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El Salvador makes Bitcoin legal tender

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Re: El Salvador makes Bitcoin legal tender

#611

Post by anonporridge »

ddtaylor wrote: post #360
paulgb wrote: post #341

Earlier quoted context omitted.

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…

LN doesn't reduce on-chain Bitcoin transaction fees, but instead attempts to move most of the transactions off-chain. With LN you would open a channel using an on-chain transaction, conduct any number of off-chain transactions in that channel, then "settle" the channel by closing with another on-chain transaction. There basically are two different views currently on the future scalability and funding model of the net…

> I don't really see this working since to compete with block subsidy rewards you would need very costly transactions.

This seems to suggest that miners dictate the reward they get, rather than miners are forced to adapt to the reward they are offered.

There's no required amount of energy used for mining and miners are offered 0 guarantee of reward. Mining difficulty automatically increases and decreases depending on how profitably miners can operate. If the reward drops to the point that a miner using expensive coal can't compete with a miner using cheap solar, then they simply go out of business and hope they can sell their equipment to someone who can still turn a profit.

Re: El Salvador makes Bitcoin legal tender

#612

Post by lukifer »

el-salvador wrote: post #449
rsync wrote: post #289

Earlier quoted context omitted.

"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 ..." This bitcoin to dollars confluence is even more interesting in the case of El Salvador where the US Dollar is the official currency . When you are in El Salvador you use actual, physical US Dollars for all cash transactions. This is not a de facto standard as in some other…

> When you are in El Salvador you use actual, physical US Dollars for all cash transactions. This is not a de facto standard as in some other countries - it is the official legal currency in the country. El Salvador has very strict cash regulations. Most transactions over $100 in cash require an ID. Even paying for a new laptop in cash would require you to fill a form stating source of income.

I’d be curious to know if similar regulations will exist for BTC.

Re: El Salvador makes Bitcoin legal tender

#613

Post by dougSF70 »

tangent128 wrote: post #324
dougSF70 wrote: post #161

Earlier quoted context omitted.

I think that using cash makes money expensive which adds some base load inflation - this will help reduces homelessness and other societal ills (such as wealth inequality). Electronic money is never lost, not like those pounds, pennies, dollars, quarters. Losing money, takes out of circulation. While not much is taken out, it might be enough to create a base load of inflation - money becomes more scarce and therefore…

(I think your definitions are reversed- a decrease in money supply is associated with deflation , not inflation.)

From the interwebs: In the U.S., the money supply is influenced by supply and demand—and the actions of the Federal Reserve and commercial banks. ... More money flowing through the economy corresponds with lower interest rates, while less money available generates higher rates."

Higher rates = higher cost of borrowing = higher prices = higher inflation.

Re: El Salvador makes Bitcoin legal tender

#614

Post by crazypython »

acdha wrote: post #390
crazypython wrote: post #314

Earlier quoted context omitted.

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.

> There is open market competition for these third-parties. Like banks? > The system is fully trustless Except for those third-parties, you mean? The people running the Lightning network are essential to this system functioning and very, very few people won’t be fully reliant on a bank to store their Bitcoin — especially after the first time someone makes the news for losing their wallet.

> Except for those third-parties, you mean?

The third-party can't steal your Bitcoins. Assuming your node is online 24/7, you can verifiably cash out your Bitcoin on the blockchain at any time.

The third-party doesn't hold your Bitcoin– both parties can close the channel and cash out, again without any trust.

Your Bitcoins can't be stolen by a third-party, unless you and your watchtower fail to broadcast a transaction with proof there was a channel transfer.

I read watchtowers are used to keep third-parties honest when nodes aren't online 24/7. https://blog.bitmex.com/lightning-network-part-4-all-adopt-t... They don't hold your keys.

Re: El Salvador makes Bitcoin legal tender

#615

Post by anonporridge »

SavantIdiot wrote: post #541
madacol wrote: post #534

Earlier quoted context omitted.

Each update to the channel is a new transaction that references the opening transaction, on each update, this transaction is replaced with a new one, so in practice only the last transaction is kept (old transactions become dangerous to publish) To know how they update trustlessly you should read my other comment https://news.ycombinator.com/item?id=27451184 LN eliminates the need of escrow completely by using bitcoi…

> bitcoin's script (smart contracts I'm out of the loop, I didn't realize bitcoin had contracts yet. Cool.

The big difference is that bitcoin's scripting language is not turing complete. This is a security and scalability trade off that the bitcoin community isn't willing to compromise on, which drove people like Vitalik (started as a bitcoin dev) away to start Ethereum.

Taproot is also a rad upgrade that is going to improve bitcoin's layer one scripting in some interesting ways, https://bitcoinmagazine.com/technical/taproot-coming-what-it...

I haven't looked into this much, but there are projects like Rootstock, https://www.rsk.co/, that essentially recreate all of Ethereum's functionality as a bitcoin sidechain.

