*Unlike El Salvador or the Central African Republic, Nigeria is a more consequential player on the world’s economic stage. As Africa’s most populous country, Nigeria’s 218 million-plus citizens are considered one of the world’s most important and lucrative emerging markets. Its embrace of Bitcoin could serve as a model for other emerging countries to follow as citizens look for alternatives to the current remittance market and viable alternatives to weak national currencies. *
Andy
Remember when TMF had great financial writers like Robert Sheard, Whitney Tilson, and Morgen Housel?
Now they have clowns who don’t even know what legal tender is. It is embarrassing and hard to watch this happen.
Not sure if you saw this disclosure Syke.
RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin.
Andy
Nigeria.
Home to the famous Prince who has $20 million he needs to move out of the country, if only you will help.
And now the country wants to make Bitcoin legal tender.
Honestly, this isn’t funny enough to be a bit on SNL, but with a couple more embellishments maybe it will be.
Actually, they are only talking about making Bitcoin legal. As opposed to illegal, which it is currently. Bitcoin is currently legal in the United States. That doesn’t mean it is legal tender. I don’t quite understand how a financial writer wouldn’t know the difference. To be fair, it could have been the editors who wrote the headline. There was still some weapons grade stupidity in the rest of the article though.
I’m giving them the benefit of the doubt by assuming the author and his editors are simply as stupid as they appear to be and not knowingly spreading lies in order to pump their book. But between dumb or dishonest, neither is a good look.
So that is what set you off. Well a first step would be to make it legal. Just like in the states. When a state let’s you pay your taxes in crypto.
Starting September 1, 2022, the Colorado Department of Revenue (DOR) will now accept Cryptocurrency as an additional form of payment for all state taxpayers. This includes individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax.
Andy
Legal tender is for all debts Public & Private. Can they make you accept bitcoin?
In some countries they can. But I have been thinking about this a lot lately. Is gold, silver, diamonds, opals legal tender? Well some places yes but most no. Ok so let’s just say that bitcoin is on the same level as gold, silver, diamonds and opals, just for argument sake. Now what would I rather take for trade? Let’s say I am selling my car for 30,000 dollars. Would I like to take gold? Well no I wouldn’t because for one it is to heavy, also there is a chance that it has been refined and something like lead was put into the ingot. Also, I have to find a place to exchange it for USD. Silver the same problem. Diamonds and opals, I don’t know how to grade them so how do I know what they are really worth? But Bitcoin, well there is a market for it and I can exchange it almost immediately for USD. Put it into my wallet, maybe say if you want to give me bitcoin you have to give me 35000 dollars instead. They put it into your wallet and you exchange it immediately for USD 35,000. You know how much , or just about how much it’s worth because it states on the market how much it’s worth. You don’t need to know how to grade it. Seems pretty simple.
Andy
Thing is, they actually don’t accept crypto. They get paid in Yankee dollars. Paypal is willing to exchange your crypto for dollars (after extracting a fee, of course) and then send those dollars to the state (who also charges you a fee for the convenience). If you need a refund for some reason, the state pays you in dollars, not crypto.
And don’t take my word for it. From your link (emphasis added):
A sufficient amount of cryptocurrency to cover the tax, obligation and fees is converted to dollars and remitted to DOR to complete the online transaction.
So, I suppose it is nice the state makes it convenient for you to pay taxes, but they say straight up they are accepting dollars, not crypto. And it raises an interesting question in that the primary advantage of crypto is that it is decentralized and does not require a third party to complete transactions. Yet, in this case the state requires a centralized third party of their choosing (Paypal) and the state won’t accept crypto payments from any other third parties.
Defeats the premise of crypto, don’t you think?
Almost as simple as asking the buyer to do that transactional work and just give you $30,000 US…
So, the Fool talks it’s book, just like the rest of “the wise”. Anyone surprised?
Steve
Not at all. That is how commodities work. But I think it defeats your premise that Crypto is a scam. There is something going on if a state will accept it for payment.
Andy
So gold, silver, diamonds, opals and bitcoin are worthless?
Andy
No BTC is far too volatile for manufactured goods or commodities to trade as a currency. Your costs would not be covered at times as BTC fluctuated. It would be havoc in a company’s books.
BTC is broken up into smaller units for trading. But those smaller units are as volatile obviously.
Yet many companies do hold it on their Books. Tesla, Block, MSTR, Coin, etc.
Andy
BTC had a top January 2014. The next top was with BTC and Eth in January 2018. That 2018 bottom was on the 2014 peak. The Oct 2021 peak almost four years later has its 2022 bottom around the 2018 peak on the chart.
BTC might not rise as much again. Eth will rise in all likelihood. As an asset for a decade you win with these Cryptos of course depending on your entry.
Musk got it wrong.
Most of those companies might take BTC or Eth and then hedge or sell. By hedge I mean look at the risk profile of holding it and go to USD immediately in larger part to avoid risk. Those who are holding BTC or Eth are taking on risks I do not like. Depending on their timing.
As per your link, the state doesn’t accept crypto for payment. The state gets paid in dollars, not crypto.
I think you would have to look at their balance sheet to say that but all the ones I listed hold bitcoin on their balance sheets.
Andy
Per my link they allow crypto to be used for payment of taxes. Unlike your beanie babies, which they do not accept at all.
Andy
Andy,
I get some companies are holding it. That is different than every company buying and selling in BTC…costs and revenues. It is a far cry and instead an added risk on an asset. As an asset it is not cash.