissing facts I’ve provided as irrelevant to the discussion at hand.

The crux of our disagreement is that you believe a blockchain can’t be secure unless it is independently verified by thousands of nerds who’ve downloaded copies in their mother’s basements, where as I’m saying, there are other compensating factors that add security to a distributed network.

I agree there is a trade off between security and processing if you only consider a single attribute, your “striesland effect”.

But I don’t agree that it is the only attribute providing security to a blockchain and makes it reliable and secure, and something that can be trusted for commercial or enterprise purposes.

To limit it to credible public companies in western democracies requires it to be private, which removes any benefits of a blockchain and brings all the disadvantages. 

That doesn’t even make sense. I think you are writing nonesense now simply to be contrary. Public companies maintain a distributed ledger, how the hell does that make it private ffs?

 A simple Database shits all over a blockchain from orbit as a private ledger.

Paypal shits on BTC as a payment system – yet you actually think El Salvador is starting to accumulate it as a means of fiat monetary reserves?

There are advantages in a trustless distributed system – yes, even in BTC over paypal, in terms of a pure value transfer system. For the same reasons there are advantages in trustless distributed database systems of the type the BSV provides.

Last edited 3 years ago by Stewie

The Striesland effect is one attribute that adds security to the blockchain network, it is particularily useful at solving the issue of distributed processing during the bootstrapping phase of any network.

However as the network grows it was ALWAYS envisaged that the processing would eventually move to a few large sever farms, and OTHER attributes like the ones I have listed will provide the security assurances to the network – Satoshi even said so himself (see attached image).

The less copies of a blockchain there are, the easier it becomes to manipulate 

Again yes, it would become easier to manipulate IF you ignore all the other attributes that add network security.

Re comments to a partial node and verification – I was careless in my use of the word “verify” I meant in with the context of auditing the blockchain against their own system and records NOT verifying actual transactions in terms of mining.

I disagree with your assumption that there will ultimately be only one version of the BSV blockchain maintained anywhere in the world, ultimately there will be a number of miners. These will probably eventually specialise in the processing of certain data and transaction types, but they will maintain a complete copy of the blockchain transaction history.

To add a new address to monitor requires downloading the entire chain again to find all the relevant blocks.

That doesn’t make any sense – BitCoin is a UTXO system, addresses are irrelevant to the security of the system, the entire system is built on the status of unspent transactions. Most of these issues have already been addressed by BitBus and other like solution providers.

BTC with it’s very low transaction rate is already pushing the limits of practicality with a 300Gb chain.

I’ve already refuted that claim multiple times from a commercial perspective:

You: 3Gb X 144 blocks per day = 432 Gb per day

x 365 days a year = 157,680 Gb per year.

Where are you planning on storing the blockchain?

Me: I understand Gb storage is around $0.02 or 2c per Gb – is that correct? If so then it 157,680 Gb of storage would cost about $3k per year?

Sure if you are talking about hobbyists running the BTC nodes on their Raspberry pi’s then they’re likely to be finding maintaining a complete copy of the chain increasingly expensive or impractical, but for commercial miners it simply isn’t true.

Last edited 3 years ago by Stewie

If you really want a point by point rebuttal I may write a whole article over the weekend.

Go for it – I would really like it to be critiqued. I mean they’re hosting the Coingeek conference at the moment, the concluding speakers aren’t a bunch of moonboys and putz’s like Max Kieser and Michael Saylor – they’ve invited two of crypto currencies biggest critics, Nouriel Roubini and Nassim Taleb, NOT to cheer them, but to critique them!! They want them to pull it apart and find faults with it!

Honestly BJW I really do enjoy both your articles and your commentary, I find you insights to be worthy of consideration. If you look below at our other interactions other than on this particular thread you will find I probably agree or concede to most of your points.

The crux of our disagreement is centered on our own definitional viewpoints in regards to blockchain security in the speed vs distribution equation, and between our viewpoints on blockchain datasize.

BTW – I will admit that my views on the blockchain in respect of those issues are in the minority, and that yours is the dominate narrative. That said, my views are aligned many other’s and aren’t invalid simply because I am the one articulating them here in this forum.

