El Salvador makes Bitcoin legal tender

Also, the person, let's say they bought Bitcoin at $100 - and they gave it to them at $20,000 - then what they gave is 5% of that amount - and the full amount is actually realized/then paid for/"donated" by others; sure they potentially gave up 90% of the Bitcoin if they could have even realized a significant amount of that without influencing the price too much.

There are hidden costs to economically disrupting developing economies even if it's "for the poor people". For facebook, it was decimating any local ISP growth by snatching their market. For this, there could be any other number of normal payment systems that are squashed even as this BTC patron moves on to pumping bitcoin elsewhere.

> But that's true for renewable energy too. Nothing about the two energy sources are different.

There is one crucial difference: renewable energy is much cheaper. In the quaint units used for electricity trading, solar energy is being typically sold (in PPAs) for US$20–40/MWh in China and India, and every few months there's a new record low price; the latest is US$10.40/MWh in Saudi Arabia this April, but there have been solar PPAs signed for under US$20/MWh all over the world:

https://www.theguardian.com/australia-news/2021/apr/25/insan...

https://www.weforum.org/agenda/2020/10/solar-cheap-energy-co...

https://www.greentechmedia.com/articles/read/merchant-income...

https://balkangreenenergynews.com/saudi-arabia-to-add-3-7-gw...

By contrast, continuing to run existing coal plants costs around US$40/MWh, and US$50/MWh is a more typical wholesale price.

> Please tell me why mining does not incentivize cheaper fossil fuel energy technology in the same way it supposedly incentivizes cheaper renewable energy technology.

Oh, it totally would! If it existed.

We could imagine a disaster scenario in which someone figured out how to turn coal into electricity at US$1/MWh, and also found a hitherto unsuspected giant coal deposit that can be strip-mined, so the cost of mining is similarly low. Massive power plants would immediately be built, heedless of the vehement protests from other countries as well as the hapless villagers living atop the coal, and bitcoin miners would flock to the province just as they now flock to hydroelectric regions, and just as aluminum smelters have always clustered around hydroelectric dams and geothermal regions. The planet would warm up even more rapidly.

But that isn't the world we live in. With the exception of marginal cases like flaring of oilfield gas† and subsidized pricing, fossil fuel energy isn't cheaper. It's more expensive, and not just by a few percent—100%–400% more expensive. That's a contingent fact—it could certainly have happened differently, just as we could happen to live on a planet with abundant platinum in the crust, and fossil fuel used to be cheaper before we extracted all the easily accessible deposits like sea-coal—but it's still a fact. And it seems unlikely to change rapidly, since the bottleneck in exploiting fossil fuels is the cost of industrial-scale heat engines, which are 250 years old and consequently improving fairly slowly. The Parsons turbine, the mainstay of fossil-fuel electricity generation, hasn't changed fundamentally since 01884, although innumerable incremental improvements have raised its efficiency. By contrast, PV's getting cheaper at a double-digit percentage per year.

So, for bitcoin purposes, renewable energy is interchangeable with fossil-fuel energy, just cheaper. But from the standpoint of renewable energy, bitcoin mining has several unique factors to recommend it:

· It's perfectly portable. Portland cement kilns use a lot of energy too, but we don't see renewable-powered cement kilns in Saudi Arabia bankrupting fossil-fuel-powered cement companies in Mexico, Germany, and Akron, because cement is too heavy (per dollar of value) to be economically transported long distances, and so are the raw materials that make it up. Bitcoin, by contrast, can be sent anywhere in the world in under a second, so the new utility-scale solar plants in Chile and Huanghe are competing directly with the dirty old coal plants in Akron. Guess who wins?

· It's perfectly fungible and not subject to import tariffs. A car factory in Bangalore might survive competition from a more efficient solar-powered auto plant in Shanghai by virtue of making cars that are better adapted to local Karnatakan needs, but there's no such thing as a "bitcoin better adapted to local Karnatakan needs". The UK isn't switching to solar energy anytime soon (its average PV capacity factor is 10%, making local PV uncompetitive there) but people in the UK can easily trade using bitcoin mined in China or Portugal.

· It's very elastic: you can turn a bitcoin farm off in under a second if the price of power goes high, and turn it back on again in a few minutes when the price goes back down. (Try that with a steel mill, or even an aluminum smelting pot.) Moreover, you can load it onto the back of a truck and drive it to a different province if power is going to be expensive for a long time—an ability that has sometimes been abused by hydroelectric miners who drive their farms to regions with underutilized coal plants in the dry season, although that alternative seems to be, if you'll pardon the pun, drying up.

· It doesn't produce pollution of its own, the way cement kilns and paper mills do.

