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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

#361

Earlier quoted context omitted.

> There's no KYC for holding fiat... Woah. Hold up. There's no KYC for holding anything. There's always been KYC for obtaining fiat. For withdrawing fiat. For depositing fiat. For getting paid in fiat. For paying other people in fiat. It's not the holding at issue, it's the transacting. > ...and transactions above 10k are on the honor system for cash purchases. No, they certainly are not. Any withdrawals or deposits…

>Woah. Hold up. There's no KYC for holding anything. There's always been KYC for obtaining fiat. For withdrawing fiat. For depositing fiat. For getting paid in fiat. For paying other people in fiat. It's not the holding at issue, it's the transacting. From a bank, or a money transmitter, or a traditional employer -- sure. But I could spange on the side of the road or get picked up at a home depot and do some work and…

This is financial fanfic lol, what you've described literally never happens in reality.

> No I specifically mentioned that to use Wise without fees it's an issue for the unbanked, which is a major problem in El Salvador. I'm glad the plight of the unbanked is "fanfic" to you. We all know the rich legal citizens who are banked have the financial upper hand including in international transactions.

You uh, got some numbers to back up your assertions? Unbanked people are un-banked because they don't have money. Do you know of a lot of wealthy folks without bank accounts?

I'm gonna need to see some stats on all of this. Everything you've said is theoretical, hypothetical, and I'm going to need an understanding of exactly how often these scenarios play out. If it's just that, then it doesn't matter.

> For instance, it is a crime to carry a hand gun in public for defense in Hawaii without a virtually unobtainable license, yet the constitution pretty clearly says the right to bear arms shall not be infringed.

It actually doesn't, because if it did, you'd be right, and that law would be unconstitutional.

The point at issue is the "well regulated militia" bit and I defer to the Supreme Court's interpretation. Plus the whole context thing. America isn't a civil law society, its a common law society which means law is subject to interpretation and precedent. The text alone isn't the source of truth. In Quebec, it would be, because their legal system is based on the Napoleonic code. Americas is not. [1]

Anyways, this has been fun - you think crime is good when you personally disagree with the law, I think the law should be respected until changed, and that advocacy is the path. Nobody agrees with all of the law, but it works because we all respect it anyways. I don't think it should be a crime to hold a dead lobster less than 6" long. However, respecting the law is fundamental to a society. If you don't agree, we won't come to terms.

[1] https://www.lexisnexis.com/en-us/lawschool/pre-law/intro-to-...

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

#362

Earlier quoted context omitted.

you think the government doesn't have a list of its citizens? I'm sure they have something like a social security number.

There is a National ID Number for everyone with Salvadoran Nationality 18 and older. And also a Tax ID that anyone can apply for.

As someone from Latin America, it's funny to read about Americans' struggle for a countrywide ID and the sense of government control/ freedom.

Here in Mexico the government has our biometrics, there's a national election ID, SSN and a unique "clave de población " .

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

#363

Earlier quoted context omitted.

>Woah. Hold up. There's no KYC for holding anything. There's always been KYC for obtaining fiat. For withdrawing fiat. For depositing fiat. For getting paid in fiat. For paying other people in fiat. It's not the holding at issue, it's the transacting. From a bank, or a money transmitter, or a traditional employer -- sure. But I could spange on the side of the road or get picked up at a home depot and do some work and…

This is financial fanfic lol, what you've described literally never happens in reality. > No I specifically mentioned that to use Wise without fees it's an issue for the unbanked, which is a major problem in El Salvador. I'm glad the plight of the unbanked is "fanfic" to you. We all know the rich legal citizens who are banked have the financial upper hand including in international transactions. You uh, got some numb…

>This is financial fanfic lol, what you've described literally never happens in reality.

Likely unbanked people working without any work authorization working for cash can be seen at the hardware store daily where I live. I invite you to come to any major city near a border and see it with your own two eyes. Or maybe they just looked and acted really mexican but didn't want to get a very easily gotten regular job and preferred shit wages by the side of the road? I don't need to "cite" something I have seen with my own two eyes. And do you seriously think illegal movement of hard cash across borders is fanfic? I understand if maybe you live in rich or ethnically homogeneous enclave or are otherwise not exposed to the poors and the illegal immigrants that I see every day; from that perspective maybe it does seem like a distant fiction. Do you really think people working for cash to remit abroad is not a thing? If you do, I admit defeat without so much as a citation.

>I'm gonna need to see some stats on all of this. Everything you've said is theoretical, hypothetical, and I'm going to need an understanding of exactly how often these scenarios play out. If it's just that, then it doesn't matter.

