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I agree with the rest of your comment, but there's some sleight of hand here:

> 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.

I think that's a fair comment. Re-using the word "energy" in that sense is potentially misleading to always mean electrical energy.

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)

> 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.

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.

> 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 $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

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 the next few decades rendering bitcoin unusable.

EDIT: corrected public key, I had written "public/private" for some reason.

> 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.

You know how much each wallet contains but not whom it belongs to. Hypothetically, if you cannot use a western exchange you might figure out how to buy Hondurian assests, and then resell for dollars. It entirely depends on how Honduras will setup KYC laws, if any at all.

> it's exceptionally simple to scale up and down in accordance with available cheap surplus.

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.

> this seems to be a majorly misunderstood concept.

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.

Are lightning transactions completely transparent?

The transactions pass through generally only 1-2 nodes which will be required to log everything unless they want to risk punishment for laundering illegal BTC, and people dont want to close their channel and end up with illegal BTC without evidence of how it happened, so yeah. There are huge problems with trying to build fungibility on top of a traceable foundation.

So then lightning network transactions are not automatically transparent, then. Transparency depends on the willingness and ability of nodes to log transactions, and then to share those records.

There are many further privacy issues on top of that that allow third parties to trace payments, so the current design is totally insufficient to be called not-transparent

> this seems to be a majorly misunderstood concept.

It seems you misunderstand. Illicit fiat and extortion can be used to access energy to mine Bitcoin, effectively laundering that illicit fiat.

This scenario doesn't have any particular features that make access to energy or mining bitcoin the differentiating factor. Illicit fiat and extortion can be used in order to launder illicit fiat in many ways.

The underlying problem actually lies in the fiat system, not the Bitcoin one.

> The underlying problem actually lies in the fiat system, not the Bitcoin one.

How so?

> 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.

Wouldn‘t the money already need to be laundered to buy energy with it in the first place?

Iran doesn't need to launder money to buy electricity in their own country.

Wow this is perhaps the best critique of Bitcoin yet.

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.