Isn't that exactly what FreeTrade meant by "Salvadorians will end up forced to use proprietary payment networks denominated in BTC."? Coinbase might do it for free, but that doesn't mean the eventual winner will be free, nor does it mean that users couldn't be banned, or tracked, or forced to use 'supported' services, etc.

As long as BTC transfers between custodians are possible, that should be quite small problem. There might be winner in terms of liquidity and volume, but because anyone can quite easily fire up custodian service, there should be also plenty of competition.

So we have basically invented... banks, but with bitcoins?

With Bitcoin, I don't have to keep my savings in the bank even if I choose to use a bank for other services. As someone whose had their bank account frozen before, this is of great value to me.

I could use banks or Lightning like a checking account, while keeping the majority of my savings under my control.

Yeah but you are most probably using a centralized exchange to execute BC transactions for free which might froze your account as well in the future because $REASON. Also thinking that in the long-run, in a future where BC is accepted almost universally this is not going to be heavily regulated by governments it's being naïve IMO.

Yes. Financial institutions are useful for fiat and non-fiat currencies, in fact they were born long before fiat currency.

The full circle

This is the dumbest thing I've ever read. So you designed a system that sacrifices everything to achieve trustlessness, and then you immediately reintroduce a centralised trusted entity. You can't make this shit up. I'm so glad I left the crypto community in 2014, it's become completely deranged.

It is not dumb. Custodians are useful, very useful actually. With Bitcoin you can use custodians, but you can also host your bitcoins yourself if you want. The opportunity to do latter is the most important and makes Bitcoin valuable. However majority people in majority of cases prefer to use custodians, and there is nothign wrong with that.

If 99.99% of people are holding their coins in a bank, then I'm not certain what the point of the blockchain is.

Is the entire global system supposed to move to bitcoin just so 0.001% of people can keep their money under their mattress in a hard wallet?

I am coming to believe a large contingent don't actually care about trustlessness. They care about the deflationary aspect because it's supposed to make them rich.

I think the parent poster was being somewhat self-aware and tongue-in-cheek. They're not saying centralization is the ideal; just that it exists and works well.

Yeah, great move to leave crypto in 2014!

Whatever you need to tell yourself to sleep at night, buddy.

So I'm supposed to be sad about not participating in a pyramid scheme? You're literally making my case for me.

It's sad to see comments like this on hn. I thought this place was supposed to have meaningful discussions.

But then why use Bitcoin if you're going to use what is essentially a bank?

Not just a bank but an unregulated bank tied to all sorts of shady currencies like USDC, Doge etc which has regular outages. That's also ignoring the wild volatility in the value of bitcoin.

What could possibly go wrong!

Once you have BTC you can choose to store it outside of a bank as a non-inflationary asset. No one can remove it from your wallet.

I can do that with gold.

Gold is less volatile, and the value of the volume of a €2 coin in gold is 9 months of El Salvador nominal GDP per capita.

Or the gold could be stored elsewhere and accessed via an app, with exactly the sort of database every bank already uses.

Either way, BTC adds nothing. Apps might, depending on the banking infrastructure, but BTC itself? Nada.

This is a new unit of measure! Now I need to know my monthly salary in eurocent volume of gold.

€0.01 coins have a volume of ~0.346ml, gold has a density of 19.3g/ml and a current price of 60.89 USD/g, so a eurocent-sized gold coin would be worth 407.02 USD :)

Thank you :) I'll look at those coins differently now.

Yeah, but you're still having to pass through Coinbase or any other exchange, and they can remove it from you there. That's the point, if Bitcoin needs an exchange to be functional you're losing all the differential features that Bitcoin has.

Yes, but you can still protect your wealth once it’s out of the exchange.

I guess the answer to the exchange problem is to have a decentralised exchange.

So the modern version of keeping gold under my mattress?

Ease of access to and exchange with global marketplaces. I can transfer/trade directly from/to El Salvador without any bank being involved in that transaction.

A bank by any other name is still a bank. Sure there is definitely a legal difference such as deposit insurance and access to their lender of last resort. For the customer however it doesn't matter they still need KYC, the cops can still see their transactions, they still have to ask where the money is from, they can still knock on your door and put your hands in handcuffs. Many of the advantages to people in El Salvador with BTC is avoiding extreme inflation in the national currency. However one does well to note that inflation woes in the Atlantic world actually correlated with a partial deflation of the Bitcoin bubble, so if you're in the EU/US bitcoin is an investment when money is cheap, not a hedge for your money becoming cheap.

Our currency is the USD since 2001. The SVC our former local currency has been pegged for 20+ years to the usd [1].

The SVC is no longer used day to day and is usually kept as a collectible item, it can still be exchanged at banks at 8.75 SVC per 1 USD.

[1] https://www.xe.com/currencyconverter/convert/?Amount=1&From=...

If you need to keep your money on an exchange to be able to do transactions, you'll probably still need to go through a bank or exchange or the same thing by any other name.

The only other legal tender in El Salvador is the US Dollar. If, for any reason, you have qualms about the US financial system, especially as someone foreign to the US with little priority in its decision making processes, it might be desirable to opt for a different currency. Is BTC the right currency for their government to bend to that purpose? I guess we'll find out.

To make the bitcoin investors rich.

Also to stick it to the man.

Nevermind the unprecedented new level of randomware hacks.

This. People just assume onchain txes and LN are the only way to scale. In practice centralized scaling via custodials has been there from the very early days.