· It's very energy-intensive; the cost of energy is typically about half the total cost of bitcoin mining. An average product of the economy is about 11% energy, so a 20% increase in the cost of energy raises the price of the product by 2.2%. But a 20% increase in the cost of energy raises the price of bitcoin mining by about 10%, which is easily more than your entire profit margin. This means that bitcoin experiences much stronger pressures to seek out cheaper energy than most other industries.

Now, obviously the whole zero-sum competition aspect of bitcoin mining is bad and wasteful, benefiting nobody, and I hope we find a workable alternative soon; but it's fortunate that, at least at the moment, that wasteful competition is subsidizing renewable energy.

Does that help?

______

† Mining bitcoin from oilfield gas that would have been flared anyway doesn't promote global warming, it just makes the gas less likely to accidentally get vented without burning, which has even worse global-warming effects.

How can you find fault with someone trying to make more money? This is capitalism at work. Not saying the energy argument for crypto is moot, but it is certainly blown way the heck out of proportion. Let's regulate lithium mining while we are at it, no?

Economic advantage is a like gas in a vacuum, it will spread everywhere it can, until it cannot.

Your dissertation seems to be unrelated to this conversation. Your topic sentence says “thats not an argument.” Or “thats not how it works” and proceeds to not disprove that at all, derailing every conversation with something completely unrelated

This is against HN guidelines

The total value of the miner reward does increase with price, but because of halvings every 210,000 blocks it's a slower rate than the price increases on its own.

Note here, https://www.blockchain.com/charts/miners-revenue, that the current miner reward (in USD) is currently lower than it was at the peak of the 2017 bull run, despite the unit price being approximately double.

A lightning node doesn't need to be on 24/7. To prevent your counterparty from stealing your funds you only need to be online every 2 weeks (or never if you use a watchtower service). Syncing is also fast, so 1 hour of internet access/electricity should allow you to catch up 2 weeks of blockchain history.

>Also remember that the hardware cost of a full node is likely more than a month’s wages.

Are there no thin wallets for lightning?

You mean that if you store cash it will magically disappear once you hit a certain quantity or age?

The stack of hundred dollar bills under my mattress disagrees with you.

Electronic money is never lost, not like those pounds, pennies, dollars, quarters. Losing money, takes out of circulation. While not much is taken out, it might be enough to create a base load of inflation - money becomes more scarce and therefore more expensive.

Low inflation leads to asset price bubbles - stock market and housing in particular. It also suppresses wage inflation. So housing becomes more expensive and wages do not keep up, making housing less affordable. A double punch.

Low inflation leads to more financial speculation as people with access to capital look to diversify away from a limited pool of assets (Bonds and cash become less desirable in low inflation regimes). Buying housing and leasing it out is a good use of capital. However, this leads real-estate investors to drive increases in rent as they chase yield and airbnb-empires also drive rental prices - as this is one way of driving yield.

High rents combined with low wage growth means that people's lives become priced for perfection and one small deviation can knock them out of equilibrium - losing their home / rental property when they lose their job.

All because governments and technology are conspiring to keep inflation low. Using cash is the person-on-the-street's only weapon to fight it.

For perhaps the same reasons as you, I decline/turn-off auto-pay of any services I subscribe to. I actually cut checks every couple of weeks to pay bills.

I need a regular reminder of how I am being nickeled and dimed. My big fear is a constant drain on my account from a service that I had forgotten about or just the accumulative damage a lot of services add up to.

To be sure, our corporate overlords love the auto-pay, cashless society they have created for our convenience.

Not so with your so-called digital dollars.

An actual digital dollar would have no transaction fee whatsoever.

Numbers in a retail bank's ledger are not digital dollars. They represent an obligation of the bank, and not direct ownership of dollars.

Digital dollars exist, but only banks can hold them, as they're the only ones with accounts at the central bank. The rest of us use retail bank accounts, which are the equivalent of custodial wallets in the crypto world.

https://en.bitcoin.it/wiki/Script

Multisignature requires a quorum k-of-n signatures to unlock funds, for example 3 of 5 keys (or 2-of-3, 2-of-2, etc):

https://en.bitcoin.it/wiki/Multi-signature

So you can have a wallet that requires 2 signatures to move funds, where you control 2 signing devices (mobile app + hardware wallet) and the third-party holds the 3rd key. Normally you manage all transfers without involvement of the third party, but if one of your keys becomes inaccessible they can help you sweep your funds to a new set of keys.

