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One year on, El Salvador’s Bitcoin experiment has proven a failure

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Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#151

Post by thinkloop »

Yizahi wrote: post #135
kranke155 wrote: post #109

Earlier quoted context omitted.

Someone needs to explain to me how the Lightning Network actually works, because I find it super sus. How do people make money off transactions as miners if BTC transactions are so cheap ?

People must lock BTC in the "channels" from them to each of the peers they ever want to transact with, in the amount of what they will spend with them in the future. This should produce approximately 10billion*10billion channels in total (so 1^20 whateverellion channels for all humans). Then magic internet machine will solve this Traveler Salesman problem for each transaction. After people realised that this is a cra…

People have realized this a long time ago. The expected configuration is a node-based network like the internet. Messages (money) hop from "router" to "router" until they reach their final destinations through the shortest paths. The "bank" would still be your bitcoin wallet, while your lightning allocation would be like a credit account with every vendor simultaneously. The nodes are routers. The amount you put "at-risk" in lighting only needs to be a minimum amount you need to transact for the day/week/month - and it is not really "at-risk" since there are strong protections built-in.

The general story is that not all transactions are equal. A payment from your cousin for a poker debt doesn't need the fury of a million computers protecting it. Similarly if you have an ongoing relationship with a vendor, and many other examples. In real-life there are vastly differing trust-profiles between transactions. It's ok to trade some security for some efficiency sometimes. It doesn't make sense to treat them all the same.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#152

Post by el-salvador »

hailwren wrote: post #133
yuan43 wrote: post #120

The policy only ever made a little sense. What El Salvador desperately wants is a currency it can inflate to pay for the stuff it can not afford. In this regard, it is no different than any other country. What it had was a currency it does not print (US dollar) and for which there is an ongoing international shortage. What El Salvador got with Bitcoin was yet another currency it does not print and for which there is…

> Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own. This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina. What you really don't want as a layperson in Latin America, is for really any third party -- but especially government third parties, to have control o…

> > Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own.

I agree with that. For example linking the U.S. banking system via ACH/Fedglobal with the El Salvador one as Panama and Mexico have done to bring down transactions costs.

https://www.frbservices.org/financial-services/ach/fedglobal

> This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina.

But El Salvador is not Argentina though. El Salvador had never been affected by unstable currencies or unfavorable exchange rates set by their governments.

Bitcoin on the other hand, has been the first experience for Salvadorans, of having a currency that loses 50% of its value.

I'm just judging from their accents in Youtube videos, but part of the Salvadoran bitcoin wallet developers were from South American countries, so it seems to me that they were trying to solve a problem that existed in their countries, but not in El Salvador.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#153

Post by mostly_harmless »

My theory behind this is there are many BTC holders with cap gains (or assets acquired through illegal methods) that can't easily cash out, and El Salvador's BTC support was a grab at capturing tourist revenue through state sponsored money laundering.

Through that lens, it would be interesting to see if there was any anomaly in GDP, luxury goods sold, real estate sales, or tourism in the country.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#154

Post by hailwren »

el-salvador wrote: post #152
hailwren wrote: post #133

Earlier quoted context omitted.

> Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own. This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina. What you really don't want as a layperson in Latin America, is for really any third party -- but especially government third parties, to have control o…

> > Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own. I agree with that. For example linking the U.S. banking system via ACH/Fedglobal with the El Salvador one as Panama and Mexico have done to bring down transactions costs. https://www.frbservices.org/financial-services/ach/fedglobal > This is just not true.…

> But El Salvador is not Argentina though. El Salvador had never been affected by unstable currencies or unfavorable exchange rates set by their governments.

You're conflating two things. Inflation has little do with how well a remittance system functions. You wouldn't say that Western Union's system functions better or worse because of the currency it is denominated in.

> so it seems to me that they were trying to solve a problem that existed in their countries, but not in El Salvador.

While not inflation, El Salvador doesn't have a great history of fiduciary responsibility either. [1] 1 - https://en.wikipedia.org/wiki/History_of_El_Salvador#Corrupt...

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#155

Post by njarboe »

yamtaddle wrote: post #124
UncleMeat wrote: post #73

Earlier quoted context omitted.

I cannot think of a single individual item that I buy at the grocery store that has doubled, let alone more than doubled.

IIRC the giant flats of Costco eggs went up to 3-4x their former price over the last year or so. Still a great deal, they're just not "holy shit that's practically free!" like before.

