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El Salvador makes Bitcoin legal tender

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Re: El Salvador makes Bitcoin legal tender

#261

Post by KingOfCoders »

notafraudster wrote: post #174
pinkybanana wrote: post #101

Earlier quoted context omitted.

Both. Some people (probably minority) will use self-hosted wallets. Majority will use custodials (banks). > And if the latter, why would bitcoin be of help at all? A normal bank account would be simpler and less worrisome. USD will still stay as the official currency of El Salvador. However now merchants have to accept also BTC. The hypotheses is that for example foreign businessmen will bring BTC in form of investme…

The original conversation was about how Bitcoin could help the 70% who are unbanked have access to something like a bank account. The proposed mechanism for this is "well, they can go to a bank and register something like a bank account, or else they can be a high-SES self-educated tech person who builds their own bank using computer hardware". I do not think this could help the 70% who are unbanked have access to so…

I'd also say it's easier to give everyone the right to an account as in Germany (if the reason is that they can't get one b/c of a missing/bad credit history and not because they don't live to a bank and have no phone), to solve the 70% unbanked problem instead of introducing BTC.

Re: El Salvador makes Bitcoin legal tender

#262

Post by rawtxapp »

ddtaylor wrote: post #251
rawtxapp wrote: post #191

Earlier quoted context omitted.

They are using lightning network which allows almost instant and practically free Bitcoin payments.

LN requires opening and closing channels, each of which have to be done as a regular Bitcoin transaction. The value proposition of LN is that repeated transactions with the same entity (or some subset of) can be done without high fees, but considering almost nobody is currently using LN that doesn't change things right now.

Channel factories will bundle channel open/closes into a single transaction significantly reducing the burden on the blockchain.

LN adoption is growing very nicely (1ml.com), there are lots of wallets and users now.

Re: El Salvador makes Bitcoin legal tender

#263

Post by neither_color »

UncleMeat wrote: post #231
rawtxapp wrote: post #191

Earlier quoted context omitted.

They are using lightning network which allows almost instant and practically free Bitcoin payments.

Why would somebody who doesn't have a bank account be more capable of using a provider on the lightning network?

This is a good question and I think the clues are in the way informal vendors in parts of Asia and Africa have already caught on to transacting through mobile. In remote parts of ES there aren’t any bank branches and villagers have to travel an hour or more by bus into town just to open an account, when they get back to their village that same lack of infrastructure means no POS or businesses accepting cards. Feature phones and smart phones, however, are ubiquitous and this gives an “official” way of doing this.

This solution doesn’t have to be crypto at all, however. I’ve been to China where even food carts have QR codes printed on them for people to take wechat pay and ali pay.

Re: El Salvador makes Bitcoin legal tender

#264

Post by KingOfCoders »

gruez wrote: post #258
jasonlaramburu wrote: post #40

Earlier quoted context omitted.

LN still requires periodic on-chain transactions to close and open payment channels. So either these costs are being passed along to the users in El Salvador or the wallet provider is subsidizing it.

While you do need to close/open payment channels if you want to move the funds off the lightning network, I don't really see why you'd need to "periodically" do it. Lightning channels can stay open indefinitely so you can theoretically park your money on there indefinitely.

I have no clue, so Lightning is Bitcoin without the Bitcoin and blockchain? Without the blockchain how is it different from a MySQL database table?

Re: El Salvador makes Bitcoin legal tender

#266

Post by danShumway »

SturgeonsLaw wrote: post #192
blocked_again wrote: post #148

Earlier quoted context omitted.

I am sorry but what is the point of adopting BTC if vast majority of the transactions are going to be handled by a third party service. Makes no sense to me.

With USD (and indeed any national currency), generally all functions except issuance are handled by third party services, that would be the status quo for a currency, wouldn't it?

Sure, but is Bitcoin trying to improve that status quo or replicate it? Am I supposed to be impressed that Bitcoin has built a system that is also reliant on third-party services, just like modern banking?

For the moment, starting up a lightning provider is simpler than starting up a payment processor, but how much of that is because of regulation? And do we have any evidence that in the future lightning providers won't be as regulated as modern payment providers? Why should I assume that in the future the situation with lightning providers is going to be any different than the current situation with PayPal?

Re: El Salvador makes Bitcoin legal tender

#267

Post by rawtxapp »

m3kw9 wrote: post #253
rawtxapp wrote: post #191

Earlier quoted context omitted.

They are using lightning network which allows almost instant and practically free Bitcoin payments.

The problem here lies when the merchant want to derisk btc/USD by often converting it back to USD after a transaction. That causes a miner fee, there is a penalty in breaking the lighting channel.

You can stay on lightning for exchanges, Bitfinex for example offers lightning deposits/withdrawals, El Salvador would too, considering they are using lightning right now.

Re: El Salvador makes Bitcoin legal tender

#268

Post by [deleted] »

whoisninja wrote: post #259
blocked_again wrote: post #18

> The El Salvador President has previously said the move will open up financial services to the 70% of Salvadoreans who do not have bank accounts. Right. People who can't even afford a bank account would now all be using financial services by paying 10 dollars per transaction.

living in a priviliged bubble, can't even open a website to check Bitcoin fees and what lightning network is. why strike is #1 app in their country. main chain fees is $1 right now, and lightning tx are almost free: https://mempool.space/

[deleted]

Re: El Salvador makes Bitcoin legal tender

#269

Post by gruez »

jasonlaramburu wrote: post #238
random_kris wrote: post #53

Earlier quoted context omitted.

I run 1 node and in a year I haven't yet had to reopen an existing channel. And 3 channels are good enough for most

Are you buying daily essentials using LN, or running a small business? Also how could someone in El Salvador run a node without reliable electricity and internet? Also remember that the hardware cost of a full node is likely more than a month’s wages.

>Also how could someone in El Salvador run a node without reliable electricity and internet?

A lightning node doesn't need to be on 24/7. To prevent your counterparty from stealing your funds you only need to be online every 2 weeks (or never if you use a watchtower service). Syncing is also fast, so 1 hour of internet access/electricity should allow you to catch up 2 weeks of blockchain history.

>Also remember that the hardware cost of a full node is likely more than a month’s wages.

Are there no thin wallets for lightning?

Re: El Salvador makes Bitcoin legal tender

#270

Post by squeaky-clean »

JKCalhoun wrote: post #201
miked85 wrote: post #157

Earlier quoted context omitted.

The digital dollar has been here for years. I couldn't even tell you the last time I carried paper currency.

If I hand a cashier a physical dollar, no fee to me. Not so with your so-called digital dollars. An actual digital dollar would have no transaction fee whatsoever.

That fee is only because we want that money settled instantly by a third party. There's no fee for a bank to bank transfer. Or heck, even writing a check. Once you get VISA involved they want a cut.
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