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El Salvador makes Bitcoin legal tender

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Re: El Salvador makes Bitcoin legal tender

#311

Post by [deleted] »

janeroe wrote: post #164
hn_throwaway_99 wrote: post #63

Earlier quoted context omitted.

The idea that "normal people" will be able to use bitcoin at all without getting their private keys stolen is laughable. Think of how often online bank accounts get hacked in the US, except the difference now is that your money is gone, permanently.

> The idea that "normal people" will be able to use bitcoin at all ... is laughable. The idea that "normal people" will be able to use cash at all is laughable. The idea that "normal people" will be able to use gold coins at all is laughable. And yet, many use (or used to) and don't need a mommy state to tell them what to do.

[deleted]

Re: El Salvador makes Bitcoin legal tender

#312

Post by UncleMeat »

TimJRobinson wrote: post #89
FreeTrade wrote: post #56

Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC. BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to…

They're literally using Lightning for payments right now in El Salvador. They didn't do this without having local projects already. Bitcoin Beach ( https://twitter.com/Bitcoinbeach ) made a lot of this happen.

Bitcoin beach is run by a few college students. Not exactly something to depend on.

Re: El Salvador makes Bitcoin legal tender

#313

Post by CapriciousCptl »

kragen wrote: post #246
BurnGpuBurn wrote: post #86

"Bitcoin is positioned to disrupt the remittances industry in El Salvador, estimated at about $5 billion annually. Most families in towns like El Zonte do not have bank accounts, and rely on services such as Western Union WU +0.5%, which take 5-10% in fees. The closest Western Union is approximately one hour by bus, requiring the recipient of the cash transfer to take the bus back with cash on hand, creating a safety…

I've had some experience with this myself, although I haven't gotten robbed outside a WU yet; I wrote a little about my Argentine experience in https://news.ycombinator.com/item?id=27448744 . It's important to remember that WU's fees are so high in large part because WU is assuming risks (of identity fraud, of regulatory blockage, and of cash theft) that Bitcoin largely avoids.

WU incurred $41.3 million in "non-credit related losses," which includes fraud in 2020[1] which is only maybe 1% of their revenue. It had another ~$40 million in expected credit losses (primarily from agents), so I think ~2% of the fee goes to losses.

Since their gross margins are consistently 40% and their operating margins are ~20% I think barriers to entry/international government regulations better explains the high fees.

[1] 2020 10-k (ctrl-f for 41.3)

Re: El Salvador makes Bitcoin legal tender

#314

Post by crazypython »

blocked_again wrote: post #148
BTCOG wrote: post #122

Earlier quoted context omitted.

They are using Zap/Strike (Lightning) and zero fees. The phony "fees are $1,000 a tx line" and $10 hyperbole simply show you have no clue what you're talking about when speaking about Bitcoin. Even on chain the past solid week you could send free BTC transactions, or for a couple of cents.

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.

There is open market competition for these third-parties. The system is fully trustless. Furthermore, onion routing (akin to Tor) is in development to prevent that third-party from knowing the content of your transaction and who you transacted with.

Re: El Salvador makes Bitcoin legal tender

#315

Post by KingOfCoders »

gruez wrote: post #288
KingOfCoders wrote: post #264

Earlier quoted context omitted.

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?

If someone sends me 1 BTC and the transaction is recorded in mysql, the database operator can revert the transaction and I have zero recourse. That's not possible with lightning. If someone sends me 1 BTC over lightning, then decides to reneg on it by trying to commit an older state of the channel (where they haven't sent me 1 BTC), then my recourse is to rebut that transaction with a newer one.

Thanks!

Re: El Salvador makes Bitcoin legal tender

#316

Post by cft »

HWR_14 wrote: post #301
cft wrote: post #243

Earlier quoted context omitted.

Both have to be in WF, or you have to use Zelle or wire transfer (big fees). I ended up using WF Business Pay that i used for employee payroll...

