The El Salvador government is directing a state run energy company to provide 'cheap' (does that mean free?) energy to those mining bitcoin in El Salvador. Are these miners even locals or are they Americans?
The miners will be getting cheap energy at the expense of the local population/ country.
Maybe the miner's profits will be taxed and go back to the government for a return on investment.
The thermal energy from the volacano is being pursued not because it is more efficient, but because it is more green and more moral.
El Salvador making bitcoin legal tender, and forcing it to be accepted in payments, is the best thing to happen to bitcoin. The only way this can work is if the government buys the bitcoin from merchants and give them dollars, so the government is the buyer of last resort for your bitcoin.
No where in the world can a bitcoiner force anyone to accept bitcoin for goods/services or exchange for dollars but El Salvador.
El Salvador receives millions of dollars in aid from the US. The US tax payer is funding bitcoin mining (through energy subsidy) and funding the El Salvador government trading facility of converting bitcoin to dollars. The government bears the transactions costs/ and the volatility risk.
El Salvador shouldn't receive a cent of US aid to support this, only private contributions. If the El Salvador government has enough money for bitcoin projects, they don't need US aid for humanitarian reasons.
Bitcoiners who support this can no longer claim to be about freedom, as this is coercive, and is only possible through massive government spending to subsidize it that El Salvador is doing.
This is only a victory for the miners being subsidized, and the bitcoiners who have a buyer of last resort.
Is it really a medium of exchange if statistics show that 95% of merchants convert to dollars immediately? Is it really a victory if you have to use government force to get people to accept it?
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
#222Earlier 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…
People in El Salvador will simply have the free choice to put their money into BTC. If people in El Salvador make or lose a bit of money because they diversify their exposure, will they not have contributed to the overall price signal process of the free market? Why is it bad to give people options?
I wonder what percentage of people in El Salvador have enough money to "put into BTC". Wouldn't most of the poor population be living essentially hand to mouth and spending their meager amount of money on daily food and shelter?
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#223The El Salvador government is directing a state run energy company to provide 'cheap' (does that mean free?) energy to those mining bitcoin in El Salvador. Are these miners even locals or are they Americans? The miners will be getting cheap energy at the expense of the local population/ country. Maybe the miner's profits will be taxed and go back to the government for a return on investment. The thermal energy from t…
> El Salvador receives millions of dollars in aid from the US.
This has been true for decades. Not anymore. A couple of weeks back the US gov said that it would stop all USAID funding and give it instead to ONGs in El Salvador which are basically the opposition or anti-Bukele.
I assume that there are other ways that the US gov sends "aid" but I'm sure these will also stop soon enough.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#224Earlier quoted context omitted.
Are the benefits of proof of work worth the additional cost over other consensus algorithms, to you?
The other consensus algorithms all follow the same consolidation logic of capitalism. Specifically, power consolidates year after year similar to banks, media companies, communication companies, etc. It looks to me like the PoS systems algorithmically codify this logic, and since the consolidation exists digitally, I would have a hard time coming up with a plan to break up the PoS oligopolies. The reason why the digi…
I've gradually come around to the side of PoW being important as layer 1, because it's as close as we're likely to get to Lockean labor theory of property being directly manifest rather than built on a legal-deeds-and-titles national framework, and that has an immediate effect of building trust out of speculative value. PoW can be made more efficient along some axes, but not all of them. As such it puts every economy in a Red Queen's race to do things with available energy and computing power that are of more value than speculation.
However, PoS has an important role as the layer for specific applications and markets, since it acts more like central banking with the tradeoffs of such.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#225Earlier quoted context omitted.
If Bitcoin is money, then it is absolutely fiat money and always has been. The alternatives would be that it is commodity money (which is not the case because you can't use a Bitcoin other than exchange it for something else) or representative money (which is not the case because Bitcoin isn't backed by anything else for which it can exchanged). Up to this point, it's been a rather degenerate case of fiat money becau…
By whose fiat can the supply of Bitcoin be inflated? And are precious metals fiat by the standard you've laid out? Or are they commodities strictly on thin premise that you can use silver as a disinfectant, etc?
