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El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

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Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#151

Post by lucb1e »

kerng wrote: post #99
lucb1e wrote: post #37

Almost half the electricity produced in El Salvador is from fossil sources (they don't have nuclear power): https://data.worldbank.org/indicator/EG.ELC.PETR.ZS?location... Option A: invest in that volcano and reduce greenhouse gas emissions. Option B: invest in that volcano and mine bitcoin. B makes them richer so long as other people keep expecting Bitcoin prices to rise (increasing demand), so I can see why they do…

Its telling of the quality if HN, if the top comment is a false dichotomy... I have noticed a steep decline of thoughtful comments over the last year. And of course: why not do both, and more? Edit: lots of downvotes, but at least a higher quality comment is on top now.

> why not do both, and more?

We'd all love if they did that instead of what was announced, but that's not the announcement.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#152

Post by adrianN »

mtalantikite wrote: post #123
danbruc wrote: post #110

How much money is there to be mined per year? On the order of 10 billion dollar? What share of the total hash rate could you realistically buy and power with your volcano? One percent? Probably not ten percent. What would the investment for the hardware be? I have a hard time imagining that you could make a noticeable difference this way even for an economy like Salvador's. And there are probably many better ways to…

I think this is only one part of the story for them. If 70% of their country is un-banked, many transactions are probably in cash, and there probably are a lot of undeclared sales and income that is not being taxed. If they can really get their population using tools that would make it easier for the government to collect taxes, make it easier for tourists to visit and spend money, etc then the mining rewards are onl…

If taxing and replacing cash transactions were the main goals, they should maybe use GNU Taler instead of bitcoin.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#153

Post by freeone3000 »

ipaddr wrote: post #118
cratermoon wrote: post #105

Earlier quoted context omitted.

> B makes them richer B makes the colonizing foreign investors richer. It won't do shit for the poor country.

How did you reach that conclusion? Wouldn't this be a way to export power without the lines.

No, because Bitcoin doesn't turn back into energy. The energy is just gone.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#154

Post by GhostVII »

rawtxapp wrote: post #144
fnord123 wrote: post #136

Earlier quoted context omitted.

> Mandating BTC as legal tender is an awesome move. To me the most important benefit is that the 70% of the population which was excluded from banking and relegated to use physical currency will now be included. If the economy is an engine and money is the oil, El Salvador, which had only some drops of oil, will now get a complete oil change with synthetic on top of that. You are 100% incorrect. Bitcoin is wildly def…

> You are 100% incorrect. Bitcoin is wildly deflationary. Therefore it does not encourage an economy to function, it encourages people to hold onto it with white knuckles. It's not oil for the economy, it's sand. In my opinion, that's the biggest lie that people have been made to believe to justify constant stealing of their purchasing power over time. People will always spend money for things they need, they will al…

It also encourages them to invest their money. The choice isn't either spend money on over-consumerism or lose it, the choice is either spend it or invest it so someone else can allocate more resources to what they are doing.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#155

Post by Empact »

fnord123 wrote: post #136
pocoloco wrote: post #129

As a Salvadoran living abroad but keeping an eye on politics there, I feel the need to comment given the amount of skepticism shown here, which is understandable given the history. I believe that what the president, Nayib Bukele, and his team have done is monumental. The reason is that I also believe that the financial system crashed back in 2008 and has been kept alive by central banks worldwide. Last summer we saw…

> Mandating BTC as legal tender is an awesome move. To me the most important benefit is that the 70% of the population which was excluded from banking and relegated to use physical currency will now be included. If the economy is an engine and money is the oil, El Salvador, which had only some drops of oil, will now get a complete oil change with synthetic on top of that. You are 100% incorrect. Bitcoin is wildly def…

Is it really so difficult to imagine a world where people spent less conspicuously, and invested more prudently?

In a sound currency world, interest rates are set by the relative availability of funds for investment - that is, they are counter-cyclically market-determined: if there is little investment, rates will be low, if the economy is booming, rates will naturally rise.