Additional resiliency and security is gained by increasing the quorum to 3-of-5. You control a mobile app plus 3 hardware signing devices, which are ideally distributed geographically. This increases reliability in case something happens at your primary site (like your house) and increases security by requiring an attacker to physically visit multiple locations. The 5th key is held by the recovery service.

tl;dr: https://keys.casa/how-it-works

Regarding your second argument: Change in the financial system does not happen by itself. You need severe pressure. DeFi has a huge potential to put pressure on the traditional financial markets to make them more accessible to the poor and limit their excesses (monetary inflation).

The government could of course “ban” Bitcoin and DeFi. But since they are decentralized it can’t make them really disappear — only more cumbersome to get into (and out of), for example, by closing down centralized exchanges. But the government can’t really prevent you to meet a “dealer” cashing in/out on your cryptos.

And what do you do when politics are fully captured by corporate and oligarchical interests?

The majority of bitcoiners see no way out of our current political system. The dollar underpins the US hegemony.

Bitcoin wouldn't be necessary if the government would allow alternative currencies, but until bitcoin, it had squashed numerous attempts at alternatives.

So to say that we need to solve it politically misses the point. Bitcoin is a solution to solve what is seen as a political mess. Further, politics is just non-violent war. This _is_ a political method.

> their rich friends will just find a way to use it against you

I don't entirely disagree. I see bitcoin as a start. The lightning network already brings some anonymity to transactions, but it could be made to do better.

Monero (XMR) is a privacy based crypto that already does so and can currently do 1500tps on chain (BTC does ~7). Crypto is war against oligarchs motivated by failed traditional politics. Monero and other techs like decentralized exchanges are a step up in weaponry of this war.

And this isn't the best argument for bitcoin. The best argument for it is the limited supply.

Considering the BBC has a dog in the fight, I believe that's probably why it doesn't mention the anti-inflationary argument that is the true reason a country would want to transact in BTC.

The USD is available to the US to make more of at any time. Imagine trying to run your government on someone else's currency. You'd always be at a disadvantage.

In the past the US hegemony has regime changed several countries that tried to use their own currency. (See Lybia)

Further, why walk around with all of your BTC available to you? If you really have enough to worry about gangs stealing it, put it in cold storage or on an exchange, but don't carry access to it around in your pocket the same way you wouldn't carry cash around in your pocket.

If the payee has a Greek bank account I suppose? But then it means that if both payer and payee have a n26 bank account and use it in Greece, they don't have to pay this fee anymore, right? So why would they use Greek banks?

I just don't see how this 3 EUR fee still exists given the current competition.

Don’t you understand? The system is broken

The third-party can't steal your Bitcoins. Assuming your node is online 24/7, you can verifiably cash out your Bitcoin on the blockchain at any time.

The third-party doesn't hold your Bitcoin– both parties can close the channel and cash out, again without any trust.

Your Bitcoins can't be stolen by a third-party, unless you and your watchtower fail to broadcast a transaction with proof there was a channel transfer.

I read watchtowers are used to keep third-parties honest when nodes aren't online 24/7. https://blog.bitmex.com/lightning-network-part-4-all-adopt-t... They don't hold your keys.

Imagine a transaction as being a simple cryptographic signed message that sends 1 BTC to someone, you just broadcast it to the network and it gets recorded immediately. But if you expect to continue transacting with the same person, instead of broadcasting the transaction, you can hold on to it and keep iterating on top of it with new balances, each time signing the transaction so that your counterparty can always go to blockchain to claim their coins.

There's obviously some mechanism to avoid broadcasting old state and making sure you actually have the funds, etc, but you can't flood the network, even if you tried, you'd only be flooding your immediate neighbor which still charges fees, but much smaller fees than the blockchain. There's also mechanism for connecting those channels, so you don't need to have a direct channel with someone you want to pay, you just need a path to them.

This solution doesn’t have to be crypto at all, however. I’ve been to China where even food carts have QR codes printed on them for people to take wechat pay and ali pay.

LN adoption is growing very nicely (1ml.com), there are lots of wallets and users now.

Lightning scales with the number of transactions, but does not scale with the number of users. For that it still needs the bitcoin network to verify, and you're back at your transaction bottleneck but with added complexity.

Fiat currency not controlled by major economic powers has been know to do that (and there are a few cases for major powers, too, in conditions like just after losing major wars with other such powers.)

Conversely, if you aren’t a major economic power, a fiat currency that is controlled by one is at the mercy of other countries. (And, even if you are a major power, your currency has some exposure to your relationships with othe countrieds, though “at the mercy of” may be too strong.)

Not all fiat is “the USD from the perspective of the US”.

Instead USD drops by ~95% over a 100 year period[1].

1: https://www.statista.com/statistics/1032048/value-us-dollar-...

I am happy to pay and be paid in cryptocurrency, but I wouldn't want to allow my rainy day fund or funds set aside for specific purchases (i.e. maintaining continuity of life/business) to have exposure to the extreme volitility that cryptocurrencies have.