>By whose fiat can the supply of Bitcoin be inflated?
That's not what "fiat" means in this context. Fiat money is simply money that is asserted to be valuable. Control over issuance of money by those who assert the value of money is not an essential element of fiat money.
For example, the US dollar is adopted as the currency of the Republic of Palau, and yet the Republic of Palau has no control over the US dollar. Does that suggest to you that, in Palau, the US dollar is not the fiat currency?
>And are precious metals fiat by the standard you've laid out? Or are they commodities strictly on thin premise that you can use silver as a disinfectant, etc?
Precious metals are not money; they're commodities. No-one thinks they're money. The question "are precious metals fiat?" is meaningless.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#226One interesting thing to me is that Bitcoin is a lot easier to steal than money in banks. A bad actor can steal your private key and take all of your BTC, and it's gone forever. Try doing that with a bank account -- the bank will back you up, there are transfer limits.
The whole point of Bitcoin is that the bank itself cannot steal your money.
Coinbase or any other exchange can certainly steal your coins, just like a bank can steal your money. Hosting your own private key is like having your money in your mattress -- it's as secure as you allow it to be, and once stolen it's gone forever.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#227Earlier quoted context omitted.
Euh... HODL ? :) I mean, it's literally the #1 meme for cryptocurrency.
I mean, of course hodl, but not at the cost of dying of starvation or missing out on having your dream home, etc. Bitcoin subreddit is full of stories of people buying their first homes or cars, I've seen many people start their small businesses with their gains. Life is short, you enjoy/spend what you have while you're here.
But currency needs to move in order to be, you know, a currency. The lack of upward price movement of e.g. the US dollar means that there is no advantage to sitting on it. Invest it, spend it, or lose it.
Inversely, with BTC, you would want to spend as little as humanly possible. Make whatever philosophical arguments you want: this is not adding oil to the engine. This is adding sand.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#228Earlier quoted context omitted.
People in El Salvador will simply have the free choice to put their money into BTC. If people in El Salvador make or lose a bit of money because they diversify their exposure, will they not have contributed to the overall price signal process of the free market? Why is it bad to give people options?
I wonder what percentage of people in El Salvador have enough money to "put into BTC". Wouldn't most of the poor population be living essentially hand to mouth and spending their meager amount of money on daily food and shelter?
Yep, impoverished people can't acquire BTC to begin with. This doesn't help at all.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#229Earlier quoted context omitted.
This "volatility will come down as the market cap gets larger" keeps getting thrown around, yet Bitcoin just lost 50% of its value at a market cap of 1 trillion USD. What market cap is required for Bitcoin to stop being volatile?
I mean even gold (which is a centuries old asset) is pretty volatile on a yearly basis (high of ~2100$, low of ~1650$ this year). I think when Bitcoin approaches Gold's price, you can expect similar volatility because by then large institutions/countries would be holding it. Also on a long term basis, it appreciates an average of ~300% year over year which is much better than the dollar which is depreciating on purpo…
Gold is not a used directly as a currency anymore, in part for the reason that it's hard to control the value of an asset. It turns out that having some control over a currency's inflation/deflation is very powerful and good for economies to function.
Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin
#230Remittances, things like wire transfers, account for 22% of their GDP. Bitcoin will give that money back to the people with the way lower cost of transfers, esp through the Lightning Network that is planned to be widely used. Elizabeth Stark boldly said 7 yrs ago and Bitcoin is like TCP and needs an http, and then built Lightning on top of Bitcoin and this is super exciting to see. EDIT: removed “fees”, it’s just rem…
Your Abuela isn't going to be able to take her .05 Btc down to the local Bodega and buy groceries. El Salvador already uses the US Dollar as its official currency. A migrant worker in the USA is going to face a lot more fees, scams, and difficulty to buy and send BTC than just wiring the same currency he earns to to a relative who can then spend in the same currency. This Bitcoin thing is a marketing ploy from the co…
A lot more fees
That couldn’t be more wrong.
Look into The Lightning Network