Two questions:
- will those moves make the country a good location for laundering bitcoins?
- generally speaking, is there no other way of profiting from surplus electricity (which essentially, this is)?
- will those moves make the country a good location for laundering bitcoins?
- generally speaking, is there no other way of profiting from surplus electricity (which essentially, this is)?
In terms of profiting from surplus electricity, Bitcoin (or cryptocurrency mining in general) is a great option as it's exceptionally simple to scale up and down in accordance with available cheap surplus. One major benefit that miners are taking advantage of is locating in close proximity to energy stations, reducing the inefficiency of transporting electrical energy over distance. This turns effectively "wasted" energy in to a solidly efficient energy store for infinite amount of time— for example: 1 BTC will always be equal to 1/21000000 of the total supply.
> This turns effectively "wasted" energy in to a solidly efficient energy store for infinite amount of time— for example: 1 BTC will always be equal to 1/21000000 of the total supply.
It's not an efficient energy store if you can't get the energy back, it's just energy usage. Also, yes, 1 BTC will always be the same fraction of the total supply, but the actual value of it varies.
As for the value of 1 BTC, it's value fluctuates if you operate on a base currency which is not BTC, but that is the same for any currency exchange.
(I am suggesting currency, though I also understand that BTC may not be unanimously agreed on as a currency— but in El Salvador's case it is)
Yes but also, even though 1 BTC will always be worth 1 BTC, the amount of work it buys you won't be the same, as with any currency. In theory, you can also store USD for an infinite amount of time (assuming you exchange the paper for new paper when it decays), but it, too, won't hold its value.
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 $1000 was worth way more in 1980 than it is today.
Edit Note: I actually just re-read your comment and realised I misread. I read store value for an infinite amount of time
EDIT: corrected public key, I had written "public/private" for some reason.
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.
It seems you misunderstand. Illicit fiat and extortion can be used to access energy to mine Bitcoin, effectively laundering that illicit fiat.
The underlying problem actually lies in the fiat system, not the Bitcoin one.
How so?
Fiat currencies are exceptionally good instruments for exchange value for illicit purposes. Primarily this is because it is unknown what the total supply of fiat is (although there are reasonable models for estimation) and it's transactional history is impossible to define.
Both of these properties combined (although other factors undoubtably are at play) mean it's very easy for large amounts of fiat to exchange hands without any third parties knowing (i.e cash transactions).
This is the underlying issue that allows fiat currencies to be the best method for transacting for illicit purposes.
In summary, Bitcoin is bad because it allows money laundered using the existing financial system to flow into it. Forget the property, energy and hardware providers for accepting illicit funds. Bitcoin is the real problem.
By you as well!
1. Yes, they are transparent, however mixers are a thing.
2. The 2 things confounding mixers are KYC and volume. El Salvador, a country, is in a position to ignore KYC and thereby promote mixing (laundering as one of the benefits) under its jurisdiction. Now they just have to attract the volume. You could never get away with this in the US.
There's more to it than the bitcoin fundamentals. Laws do matter and they come into play by location.
This point comes back frequently, but it's actually not true.
In order to turn a profit from bitcoin, you need to offset hardware depreciation costs, and that usually means you need to mine 24/7.
Making hydrogen, smelting aluminium, de-salinating water. But bitcoin can be transferred over internet, so the logistics is easier.
Nah. Bitcoin is actually a lot easier to trace than paper US Dollars.
The problem comes from privacy coins like Monero, which arguably should be outlawed (if not already)
You cannot (and should not try to) outlaw maths.
But also: outlaw where? Math doesn't recognize borders; the two are like oil and water.
Are you also in favour of outlawing Tor, E2EE, HTTPS? I am always surprised that some people want privacy outlawed.
Disclaimer: Monero contributor
- of course there are other ways, but given the return on kW/h, what's the _most_ profitable?
Undoubtedly there is, e.g. steel making - with the attendant logistical challenges. But few ways to fairly directly convert electricity into money.