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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

#291

Post by randomhodler84 »

acjohnson55 wrote: post #279
randomhodler84 wrote: post #240

Earlier quoted context omitted.

Ok, hold up. Energy usage is a good thing and provides security, actually. You can’t ditch the energy and retain security. I’m sorry, but PoS is a bad and the wrong model for censorship resistant, non-state stores of value.

That's simply not true. Proof of work is nothing but an extremely expensive to randomly select the entity that gets to finalize the next block. The system leaks value like a sieve. Either the miners have to be compensated by printing money--and devaluaing everyone else's holdings--or by the transaction fees of a system that has a hard practical and ideological limits on its transaction capacity. Avalanche already pro…

Yes it is true! You still don’t get it, and I don’t think I can convince you. Energy = Security. This is an fundamental axiom. Security of transactional data grows with every block in a PoW chain. PoS finally breaks down to mutant PoW with stake grinding; among other oligarchical concerns. We must spend energy to sustain the hardest money humans have known. Yes, it is a deep ideology that a monetary network must incur ongoing continued capital investment! Everyone looking for a cheap n easy way out with PoS. No free lunch.

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

#292

Post by dragonwriter »

jMyles wrote: post #289
dragonwriter wrote: post #288

Earlier quoted context omitted.

“Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it”. [0] (Commodity-representative/redeemable currencies cam be created at will, but are also not fiat money.) Bitcoin is not fiat money, but not for the reason you present, which tries to use a definition of fiat from outside of the specific context to create a new de…

> can be inflated by a command or act of will > not backed by a physical commodity Aren't these two ways of stating the same monetary property? The reason that fiat currencies can be created by fiat is they aren't backed by anything. > Commodity-representative/redeemable currencies cam be created at will No they certainly can not. Not without an actual supply of the commodity. At least not in the case of redeemables.…

> > Commodity-representative/redeemable currencies cam be created at will

> No they certainly can not. Not without an actual supply of the commodity.

Yes they can. (And there is plenty of historical example of that happening.) Heck, pre-state-monopoly banknotes were essentially a redeemable virtual currency over the currency in which they were denominated which often relied very heavily on this trait.

There is a risk associated with doing so, but that's also true of fiat currency, though the exact failure mode is different.

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

#293

Post by munificent »

enchiridion wrote: post #246
munificent wrote: post #187

Earlier quoted context omitted.

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.

Yes, but that is not a sufficient justification for war.

The idea that bitcoin incentivizing efficient power generation because it consumes all that power somehow being a justification for bitcoin is entirely bananas.

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

#294

Post by fnord123 »

pocoloco wrote: post #162
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…

Yes, and this is exactly what Jeff Booth explains in this podcast way better that I ever could: How Inflation Is Stealing Your Wealth | Jeff Booth | Pomp Podcast #572 https://www.youtube.com/watch?v=RuCqFjU9Wi4

This is presented in a conspiratorial manner. "Who wants their money to be worth less?" "Governments don't want you to know..."

It's very simple. 100 euros in your hand right now is worth more than a possible/probable 100 euros in your hand next week. And Jeff Booth is arguing that we are trapped in a mental prison because we agree with this obvious fact.

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

#295

Post by api »

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…

People would spend very conservatively and nothing particularly interesting would happen. It would be virtually impossible to raise money for new businesses.

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

#296

Post by jollybean »

pocoloco wrote: post #247
jollybean wrote: post #242

Earlier quoted context omitted.

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 Steal…

There are over 150 nations, most of them tiny that have a currencies, it's not rocket science.

A nations currency will have the integrity and competency of the governing class, so El Salvador will be able to have a basic currency when they are not corrupt.

Frankly, this whole thing stinks of corruption, my bet is that the leadership are already speculating on BTC and are making big statements like Musk to drive it up, and that their fingers will be in the pot of the BTC volcanic mining.

But it may be moot: you can't force people to use BTC and businesses, esp. those that import will balk at it, and citizens likely won't adopt it.

Ask a US, Canadian, UK, Brazilian bank to provide basic financial services for citizens and they'd do it in a heartbreat.

The 'currency problem' in El Salvador is just a symptom of underlying problems.

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

#297

Post by jollybean »

beckingz wrote: post #259
jollybean wrote: post #243

Earlier quoted context omitted.

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.

Looks like USD may be losing qualities 1 or 2 depending on how you define stability or integrity.

Just the opposite, during difficult times people rush to USD which bolsters 1 and 2.

That it's used widely and fungible is what gives it value.

If your own currency is destroyed, you use the one that has the most integrity that's relative to your country. For most nations the default would be USD. For Vietnam probably RMB. For Belarus either Euro or Rouble.

Then you develop integrity in governance and switch to a national currency.

A nations currency is actually a vert good measure of the competence and integrity of the leadership class.

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

#298

Post by jollybean »

rawtxapp wrote: post #220
reader_mode wrote: post #215

Earlier quoted context omitted.

Yeah that's all fine and dandy until you need to take out a loan and on top of high interest you also need to account for deflation - good luck getting a house mortgage and falling wages. Deflation puta pressure on price of work as well - but people don't like pay cuts.

You know what happens then? House prices will fall because they won't have access to cheap money, so they'll end up being priced at their true value. Housing would stop being an investment, instead it would serve it's true purpose of providing lodging.

Yes, and then you know what happens? Builders stop building because of dropping prices. Trees stop getting felled.

It's called a 'deflationary trap' and everything falls apart.

Nations need a stable currency to function, BTC is untenable.

There's not much to debate here because it simply won't work, it's Banana Republic kind of stuff. They'll never switch over to BTC as a nation it's pragmatically impossible.

If they had the ability to effectively switch over to BTC, then they'd have the ability to responsibly issue and manage a currency.

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

#299

Post by jollybean »

Empact wrote: post #155
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…

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 determi…

It's 'definitely not sane' to fix the amount of currency in circulation, either fiat or gold or crypto, arbitrarily.

It would be like saying 'we're going to fix the amount of roads we have' and 'people will be forced to use the roads more sensibly!'.

The only reason for 'fixing' currency would be to prevent bad actors from running the printing press. Now - this is actually a very real problem historically - however, it's a pretty crude solution.

The smart thing to do is manage your currency smartly - literally like everything else in civilization.

You need good Public Health Policy, you need good Monetary Policy.

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

#300

Post by rsj_hn »

sanderjd wrote: post #265
deviantfero wrote: post #256

Earlier quoted context omitted.

there are storage and distribution limitations for producing even more energy, that's why surplus is sold to neighboring countries currently.

Is it a distribution problem? They can't build enough power cables, or they've already built them over as far an extent as is manageable? I can see how it's easier to just put a big data center on site, but it seems like it would be better to invest differently.

To invest in a data center requires things like reliable property rights, a functioning judicial system, peace and security, network connectivity and other supply chain issues. You want rule of law, peace, security and infrastructure.

The advantage of bitcoin is that once you mine the coins, it is a lot harder for someone to come and take them from you, whether that someone is a rebel group or a corrupt government official or just a local crime syndicate. Moreover you are not dependent on available network backbones or any of the other required infrastructure that a data center depends upon.

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