El Salvador adopts Bitcoin as official currency, first country to do so • Hacker News Board

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

#371

Post by m00dy » Wed, Sep 08, 2021, 11:21 AM UTC

simiones wrote: post #368

Karrot_Kream wrote: post #315

Earlier quoted context omitted.

> 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 specif…

deactive hn account

pull the plug of your computer

leave the metaverse

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

#372

Post by ajkdhcb2 » Wed, Sep 08, 2021, 11:43 AM UTC

simiones wrote: post #366

ajkdhcb2 wrote: post #130

Earlier quoted context omitted.

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/t…

Do you know what the lightning network is? It changes all of these relationships, and it is key to what we are talking about, but you didnt mention it in this comment.

Separately to the lightning network, the security (hashrate, energy usage) is still not directly linked to the number of on-chain transactions that are processed. You can compute "a practical energy/block" specifically for bitcoin but it does not translate to a meaningful energy/transaction value because the quantity of energy used is not directly caused by transactions. You can have a less-secure blockchain that does many more transactions than bitcoin with low energy usage (altcoins exist) - if these are low value transactions then people won't even be incentivised to attack it. The relationship is NOT just energy/transaction. Your estimated energy/transaction value will keep changing because that's not the relationship; the new coins in the block reward will eventually drop to zero, the value processed by the network will change, the ASIC development situation will change, etc. It's like finding a runner that eats icecream and computing icecream/kilometre.

>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.

Nothing is stopping it. Run your own lightning node and you can do more transactions than what you are erroneously claiming

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

#373

Post by topranks » Wed, Sep 08, 2021, 1:47 PM UTC

fennecfoxen wrote: post #129

la_fayette wrote: post #77

Earlier quoted context omitted.

I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The developed world is responsible for climate change, so I guess the poorest have their right to use their money how they want and not in the way some banks or you consider it. The impact of the lightning network on energy consumption is even neglible..…

> I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The fees are high because the costs are high. Existing remittance channels are shackled by anti-money-laundering, anti-organized-crime, anti-terrorism, know-your-customer compliance costs (typically enforced by the governments of multiple jurisdictions…

The fees are inflated because the block size is artificially limited. The mining reward is likely still enough to incentivize miners without any significant fee market, and difficulty adjustment is part of the protocol anyway.

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

#374

Post by thebean11 » Wed, Sep 08, 2021, 2:21 PM UTC

simiones wrote: post #365

thebean11 wrote: post #329

Earlier quoted context omitted.

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.

Sure, if you changed the code of lightning then it would work differently. If you changed the code of the L1 chain it could work differently too. How are those guarantees different?

Calling it a promise makes it sound like there's counterparty risk and you're relying on them not changing the code. Changing the lightning code would have no effect on your funds locked into lightning using the old code.

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

#375

Post by thomastjeffery » Wed, Sep 08, 2021, 2:53 PM UTC

cwkoss wrote: post #291

thomastjeffery wrote: post #229

Earlier quoted context omitted.

Yes, that is a factor. Other factors include abandoned coal fire plants being restarted for mining. The question is not if there is a factor that is positive, but whether the positives outweigh the negatives. Every source I have seen is confident they do not.

Maybe we should focus regulations on coal fire plants instead of cryptocurrency?

We can and should focus on both.

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

#376

Post by X6S1x6Okd1st » Wed, Sep 08, 2021, 3:19 PM UTC

Ancapistani wrote: post #349

X6S1x6Okd1st wrote: post #312

Earlier quoted context omitted.

And breaking windows spurs the local economy because people will pay to get them fixed.

You’re confusing economic activity with technological progress. Breaking a window isn’t going to be a net positive. If everyone breaks a window and replaces it, every week, at some point it’s highly likely that a more efficient process for window replacement will be developed.

I've never heard the rejoiner to the broken window fallacy that they just aren't breaking enough windows lol.

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

#377

Post by Ancapistani » Wed, Sep 08, 2021, 4:02 PM UTC

X6S1x6Okd1st wrote: post #376

Ancapistani wrote: post #349

Earlier quoted context omitted.

