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El Salvador adopts Bitcoin as official currency, first country to do so

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Re: El Salvador adopts Bitcoin as official currency, first country to do so

#61

Post by [deleted] »

lottin wrote: post #9
JumpCrisscross wrote: post #3

Earlier quoted context omitted.

> prompt the USA to import more products from El Salvador to reduce the size of the remittances sector and thereby lessen the reason people use Bitcoin Who in America would benefit from fighting this? Crypto is a real industry. It’s more profitable for the financial sector than similar activity in U.S. dollars. And the Fed doesn’t thoroughly love that it has to take international factors into account when its politic…

> Crypto is a real industry. Not really. An industry produces goods and services. What does crypto produce?

[deleted]

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#62

Post by xur17 »

simiones wrote: post #42
bethecloud wrote: post #19

Earlier 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…

> 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.

If you settle everything onchain, maybe (I haven't done the math on this, so I honestly don't know), but storing every transaction for a cup of coffee in a datastore that persists across tens of thousands of computers for the rest of time is absurd.

Long term Bitcoin layer 1 (onchain) is likely to be the settlement layer for large transactions, and other layers (lightning network, etc) will be used for every day activities like buying coffee, sending funds to a friend, etc.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#63

Post by dahfizz »

skizm wrote: post #29

How are they getting around the very long wait times and large fees for transaction confirmations? I'm guessing the "government digital wallet" is just an account on a government service that changes values in a (centralized) database while holding a bunch of btc under the hood? Or maybe there are private bank options that do the same?

Credit card transactions take 3 days to clear the visa network, but swiping your card to pay for something is still instant. These things have already been solved in the application layer.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#64

Post by noelsusman »

imtringued wrote: post #2

I wonder if this will prompt the USA to import more products from El Salvador to reduce the size of the remittances sector and thereby lessen the reason people use Bitcoin in the first place. Before anyone tells the Salvadorians to export more products... they do... and they do it by working in a country that exports to El Salvador.

I doubt the US government cares enough about this to do much of anything, and I'm not sure how importing more products would even work. Would Congress just buy a bunch of Salvadoran coffee beans?

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#65

Post by Tenoke »

option_greek wrote: post #30
remir wrote: post #14

Why go with Bitcoin specifically? Why not use the Celo blockchain or Algorand instead and create their own stable coins on there? Both these networks are proof of work, transactions are very fast and cheap as well. Bitcoin is slow to validate transactions, is environmentally costly, and its value fluctuate, so I'm not sure what they were thinking. I wonder what the 30$ they receive from the gov is worth today after t…

Algorand is not proof of work. Its a variation of PoS with very interesting use of VRF functions.

More than a year after its smart contract introduction devs have still failed to create a single DEX (let alone something more complex) there despite trying. The one Algo were hyping about having a dex last October (idex i believe) have quietly removed mentions of Algo on their site after failing despite all the PR.

This should tell you how good of a choice Algo is for anything. There's plenty other promising POS chains on which devs are actually successfully managing to build stuff on to be focusing on Algo.

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#67

Post by space_rock »

remir wrote: post #14

Why go with Bitcoin specifically? Why not use the Celo blockchain or Algorand instead and create their own stable coins on there? Both these networks are proof of work, transactions are very fast and cheap as well. Bitcoin is slow to validate transactions, is environmentally costly, and its value fluctuate, so I'm not sure what they were thinking. I wonder what the 30$ they receive from the gov is worth today after t…

Shill those coins. Let me guess you have no idea about the technical tradeoffs involved in bitcoin

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#68

Post by solveit »

simiones wrote: post #42
bethecloud wrote: post #19

Earlier 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…

So, you're correct, but the previous poster did that thing we so often do where we go too far to make a correct point.

In this case, the correct point is that the waste of energy is to ensure the security of the blockchain (as you correctly pointed out), and not to process transactions. The marginal cost of processing another transaction is completely negligible compared to the cost of securing the blockchain, and so naive comparisons saying that a single transaction uses as much energy as XXX where XXX is the total energy cost divided by the number of transactions is misguided. You could send a million more transactions and the energy cost wouldn't budge.

Of course, the overreach is in the part where they said a single laptop could run all of Bitcoin. Marginal transactions are cheap, but not that cheap, and a single laptop couldn't secure shit. (Again, all as you correctly pointed out. I just wanted to clarify where everyone was coming from for readers who aren't familiar with how Bitcoin works.)

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#69

Post by amusedcyclist »

doomroot wrote: post #60
amusedcyclist wrote: post #46

Earlier quoted context omitted.

Please point me to good answers on why proof of work is a reasonable way to run a currency

https://bitcoin.org/bitcoin.pdf

I understand how it works thanks, i'm looking for an explanation as to why this waste of energy is a good way to run a currency

Re: El Salvador adopts Bitcoin as official currency, first country to do so

#70

Post by liuliu »

Because they have both Dollar and Bitcoin as legal tender, the result is unclear. In theory, because USD is still cheaper (if Bitcoin is supplied constrained as it is promised), people will trade with USD and hoard Bitcoin. However, when crossing borders, USD is more cumbersome to move around, that may deter people to import products with "cheap" USD.

It would be very interesting to observe, whether they will eventually move to Bitcoin only (if the bull market keeps going) based on Economics history (because domestic market will hoard Bitcoin, causing outflow of USD). And if that happens, would be interesting to observe the other factors (wage and services) deflate as the theory predicts.

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