Re: El Salvador makes Bitcoin legal tender

#616

Post by dougSF70 »

systemvoltage wrote: post #224
dougSF70 wrote: post #161

Earlier quoted context omitted.

I think that using cash makes money expensive which adds some base load inflation - this will help reduces homelessness and other societal ills (such as wealth inequality). Electronic money is never lost, not like those pounds, pennies, dollars, quarters. Losing money, takes out of circulation. While not much is taken out, it might be enough to create a base load of inflation - money becomes more scarce and therefore…

Homelessness is a California’s complex housing shortage and governance/policy problem. The world is much bigger than issues in SF/Portland/Seattle. I am not following the strawman from utilitarian aspects of cash -> inflation -> homelessness & inquality.

Cheap money forces it to find a home that generates a 7%+ return. Cheap money reduces the number of asset classes that can guarantee (within reason) those returns to Housing and Stocks (and Crypto of course). Buying a home becomes out of reach for more people. In addition, low inflation also suppresses wage growth. As house prices increase (just look at Blackrock's purchase of residential property at 30-50% premiums) rents will also increase because professional landlords are seeking a 7% return and if the property changes hands at a 10% lift then rent-asked for that property will also rise. This leads to a situation of unaffordable housing (exaggerated by lack of new supply coming in line in places like California) in the face of low wage growth - this leads to homeless-ness. IMO.

Re: El Salvador makes Bitcoin legal tender

#617

Post by voidray »

nmz wrote: post #597
joshmarlow wrote: post #578

Earlier quoted context omitted.

> The primary beneficiaries of this will be organized crime Michael Morell, a former acting director of the CIA, has some things to say about the use of BTC in crime: > Based on our research and discussions with industry experts, I have confidence in two conclusions: • The broad generalizations about the use of Bitcoin in illicit finance are significantly overstated. • The blockchain ledger on which Bitcoin transacti…

> There's also a strong (IMO) argument that energy-intensive crypto-mining can make renewable energy more competitive If this is true then the goal is to create a mining algorithm that focuses on being as wasteful as possible. > by only mining when renewables are producing excess power. This is simply not true. There is no such thing as excess power, whatever is not used should be stored or sold to other countries. >…

> If this is true then the goal is to create a mining algorithm that focuses on being as wasteful as possible.

This wouldn't be profitable for miners, so the economics of the coin would collapse. Bitcoin is designed to balance these incentives.

> This is simply not true. There is no such thing as excess power, whatever is not used should be stored or sold to other countries.

You don't understand power grids. Electricity is diminished the further it travels over transmission lines. Only fossil fuels like oil can be "stored and sold to other countries", renewables don't work like this. Excess power generated by renewables, and even by some non-renewables, is frequently wasted because (at certain times) it's either not economically feasible to transport it to population centers, or the grid is at full capacity. You can't pump that excess power into the grid or you will break it.

> Excess energy production has always been a thing

Sure, but this is a new solution.

> and there are mitigation efforts in place much better than "lets put a server farm that wastes energy"

Why do you think current plans are better? Bitcoin mining gives a financial incentive to produce renewables as a direct result of the technical details of power grids. You're being awfully dismissive for someone who knows so little.

Re: El Salvador makes Bitcoin legal tender

#618

Post by vmception »

angry_octet wrote: post #605
vmception wrote: post #503

Earlier quoted context omitted.

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.

An empty bitcoin block and a full bitcoin block use the same amount of energy

I wasn't commenting on whether use of the network makes it more attractive to compete for increasingly scarce bitcoin with sustained or greater use of energy

Its not that hard, just imagine you are taking a standardized test, the accurate answer is the one you choose

Re: El Salvador makes Bitcoin legal tender

#619

Post by joshmarlow »

nmz wrote: post #597
joshmarlow wrote: post #578

Earlier quoted context omitted.

> The primary beneficiaries of this will be organized crime Michael Morell, a former acting director of the CIA, has some things to say about the use of BTC in crime: > Based on our research and discussions with industry experts, I have confidence in two conclusions: • The broad generalizations about the use of Bitcoin in illicit finance are significantly overstated. • The blockchain ledger on which Bitcoin transacti…

> There's also a strong (IMO) argument that energy-intensive crypto-mining can make renewable energy more competitive If this is true then the goal is to create a mining algorithm that focuses on being as wasteful as possible. > by only mining when renewables are producing excess power. This is simply not true. There is no such thing as excess power, whatever is not used should be stored or sold to other countries. >…

> This is simply not true. There is no such thing as excess power, whatever is not used should be stored or sold to other countries.

I agree that would be ideal, but current battery technology is limited and we loose power with transmission distance.

A gravity battery could work for storing that excess power (up to a point) but that seems like it could be a pretty capital intensive project.

In lieu of better solutions, we sometimes have to go with less than ideal ones.

https://en.wikipedia.org/wiki/Gravity_battery

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