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What fraction of their reserves are and will be held in Bitcoin? Would a Bitcoin crash prompt a balance of payments crisis?
El Salvador adopts Bitcoin as official currency, first country to do so
51–60 of 394 posts
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#52It’s amazing how countries are wholeheartedly adopting this thing as an official currency that we have no idea who invented and for what purpose. I mean sure, there’s a white paper that says why it was invented, but why should anyone believe it? If it does turn out to be malicious it’s going to make for one hell of a cautionary tale.
Actually it's far more transparent and verifiable by anyone than you would think. I highly encourage you to read more about it. I have no doubt the more understand the more you appreciate it.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#53Earlier quoted context omitted.
Nope. Bitcoin use and mining power are completely uncorrelated. By mining bitcoins, your earn as much as the computational fraction you are representing. So, indeed, there was a race to more and more mining power in the recent years but it can completely be reversed. For example if electricity prices rises. Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything…
> Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users. No, that is completely inaccurate. First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. And if the parameters were adjusted such that it would be that easy to mine blocks, bitcoin would become v…
A laptop is an exaggeration but the general point that if you reduce the hashrate say 10fold you'll still be processing exactly the same amount of transactions (after the difficulty adjusts at least) is true.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#54Earlier quoted context omitted.
I don't know the exact law in El Salvador, but in general "legal tender" does not imply an obligation to accept as payment in stores, it just means that most debts are discharged if the debtor offers (tenders) to settle the debt using a 'legal tender'. So, for instance, if your plumber did some work for you and sends you an invoice afterwards then that debt is discharged if you offer to settle it using a 'legal tende…
In El Salvador it means an obligation to accept it. Which is good for bitcoin adoption but does reduce people's freedom to refuse it
I'm envisioning a lot of dirty looks from paper cash-preferring shopkeepers to crypto tourists when the tourists buy up all shop's inventory and leave the shopkeeper with just a few numbers in some app.
EDIT: To be clear, I mean tourists each individually buying a normal amount of things using BTC, which adds up to the store exchanging it's inventory for a number in the app.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#55Earlier quoted context omitted.
what an awful waste of energy. Each bitcoin transaction uses the energy equivalent the entire lifespan of a tree. Effectively, each bitcoin transaction is cutting down of tree... in this case, for a hamburger
They are using lightning wallets. So no on chain settling. No (extra) trees were harmed for hamburgers (though obviously opening and closing of channels and initial mining it self is energy intensive).
Actually, they are not even using lighning wallets. They are using a centralized payment processor that has personal accounts for users, like any other payment app. This centralized processor happens to use lightning wallets in its backend, but there is no 1:1 mapping of payment_account:lightning_wallet. And since Lightning itself doesn't interact with the blockchain except when you open/close payment channels, there is no actual use of bitcoin in the whole scheme.
Which is of course to be expected, as the bitcoin network is entirely unable to process the transactions of a small rural town.
Basically, people in El Salvador will use a centralized payment app that happens to denominate prices in Bitcoin. It will be interesting to see how much this actually works with the extreme volatility of Bitcoin, but for a country that is apparently desperate to get foreign value into the country it may be the worse option, except for all the others.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#56Best part is the President trolling the IMF on Twitter: https://twitter.com/nayibbukele/status/1435263064933285898
Yea, best to troll on Twitter than fix your country that has the literal highest homicide rate in the world.
Murder good for Bitcoin?
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#57It’s amazing how countries are wholeheartedly adopting this thing as an official currency that we have no idea who invented and for what purpose. I mean sure, there’s a white paper that says why it was invented, but why should anyone believe it? If it does turn out to be malicious it’s going to make for one hell of a cautionary tale.
[deleted]
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#58An authoritarian banana republic is pretty much the only place where something like this would happen : https://www.hrw.org/news/2021/05/21/us-can-stop-el-salvadors...
Generally speaking banana republic is an offensive term to those living the states you’re referring to.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#59Earlier quoted context omitted.
Nope. Bitcoin use and mining power are completely uncorrelated. By mining bitcoins, your earn as much as the computational fraction you are representing. So, indeed, there was a race to more and more mining power in the recent years but it can completely be reversed. For example if electricity prices rises. Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything…
> Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users. No, that is completely inaccurate. First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. And if the parameters were adjusted such that it would be that easy to mine blocks, bitcoin would become v…
>First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions.
Completely wrong. Go run a testnet yourself and you will see.
>And if the parameters were adjusted such that it would be that easy to mine blocks, bitcoin would become valueless, as everyone with a laptop could produce their own longest blockchain where they have half of all bitcoin.
The difficulty adjusts automatically. The energy usage comes only from the competition aspect - people are competing to earn blocks. You are lacking basic understanding of how PoW functions.
Re: El Salvador adopts Bitcoin as official currency, first country to do so
#60Earlier quoted context omitted.
The "problems" you've listed have been very clearly debated for the past 5 years. You can find answers. Youre just repeating talking points.
Please point me to good answers on why proof of work is a reasonable way to run a currency