El Salvador makes Bitcoin legal tender • Hacker News Board

Re: El Salvador makes Bitcoin legal tender

#601

Post by anonporridge » Wed, Jun 09, 2021, 7:57 PM UTC

loup-vaillant wrote: post #595

la_fayette wrote: post #573

Earlier quoted context omitted.

As they use lightning network the reasoning that there will be high demand for block space is not a valid assumption. Theoretically, it is possible that the government of el salvador is doing a single transaction on the blockchain as channel funding and sends bitcoin via lightning to 6,4 million people from el salvador from that channel without touching the blockchain...

Block space isn't the point. The price of a Bitcoin is. Raise the price, and mining will naturally spend more energy on it. Therefore, anything that raises the price of Bitcoin contributes to Global Warming.

Price of bitcoin * total block reward (new coins + fees)

The total value of the miner reward does increase with price, but because of halvings every 210,000 blocks it's a slower rate than the price increases on its own.

Note here, https://www.blockchain.com/charts/miners-revenue, that the current miner reward (in USD) is currently lower than it was at the peak of the 2017 bull run, despite the unit price being approximately double.

Re: El Salvador makes Bitcoin legal tender

#602

Post by rllearneratwork » Wed, Jun 09, 2021, 7:57 PM UTC

minsc__and__boo wrote: post #593

fredfoobar wrote: post #555

Earlier quoted context omitted.

Monero and other crypto folks seem to rush in whenever Bitcoin is being attacked for something. I find it fascinating.

I'm not a monero folk and think it has no real world application outside of criminal dealings. Monero is being used as a currency though which is relevant because bitcoin used to be used as a currency too before the first bubble/speculators got a hold of it. It's critical to any conversation with claims about bitcoin being a great currency (it's not)

I am of an opinion that deflationary crypto (like Bitcoin) can not be used as currency. It should absolutely be used as a store of value (kind of like gold) and as a way to transfer value.

ETH is not deflationary and it is a good candidate to be used as currency.

Re: El Salvador makes Bitcoin legal tender

#603

Post by vmception » Wed, Jun 09, 2021, 8:00 PM UTC

sgeisler wrote: post #184

To give some technical background: yes, using Lightning (as they seem to do) for affordable BTC payments is challenging for most. As far as I am aware that is why they rely on custodial solutions [1]. People hold their money with someone from their village they trust, which is not ideal but neither is being unbanked. Down the road I could easily see this trust being spread over multiple people using multisig wallets.…

I've always said that the most productive use of the state in response to bitcoin is by helping make better UX, protocols, optional smart contracts for industries (no different than little stickers on plastic bottles or electronics, but way more useful for builders and consumers alike).

This is a great step in that direction.

Re: El Salvador makes Bitcoin legal tender

#604

Post by thinkmassive » Wed, Jun 09, 2021, 8:00 PM UTC

lftl wrote: post #430

thinkmassive wrote: post #406

Earlier 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?

Bitcoin has a scripting language that allows more complex requirements to unlock funds, rather than simply sending an amount from one key to another:

https://en.bitcoin.it/wiki/Script

Multisignature requires a quorum k-of-n signatures to unlock funds, for example 3 of 5 keys (or 2-of-3, 2-of-2, etc):

https://en.bitcoin.it/wiki/Multi-signature

So you can have a wallet that requires 2 signatures to move funds, where you control 2 signing devices (mobile app + hardware wallet) and the third-party holds the 3rd key. Normally you manage all transfers without involvement of the third party, but if one of your keys becomes inaccessible they can help you sweep your funds to a new set of keys.

Additional resiliency and security is gained by increasing the quorum to 3-of-5. You control a mobile app plus 3 hardware signing devices, which are ideally distributed geographically. This increases reliability in case something happens at your primary site (like your house) and increases security by requiring an attacker to physically visit multiple locations. The 5th key is held by the recovery service.

tl;dr: https://keys.casa/how-it-works

Re: El Salvador makes Bitcoin legal tender

#605

Post by angry_octet » Wed, Jun 09, 2021, 8:00 PM UTC

vmception wrote: post #503

angry_octet wrote: post #79

Amazingly shortsighted. The primary beneficiaries of this will be organised crime, who will now be able to wash the Bitcoin via El Salvador to convert it to dollars, which they can use to buy trade items and export the profits. The number one export of El Salvador is actually people. If they were concerned about remittance fees they could just set up a bank in the US with low fees, instead of getting kickbacks from O…

An empty bitcoin block and a full bitcoin block use the same amount of energy Use and El Salvador’s use has no influence on that The hyperbole only marginalizes yourself

Truly an exemplary level of delusion. I marvel that people are able to function day to day in society while having deeply held views that are so divorced from reality.

