Understand the implications of Bitcoin's downfall in El Salvador. Learn about the failed economic bet and its impact on the country's financial stability.
I despise crypto, crypto-bros, and do not own a single unit of cryptocurrency. Crypto is not only impractical due to its fluidity but almost every crypto is deflationary by design which disincentivizes people from spending it.
With that out of the way, the blockchain is certainly more resilient to a “fuck you” class solar flare than the regular economy. There are for sure a bunch of people with EMP-resistant copies of the blockchain (since every node has a copy). As soon as internet goes back up, so will the crypto-bros.
Meanwhile cash makes up only a few percent of fiat currency and the rest is digital money in databases around the world’s banks and financial institutions. Almost all cash flow is completely virtual and literally cancels out in accounting at the end of the day.
If those databases get wiped, the global economy simply collapses and your paper money won’t be worth shit-fuck. Admittedly neither will crypto since no-one actually uses it for anything other than exchanging it for fiat.
One of crypto’s major problems is that it actually behaves too much like cash. Every bitcoin is a non-fungible token, it’s not tied to gold but might as well be; exchanging a bitcoin costs exorbitant amounts of crypto and real-world resources. Meanwhile if my bank wants to give me a big loan they merely change a number in their database. On a technical level they could give me a one trillion euro loan today if they wanted, although that would run afoul of many laws and immediately bankrupt them once I tried to actually spend that money in what would quickly turn out to be a one-man bank run.
I despise crypto, crypto-bros, and do not own a single unit of cryptocurrency. Crypto is not only impractical due to its fluidity but almost every crypto is deflationary by design which disincentivizes people from spending it.
With that out of the way, the blockchain is certainly more resilient to a “fuck you” class solar flare than the regular economy. There are for sure a bunch of people with EMP-resistant copies of the blockchain (since every node has a copy). As soon as internet goes back up, so will the crypto-bros.
Meanwhile cash makes up only a few percent of fiat currency and the rest is digital money in databases around the world’s banks and financial institutions. Almost all cash flow is completely virtual and literally cancels out in accounting at the end of the day.
If those databases get wiped, the global economy simply collapses and your paper money won’t be worth shit-fuck. Admittedly neither will crypto since no-one actually uses it for anything other than exchanging it for fiat.
One of crypto’s major problems is that it actually behaves too much like cash. Every bitcoin is a non-fungible token, it’s not tied to gold but might as well be; exchanging a bitcoin costs exorbitant amounts of crypto and real-world resources. Meanwhile if my bank wants to give me a big loan they merely change a number in their database. On a technical level they could give me a one trillion euro loan today if they wanted, although that would run afoul of many laws and immediately bankrupt them once I tried to actually spend that money in what would quickly turn out to be a one-man bank run.