El Salvador is under pressure as a result of Bitcoin’s price drop over the last several days. For the past several months, El Salvador’s dollar-denominated bonds have been in free slide. Nayib Bukele, the country’s president, seeks to improve the country’s economic realities by issuing Bitcoin-denominated bonds.
President Bukele’s prolonged association with Bitcoin, according to Steve Hanke, a professor of applied economics at John Hopkins University, may prove highly costly for the country’s economy and the status of its dollar-denominated bonds. He chastised Bukele for his frequent Bitcoin purchases, adding that if he was so interested in Bitcoin, he should “gamble” with his own money rather than taxpayers’ money.
After Bukele announced intentions to sell $1 billion in Bitcoin-denominated bonds in December, Steve Hanke expressed worry about the quality of the country’s bonds. The bond offering will raise half of the intended amount, which will be used to fund the development of a Bitcoin City, while the other half will be used to acquire more Bitcoin for the country’s reserve.
The Spat Over Dormant and Active Volcano
Steve Hanke’s ignorance of geothermal energy was ridiculed by President Nayib Bukele.
Only when volcanoes are dormant can geothermal energy be collected.
El Salvador’s president, Nayib Bukele, took to Twitter to dispute famous economist Steve Hanke, who rejected the potential energy source for the Ciudad Bitcoin project because it is a dormant volcano.
Hanke, an applied economics professor at Johns Hopkins University in Maryland, sent forth the tweet on January 7. Hanke implied in his reply that employing a dormant volcano as a power source for the Bitcoin City project, proposed by Bukele on November 21, 2021, would be impossible.
Bukele scowled at Hanke’s snide reply, stressing that geothermal energy does not come from volcanic activity. The majority of geothermal energy comes from wells near INACTIVE VOLCANOES! “Why would you build a city beneath an ACTIVE VOLCANO?” you might wonder. El Salvador’s president sent out a tweet.
Bukele also included a meme in his answer that alluded to Hanke’s remark, which has been shared over 600 times and has almost 6,000 “likes” as of this writing.
The economist’s tweet drew a response from several well-known bitcoiners, including Stacy Herbert, a Bitcoin advocate alongside her husband Max Keizer. “Stacy and Max after moving to a Bitcoin City constructed on an active volcano,” Herbert ironically captioned the classic photograph of the burnt lovers of Pompeii.
El Salvador recently declared that it was presenting approximately 20 legislation to its government that would give Bitcoin bonds legal support, prompting the professor’s new warning. Hanke, who has counselled developing market countries on currency challenges, has never shied away from criticising El Salvador’s Bitcoin adoption.
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