Re: El Salvador makes Bitcoin legal tender

#606

Post by anonporridge » Wed, Jun 09, 2021, 8:02 PM UTC

bigphishy wrote: post #582

rawtxapp wrote: post #515

Earlier quoted context omitted.

And that crypto would be?

nano to name one

The one that just suffered a massive spam attack despite having less than $1 billion of value accrued on it?

https://www.coindesk.com/nanos-network-flooded-spam-nodes-ou...

Re: El Salvador makes Bitcoin legal tender

#607

Post by madacol » Wed, Jun 09, 2021, 8:03 PM UTC

paulgb wrote: post #552

rawtxapp wrote: post #516

Earlier quoted context omitted.

I'm referring to block rewards, the miners will get block rewards until 2140, price of Bitcoin doesn't matter.

Miners will get an exponentially decreasing amount of block rewards until 2140, but even 20 years from now the (BTC-denominated) size of the block rewards will be substantially lower than they are today. The price matters because they are BTC-denominated. If the price of Bitcoin doubles every 4 years, the security of the system can stay at parity with what it is today (assuming the real value of transaction fees stay…

Onchain fees constitute ~10% of current miners income, and that will probably increase, not decrease

Re: El Salvador makes Bitcoin legal tender

#608

Post by gruez » Wed, Jun 09, 2021, 8:05 PM UTC

jasonlaramburu wrote: post #404

gruez wrote: post #269

Earlier quoted context omitted.

>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…

Right but the node needs to be online anytime you transact, correct?

Yeah that's a fair point. You probably[1] need to be online to make a transaction, but you can potentially have a thin client setup where you communicate with a hosted node somewhere, but the signing and stuff is kept on-device. This allows you to make transactions in the case where power is out, but your phone still has internet access. I don't live in el salvador so I'm not sure what the frequency of power outages is relative to telecommunications outages, but at least in the US cell towers and landlines run on backup power so they're up even when there's a blackout.

[1] For maximum convenience it's mandatory, but it's conceivable to update the state of a channel entirely offline. This would allow you to make offline transactions with a node you have a direct channel to, but multi hop transactions (ie. transactions with nodes that you don't have a direct channel to) would still be a hassle.

Re: El Salvador makes Bitcoin legal tender

#609

Post by paulgb » Wed, Jun 09, 2021, 8:05 PM UTC

madacol wrote: post #607

paulgb wrote: post #552

Earlier quoted context omitted.

Miners will get an exponentially decreasing amount of block rewards until 2140, but even 20 years from now the (BTC-denominated) size of the block rewards will be substantially lower than they are today. The price matters because they are BTC-denominated. If the price of Bitcoin doubles every 4 years, the security of the system can stay at parity with what it is today (assuming the real value of transaction fees stay…

Onchain fees constitute ~10% of current miners income, and that will probably increase, not decrease

As a percentage, it will certainly increase, but in real value? I’m not so sure, especially when on-chain transactions are competing with Lightning.

Re: El Salvador makes Bitcoin legal tender

#610

Post by lukifer » Wed, Jun 09, 2021, 8:09 PM UTC

sabhiram wrote: post #547

Dzugaru wrote: post #530

Earlier quoted context omitted.

Except that's not how it works. This adoption has a massive impact on acceptance of Bitcoin. If we assume Bitcoin is a mistake for humanity - this clearly is a great wrongdoing. A smaller wrongdoing would be buying Bitcoin, holding Bitcoin or making positive comments about Bitcoin on HN. Sadly, all these are economically justified (for now).

Isn't it pretty awesome that as a bunch of environmental activists, we are ok with golf greens and almond exports? Ok with tankers which spill oil by the lake-full and intense deforestation? But when it comes to proof of work crypto - suddenly it's a veil of FUD? How can you find fault with someone trying to make more money? This is capitalism at work. Not saying the energy argument for crypto is moot, but it is cert…

The appropriate answer (widely accepted by economists [0]) is a carbon tax and dividend, such that the externality is assigned a proportionate price signal. This additional price burden would be factored into the Proof of Work, and might provide additional incentive to migrate to Proof of Stake, or a low-energy Proof of Work algo. (This might eventually happen anyway, due to competitive pressures of transaction costs).

We can argue until the cows come home about which energy expenses increase human well-being, and which are “wasteful” (Adam Smith hated opera and thought it was a waste of money), but the only fair answer is to ask individuals and firms to pay their fair share proportional to usage, be it crypto mining or cloud marketing analytics or Christmas lights.

[0] https://clcouncil.org/economists-statement/