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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

#241

Post by PretzelPirate »

gjulianm wrote: post #28
personlurking wrote: post #22

Earlier quoted context omitted.

An attempt to answer your "what's next?" question: "What about you guys floating $1 billion in “Volcano Bonds” (backed by future #BTC mining output) for El Salvador to pay off the IMF loan - so they can tell the IMF to beat it." https://twitter.com/maxkeiser/status/1403023717429559299

It's a $1B loan to a country with a low debt rating. It's a risky investment already, and now you add Bitcoin with its price volatility? I don't know how that's a good idea from the investors point of view.

The loan could be specified in BTC and not pegged to an exchange rate. Then as long as long as El Salvador kept mining they’d be able to pay it back with interest. I suspect many BTC holders would be happy to participate in that type of loan.

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

#242

Post by jollybean »

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…

I think all of this is completely upside down.

It's a wildly irresponsible financial move.

1) It only takes a bare minimum of competence to create a currency that has integrity, and is stable.

2) Extending that digitally, should not be a hard.

3) Using energy supplies to calculate made up numbers seems like a giant waste of energy - that energy could be used to heat homes and power other things.

4) BTC is wildly unstable, since El Salvador depends on imports - and - nobody accepts BTC for payment - it's going to be a wild ride.

5) Nobody is going to be issuing debt in BTC so that part is moot.

6) BTC is inappropriate for 'unbanked' people - they're going to be the target of hackers worldwide. Sure, you could make a 'government wallet' that protects them from that ... but then why not just do regular banking.

6) For a currency ... if for some reason you can't do #1 ... the best option, by far, is to use USD. Prices in USD are stable. They're accepted globally. You don't have to issue debt in USD, but you can if you want. You can also digitally bank in USD if you want, it's not that hard.

7) If you really think that the best way to leverage volcanic heat is to mine BTC ... then fine. Do that - and exchange it for whatever currency you need.

This whole concept is fairly insane, regular people I feel are going to pay a heavy price.

Lastly - the problem is not 'finances' - it's the fools managing the country. If they acted with a modicum of responsibility, you'd be able to have all of the normal things other countries do i.e. a currency, basic banking. None of that is actually that hard.

A better solution would be to approach an established bank somewhere: US, Canada, Brazil, UK, Germany and ask them to provide online banking for your citizens, probably in USD or a mix of USD and local currency.

Do the BTC mining if you really want to, but as a secondary thing.

Final Note: this already has the stench of corruption. My bet is that the leadership already has a big stake in BTC and are 'Doing a Musk' by propping it up and they will be grafting off the top of the mining activity.

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

#243

Post by jollybean »

GhostVII wrote: post #154
rawtxapp wrote: post #144

Earlier quoted context omitted.

> 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.

This is not about incentives to spend or invest - it's about having a functioning basic unit of economic measure that is 1) stable 2) has integrity and 3) hopefully under the control over the government.

BTC isn't good for any of that.

USD is good for 1 and 2.

The gov. can move to re-establish it's currency and have 3 as well.

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

#244

Post by jollybean »

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.

There has literally never been a more clear and obvious way to waste energy for no reason, something which is happening at scale, during a time of energy crisis.

This has Easter Island written all over it.

'Hey, let's use all our resources to build Giant Heads! The person with the most heads gets to be the King!'.

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

#245

Post by jollybean »

dadoge wrote: post #4

Remittances, 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…

People in the US sending USDs to El Salvador would be much more efficient than any other scheme.

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

#246

Post by enchiridion »

munificent wrote: post #187
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.

This is true exactly to the degree that landmines reward efficient blood donation.

I mean it's not a perfect analogy, but I'd be willing to bet a lot of lessons from battlefield medicine has made it's way into civilian trauma care.

