"So we want to encourage both tourists to use bitcoin but, more importantly, families that send money from the U.S. back home — we want them to start sending in bitcoin,”
That injection of bitcoin helps to offset the bitcoins that are spent outside the local community (e.g., from buying airtime on Bitrefill, or cashed out on an exchange). As long as local merchants keep seeing bitcoin revenues, they'll become more likely to get in the habit of using those for local spending ... staff/payrolls, vendors, other local merchants, etc.)
Custodial is the way it's gonna have to be to onboard masses. Only a few will opt for non-custodial solutions because they will need to be more technically savvy. Anyway all the solutions people already use (like banks) are custodial.
Cool story, but the idea of impoverished people basing their economy off an extremely volatile currency that can fluctuate 30% in a handful of days of seems like the recipe for failure. Yeah this guy is providing liquidity, but what’re the citizens going to think when btc loses a quarter of its value in a week? How trusting will they be then? Also, are people just trading tiny factions of bitcoin regularly for food and services? Paying 0.000001btc for a good or service just seems like a headache. Need more info on the downsides, it’s not all roses.
>but the idea of impoverished people basing their economy off an extremely volatile currency
Getting really tired of this argument.
First off, the volatility is often UP, and that helps people.
Second, the volatility is still less than your average Latin American currency (which is always going DOWN).
Even with 10% market swings, feels fine to me using it as currency here in Mexico where I live.
I'm considering paying the taco guys (who are poor but always have smartphones) in lightning BTC. If they want cash they can always use a gateway like mex.dynet.com.
Furthermore, assuming the volatility is up and the value of bitcoin increases 100% in 2 months, why would anyone want to exchange the currency then? I can speak for myself that I want to hold bitcoin and not exchange it, especially in a bull market. So if people aren’t exchanging the currency because the value is increasing, then it’s not a good media of exchange. If btc was more stable in value then I’d agree that it would be great for exchange. But I think we are years of price discovery away from this point.
Not going to argue that Latin American currencies won’t lose value, but assuming that volatility for btc will be dominantly upwards is a misleading assumption for already financially unstable people. I hold small amounts of btc relative to the rest of my net worth because there is so much volatility and risk. If you look at this from a purely risk perspective, these people would be taking on enormous risk (relative to their net worth) if they were to keep 80-90% of their net worth in btc.
> Paying 0.000001btc for a good or service just seems like a headache.
Most lightning wallets use satoshis as the standard denomination, not full bitcoins. In your example, the good or service would be marked as costing 100 sats.
> volatile currency that can fluctuate 30% in a handful of days
Merchants can easily hedge to lessen exchange rate risk. Then again, so can anyone else.
They can do it today pretty easy. On Cash App, you simply hit the "sell" button, and it converts to fiat. There's no Cash App (yet) in El Salvador though.
But you know what? Uneducated impoverished people seem to figure out what they want to figure out. Go to some remote interior part of Kenya and find the least technically savvy person you can find walking the street, ... and I bet you they use M-Pesa. They figured it out, and they use it frequently.
Uneducated impoverished people also figure out how to get into upside auto loans and pay day loan debt pretty easily. Btc needs more price discovery before it can be used as an every day currency. You don’t want to turn these people off when their money’s value drops 50% in a month. Seems too risky for financially unstable persons.
I suspect when there's such thing as Libra, or a CBDC (central bank digital currency), .. and the person has a choice, ... hold $20 of some CBDC USD (or Libra stablecoin), versus hold $20 of BTC and take a chance it ends up being worth $25, they'll take the chance. It's not my place to tell them what they should and should not do with their money.