Just because one of the many potential use cases of cryptocurrency doesn't seem to be panning out very well doesn't mean that the other use cases are invalid.

Also "fairly trivially traced" can be naive. Here's one scenario from a million possible scenarios. You hate politician John Doe and happen to know me. I have a stash of millions in ransom money on my public anonymous wallet.

So I start sending money to organizations close to John Doe, and John Doe himself, implicating him in crime. You give me cash personally for a job well done. I just laundered some of my money and used the "trivial to trace" money against someone else.

Things aren't as simple as you may believe. Sure, if you're stupid and directly cash out your coin to your persona, you'll get traced and caught.

But money is money, it's a resource you can use in countless ways to move the pieces on the board around and get someone to pay you for it.

Here's another example. I start donating 100k USD worth of coin to bunch of charities. You may assume one of those is a pawn. But you can't prove who it is. Well, I happen to know one of the charity owners. I give him 30%, I just laundered 70k. I also lost some, but eh? I can blackmail some more people. Other people's money are cheap to me when I risk nothing by taking them.

Those are relatively simple schemes. If you sit down and think, you can come up with much better ones.

For example what I use this ransom money to pay for some other criminal activity? Like kill someone. I move the problem to them, but they can pass the ball around more until you can't prove WTF is happening. You have no idea whom those wallets belong to and why are there transactions happening. You can trace the money but you have no idea after some point if the recipient has any clue about the origin, or if there's criminal intent.

Here's another weakness. Who has worldwide authority over crime? No one. So if I shift my coin to the opposite side of the world and cash it there, due to fragmentation, lack of cooperation and so on, I may have cashed out before someone manages to even make the right calls to begin negotiations on cooperation.

Yes you can run LN in a non-custodial manner, but the user experience is really bad.

This is also a statement that need clarifying. What do you even mean when you say "on fundamental level"?

> lots of solutions that trade decentralization and independence for performance, lots of hype and marketing, lots of bells and whistles of questionable value, lots of money being made in scams and rug-pulls.

All of this can be said about btc too. Except the part about trading decentralization and independence for performance. Btc has really bad performance and decentralization and independence (from what?) can be questioned.

In that situation, I would look into setting up an offshore corporation with a bank account to hold the income, and then get a debit card that could be used in Argentina.

This would be a hedge against the volatility of bitcoin (but maybe you see that as an advantage) and it would not require you to get cash from strangers, which I personally would be a little hesitant about, since there is a non-zero chance you are accepting dirty money and/or helping people circumvent currency controls, but I do not know the laws of Argentina, and whether or not you are violating any laws here.

As I said on my previous post, you are circumventing local laws and taxes while living in Argentina by using Bitcoin. TransferWise and Paypal may not work in Argentina (I'm pretty sure TW works but just doesn't offer you a favorable exchange rate), but you could still receive a normal bank transaction from abroad and sell your dollars cheaper as stipulated by the laws in the country you choose to live in.

>Argentina does have a little bit of income tax, which I'm not allowed to pay (I tried, but the tax office turned me away because they don't accept income taxes from illegal immigrants), but most of the tax revenue here comes from the VAT, which I pay just like everyone else, because it's included in the price of everything. Exports of information technology services, which is what I do, are exempt from VAT. In fact, when I had a company here, before I was an illegal immigrant, I had to pay a lot of extra VAT that was supposed to get refunded, but it never was, because following that aspect of the law is too inconvenient to the government. (Because all my revenue came from exports, you see.) One accountant suggested that I bill a friend's domestic company for fake services in order to get the refund. I refused.

Not true. Illegal immigrants can be registered as autonomous workers, and since you earn in dollars you probably would fall in the 'Responsable Inscripto' category and have to pay autonomous worker fees + 35% of what you earn. You are just choosing not to. Also, the VAT is not the lion's share of tax collection in Argentina, but income taxes.

>I understand that if you've lived in a country all your life with a more or less reasonable government, all of this sounds ridiculously implausible.

I'm Argentinian. I simply chose to migrate away to a country without stupid taxes or laws rather than having an unfair advantage over my countrymen by avoiding them abusing the low-attachment-to-where-I-work-from nature of my career. The local tech scene in Argentina is filled with guys like you who avoid as many taxes as they can (except VAT, of course) using crypto or offshore accounts and then goad on the internet about it. You are lucky tax evasion is not a jail-able offence in Argentina, probably because the corrupt politicians are cut from the same cloth.

Sorry if I come across as too harsh on my opinion on tax evasion. I think it's an understandable crime in Argentina, but it somehow rubs me the wrong way when people openly discuss it like this on the internet.