The internet says that WF has no bank-to-bank fees outside of WF. At least, as of 3 weeks ago.

Can you post a non-Zelle link with instructions?

Re: El Salvador makes Bitcoin legal tender

#317

Post by squeaky-clean »

rawtxapp wrote: post #91
ankurpatel wrote: post #68

This is good news in that we will see a real country with decent population use it and fail badly proving that Bitcoin is not viable as a valid currency. Once that is done its value should plummet dramatically. Until now it is not used for any payments and mainly for speculation/gambling to make easy money. Most of the people are just supporting it to hype up the value so they can make most profit.

Or, maybe just consider this, you are wrong and it ends up being very successful and more countries adopt it. For what it's worth, they have already been using Bitcoin in the El Zonte for some time now [1]. 1: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-...

It doesn't really help my faith in BTC when the article never refers to actual Bitcoins like currency, and instead uses USD equivalent everywhere.

> Transfers of $35/family are made to 600 families every 3 weeks, which covers 50% of basic needs per household.

$35? Or $35 equivalent in Bitcoin? The article never really explains why giving them bitcoin is better than just giving them $35 in paper bills and coins. Just that the person giving the money will only do so as BTC, it doesn't sound like the townsfolk have any say in it.

> At the time of writing, the price of Bitcoin is $9226.56.

So anyone who paid their utility bill with Bitcoin at the time of the article overpaid by 4x compared to current bitcoin prices, or about 6x compared to the peak.

How realistic is it for this to continue when delaying a utility bill by a month could possibly make the value of that bill half, or double. I don't see how this can scale, and it sounds like the El Zonte situation only works because of the guaranteed BTC income by a benefactor.

Re: El Salvador makes Bitcoin legal tender

#318

Post by xapata »

kragen wrote: post #208

There's disappointingly much heat and little light in this thread; lots of people in rich countries ripping on El Salvador (and bitcoin) with little more than stereotypes to go on. Let me try to displace some of the content-free flaming with real information. I'm not in El Salvador, but I do have some experience with how Bitcoin gets used in practice in low- and middle-income countries, despite the transaction fees s…

> The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what’s happened in the US over the last 50 years, in fact, only more so.

Why does it make most taxation impossible? Goods and services still change hands.

Re: El Salvador makes Bitcoin legal tender

#319

Post by brianobush »

wokwokwok wrote: post #252
spmurrayzzz wrote: post #197

Earlier quoted context omitted.

Lightning network liquidity should actually help solve this. If you maintain a reserve and open a ton of payment channels for folks (those HTLCs are all on-chain), this drastically reduces impact of confirmation time and fees.

Should? Is that a speculation? Surely if they’re not doing this for the first time ever on an entire country? Someone has already used a large scale lightning network before right?

Six million is not a huge country. The current lighting network can handle millions of transactions per second.

Re: El Salvador makes Bitcoin legal tender

#320

Post by freeone3000 »

singularity2001 wrote: post #133
aNoob7000 wrote: post #72

Earlier quoted context omitted.

LOL! Very true.. Who the hell has time to figure out all this stuff? I personally think the day the digital US dollar is developed and can be stored in your IPhone. If I can take my locally stored digital dollar and then send it via imessage or whatsapp, then the game is truly over for Bitcoin.

I personally think the day the digital US dollar is developed … The digital US dollar is pretty much in use already, or do you think your bank has anything physical resembling the number on your account?

It's closer to each individual bank having their own digital currency, all of which are worth 1 USD each. The digital US dollars at my bank are not directly exchangable with the digital US dollars at your bank. You need to settle up with an ACH transaction, which takes at least a day to transact as it has to run in a central batch job. In addition, only US domestic institutions can use this mechanism to transfer US dollars between themselves -- international institutions need to use the SWIFT system, which is multiple days for a transaction. Contrast with credit card payment and settlement, which acts closer to a digital system but can't be used as a store of value (and has punitive fees for attempting to do so). The US dollar acts like a cash system with some digital features rather than a digital system.
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