El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin • Hacker News Board

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#281

Post by 1917athrow » Fri, Jun 11, 2021, 11:03 PM UTC

randomhodler84 wrote: post #272

bootlooped wrote: post #249

Earlier quoted context omitted.

I don't think want vs need is as subjective as you say. I could assert that I need a Maserati and no other vehicle will fit my requirements, and it would be pretty easy for others to counter that either my supposed need is really a want, or the requirements are arbitrary and unnecessary. Likewise I think your needs regarding crypto are more of a want. What would be the consequence if you didn't get that? Would you di…

Life without bitcoin: one can watch as the value in the output of ones labor encoded in fiat decreases over time, punishing saving and devaluating our lives work; or One can opt-out of this and store it in something that does not, and rewards saving. It also has the benefit of security, integrity, audit ability, censorship resistance, transferable over arbitrary communication channels, etc. Most folks live paycheck t…

> Once you get it, there is no other option to avoid growing poor slowly.

So holding stock in companies that, I don't know, actually produce something isn't an alternative? That just doesn't pass the sniff test.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#282

Post by jMyles » Fri, Jun 11, 2021, 11:05 PM UTC

oogabooga123 wrote: post #44

jMyles wrote: post #34

Earlier quoted context omitted.

> makes BTC fiat Did I miss a memo? Or is this a sort of Freduian slip wherein you said 'fiat' when you meant to say 'official'? It seems to me that we've been conditioned to conflate the two.

That’s what “fiat” means. Did you have a Freudian slip wherein you said “fiat” when you meant to say “debt based central bank monetary system”?

From MW for 'fiat'[0]:

> a command or act of will that creates something without or as if without further effort

A fiat currency is one whose supply can be inflated by a command or act of will. The supply of Bitcoin cannot be inflated in this manner, so it's not a fiat currency. As properties, official and fiat are orthogonal. A currency can be one, or both, or neither.

0: https://www.merriam-webster.com/dictionary/fiat

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#283

Post by 1917athrow » Fri, Jun 11, 2021, 11:06 PM UTC

zoomgyal wrote: post #257

thehappypm wrote: post #248

Earlier quoted context omitted.

A: Bitcoin has inflated 40% in value in the last month. B: This is probably the strongest argument for Bitcoin and the original vision. C: Sending BTC is immediate but since you can’t really use BTC to buy much (yet) you still need to sell and wait for funds to clear, which takes about as long as just wiring money.

When OP talks about "inflation" they're talking about the amount of money entering the money supply. Bitcoin didnt "inflate" even though it got more expensive. The price did, not the supply. The supply of BTC is algorithmically programmed and there will only ever be 21 million produced. You can't print more Bitcoin at will but a government can print their fiat currency, for better or worse.

Just a nit: there can be more than 21 million if the community forks and migrates over to a version where the algorithm has been changed.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#284

Post by garydevenay » Fri, Jun 11, 2021, 11:07 PM UTC

throwawayffffas wrote: post #85

garydevenay wrote: post #59

Earlier quoted context omitted.

> In theory, you can also store USD for an infinite amount of time This is actually not true, as 1 USD does not equal a static percentage of all USD. If you look at the stock-to-flow of storing value in USD compared to Bitcoin or even Gold, it's immediately apparent that USD or central bank backed fiat currency is an exceptionally inefficient way to store value as it's being debased at alarming rates. This is why $10…

I would point out that 1 BTC does not equal 1/21000000 of the total supply forever. For three main reasons a) wallet keys get lost making stored bitcoins unavailable. b) The developers/community may very well decide to change the total amount of bitcoins available in the future. c) With the rise of quantum computing it is conceivable that the public key encryption that is used to secure the wallets may be broken in t…

> wallet keys get lost making stored bitcoins unavailable

This does not remove Bitcoin from the network, just because it is never spent.

> The developers/community may very well decide to change the total amount of bitcoins available in the future

Actually it's not possible. You can fork the network if you get some level of consensus from developers, miners and node runners (not to mention a community that is willing to accept their value be debased) and increase the supply, but then by definition your coin is not on the Bitcoin chain, it is on your new forked chain.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#285

Post by randomhodler84 » Fri, Jun 11, 2021, 11:08 PM UTC

1917athrow wrote: post #281

randomhodler84 wrote: post #272

Earlier quoted context omitted.

Life without bitcoin: one can watch as the value in the output of ones labor encoded in fiat decreases over time, punishing saving and devaluating our lives work; or One can opt-out of this and store it in something that does not, and rewards saving. It also has the benefit of security, integrity, audit ability, censorship resistance, transferable over arbitrary communication channels, etc. Most folks live paycheck t…

> Once you get it, there is no other option to avoid growing poor slowly. So holding stock in companies that, I don't know, actually produce something isn't an alternative? That just doesn't pass the sniff test.

Stock is good too, any asset to escape fiat; but it’s the currency properties of bitcoin that have advantages over it - like 24/7 market. Not to mention portability. Transferability. Self-custody.

The valuation of companies should reflect production, however any sensible extrapolations of thus in recent times are no different than speculation in cryptocurrencies. It’s all perception. That’s all money is — a shared delusion that something stores value.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#286

Post by jMyles » Fri, Jun 11, 2021, 11:11 PM UTC

NovemberWhiskey wrote: post #225

jMyles wrote: post #207

Earlier quoted context omitted.

By whose fiat can the supply of Bitcoin be inflated? And are precious metals fiat by the standard you've laid out? Or are they commodities strictly on thin premise that you can use silver as a disinfectant, etc?

> By whose fiat can the supply of Bitcoin be inflated? That's not what "fiat" means in this context. Fiat money is simply money that is asserted to be valuable. Control over issuance of money by those who assert the value of money is not an essential element of fiat money. For example, the US dollar is adopted as the currency of the Republic of Palau, and yet the Republic of Palau has no control over the US dollar. D…

> Fiat money is simply money that is asserted to be valuable.