Here ya go![1] Most Salvadorans are unbanked. If your theory that the unbanked are just the people without money (which I dispute below), then it stands that the unbanked are probably most in need of remittance, and get the largest marginal utility from unbanked low transfer cost methods such as crypto (particularly such as LTC and BCH with have only pennies transaction fee).

>Unbanked people are un-banked because they don't have money

Or because they lack documents (even if they are legal citizens). Or because they are an American in a foreign country and no bank there wants to comply with FATCA reporting requirements. Or because they have money, but not _enough_. Or because they have some enemy in government, or lack a permanent address or proof of address. Recently I was rejected for a bank account because I was moving and had no address, despite having good income and assets and a valid passport recognized by the bank and our government as the authoritative identity document. Your view of the unbanked is naive and simplistic.

>Do you know wealthy people without bank accounts?

Not off hand, but there are plenty of Americans with large amounts of unbanked money. Such as this man who had 87k seized by the road side despite doing nothing wrong [3] (he did have a bank account but preferred not to store cash there). You won't have to dig long to find examples of truckers and other folk who keep large stores of cash outside the banking system, that we only know about because their money was seized by some overzealous thief in Blue by the side of the road.

>It actually doesn't, because if it did, you'd be right, and that law would be unconstitutional.

Actually it says the right of the people, not the right of the militia. I live in a state where I can conceal carry without a license. I do it everyday, and guess what -- no one has ever noticed because it makes zero difference to anyone else unless someone tries to fatally hurt me or my family. If I did it in Hawaii the only difference would be if I ever successfully defended myself or my family I would go to jail for exercising my constitutional rights.

>, I think the law should be respected until changed

And if you were in the US at the time of the American Revolution, you'd be left screaming about how it's against the law to fight the British and how we should all just solicit the King for a change. The law definitely doesn't "work" for the many victims of the drug war, the people in jail for having both a joint and a gun, or the many immigrants not quite as lucky as you that have been deported from the country after performing even military service [2].

I think crime is good when there is no victim and it expands liberty. I think crime is good when the law is unjust. I don't think all criminals are bad, and no I don't agree to your terms. There have been a number of successful, well respected, and honorable men who thought the same.

[1] https://www.statista.com/statistics/1011424/el- salvador-bank-account-ownership-rate-type/

[2] https://theconversation.com/deported-veterans-stranded-far-f...

[3] https://www.reviewjournal.com/crime/courts/nevada-troopers-t...

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

#364
post #185

Earlier quoted context omitted.

So the way to scale the blockchain is to avoid putting transactions on it. If I promise you that if you give me your burger you'll have 5SAT from me, and later you ask for my water and offer to reduce my debt to 4SAT in exchange, did we use the bitcoin blockchain in our transaction? With ligthning, you're not using the bitcoin network to process transactions. If we opened a lightning channel for our 2 personal bitcoi…

Jo sends $100 from Bank A to Alice at Bank B, then Bob sends $100 from Bank B to Jo. The banks will have no USD to settle at clearing as a result. Did Jo and Alice participate in a USD transaction?

Yes, they traded in USD. But they did not use the Fed's accounting systems to do so.

Similarly, if I send you 1000SAT through the lightning network, I am trading in bitcoin, but not using the bitcoin blockchain to do so.

Sure, Lightning relies on guarantees offered by the bitcoin blockchain to promise payment security. But it's not the same thing, and the Lightning network could become compromised even if the bitcoin blockchain remain secure For example, if Lightning accidentally started adding an extra 0 to transactions, if I send you 100 SAT over the LN you could see that you are receiving 1000 SAT and send me some products. Later, when the channel is closed, the bitcoin blockchain would refuse the final transfer, but it may be too late.

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

#365
post #269

Earlier quoted context omitted.

I think that is a great analogy. If you view Bitcoin on the main blockchain as M0 money supply, then side channels like the Lightning Network and other centralized payment processors that have been popping up can be viewed as M1 and more commonly M2. If Bitcoin's original thesis of truly decentralized P2P cash still holds, then it should be viewed as an M0 money supply. Financial services and products build on top of…

I don't like that analogy. Unlike M0 and M1, every BTC on the lightning network represents one BTC on the L1 chain. The L1 funds are locked in order to participate in L2.

That's a promise that Lightning makes and that you can check in their code today, but it is not a fundamental guarantee the way that the bitcoin blockchain offers guarantees.

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

#366

Earlier quoted context omitted.

> Completely wrong. Go run a testnet yourself and you will see. If you imagine that a laptop has enough hashrate to mine all the world's transactions in realtime, then how do you explain to yourself that the actual Bitcoin network is only able to add a few hundred transactions per second to the chain? > The difficulty adjusts automatically. The energy usage comes only from the competition aspect - people are competin…

I am struggling the follow the argument through the comment chain. Energy is used to secure the chain via mining; a secure network is required to be a payment system, but the energy usage is not from processing transactions. Originally the discussion is about people "using Bitcoin to pay for their McDonalds". Then the commenter erroneously stated, in response to that, that a "bitcoin transaction uses the energy equiv…

This is pretty muddled up.