Anyhow, I will leave this discussion here tonight. I enjoyed your article, I think the underlying story El Salvador story is a little overblown in importance, but it was an entertaining read and a good discussion, which after all is what we’re trying to achieve.


Last edited 3 years ago by Stewie

You blokes should both work weekends to produce content.

It’s the EZFKA way!



take the rents, set up an NDIS supplier to rort the system, maybe cosy up to a parliamentarian

That’s for the EZFKA aristocracy… keep the regular EZFKA units compliant -and even actively supportive- by holding out hope that someday they can get to do this themselves.

Of course they never can, unless by accident

Until then, EZFKA units get to work weekends for free…. to try to “get ahead” 😋

Last edited 3 years ago by Peachy

now, now, BTC is not a corrupt currency.

It is what it is, it does what it does. It’s transparent and has no issuer that plays games with it.

You might not like the way it does what it does or how it’s gotten to where it is, but that’s different.

There are other tokens out there that do other things and people who don’t like BTC are free to use them

(…except in .sv, where they need to take BTC 🤣)

The lightning network could solve the transaction cost issue; indeed the country-wide scale of the experiment may be exactly what’s needed to make it (finally) work.


“The lightning network could solve the transaction cost issue..”

I had to go and get my iPad so I could reply with the appropriate emojis for that comment….

😐 🙂 😀 😆 😅 😂 🤣 😂 🤣 😂 🤣 😂 🤣

We’ll be driving around with cars powered by Nuclear fusion before the LN actually works reliably, let alone within the existing KYC/ALM and money transmitting framework.

Last edited 3 years ago by Stewie

I for one am intrigued about this development.

It will be the first real life experiment on a country wide scale.
See how Bitcoin performs, and maybe they will give other cryptos a go.

Instead of theorising about the pros and cons of crypto now we will be able to see if it actually works.

A lot will be learned from this, so bring it!


Yep. That’s the right attitude.

(Only a few, like Davo, wouldn’t see it this way.)

Last edited 3 years ago by Peachy

Davo has the delusion that he is Australia’s Nouriel Roubini and is looking for something that he can correctly predict will crash.




While I take anything CSW says with a grain of salt, I found this excerpt from the latest Coingeek conference to be quite interesting.

“And if you then build other currencies like we are doing with Tuvalu and other nations (…)”

Tuvalu is the only nation to formally announce so far that it is in currency trials with CBDC on the BSV network, however Craig seems to be deliberately implying that there are others also involved with trials on BSV.


Tuvalu has apparently 14,000 people, El Salvador 6,000,000


So? Tuvalu is simply the first nation to trial it…. Sudan has a population of 43,000,000 and is rumoured to be the next nation to announce a CBDC trial on BSV.

This would make sense given Sudan has already been heavily involved in terms of investigating moving other aspects of Govt record keeping onto the BSV ledger:

BitCoin was designed to be capable of handling ALL global transactions…. they just performed a live demonstration of 50,000 transactions per second at the latest Coingeek conference.

UTXO allows for horizontal scaling – it has virtually unlimited transaction processing capabilities.

Last edited 3 years ago by Stewie

Certainly a possibility and a valid criticism that I’m not equipped to answer, other than noting that a huge amount of money is being spent to do just that.

As for the benefits of putting the info on a public ledger – you would have to ask the Sudanese, Tuvaluvians and everyone else investigating doing so.


Last edited 3 years ago by Stewie

That is a risk – Ripple turned it into an art form. Time will tell over the next year or so the degree of truth in these claims.


just having a bit of a jibe 😘

it is interesting that (14,000/6,000,000) is approximately the same order of magnitude as (BSV price/BTC price)


You having a jibe?! Surely not.

IMHO the price is more a reflection of the enormous and unrelenting campaign to kill BSV, like for example the ‘delist’ campaign that has made it almost impossible to buy it in the worlds largest market.

if we are comparing orders of magnitude, the BSV, which is already accounting for nearly 20% of all transactions within the entire crypto economy, should have a price of around $5k a coin, simply on the basis of its peers.


I agree – in fact I think it most likely that many large nations won’t want their CBDC hosted on public blockchains… but I also think it quite likely that many smaller nations will be fine with it. I also think that if over time that business or use case model does prove successful and overcome such worries, many larger economies will be persuaded (in time) as to the advantages of its use.