You’re confusing economic activity with technological progress. Breaking a window isn’t going to be a net positive. If everyone breaks a window and replaces it, every week, at some point it’s highly likely that a more efficient process for window replacement will be developed.

I've never heard the rejoiner to the broken window fallacy that they just aren't breaking enough windows lol.

That is the fallacy, lol.

Again, though - we’re not talking about increasing the overall economic output. We’re talking about spending resources to incentivize technological progress.

I’m also not saying it’s a good idea to start doing it because it’ll surely work. I’m only saying that it may well end up having positive effects outside of the primary use case.

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

#378

Post by 99_00 » Wed, Sep 08, 2021, 4:06 PM UTC

el-salvador wrote: post #336

99_00 wrote: post #184

Earlier quoted context omitted.

Ability to implement monetary policy comes from monetary sovereignty. Monetary sovereignty is a spectrum, with countries having high degrees of MS and low degrees of MS. Since El Salvador pegs its currency to the US dollar it has a low degree of monetary sovereignty. Having a low degree of monetary sovereignty is the reason countries like Greece ran into so much trouble after the 2008 financial crisis. Greece doesn't…

Our currency is the USD. The former local currency only exists in collectors hands or old laws.

Thanks for the correction. Do you know how remittances to El Salvador work in practice?

Do people use regulated money transfer services (Western Union) or do they use informal trust based money transfer services?

https://en.wikipedia.org/wiki/Informal_value_transfer_system

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

#379

Post by simiones » Wed, Sep 08, 2021, 4:44 PM UTC

ajkdhcb2 wrote: post #372

simiones wrote: post #366

Earlier quoted context omitted.

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/t…

Do you know what the lightning network is? It changes all of these relationships, and it is key to what we are talking about, but you didnt mention it in this comment. Separately to the lightning network, the security (hashrate, energy usage) is still not directly linked to the number of on-chain transactions that are processed. You can compute "a practical energy/block" specifically for bitcoin but it does not trans…

What do off-chain transactions like Lightning have to do with the transaction costs of the blockchain itself? We can trade bitcoin over HN comments, that doesn't mean that the bitcoin blockchain is involved in our trade.

The whole discussion is about the Bitcoin blockchain itself. Altcoins, lightning, payment apps etc are all entirely irrelevant to this point.

The bitcoin blockchain as it exists today has a pretty well fixed energy cost per transaction. All sorts of things could change this - changes in the protocol to allow bigger blocks, changes in the hashrate that most miners are willing to invest, changes in mining hardware efficiency etc.

But what you are claiming is like saying that it's meaningless to talk about the gas/mile of a diesel Ford Mustang, since you could always change the engine (block size), or change from gas to another fuel (better ASICs), or choose to ship the car by ferry somewhere(use Lightning instead)!

> You can compute "a practical energy/block" specifically for bitcoin but it does not translate to a meaningful energy/transaction value because the quantity of energy used is not directly caused by transactions.

Why does it matter that "it's not caused by " the number of transactions? As long as the block size is fixed, the number of transactions that can be processed by the existing bitcoin network is directly linked to the energy expenditure of the existing bitcoin network. Other hypothetical versions of the bitcoin network could achieve other energy/transaction thresholds. But the one we have today is extremely wasteful.

> Nothing is stopping it. Run your own lightning node and you can do more transactions than what you are erroneously claiming

"Why can't my car do 600km/h, it can only do 200km/h?" "Nothing is stopping it. Board a maglev train and you can do far more than 200 km/h."

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

#380

Post by topranks » Wed, Sep 08, 2021, 5:12 PM UTC

lottin wrote: post #267

solveit wrote: post #68

Earlier quoted context omitted.

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…

What? Securing the blockchain and processing transactions is the same thing. What do you think "securing the blockchain" entails other than processing transactions?

The point is the number of transactions in a block could vary, and not require additional hashpower.

Obviously it's limited now by the blocksize (let's not go there). But the point is the "per transaction" figure is based on the currently imposed limits.