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A comment on El Salvador abandons Bitcoin as legal tender after failed experiment. Parent comment

Re:El Salvador abandons Bitcoin as legal tender after failed... by shash on Monday February 03, 2025 @10:56PM (#42927701)
That's because it's actually quite sane; relying on commodity backed currencies - especially those which are _finite_ leads to deflation. You see that with BTC, where the value keeps rising and you need more and more fractional denominations to make sense. With gold (and historically, more so silver), it was _very rarely_ used for actual trade because it ended up being like five gold coins == someone's entire life savings. It was always silver, copper and unit of account.

Debased currency - a problem every large state eventually faced - is a consequence of deflation.

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Re:El Salvador abandons Bitcoin as legal tender after failed... by TeaBrain on Monday February 03, 2025 @11:26PM (#42927937)
>Debased currency - a problem every large state eventually faced - is a consequence of deflation

Inflation in the monetary supply, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.

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Re:El Salvador abandons Bitcoin as legal tender after failed... by lmm on Monday February 03, 2025 @11:48PM (#42928102)
> Inflation, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.

No, that's not debasement - in fact it was the opposite, the huge supply of silver (not so much gold) meant those Spanish coins were good-quality bullion. Inflation happened, and while that can commonly be caused by debasement, that wasn't the cause in this instance.

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Re:El Salvador abandons Bitcoin as legal tender after failed... by Aloisius on Monday February 03, 2025 @11:58PM (#42928195)
Em. Spain, famously, didn't debase its currency.

The gold escudo was 22-karat for basically it's entire existence,.

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Re:El Salvador abandons Bitcoin as legal tender after failed... by TeaBrain on Tuesday February 04, 2025 @12:24AM (#42928385)
I was more thinking in terms of the modern conception of currency debasement resulting from the increase in the monetary supply, though I think I must have just been thinking of the real, not the escudo. Several years ago, I read a couple of books on the conquistadors, where the details of the devaluation of silver was discussed, but it's been a while since the information was fresh in my mind.
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Re:El Salvador abandons Bitcoin as legal tender after failed... by jpcom on Monday February 03, 2025 @11:11PM (#42927826)
Interesting take. Therefore they needed a bridge between the deflationary BTC and a low-inflationary day-to-day note. Is there an obvious fix, my liege?
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Re:El Salvador abandons Bitcoin as legal tender after failed... by int_19h on Tuesday February 04, 2025 @03:15AM (#42929581)
A bit more detail on the subject of historical coinage and the place of gold in it:

https://acoup.blog/2025/01/03/collections-coinage-and-the-ty...

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Re:El Salvador abandons Bitcoin as legal tender after failed... by shash on Tuesday February 04, 2025 @08:20AM (#42931949)
I was literally thinking of this article!
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