Do you happen to live in California? If so, most of the egg price increase is likely due to compliance with Prop 12 regulations.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#156

Post by Yizahi »

thinkloop wrote: post #151
Yizahi wrote: post #135

Earlier quoted context omitted.

People must lock BTC in the "channels" from them to each of the peers they ever want to transact with, in the amount of what they will spend with them in the future. This should produce approximately 10billion*10billion channels in total (so 1^20 whateverellion channels for all humans). Then magic internet machine will solve this Traveler Salesman problem for each transaction. After people realised that this is a cra…

People have realized this a long time ago. The expected configuration is a node-based network like the internet. Messages (money) hop from "router" to "router" until they reach their final destinations through the shortest paths. The "bank" would still be your bitcoin wallet, while your lightning allocation would be like a credit account with every vendor simultaneously. The nodes are routers. The amount you put "at-…

So user gets a credit at the Not-A-Bank router-node for the full amount of what he intends to spend. Tell me, how exactly does this differ from a bank? Except with less oversight?

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#157

Post by hailwren »

georgeecollins wrote: post #148
hailwren wrote: post #133

Earlier quoted context omitted.

> Even so, this scheme only makes a little sense. A better approach might have been for the government to have set up a USD-based remittance program of its own. This is just not true. Crypto as foreign remittance has been proven and is working quite well in Argentina. What you really don't want as a layperson in Latin America, is for really any third party -- but especially government third parties, to have control o…

That's a depressing statement about Argentina and Bitcoin. I would be much more interested if Bitcoin were useful for legal transactions in countries with stable currencies and banking. Bitcoin enthusiasts can be so anti-government that they seem to think ever government will turn into a basket case like Argentina. Perhaps every government gets into trouble eventually. But you could wait a couple lifetimes for it in…

Ok, but it hasn't been so long since presidents in El Salvador were siphoning public funds. https://en.wikipedia.org/wiki/History_of_El_Salvador#Corrupt...

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#158

Post by yamtaddle »

njarboe wrote: post #155
yamtaddle wrote: post #124

Earlier quoted context omitted.

IIRC the giant flats of Costco eggs went up to 3-4x their former price over the last year or so. Still a great deal, they're just not "holy shit that's practically free!" like before.

Do you happen to live in California? If so, most of the egg price increase is likely due to compliance with Prop 12 regulations.

Nope, midwest.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#159

Post by pjkundert »

pjkundert wrote: post #147
moomoo11 wrote: post #108

I want to wake up one day and cryptocurrency and anything related to it just doesn’t exist. Man that’d be a great day. Remove grifters, acquire actual progress.

Ya, back to where globalist bankster elites control every aspect of our lives. Ah, the good old days... ;)

Seriously, though: having globally accessible, indelible and irrefutable shared ledgers containing balances which cannot be forged, whose operation cannot be stopped by any malicious, busy-body bureaucrat? This is a God-send. It is already the gold-standard for international payments for me, a small computer consultant.

Think of all the poor slobs in Russia who've been steam-rolled by these sanctions, and can no longer sell their software or get paid for their little Apps. Whatever you might think about Russia -- "group punishment" is not cool; these are people like you and me who cannot now feed their families. To them, Bitcoin (and other even more capable cryptocurrencies now in development) is the difference between life and death.

So, it might be worthwhile to ... reflect, if we find ourself agreeing with the obese head banker at BIS or weird Klaus Schwab, when they say they want to control all aspects of personal commerce. They can pound sand -- I'm going to continue to work to move cryptocurrency technology forward.

Re: One year on, El Salvador’s Bitcoin experiment has proven a failure

#160

Post by SketchySeaBeast »

koonsolo wrote: post #100
gopuck16 wrote: post #92

Earlier quoted context omitted.

What you've stated here is your experience, now if you try to extrapolate the thinking/investment model you've used to large number of people - there is very limited upside and very high downside.

No it stays the same if you have an investment portfolio and only invest max 5% in high risk assets. Assume you invest 1% of your portfolio in Bitcoin. What is your downside? 1%. Not that high, is it? What is your upside? Maybe x100, so double your entire portfolio. Right now, you came late to the game, so don't expect a x100. The risk is probably still the same, but the upside way lower. But when Bitcoin was still y…

If we think like this why wouldn't I invest 1% of my portfolio in lottery tickets? At worst lose 1%, at best x1,000,000 upside?
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