It feels that Crypto is losing steam and popularity again. It wasn't looking good with Dog coins and memes rising into extreme prices and the market was begging for a correction.
The BTC news from El Salvador once again was met with excitement from the BTC community, however, once again they didn't look beyond the titles.
It seems that social media is just full of bots, NPCs that are expected to react by being bullish at anything without looking deeper.
The El Salvador news pushed price higher, and covered for the China bad news and the crack down on Crypto mining.
The BTC hashrate keeps dropping though and countered the bullish El Salvador news. Today difficulty will adjust 5% lower as the hash rate keeps going lower since the Chinese crack down on mining escalates.
David Gerard (@davidgerard) (author and Wikipedia editor) is a long-time crypto skeptic. He has explored Cryptocurrencies and understands how Bitcoin, Ethereum, etc. works. Basically, he understands better than most, and being a critic he usually discusses the dark side of the crypto industry.
In my recent post about Tether(Tether ($USDT): An Accident Waiting To Happen), I expressed the frustrations of the overwhelming majority of crypto enthusiasts and skeptics on the matter.
I've also expressed my concerns about the "Strike" payments service. As usual, everything that is presented in a bullish way from the BTC crowd is usually hiding too many dangers behind.
I've talked about Strike since the day Bitcoin was announced as legal tender by El Salvador.
There was not just one catch but many related facts to what I've written 5 days ago on noise.cash.
Strike as a payment processor is even worse than I imagined. It is a custodial service, that removes control from the user since it doesn't provide the private keys to the wallet. Meaning, Strike is centralized and has control over the funds in the wallets.
Not your keys not your crypto, but again, Bitcoin maxis don't like to discuss this fact. As they are there just to make money and have no other purpose. For Bitcoinners following any narrative from Blockstream is what will help them pump BTC.
Source of Image: Twitter
El Salvador to adopt proprietary payment network denominated in Bitcoin (source)
David Gerard, did an amazing investigation to uncover the truth behind the El Salvador new Bitcoin law and the connection with Strike.
I suggest reading the whole article on this link as it sheds some light on the geopolitics of the region and the current monetary policy of El Salvador.
Some important quotes are taken from David Gerard's article:
70% of adults in El Salvador are unbanked, and there’s already an official programme to get them into the system. [Alliance for Financial Inclusion] Bukele claims Bitcoin will fix this too … without any details as to how.
Banking the unbanked is impossible with BTC unless it becomes completely centralized under a layer-2 solution with financial hubs being able to control the flow of funding and block transactions if deemed necessary (this is the Lightning Network).
Banking the unbanked is what BCH is trying to achieve today. We all know there are many issues (concentration, regulations, etc.) but the network works flawlessly, providing access to a parallel financial system to the unbanked population of the world.
Sadly, this was what Bitcoin (BTC) was going to achieve before the company of this man hijacked it:
Image from: abcnews
The Biden administration, has declared five of Bukele’s associates “corrupt.”
(Source: apnews)
According to the economist Tatiana Marroquín, there is no clarity about what is the intention of legalising the currency, because it is already used in the country; there are people who hold cryptocurrencies, and it is legal to do so.
The law states that Bitcoin (the BTC version) will be forced to be accepted by all financial entities in the country.
It is not just legalizing but enforcing the use of BTC instead of the dollar.
El Salvador used to be run by cartel gangs as it is a central transport hub for regional drug trafficking. Until lately its capital, San Salvador, was considered the murder capital of the world (source), and one of the most dangerous countries to visit.
Bukele has repeatedly denied links to MS 13 and Barrio 18, the two largest local drug cartels, despite considerable documented evidence of his past work with the gangs to assist his political party, Nuevas Ideas.
There is certainly cooperation, as in a country run by gangs and thugs, any president will not find it easy dealing with legal ways. I'm not expecting Bukele to be a puppet of gangs in the region but certainly looks like there is at least some kind of understanding and cooperation between the government and the major gangs.
Then we have the Strike payments processing application.
Strike have been promoting Bitcoin in El Salvador for a couple of years now — they run the “Bitcoin Beach” project to run a village economy on Strike, “funded by an anonymous bitcoin whale.” It’s not clear that anyone involved ever touches anything other than the Strike app.
There was news about this village in El Salvador two years ago. It seems it was a test application for Strike.
Lightning doesn’t actually work — it replaces the original blockchain clunkiness that doesn’t work with new clunkiness
You have to pre-fill a payment channel, set up with expensive Bitcoin transactions, with all the money you plan to spend for the life of the channel.
There’s no general way to work out a path from user A to user B, and the liquidity in a path can change with every transaction — in computer science, this is called the Canadian traveller problem. At one stage, the network broadcasted all transactions to everyone just so they could work out the network graph. As I understand the current state of Lightning, you have to work out a viable transaction path on your own.
There’s a huge list of technical and economic problems that follow directly from the protocol.
The developers still tell you not to put any money into Lightning that you can’t afford to have disappear to a bug.
I felt important to quote the whole part, as this is also what the BCH community is explaining. The Lightning Network 6 years after the start of development is just not working as everyone was expecting.
The only function the Lightning Network serves is to be an excuse for Bitcoin’s miserable failure to scale. It doesn’t work and barely has users.
A final part of David Gerard's article is discussing the latest El Salvador's government authoritarian practices:
It’s bizarre seeing a room full of supposedly-libertarian bitcoiners stand to cheer and applaud that this dictator, who makes Parliament pass laws literally at gunpoint. , is good now, actually. You’d almost think the coiners’ only interest was number go up.
BTC used to be about free will. The good people have all left and since 2015 it is just about that. The only interest of BTC coiners is about the number going up.
David Gerard, I know that with this post I often cited Bitcoin Cash, which for everyone in the BCH community is the real Bitcoin.
I recommend reading El Salvador passes its Bitcoin Law — and it’s a Tether scam by David Gerard. He sheds some light on the way BTC is currently adopted as "legal tender" in El Salvador.
There are more that completely abandoned the whole crypto market and are now on the sidelines. The Bitcoin idea was a great one, but the implementation of BTC and development by Core devs didn't follow the intention.
Bitcoin since 2017 is Bitcoin Cash.
The BTC version is very similar to a Pyramid, a scheme speculators are abusing to drag people in and sell after pushing the price at some extremely high point, with a repeat every four years.
"Have fun staying poor" is how every BTC maximalist is responding to criticism, therefore, there is nothing idealistic in BTC left, and most of those involved are individuals that nobody is trusting.
Lead Image from: The Guardian
BTC network stats from: link
Quotes from: El Salvador to adopt proprietary payment network denominated in Bitcoin
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If BTC became legal in El Salvador, then it is also a good way for other cryptos like BCH to be adopted in this place.. I heard before that there are many BCH merchants in this place already