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El Salvador makes Bitcoin legal tender

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Re: El Salvador makes Bitcoin legal tender

#341

Post by paulgb »

rawtxapp wrote: post #262
ddtaylor wrote: post #251

Earlier quoted context omitted.

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.

Is it possible to calculate the transaction volume in BTC over the lightning network, or is the ledger non-public in the same way that Bitcoin's is?

If I understood the Satoshi paper right, after the block reward is exhausted the network's security depends on transaction fees being high enough to sustain a strong level of security. If Lightning brings transaction fees down, is that not a threat to the security of the network as the block reward becomes smaller?

Re: El Salvador makes Bitcoin legal tender

#342

Post by spullara »

miked85 wrote: post #273
JKCalhoun wrote: post #201

Earlier quoted context omitted.

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.

I don't pay any fee when I use a credit card.

You do, but it is hidden as the vendor is responsible for paying it. CC companies are basically a tax on transactions.

Re: El Salvador makes Bitcoin legal tender

#343

Post by scatters »

bun_at_work wrote: post #221
singularity2001 wrote: post #133

Earlier quoted context omitted.

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?

The bank does hold a fraction of your deposits, as our banking in the US is fractional reserve banking. This has been the case for quite some time, and isn't really the same thing as digital currency, even if we transact digitally.

The US does not have reserve requirements; it has capital requirements. The fractional-reserve model is not a realistic description of banking in modern developed economies.

Re: El Salvador makes Bitcoin legal tender

#344

Post by Empact »

Tarq0n wrote: post #302
rawtxapp wrote: post #274

Earlier quoted context omitted.

You just need a phone, that's it. Banking requires all the infrastructure, etc.

There's plenty of primarily-online banks. I haven't set foot in a brick and mortar bank in well over a decade.

You presumably live in a developed economy. There's a reason 70% of El Salvadorans don't have bank accounts, and it isn't a context of easy online banking.

Re: El Salvador makes Bitcoin legal tender

#345

Post by lottin »

brianobush wrote: post #319
wokwokwok wrote: post #252

Earlier quoted context omitted.

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.

Has it handled millions of transactions per second before?

Last time I checked (2019) it was processing 5,000 transactions per month.

Re: El Salvador makes Bitcoin legal tender

#347

Post by reedjosh »

miked85 wrote: post #273
JKCalhoun wrote: post #201

Earlier quoted context omitted.

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.

I don't pay any fee when I use a credit card.

You pay a slightly elevated price to use your CC.

The CC network charge vendors a percentage of the transaction. So you aren't paying directly, but we're all paying.

Re: El Salvador makes Bitcoin legal tender

#348

Post by 627467 »

enlyth wrote: post #48
spottybanana wrote: post #35

Earlier quoted context omitted.

What the normal people will use in the beginning is going to be non-custodial LN based solution like strike. Minimal fees, easy to use. If you get a bit more, move to custodial LN wallet/onchain transactions. More fees, more security and less trust. And once you have too much BTC start storing them in an offline cold storage.

I can see someone explaining to their grandmother about having to move her BTC to offline cold storage and storing her private keys securely or she could lose her life's savings in an instant with no recourse

That someone probably will have learned how to help grandma on complex digital processes last time goverment services, communications and commerce moved online.

I agree it won't be pain-free, but hardly the first time such conversion would happen

Re: El Salvador makes Bitcoin legal tender

#349

Post by bun_at_work »

X6S1x6Okd1st wrote: post #248
bun_at_work wrote: post #221

Earlier quoted context omitted.

The bank does hold a fraction of your deposits, as our banking in the US is fractional reserve banking. This has been the case for quite some time, and isn't really the same thing as digital currency, even if we transact digitally.

That definition seems to differ from the definition I've commonly seen. How do you define a digital currency?

I don't have a strict definition handy, however it seems as though digital currencies would be those that are digitally based, whereas the dollar is a tangible currency first, even if it is fiat.

A digital currency would be like crypto currency, or in-game currencies or something designed to be digital. The dollar is the federal reserve currency, and not intended to be digital. It doesn't make sense to call it digital currency, when in fact it's physical currency first, and we've developed digital tools to help us use it and move it around.

Re: El Salvador makes Bitcoin legal tender

#350

Post by PragmaticPulp »

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…

According to the article, the town didn't even want to use Bitcoin.

An anonymous donor gifted them a large amount of Bitcoin on the condition that they must learn how to use Bitcoin and advocate for the use of Bitcoin:

> After meeting with several philanthropies in the region, all of which wanted to take the funds and convert them into fiat to cover the community's immediate needs, the donor partnered with Michael Peterson, a San-Diego native that spends up to 9 months of the year volunteering in El Zonte. Michael was given the opportunity to administer the Bitcoin on one condition - he would not cash it out. Beneficiaries of the digital currency had to learn how to use the Bitcoin itself, creating a Bitcoin economy

In other words, a wealthy Bitcoin holder gifted Bitcoin to one of the poorest towns he could find on the condition that they don't cash it out.

They basically forced a poor town to use Bitcoin in exchange for free Bitcoin and now try to use it as an organic success story.

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