Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

Re:Bitcoin Failed in El Salvador. The President Says the Ans... by CPLX on Saturday December 11, 2021 @08:39AM (#29520756)

> Bukele came onstage to an animation of beaming down from a flying saucer and outlined his plans for Bitcoin City: a new charter city to be built from scratch, centered on bitcoin mining—and powered by a volcano. Bitcoin City would be paid for with the issuance of $1 billion in “volcano bonds,” starting in mid-2022. The 10-year volcano bonds would pay 6.5 percent annual interest. $500 million of the bond revenue would be used to buy bitcoins. The bitcoins would be locked up for five years, then sold to recover the $500 million purchase price; any profit on the sale would be paid out as an additional dividend. Holding $100,000 in volcano bonds for five years would qualify investors for Salvadoran citizenship.

Seems legit.

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Re:Bitcoin Failed in El Salvador. The President Says the Ans... by astoor on Saturday December 11, 2021 @11:11AM (#29521897)

Furthermore "Blockstream first proposed the volcano bonds ... issued as tokenized securities on Blockstream's proprietary Liquid blockchain. Samson Mow of Blockstream assured Bloomberg that all the numbers would work out, under Mow's rosy assumption that the price of one Bitcoin would hit $1 million within five years ... The bonds are set to be issued via Bitfinex Securities, a new unit of iFinex, which runs the Bitfinex cryptocurrency exchange and the Tether stablecoin".

The thing is, when Bitcoin City fails, it won't make cryptocurrency advocates question their assumptions (like basing your planning on your ROI being 2000%, or that it is perfectly fine to entrust the running of major components vital to its success to convicted fraudsters), it'll make them feel more victimised by the "global elite" conspiracy theories and more aggressive in pursuing future schemes, as happened with the The Crypto-Currency Seasteaders (https://news.ycombinator.com/item?id=28441794).

Can't see how this can end well for the people of El Salvador, and there do seem to be some parallels with Albania in 1997.

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Re:Bitcoin Failed in El Salvador. The President Says the Ans... by detaro on Saturday December 11, 2021 @09:35AM (#29521126)

Matt Levine had a good take on it: https://www.bloomberg.com/opinion/articles/2021-11-22/be-car... (TL;DR: it's a good marketing play targeting people who want this to be a thing, it's actually better to buy "normal" El Salvador bonds and invest in Bitcoin yourself: the normal bonds give better interest and you'd get the full gains from the bitcoin profit, not just a share)

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Re:Bitcoin Failed in El Salvador. The President Says the Ans... by xiphias2 on Saturday December 11, 2021 @09:52AM (#29521249)

How can institutions that have obligations for performance but limitations in what they can buy get exposure to Butcoin?

For normal people this bond doesn't make sense (except for the residence that they get), but regulated institutions may want a piece of it. We'll see.

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Re:Bitcoin Failed in El Salvador. The President Says the Ans... by notahacker on Saturday December 11, 2021 @10:09AM (#29521336)

I think if you're a regulated institution that wants exposure to Bitcoin you buy a Bitcoin ETF, not El Salvadorean government tokens on an unregulated iFinex marketplace which returns strictly less than an equivalent allocation of Bitcoin and El Salvadorean securities you can buy on regulated marketplaces.

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Re:Bitcoin Failed in El Salvador. The President Says the Ans... by xwolfi on Saturday December 11, 2021 @08:57AM (#29520865)

Yeah, would vote for the clow...man.

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