No. This is absolutely not the historical or academic definition of this term.

From investopedia:

> Fiat money gives central banks greater control over the economy because they can control how much money is printed. [0]

To (in the passive voice, no less) that any money which "is asserted to be valuable" is fiat money makes every object ever valued by any human into fiat money.

Moreover, it manufactures consent because it takes away the crucial ability to talk about money which can be capriciously inflated vs. money which cannot. And being in the latter category is, according to Bitcoin proponents (heck, according to me), among Bitcoin's strengths.

0: https://www.investopedia.com/terms/f/fiatmoney.asp

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#287

Post by randomhodler84 » Fri, Jun 11, 2021, 11:16 PM UTC

1917athrow wrote: post #283

zoomgyal wrote: post #257

Earlier quoted context omitted.

When OP talks about "inflation" they're talking about the amount of money entering the money supply. Bitcoin didnt "inflate" even though it got more expensive. The price did, not the supply. The supply of BTC is algorithmically programmed and there will only ever be 21 million produced. You can't print more Bitcoin at will but a government can print their fiat currency, for better or worse.

Just a nit: there can be more than 21 million if the community forks and migrates over to a version where the algorithm has been changed.

That is not true, and is a trick to try to pollute the discussion about bcash or some other nonsense. There will only ever be 21 million coins in Bitcoin by definition. If there are more — for example fractional reserve “backed” tokens on EVM chains — or even chain fork scamcoins, these are not Bitcoin. Bitcoin is UTXOs on mainnet. And 21 millionth is produced near 2140.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#288

Post by dragonwriter » Fri, Jun 11, 2021, 11:18 PM UTC

jMyles wrote: post #282

oogabooga123 wrote: post #44

Earlier quoted context omitted.

That’s what “fiat” means. Did you have a Freudian slip wherein you said “fiat” when you meant to say “debt based central bank monetary system”?

From MW for 'fiat'[0]: > a command or act of will that creates something without or as if without further effort A fiat currency is one whose supply can be inflated by a command or act of will. The supply of Bitcoin cannot be inflated in this manner, so it's not a fiat currency. As properties, official and fiat are orthogonal. A currency can be one, or both, or neither. 0: https://www.merriam-webster.com/dictionary/f…

“Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it”. [0] (Commodity-representative/redeemable currencies cam be created at will, but are also not fiat money.) Bitcoin is not fiat money, but not for the reason you present, which tries to use a definition of fiat from outside of the specific context to create a new definition for it in this context, where it has a well-established definition.

[0] https://www.investopedia.com/terms/f/fiatmoney.asp#:~:text=F....

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#289

Post by jMyles » Fri, Jun 11, 2021, 11:23 PM UTC

dragonwriter wrote: post #288

jMyles wrote: post #282

Earlier quoted context omitted.

From MW for 'fiat'[0]: > a command or act of will that creates something without or as if without further effort A fiat currency is one whose supply can be inflated by a command or act of will. The supply of Bitcoin cannot be inflated in this manner, so it's not a fiat currency. As properties, official and fiat are orthogonal. A currency can be one, or both, or neither. 0: https://www.merriam-webster.com/dictionary/f…

“Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it”. [0] (Commodity-representative/redeemable currencies cam be created at will, but are also not fiat money.) Bitcoin is not fiat money, but not for the reason you present, which tries to use a definition of fiat from outside of the specific context to create a new de…

> can be inflated by a command or act of will

> not backed by a physical commodity

Aren't these two ways of stating the same monetary property? The reason that fiat currencies can be created by fiat is they aren't backed by anything.

> Commodity-representative/redeemable currencies cam be created at will

No they certainly can not. Not without an actual supply of the commodity. At least not in the case of redeemables. Obviously some 'representative' currencies, like those that Zimbabwe has tried, have ended up turning into fiat.

Re: El Salvador Plans to Use Electricity Generated from Volcanoes to Mine Bitcoin

#290

Post by rsj_hn » Fri, Jun 11, 2021, 11:24 PM UTC

pocoloco wrote: post #274

rsj_hn wrote: post #266

Earlier quoted context omitted.

> The thirst for USD around the world is increasing and all the so called printing by the FED is not getting to the other countries and international companies fast enough. This is because all the Fed does is create reserves that it uses to purchase Treasuries on the open market. But when we talk of foreigners demanding USD, what they really demand are treasuries, thus more "printing" (it is electronic, reserves are…

> But the problem for El Salvador is not the technology of monetary systems I do believe that the monetary system IS the problem since El Salvador is dollarized and is subject to a foreign central bank antics while having no say in the matter. Having their own would be marginally better perhaps but IMO bitcoin is a much better solution.

The only reason nations get dollarized is because they do not trust the fiat currencies issued by their own government because the government chooses to extract more from seignorage than the benefits of having the currency or the government is not otherwise trusted to not seize bank accounts. Thus they choose to opt out of their local government-run system. That is an effect rather than a cause. Once that happens, a whole host of other problems occur, from breakdown in credit systems and payment systems to underground economies and loss of tax income. Bitcoin solves none of these problems, which are the core problems. Rather, trying to use bitcoins rather than seashells, gold doubloons, or foreign dollars is just an expression of the population's lack of trust in their own government and switching from one of these alt-currencies to another doesn't help the government at all. What would help the government is enforcing rule of law, establishing trust in financial institutions, providing value for amounts taxed so that there is popular support for taxation and trust that the money is well spent, and establishing faith in the government's currency. That is what would help El Salvador, not hoping that the US government makes it easier for foreign nationals to acquire dollar denominated debt.