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Bitcoin Government

Is El Salvador's Bitcoin Experiment Authoritarian Propaganda? (nytimes.com) 73

Posted by EditorDavid from the legal-tenderizing dept.
What exactly happened after El Salvador president Nayib Bukele made Bitcoin a legal tender for the country? "As Bitcoin has dropped more than 50 percent of its value this year, there have been suggestions that El Salvador's investment has pushed the country to the brink of bankruptcy," writes a Salvadoran political/human rights journalist in the New York Times.

"However, implying that the country's risk of default derives from the crypto-enthusiasm is wrong: The economic turmoil preceded and is bigger than that." The article notes that prior to their move into Bitcoin, "the Salvadoran economy was already stretched. Total debt amounted to about 90 percent of G.D.P., a large chunk of which had been accumulated by prior administrations or spurred by pandemic-related expenses."

But what are we missing with this focus on Bitcoin? Mr. Bukele has weaponized Bitcoin to whitewash his government's growing authoritarianism on the world stage. By spreading his propaganda, Bitcoin believers are promoting a product — and lining their pockets — at the expense of our rights and livelihoods.... Over the past three months, the government has used a state of emergency to imprison almost 40,000 people, often without defense. Mr. Bukele has begun to crack down on press freedom, through a gag law that prohibits reproducing messages from gangs and his government hasn't investigated the illegal use of Pegasus spyware to monitor dozens of journalists who cover El Salvador, including me, from independent news outlets between 2020 and 2021. Reporters have already fled the country, fearing reprisal for doing their jobs....

It's pretty obvious to anyone who visits any place in El Salvador other than its beaches that Mr. Bukele is not building a techno-utopia; he's building a run-of-the-mill authoritarian state in a tech disguise. Bitcoiners would do well to remember that when they cheer for Mr. Bukele, they're not ushering in the technology of the future; they're enabling a regime that's violating the human rights of its citizens. After all, the economic freedom Bitcoin promises is worth nothing to Salvadorans if it's the only freedom we can hope to have.
But even ignoring human rights issues — the Bitcoin experiment remains unpopular in El Salvador: Remittances account for more than 20 percent of El Salvador's G.D.P., because of a large diaspora mainly based in the United States. But, according to the Central Bank of El Salvador, only 1.5 percent of remittances went through digital wallets in April, which shows Salvadorans haven't gotten onboard with Bitcoin despite the promise of needed savings. And Mr. Bukele's plan for selling his Bitcoin bonds has stalled.

Just one year into Mr. Bukele's Bitcoin experiment, average Salvadorans can tell that Bitcoin isn't working for them. In May, a national poll showed that 71 percent of Salvadorans said they didn't see any benefit from the law for their family economy. Another found that about two of every 10 Salvadorans support the decision to adopt Bitcoin. Those Salvadorans haven't adopted the currency. A paper published in April by the National Bureau of Economic Research concludes that "despite the legal tender status of Bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador...." A December national poll showed that only about 11 percent of respondents believed the main beneficiaries of the Bitcoin law are the people, while about 80 percent believed it's either the rich, foreign investors, banks, businesspeople or the government.
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Is El Salvador's Bitcoin Experiment Authoritarian Propaganda? More

Is El Salvador's Bitcoin Experiment Authoritarian Propaganda?

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  • Yes. (Score:1)

    by Anonymous Coward

    Next question.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      The headline is clearly an attempt by cryptoscammers to manipulate reality using Betteridge's law of headlines but it's not going to work.

    • Next Question.

  • No, it's just theft (Score:3)

    by rsilvergun ( 571051 ) on Sunday July 03, 2022 @04:42PM (#62670420)
    the point of it is to make it easy for the corrupt government to move money out of their economy to a place they can get to it themselves, especially if people get tired of them and they have to flee in a hurry.

    • I think you are being too cynical. Salvadoran politicians liked Bitcoin because it gave them the opportunity to fleece people from outside the country. They had that volcano bond scheme, and just becoming a major player in BTC would give the individual politicians a chance to buy or sell ahead of major moves.

      Unfortunately for them, the number keeps going down. But if your dumb neighbors are caught up in tulipmania, it makes sense to try to sell them tulips.

    • I see no reason why it can't be both.

      Corruptly taking people's money and stashing it offshore is very popular pastime of authoritarian regimes.

    • Re: (Score:2)

      by pakar ( 813627 )

      Like they do with the current banking system where there is also a layer of secrecy preventing anyone from tracking it? Bitcoin actually makes it harder to hide corruption compared with the current banking-system.

      With bitcoin the whole ledger is open to everyone and the transactions can be tracked forever... On top of that you add regulation on exchanges where it could be seized. Nowhere to hide. Nowhere to run. Always traceable.

  • Maras (Score:4, Interesting)

    by paugq ( 443696 ) <pgquiles@@@elpauer...org> on Sunday July 03, 2022 @04:51PM (#62670438) Homepage

    You may disagree with Bukele on the bitcoin thing but this article is bullshit: those 40,000 "imprisoned without defence" are gang members, "maras". The whole country was terrified with 60 persons being killed per day in a 5 million population country. Bukele stopped that and even threatened the not-yet-imprisoned mara members to stop feeding the imprisoned mara members if they didn't stop their homicides

    https://en.wikipedia.org/wiki/... [wikipedia.org]
    https://www.youtube.com/watch?... [youtube.com]

    • Dude.

      https://www.theguardian.com/wo... [theguardian.com]

      • Are you implying that you're contradicting OP in any way? I don't see any contradiction between sources you cite.