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

#247

Post by pocoloco »

jollybean wrote: post #242
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…

I think all of this is completely upside down. It's a wildly irresponsible financial move. 1) It only takes a bare minimum of competence to create a currency that has integrity, and is stable. 2) Extending that digitally, should not be a hard. 3) Using energy supplies to calculate made up numbers seems like a giant waste of energy - that energy could be used to heat homes and power other things. 4) BTC is wildly unst…

I'm afraid that if I try to retort to each point we may end up talking past each other.

But I will say this, I think that your assumption in point 1 is wrong. I think that the mismanagement of the financial system worldwide has proven that there is no country currency invulnerable to manipulation.

Jeff Booth talks about this towards the end of this interview which is great in it's entirety IMO.

How Inflation Is Stealing Your Wealth | Jeff Booth | Pomp Podcast #572 https://www.youtube.com/watch?v=RuCqFjU9Wi4

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

#248

Post by thehappypm »

randomhodler84 wrote: post #238
thehappypm wrote: post #231

Earlier quoted context omitted.

Honestly, why do you need BTC? You can't actually buy a whole lot with it, and you gotta convert to real currencies do anything meaningful anyway, which defeats the whole argument.

A) Ensuring the time-value of my labor is not eroded by the state through inflation. Yes, there are day to day risks of fluctuations in value, but one just needs to compare the trend line of where BTC is going vs fiat currencies in the longer term. I’m not worried about 50% draw downs on an asset that appreciates > 100% pa. B) ensuring that third parties like banks are unable to steal my funds. Through fees, charges,…

A: Bitcoin has inflated 40% in value in the last month.

B: This is probably the strongest argument for Bitcoin and the original vision.

C: Sending BTC is immediate but since you can’t really use BTC to buy much (yet) you still need to sell and wait for funds to clear, which takes about as long as just wiring money.

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

#249

Post by bootlooped »

randomhodler84 wrote: post #114
acjohnson55 wrote: post #91

Earlier quoted context omitted.

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.

I’m sorry you don’t see that it has value. It has value to me. In fact, I need a secure, permissionless, censorship resistant, non-state backed value storage system more than I need hydroponic food or desalinated water. The problem is the disconnect between your wants/needs and the needs of others in the world. Waste is entirely in the eye of the beholder.

I don't think want vs need is as subjective as you say.

I could assert that I need a Maserati and no other vehicle will fit my requirements, and it would be pretty easy for others to counter that either my supposed need is really a want, or the requirements are arbitrary and unnecessary.

Likewise I think your needs regarding crypto are more of a want. What would be the consequence if you didn't get that? Would you die? Would your quality of life significantly decrease? How did you live most of your life already without Bitcoin?

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

#250

Post by enchiridion »

kemotep wrote: post #194
enchiridion wrote: post #95

Earlier quoted context omitted.

Well, not exactly. There is the utility of enabling the chain. And there is nothing stopping us from extracting gold using electricity. It's in basically all soil and sea water. Sure there are some required materials, but I'd water a guess that those materials are no harder to obtain than GPUs. The only thing that stops this reckless mining are the forces of the market, and the same is true with crypto. Crypto miners…

If anyone is interested, Visa reports that their payments network (and supporting infrastructure) uses 740,000 Gigajoules[0] in a year. Can’t quite find a one for one measurement for Bitcoin, but due note this is the energy needs of all of Visa’s operations and they process in excess 100 billion transactions a year and Bitcoin (in 2020) averaged around 300,000 transactions a day[1]. If interested there is this[2] dig…

So let's do the rough math and figure out the comparison

300k per day is around 100 million transactions per year, three orders of magnitude less than Visa.

BTC uses 110 terawatt hours per year right now[0], which is 396,000,000 gigajoules, a three order of magnitude difference in the other direction. Assuming everything scales nicely, if Bitcoin were the size of visa it would use ~6 orders of magnitude more energy.

OK, so that is way worse than I thought. I'm still not sold on the idea that it's a bad thing, but it's nice to put numbers to the situation.

[0] https://www.google.com/amp/s/hbr.org/amp/2021/05/how-much-en...

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