pull down to refresh
234 sats \ 10 replies \ @taxd 5 Jul 2022 \ on: Is El Salvador Benefitting from Bitcoin? bitcoin
In my eyes it is a failed experiment. My Salvadorean friend says that nobody wants Bitcoin and one of their strongest fears is that the government starts to pay them in Bitcoin.
I can also bet my farm that nobody demands to get their salaries in Bitcoin even in El Zonte (expect the very few americans surfers who work for btc-companies and they don't count). There is simply no incentive to use Bitcoin and the UI is terrible on all wallets (such as having to scan a QR-code). Is there any normal company (Starbucks, beer halls, movie theater, ...) there that gets a tax break by using Bitcoin? Anybody using a Bitcoin card? Anybody who even has a POS-terminal that can be blipped?
The only way to kickstart a circular economy is by sufficiently strong tax breaks when using Bitcoin such that farmers demand to be paid in Bitcoin. Nothing else will work.
They will like it when it goes up again.
Everyone needs to learn. It is often the hard way
reply
Good point, we need to filter out the effects of Bitcoin’s price since it’s basically been all downhill since fall of 2021. Easier said than done though.
What will a rising Bitcoin price do to adoption & economic stats in El Salvador? Time will tell.
reply
Did you know that in traditional finance, stock performance is critisized on a 10 year basis?
Lets not say whether it has failed or won on the basis of a year. In 10 years, we can say with more certainty, but in the meantime, there is a lot of work to do for sure.
reply
I think this is the correct time frame for making judgments here, wish we all knew this when setting expectations on day one.
reply
I would expect nothing less from people who are not professional investors. Of course people don't want an asset that has depreciated so much in a year. But that doesn't mean they know what's best for themselves.
The people your friend spoke with probably don't receive money from family members overseas. Maybe they have no need for banking services at all and live with cash.
The UI issues are completely shortsighted. You don't think these simple issues will resolve in no time?
There are no tax breaks needed. All that has to happen for people to come around to bitcoin is for the US Dollar continue being the alternative, for the Fed to continue controlling monetary policy of said dollar, and for Bitcoin to continue being limited to 21 million.
reply
Right, these people are normal people who work in e. g. transportation. I don't know if they get remittances. My friend has severe problems with money transfers to El Salvador.
Since the UI issues have not been resolved during the last ten years I doubt they will be resolved during the next decade either.
No tax breaks needed? Everybody prefers USDT to btc for starters.
It doesn't matter what academics say, people don't want btc until it is usable and adds value (e. g. via tax breaks). The don't know who Powell is and couldn't care less about the Feds policies.
reply
I think many Bitcoiners assumed the country would embrace Bitcoin right away, which clearly hasn’t happened yet. However, I’m hesitant to give a verdict on the success or failure of the project, we don’t even have a full year of data yet.
Re-wiring the entire financial infrastructure in El Salvador to be built on Bitcoin will take many years. I get the sense that Nayib Bukele is in it for the long haul, and am cautiously optimistic over the next decade.
When you say tax breaks, are you referring to income tax breaks? I believe they already have a 0% capital gains tax on Bitcoin.
reply
I mean e. g. that business using btc gets a tax break for maybe five years or pay half the tax of fiat companies. If they pay their empolyees in btc. They will then raise the btc-pay and the employees will happily accept it and a circular economy starts.
Nothing else will work, in particular politics, btc-messiahs, public speeches and billboards will not work.
Note that most small businesses in El Salvador run on cash and pay no tax so what I say apply to bigger businesses.
reply
I was about to say the same thing, I've spoken to some salvadorean people online and they really like bitcoin is a gimmick for tourism, no one really using it, the chivo wallet has been a disaster
The stats referenced above are all massaged vanity metrics, we all came out of covid ofcourse things are going to go up, if you chery pick the right time frame
reply
We are in a bear market... what do you expect?
reply