Secondly, the rate of deflation is determined by the rate of increase in the economy: if the economy is shrinking over time, there is no deflationary incentive to hold - so here again the currency is counter-cyclical, discouraging rapid growth while allowing for measured growth.

Is that sand? Or sanity?

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#156

Post by adrianN »

wyager wrote: post #143
lucb1e wrote: post #37

Almost half the electricity produced in El Salvador is from fossil sources (they don't have nuclear power): https://data.worldbank.org/indicator/EG.ELC.PETR.ZS?location... Option A: invest in that volcano and reduce greenhouse gas emissions. Option B: invest in that volcano and mine bitcoin. B makes them richer so long as other people keep expecting Bitcoin prices to rise (increasing demand), so I can see why they do…

The economics of geothermal are often unfavorable for consumer/industrial electricity production. Bitcoin mining is unique in that provides a consistent consumer for electricity at a reliable price 24/7. The long-term effect of Bitcoin mining will probably be to subsidize the creation of reliable constant-output power sources like geothermal and nuclear, with some of that capacity being used for consumer/industrial u…

"a reliable price" until the bubble pops?

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#157

Post by sanderjd »

enchiridion wrote: post #79

So, I'm going to choose to be an optimist when it comes to crypto energy consumption. There has literally never been a more direct reward for efficient energy production.

It's a direct reward for energy production, which has always been well rewarded. There is no reason to think PoW mining in any way rewards efficient energy production more so than any other use of energy.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#158

Post by JamilD »

rawtxapp wrote: post #140
JamilD wrote: post #120

Earlier quoted context omitted.

Are the benefits of proof of work worth the additional cost over other consensus algorithms, to you?

PoW keeps things fair, you have to spend money on hardware and energy or become irrelevant. In other consensus systems like PoS, whoever has the most capital controls pretty much everything and has 0 incentive to sell what they get since they aren't really spending any energy for their cryptographic signature. It literally says "rich gets richer" in the protocol which is fundamentally broken in my humble opinion.

Compute power requires money though, no? Whoever has the most capital now controls the BTC blockchain, which happens to be mostly miners in China. It’s a lot easier for me to stake ETH than to buy hundreds of GPUs.

And my reward is linear with how much I stake or put down, whereas with economies of scale in mining the reward is more like quadratic. Seems to me that with PoS the rich get richer linearly, with PoW the rich get richer ~quadratically.

If I spend 0.01% of what the Chinese miners spend on my mining setup, I’m not getting 0.01% of the rewards.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#159

Post by X6S1x6Okd1st »

acjohnson55 wrote: post #91
enchiridion wrote: post #79

So, I'm going to choose to be an optimist when it comes to crypto energy consumption. There has literally never been a more direct reward for efficient energy production.

It's actually a complete waste. All it produces is more security for the blockchain, which is of low marginal value. They could use that energy to produce something of actual value, like hydroponic food, or desalinated water, or run a data center, or literally anything else.

Yeah it's a really good point that additional security for the blockchain has low value. Really the total mining reward (txfees + subsidy) should adjust to offer just enough security. We now have the mechanisms in place to do something like that through DAOs, however it seems hopeless to apply that to Bitcoin, they are so resistant towards any change what so ever.

It's wild that it took the bitcoin subsidy less than 2 decades to become far too high proportional to it's externalities.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#160

Post by adrianN »

kerng wrote: post #99
lucb1e wrote: post #37

Almost half the electricity produced in El Salvador is from fossil sources (they don't have nuclear power): https://data.worldbank.org/indicator/EG.ELC.PETR.ZS?location... Option A: invest in that volcano and reduce greenhouse gas emissions. Option B: invest in that volcano and mine bitcoin. B makes them richer so long as other people keep expecting Bitcoin prices to rise (increasing demand), so I can see why they do…

Its telling of the quality if HN, if the top comment is a false dichotomy... I have noticed a steep decline of thoughtful comments over the last year. And of course: why not do both, and more? Edit: lots of downvotes, but at least a higher quality comment is on top now.

> why not do both, and more

Presumably because they have limited capital and can't solve all problems at once?

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