The El-Salvador Experiment

[Marvell1]

Many countries can become economically self-sufficient without even knowing what Bitcoin is. For a country to be economically self-sufficient, what they need is self production, self supply of energy, a highly skilled workforce, technology, a strong financial system...and hundreds of other factors. Relying solely on a speculative asset like bitcoin will not help any economy, even a small one like El Salvador.

El Salvador or the organizations that are investing or adding it to their treasury. They just want to diversify their assets to minimize risk in case of economic instability. They have no intention of relying on it to improve corporate finances or the national economy.

If Bitcoin keeps rising in price, wouldn't that be enough to help propel the economy of a country? Assuming the government has a considerable amount of BTC in its reserves. Just like El Salvador is doing right now. At the pace El Salvador is buying BTC, it might reach a point where it will be able to pay off its debt. God knows what will happen in the future.

If btc price increases and the government holds some bitcoin then this could bring some financial benefits to the country. But they won't be able to become rich and prosperous based on bitcoin alone because the national economy is much more complex than the individual or corporate economy.

As I said, a national economy is made up of many elements and can only prosper when all of them are met. Bitcoin won't help much because at the end of the day, no matter how much its value increases, it's just an asset on a government's balance sheet. It cannot replace and take over the role of core elements of the economy. So stop thinking that bitcoin will help the national or world economy.

[Publictalk792]

If btc price increases and the government holds some bitcoin then this could bring some financial benefits to the country. But they won't be able to become rich and prosperous based on bitcoin alone because the national economy is much more complex than the individual or corporate economy.

As I said, a national economy is made up of many elements and can only prosper when all of them are met. Bitcoin won't help much because at the end of the day, no matter how much its value increases, it's just an asset on a government's balance sheet. It cannot replace and take over the role of core elements of the economy. So stop thinking that bitcoin will help the national or world economy.

You are correct in saying that although government may hold Bitcoin and its price increases, this only gives nation with financial advantage it does not turn country into rich or successful one since economy of country is far more complex. Well being of nation rests on many other factors such as jobs, industries, and trade, which are key parts of system that cannot be replaced by one asset. Thus, any gain on Bitcoin is nice bonus, but lasting national prosperity needs complete economic development in all areas, not only rise in value of single asset.

[Luzin]

It cannot replace and take over the role of core elements of the economy. So stop thinking that bitcoin will help the national or world economy.

When a state simply holds it, it doesn't help the economy. However, if the state trades, the profits can generate new revenue for the state. While many people claim El Salvador is constantly accumulating, they never sell it. This situation is certainly not conducive to economic growth. Money isn't flowing directly into the economy; it simply stagnates and can't be used to improve welfare. When Bitcoin is simply held, it becomes a commodity with limited recognition, unlike gold.

[free-bit.co.in]

When a state simply holds it, it doesn't help the economy. However, if the state trades, the profits can generate new revenue for the state. While many people claim El Salvador is constantly accumulating, they never sell it. This situation is certainly not conducive to economic growth. Money isn't flowing directly into the economy; it simply stagnates and can't be used to improve welfare. When Bitcoin is simply held, it becomes a commodity with limited recognition, unlike gold.

Are you suggesting that instead of holding bitcoin, countries should participate in bitcoin trading in the market? That would be an even worse idea because what guarantee is there that they can make a profit from the trade? Using the national budget to trade for the purpose of making profit is no different than gambling.

When bitcoin is held or added to national reserves, it is just like gold. Holding gold does little to boost the economy either. Because the task of national reserves is to prevent financial risks and stabilize the economy in times of instability due to crises, wars and pandemics. They do not promote the flow of money into the economy nor can they improve the economy simply by holding them.