Last edited 3 years ago by Stewie

This will surely end well

dictator of a failed Narcostate issues a poorly thought out decree

about as poorly thought out as this “article”

currently there is very little detail about what this entails but apparently he has mandated by law that all vendors in the country must accept Bitcoin payments

this is absolutely laughable given that Bitcoin transactions take hours to process and cost more than the actual transaction in I would suspect 99% of El Salvador commerce

additionally a large % of the population are likely to be functionally illiterate and innumerate , let alone able to perform Bitcoin transactions

as far as the risible claim that he is doing it to offset the “ risk of devaluation of the USD resulting in the destruction of the wealth of the country” – do we believe this tinpot dictator of a shithole I could not locate on a map knows more about economics than basically every developed nation on earth ?
China should have invested in Bitcoin instead of US treasuries ?

no of course not

i suspect the following
-he is an idiot
-he already holds Bitcoin and wants to spruik it

But mainly
-it is far easier for him to embezzle and siphon off the nations wealth in cryptocurrency than in USD , as unless he proposes to store billions in notes ala Pablo Escobar he needs access to banks with SWIFT/fedwire access and he will be stripped of funds if he steps out of line with regards to US hegemony and global politics

we have seen the absolute desolation and devastation rendered when inefficient and uncompetitive countries adopt a foreign currency they are not the sovereign issuer of : PIIGS spring first to mind

in this case, they won’t even have the European Central Bank to support them, and also will deal with price fluctuations from a manipulated Ponzi scheme , and a “currency” that is almost completely unable to actually perform actual transactions

whatever the case, it will certainly be “interesting” to follow the many deaths of starvation and violence that will undoubtedly result from this


everybody needs somebody to love.
everybody needs somebody to hate.

it is ok.


Someone has to remind you that you’re a dickhead lol.

You need dissenting voices or it’s just another echo chamber like all and sundry here accuse MB of being. You should be glad people hate you and this place enough to hang shit on it.

P.S. El Salvador is fucked no matter what legal tender they use. The joint is fucked and will be for a long time.


I’m also fairly sure coming put more time and effort into that comment than I did into the original article, given it was just some quick thoughts.

What this place really needs though is more people to contribute some good or thought provoking articles.

That was what was great about this article. Commentary and a couple opinions on a topical news item and then viola! Here we are with multiple interesting conversations having grown out of the seeded commentary. It doesn’t take much to contribute, sometimes the content grows out of the comments.


I think that’s fair enough but the link could have been presented without the idiotic take about “preserving his country’s wealth against the devaluation of USD”

really really stupid lacking even the barest level of insight , and prejudices the conversation due its position in the main article

also , the website is turning a bit crypto spammy.
a truly insignificant topic dominating the conversation

Perhaps that’s my fault for not preparing an article on something important

also winning@failing needs to be removed he has never contributed anything even mildly useful , just swearing and flinging his faeces


also , the website is turning a bit crypto spammy.

a truly insignificant topic dominating the conversation 

people just post what they like, what interests them. Crypto is interesting.

There’s also a small chance that it is a game-changer in a big way (like the steam engine). And a big chance that it fades away without much more than a whimpering

Perhaps that’s my fault for not preparing an article on something important

yes, if you want something done, you’ve got to do it yourself.



the MB game of mates guy was on qanda last night and apparently hes pissed everyone off w his covid views, nice

im amazed


no chance he’d be invited back, most people on the show arent anyway


Yes and today DLS has called for him to be prime minister

you fucking what mate ?

after banning me and calling me a psycho for saying exactly the same thing 15 months ago ?

this guy is a fucking joke and he needs to go away


Best thing about Cameron as PM is that he wrote the book on the game of mates.

so he’d be really good at rorting and grifting. He’d put fucken Scotty in the shade.


i doubt anyone, him, or even us, is capable of withstanding the ezfka corruption process, you just cant reign without lowering yourself into the sewer with the rest of them


I’ve met him – he’s a really decent guy. There are plenty of politicians who have integrity, it is just that they are the rare exception and are generally locked out of power by the unholy alliance between the existing mainstream triad of politicians, their political donors and the existing mainstream media.


lol look at the comments, a lot of the mbers arent happy with his stance

‘kierans777’ or whatever is a faggot, as is ‘thelambking’

Last edited 3 years ago by stagmal

I’m just staggered that not one person has called him out on the hypocrisy

do they have the memory of a goldfish ?