Let's look at it like this: a block on the blockchain has a maximum size. A transaction has a minimum size. So, each block contains a maximum number of transactions. Miners must waste a certain amount of energy hashing a block to ensure the security of the network (through the incentive mechanisms described above).

So, we can compute a practical energy/block, which translates to an energy/typical transaction.

Now, the block size is a kind of free parameter - the blockchain guarantees wouldn't be significantly different with 1GB blocks instead of 1MB. And that, in turn, would reduce the energy cost per transaction dramatically, and allow the network to process more transactions/second.

Similarly, if there were fewer people putting fewer resources into mining bitcoin, the energy cost/block could go down. This would affect the security of the network though, as it also brings down the cost of a 51% attack.

But miners are opposed to such changes, which have been proposed before. So, in practice, the bitcoin network as it is today has a huge energy cost/mined transaction.

Again, if you don't believe this, you should ask yourself what stops the bitcoin blockchain from processing 1 billion transactions/second instead of the current pitiful ~2 hundred transactions.

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

#367
post #258

Earlier quoted context omitted.

The capacity of BTC is so low that if it had universal adoption, every human being could do around one or two transactions in their lifetime.

What's your source on this? Are you figuring in the Lightning Network?

The figures for the bitcoin blockchain are public and monitored by most exchanges. They are at about 11000 transactions/hour[0] - ~3 transactions/second for the entire world.

The lightning network is a separate system for transactions denominated in bitcoin. It does nothing to modify the capacity of the bitcoin network, it creates a way to do transactions WITHOUT using the bitcoin network (except occasionally).

[0] https://bitinfocharts.com/bitcoin/

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

#368

Earlier quoted context omitted.

I was a bit too direct - it's true that officially bitcoin transactions must be accepted, and any valid bitcoin app would work - including anything based on Lightning. But in practice, it's absurd to imagine that the population of a whole country will learn about lightning or bitcoin directly and create their own Lightning channels or bitcoin wallets (though doubtless some will). Instead, most will use an app that hi…

> I was a bit too direct You're just moving the goal posts. Here was your original statement: > Actually, they are not even using lighning wallets Here is your updated statement: > it's absurd to imagine that the population of a whole country will learn about lightning or bitcoin directly and create their own Lightning channels or bitcoin wallets (though doubtless some will) You started with what sounded like fact, t…

Yes, my original statement was too direct - I said "they are not using lightning wallets" in response to someone saying "they are using lightning wallets".

The non-hyperbolic statement would have been "they will (99.99% certainly) not be using even lightning wallets".

Still, while this is a forward-looking statement, it is more than idle speculation - the government is encouraging the population to install one specific app, even offering money to anyone that does. In contrast, running your own lightning channels is known to be very difficult to do, so it is a priori extremely unlikely for a large proportion of the population to run their own.

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

#369

Earlier quoted context omitted.

But the total amount of data stored in the Lightning network is even more absurd. Not only do we store "A has paid B 1 SAT" for all time, we actually store "A is paying C 1SAT for B; C is paying D 1SAT for B; E is paying F 1SAT for B; F is paying B 1SAT".

The transactions within an open channel are only stored by the two owners of the channel. The entire network does not need to store, nor does it even get to see these transactions. They can even be private. When the channel is closed none of the channel transactions need to be committed to the blockchain, only the final balances of the channel between the two participants. A lightning channel does require an onchain…

I'm a layman when it comes to this but doesn't that mean the amount of "channels" is still severely limited? Someone mentioned 220million transactions annually. Even if those channels only open and close the balance once a year that's very little it seems.

Or can there be more than 2 owners of a channel?

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

#370

Earlier quoted context omitted.

El salvador payment system is built on the lighting network. A layer 2 scaling solution for bitcoin (up to 25 million transactions per second) https://en.m.wikipedia.org/wiki/Lightning_Network edit: typos

0 currently. https://twitter.com/nayibbukele/status/1435197879795212291?r... Also. Lightning network can give unreliable transaction costs ( eg. When sending to an unknown wallet) It's weird that everyone is supporting an off chain solution. It kinda defeats the purpose of Bitcoin in general.

It depends on what you think the purpose of Bitcoin is. In my mind Bitcoin is digital gold. It's not really convenient to pay for McDo in gold, so I would hold my gold in a bank and pay with fractions of my gold certificates. If I want, I can go to the bank and exchange my certificates for the actual bullions.
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