I don't see why people are so fixated on LN, it changes nothing, you might as well be using something like coinbase.
El Salvador makes Bitcoin legal tender
461–470 of 732 posts
Re: El Salvador makes Bitcoin legal tender
#462I am just surprised how much negativity is in HN towards Bitcoin. This is the first case of decentralised open source tech winning against big established powers - governments/faceamagoos. We should be celebrating this. I sure hope that Bitcoin is going to be Linux of money/finance. Lightning might not be at the scale it needs to be now but it will improve greatly. maybe it is good enough already? Like Ruby on Rails.…
by comparing it to Linux do you mean where the backbone of finance is run by Bitcoin (like Linux running servers), or where <1% of users directly use Bitcoin themselves?
More people directly use linux today (in the form of Android) than windows.
Re: El Salvador makes Bitcoin legal tender
#463Sigh. 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…
It is not hard to scale Bitcoin for millions of people for everyday transactions. You give people a custodial wallet and track the balances off-chain using a trusted third party. As long as a government is willing to allow such a service to legally operate: 1. You can easily support billions of bitcoin transactions a second since the transactions only change centralized database entries. 2. Users can send and receive…
Thats all great until fractional reserve banking enters the game. In the end we will efficiently trade IoUs and the best outcome would be that they are redeemable and we have a gold-standard-like thing again. That in itself would be a godsend already though probably not what Bitcoin maxis vision looks like
Re: El Salvador makes Bitcoin legal tender
#464Earlier quoted context omitted.
Multisig solutions are available for increased security and reliability. Services like Casa and Unchained Capital will even hold a single key from your set, allowing you to recover your funds if one of your keys is lost, however they can never move your funds on their own because they never possess a quorum.
How does it work that they have the ability to help you recover your funds, but they can't do that "recovery" unilaterally?
Re: El Salvador makes Bitcoin legal tender
#465They should have chosen NANO instead of BTC: Fast transactions and no transaction fees.
A bunch of redditors have set up WeNano spots all over El Salvador now: https://www.reddit.com/r/nanocurrency/comments/nvsbin/lets_f...
Re: El Salvador makes Bitcoin legal tender
#466I am just surprised how much negativity is in HN towards Bitcoin. This is the first case of decentralised open source tech winning against big established powers - governments/faceamagoos. We should be celebrating this. I sure hope that Bitcoin is going to be Linux of money/finance. Lightning might not be at the scale it needs to be now but it will improve greatly. maybe it is good enough already? Like Ruby on Rails.…
I'm not. Bitcoin has stagnated, and it hasn't delivered its promise of being used as a DeFi currency.
I bet if it was Ethereum that El Salvador had chosen, the opinion wouldn't be as harsh. Proof of stake doesn't have the same energy consumption concerns.
imo this is still a great development for all of crypto and DeFi. It will also help protect people who aren't connected and wealthy from losing their value due to ever higher levels of inflation (it is currently much higher than 3%) http://www.shadowstats.com/alternate_data/inflation-charts
Re: El Salvador makes Bitcoin legal tender
#467Earlier quoted context omitted.
From my understanding, they hold most of that in reserve accounts with the Federal Reserve. But yeah, someone at some point holds some cash. But of the total US money supply (in 2018), physical currency makes up about 11% of the total value[0]. [0] https://www.businessinsider.com/heres-how-much-us-currency-t...
And whenever this comes up, I just like to remind people that we went to a reserve requirement of 0% nearly a year ago with the start of COVID. https://medium.com/navigating-life/we-just-went-from-fractio... Edit: Downvoted, and I'm guessing it's the source? This is legitimate fact though. Here's the fed's own announcement. > In light of the shift to an ample reserves regime, the Board has reduced reserve requirement…
Which is completely fine, because the Fed is willing to step in as the lender of last resort.
Re: El Salvador makes Bitcoin legal tender
#468Earlier quoted context omitted.
Low on-chain fees are actually a disaster for Bitcoin. Once mining rewards dwindle to nothing due to halvings fees would have to rise astronomically to maintain hash power.
It depends on the price, it would need to increase ~10x to maintain hash power with today's fee (Fees are a little more than 10% of miner's reward)
How much hashpower do we need to keep the blockchain secure? Maybe it's less than what we have today, though I suspect it's more. (ASIC mining reduces the risk of 51% attacks because there's no huge mass of "dark silicon" that could be temporarily redirected from running Slack or Monster Hunter to mount a 51% attack; the vast majority of hashpower that has been manufactured so far is busily mining away to support the blockchain.)
I'm not convinced that higher transaction fees would be a huge disaster. Maybe Lightning will work out (El Salvador seems to be betting heavily on it), or maybe people will use "custodial wallets" like LocalBitcoins, or simply run up a tab at the bar; with any of these approaches, relegating the public blockchain to weekly, monthly, or trimestral settlements for most people would be a mild inconvenience rather than a disaster.
Re: El Salvador makes Bitcoin legal tender
#469Earlier 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.
It might appear that way, but that is only because the fee is hidden.
The credit card terminal agreements signed by retailers prevent the retailer from offering differential pricing when buying via credit card or cash. Essentially, the credit card fee is embedded into the price.
This might be "good" for people who have credit cards, but it is inflationary (by roughly 2%) to people whose credit is poor and only transact by cash.
But let's be honest -- who cares about the poor?
Re: El Salvador makes Bitcoin legal tender
#470Earlier 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.
If you believe LN is only useful between two parties that share a channel, I suggest you do more reading.