        • Yes, i am. Happily assuming that every single arrest made under the Bukele regiment were gang members is... naïve.

          Read the story.

          • True, but you can't make such assumption in any large scale crackdown, no matter in which part of the world this is happening. So such response to a series of murders is most definitely over the top but absolutely can be expected from any state that isn't anarchist utopia.

            • True, but you can't make such assumption in any large scale crackdown

              You're off to a good start.

    • Re:Maras (Score:4, Insightful)

      by hey! ( 33014 ) on Sunday July 03, 2022 @06:11PM (#62670594) Homepage Journal

      If they are imprisoned "without defense", we have to take the government's word that they're gang members.

    • Re:Maras (Score:5, Insightful)

      by hdyoung ( 5182939 ) on Sunday July 03, 2022 @06:20PM (#62670618)
      Bukele is awesome if you have salivate at the thought if being lorded over by a caudillo, and you thought that Duterte was absolutely great for the Phillipines. Same type of people who love Trump. I remember seeing some study once. In any population, there is a big chunk of people who are simply more comfortable with a strongman in power. It makes them feel powerful/safe.

      Bukele’s roundup was freat, if you’re cool with absolutely no oversight and zero rule of law. That means that 80 percent of the people rounded up are bad gang members, very true. But 5 percent are innocents in the wrong place at the wrong time. Another 5 percent are people that personally pissed off a cop once, and the remaining 5 percent are people who pissed off a politician.

    • Re:Maras (Score:4, Insightful)

      by fazig ( 2909523 ) on Sunday July 03, 2022 @08:33PM (#62670824)
      It's just that the same excuse has been used by pretty much any tyrant/dictator in history to sweep arresting their political opposition under the rug.
      So excuse us people who have lived through such measures and survived if we're not taking it at face value that all of those arrested are gang members.

      I like many others think that Blackstone's Ratio is a fundamentally good idea:
      It is better that ten guilty persons escape than that one innocent suffer.

      Authoritarian regimes on the other hand often do not adhere to such principles on the other hand, and will conduct sweeping crack downs where people are more or less arbitrarily arrested. This is a big red flag to look out for.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      The problem is we don't know the truth of it.

      After all, the people sent to China's re-education camps are misguided people as well and it's an internal cultural matter. But thanks to Chinese skepticism, we know that the Uyghurs are basically being wiped out by China.

      While i have no doubt SOME of those people are gang members, there should be some skepticism applied - because maybe some of those are part of the gang known as "the political opposition", for the freedom and democracy gang, and other such thing

    • You may disagree with Bukele on the bitcoin thing but this article is bullshit: those 40,000 "imprisoned without defence" are gang members, "maras".

      So? I don't care if they committed fucking genocide. Imprisonment without defense is a human rights travesty. They should be put in front of courts, tried, and when (assuming you're right) they are found guilty they should then be imprisoned.

      The article is on point and not bullshit at all. A leader imprisoning any of the population without defense is THE definition of an authoritarian. Whether or not it's popular or has had a positive impact on other parts of the country is completely irrelevant.

  • If BTC were up 3x this year would the author be singing praise?

    No, this propaganda piece glows.

    • Re: (Score:2)

      by Anonymous Coward

      "If he had won just one of those lottery tickets, would the author be singing praise?"

  • Government can inspect (Score:3)

    by NotEmmanuelGoldstein ( 6423622 ) on Sunday July 03, 2022 @08:25PM (#62670806)

    ... a run-of-the-mill authoritarian state.

    Block-chain means the government can inspect every transaction that occurs. It means a transfer that was legal 5 years ago, can be (retroactively) criminalized and punished today. Government has reasons to like Block-chain, it's just the deployment as a speculative collectible - cryptocurrency, causing problems.

    The idea of wealth controlled by the people - decentralized finance, isn't being realized with cryptocurrency.

    • You give government too much credit. The reality is the government(s) doesn't have the resources to make heads or tails of large portion of the data they collect.

      And if you're passing laws with retroactive punishment then you have far bigger problems than bitcoin.

  • "debt 90% of GDP" (Score:3)

    by Harvey Manfrenjenson ( 1610637 ) on Sunday July 03, 2022 @08:27PM (#62670812)

    ...the Salvadoran economy was already stretched. Total debt amounted to about 90 percent of G.D.P., a large chunk of which had been accumulated by prior administrations or spurred by pandemic-related expenses

    This is non-remarkable for a modern economy. For example, the US national debt is 138% of its GDP, and the numbers for the UK and France are 104% and 98%.

    • This is non-remarkable for a modern economy.

      You're right for a modern economy but El Salvador is not a modern economy. Large wealthy nations with very serious strong trade links can weather far larger debt to GDP than a country with a yearly export in the single digit billions and a trade deficit even larger than that.

      If you want to compare countries it helps to compare like countries, not countries with 500-1000x higher trade volumes and 1000x higher GDP.

  • Wtf does any of this shit have to do with Bitcoin? It's no surprise El Salvador, a place sending us hundreds of thousands of refugees, is a shit-show.

    But I don't see any sort of Bitcoin connection here. What does Bitcoin have to do with El Salvador's problems?

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