Yes. Memory of goldfish.

that’s why certain people are not allowed to post there anymore.

people who have memories and who reference/resurrect past statements and positions. (Also people who like to do use “lol”s and “hahahahaha”s while doing so.)


With crashes like that, who needs booms?!


Will take a lol over a chortle any day.


Also off topic.

The ‘Journal of the American Psychoanalytic Association’ published:

‘On Having Whiteness’
By: Dr. Donald Moss a faculty member of both the New York Psychoanalytic Institute and the San Francisco Center for Psychoanalysis.

“Whiteness is a… parasitic-like condition.”
“Parasitic Whiteness renders its hosts’ appetites voracious, insatiable, and perverse.”
“There is not yet a permanent cure.”


Donald Moss – I will give you ONE guess as to which tribe he originates from and therefore where the cultural values that form the basis of views like his own spring forth from.

It is quite simply anti-white and anti-Christian hatred, that stems from the intolerable fact that he is residing in a nation steeped in cultural values that are not his own, and that the only way he can justify maintaining his own separate values and identity within the greater whole, is by criticising and finding sufficient fault with the dominate identity.

Essentially his views are rooted in cultural and ethnic narcissism, not to mention jealousy, that virtually EVERY aspect that gives his life meaning and comfort was drawn from a culture, society and people that he despises, and that his own culture and values contributed virtually nothing to the success he enjoys from being a part of it. His entire existence is illegitimate, unless he successfully renders and pulls down the legitimacy of the society and culture that gives him succour and comfort.

Last edited 3 years ago by Stewie

It is interesting that he mentions that there is
“…not yet a permanent cure.” 
Which implies they are looking for one.

I think I might have found it:

From the original meaning of the word Genocide as coined by Raphael Lemkin in his 1944 book “Axis Rule in Occupied Europe”:
“New conceptions require new terms. By ‘‘genocide” we mean the destruction of a nation or of an ethnic group. This new word, coined by the author to denote an old practice in its modern development, is made from the ancient Greek word genos (race, tribe) and the Latin tide (killing), thus corresponding in its formation to such words as tyrannicide, homicide, infanticide, etc. Generally speaking, genocide does not necessarily mean the immediate destruction of a nation, except when accomplished by mass killings of all members of a nation. It is intended rather to signify a coordinated plan of different actions aiming at the destruction of essential foundations of the life of national groups, with the aim of annihilating the groups themselves. The objectives of such a plan would be the disintegration of the political and social institutions, of culture, language, national feelings, religion, and the economic existence of national groups, and the destruction of the personal security, liberty, health, dignity, and even the lives of the individuals belonging to such groups. Genocide is directed against the national group as an entity, and the actions involved are directed against individuals, not in their individual capacity, but as members of the national group.[13] — Wikipedia

So is this Permanent Cure going to be a Final Solution?

Last edited 3 years ago by BING!

For many Jewish people by definition the expectation of assimilation and integration is an expectation for them to genocide themselves and their identity – consequently their values, in seeking to preserve their own values and identity, must by definition be the complete opposite.

If they do so within their own siloed community then it is less of a problem, but it becomes an enormous issue of cultural conflict when they push these ideas out into the wider community, and it commences to disrupt the host societies ability to solve the social and economic problems that gave its society purpose, and which require a fairly unified set of values in order to most efficiently solve.

Essentially they can only survive within a dominant culture by pushing their values of separateness in culture and identity at the expense of the dominant society or culture – ergo, the inevitable conclusion is that their values seek to genocide any culture or society that opposes their own.

Culture matters, as the Egyptians, Babylonians and Romans found before us.

Last edited 3 years ago by Stewie


They are being hosted by the white man’s country, but then turn around and call that same white man the parasite. It is a total inversion of the truth which implies that they see themselves as the superior being and legitimate owners of everything we’ve built.

“Non-Jews exist to serve Jews”
Yosef, the spiritual leader of the Shas Party and the former chief Sephardi rabbi of Israel:

“Why are gentiles needed? They will work, they will plow, they will reap. We will sit like an effendi and eat,”