Most Salvadorans have already ditched their national Bitcoin wallets
restofworld.org
restofworld.org
For a government program rolling out new technology, that actually seems quite impressive.
I'm just impressed that a small, developing country could roll out a new technology so fast.
>> Not if the technology is a currency. I think this finally ends the idea that bitcoin can be used for day-to-day transactions.
> The program started less than a year ago. I think it's way too early to say that. So far, it seems like people prefer still transacting in dollars, but that may change over time.
Isn't that a lot like saying "give Google+ time, it may catch on eventually"? Most users tried and rejected it.
Add in transaction fees of several dollars each and the idea of buying a pizza with bitcoin becomes pure fantasy.
If they are printing money I'd love to know how.
Because of this threat fiat printing will be never get to the point that BTC is a good store of value. It has been a huge success at what Satoshi was railing against, but will be a huge failure for the Michael Saylors of the world.
I have no idea if Bitcoin will ultimately be successful, but it is telling to look at the powerful people who are the most vocal against it.
You ignore the obvious for some farfetch conspiracy
The first step is realizing that the central bank fiat systems are designed to be corrupted for the benefit of the people issuing the currency and their associates. Bitcoin may or may not successfully counter that, and Bitcoin may not necessarily be less corrupt.
Weren't much the same things said about gold pre-Bitcoin?
Bitcoin has failed for on-chain payments as described in this article, this paper [0] and it's own white-paper.
[0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
But over the past few weeks I've become really unsettled as I've dug into the history of bitcoin that I missed - the 2013-2017 Era say, when bitcoin really did fail at its core goal of being a currency. It has undeniably failed. That isn't to say it isn't finding a new use - but the whole ecosystem is missing that core currency use case. We're sort of seeing attempts at it with lightning network and stablecoins - but these are toys.
All this to say, I agree with you, and I'm horrified that people will ignore and write off the experience and history offered by people who were there so they can jump on the latest fad - in this case a polarized bitcoin good/bad opinion.
The only thing that has failed is the detractors complaints, meanwhile actual things have happened in the world.
Anyone can run a LN node; you are free to open channels and interact with the network without any centralized controller. For any definition of centralized I know (say, 1 big api provider, or a collection of PoS stake nodes), this does not apply to LN.
There is no censorship possible in this construction — indeed the peers routing the payments don’t even know the originator, just liquidity levels between their channels. Analogous to onion routing — how can a peer censor a circuit if they don’t know the originating and destination endpoints?
Calling Lightning centralized is something an ignorant precoiner would say. Really, rvz doesn’t know what they are talking about.
And somehow you do? Assuming you have read both the paper I linked to and this article? I know it's difficult to read the cold hard truth and evidence on what the Lightning Network has become and will tend towards to in the future via the analysis and inspection. But of course, why would anyone expect someone who calls themselves 'randomhodler' or a Bitcoin maximalist to understand that? Since to them, anyone critiquing anything related to 'Bitcoin' will be like attacking their identity, investment and the technology all in one?
So somehow according to you, it is not 'centralized by design' as the paper has clearly demonstrated, and Bitcoin has somehow 'succeeded' in on-chain peer-to-peer electronic payments as described in the white-paper, due to the Lightning Network which that is an off-chain L2 solution and doesn't directly use the blockchain?
The problem with using anecdotes is that it is not evidence or a concrete refutation against the paper. "I can run one myself" isn't the point. The actual reality has been outlined by the paper on what happens when the Lightning Network grows and it leads towards inevitable centralization of these hubs with the most liquidity (take a guess who runs those hubs) - creating a worse version of the current traditional system without directly using the blockchain for on-chain payments with a volatile ' store of value' as a 'currency' and altogether contradicting the point of Bitcoin.
The whole point of it is to be used for on-chain payments, a digital currency and a P2P electronic cash system and it is evident that in El Salvador, the paper I linked and the inevitability of the LN have clearly demonstrated that this experiment has failed in all of that.
If that's not a failure, then I don't know what is.
I don’t disagree with their conclusions, however I don’t think it follows with your conclusions. Nor do they really matter today. For one, they don’t actually have the visibility into the transaction volumes, just aggregate channels, so their analysis is limited to distribution of value — analogous to blockchain analysis that only looks at output balances and their associated other outputs. Additionally, this space moves fast and any cryptocurrency data from 2018 is of less value post 2020.
If we are arguing that decentralization of value is removed from peer to peer cryptocurrencies, I think this technology cannot deliver, indeed this is a socioeconomic issue rather than the technology. Of course the Gini coefficient is going to model the society that produces this tech, especially today.
What is your criteria of failure here? You absolutely love saying “Bitcoin has failed” or “Lightning network has failed”, but at what? For some socioeconomic centralization of value metric? Ok cool but that’s not what Bitcoiners are getting at.
I think you believe that the technology did not live up to its promises. I don’t agree, but I can see how one could feel that way. Now, I ask you, what is the alternative? It’s all well and good to deny existing technology as achieving its goal, but what should we do instead? If you think blockchain as a construction cannot remain decentralized in the face of spam bots and worldwide tx load, what are our alternatives that could possibly lead to this optimistic decentralized solutions?
Both rvz and I have been really clear about the failure
rvz: > Bitcoin has failed for on-chain payments as described in this article, this paper [0] and it's own white-paper.
Me: > bitcoin really did fail at its core goal of being a currency.
As I went on to say, the failure at being a currency doesn't preclude it finding success at something else (and its price suggests its finding it).
1) BTC - PoW 2) ETH - PoW (but the Beacon chain PoS merge seems to be going well) 3) BNB - PoS-like 4) XRP - PoS 5) SOL - PoS
So of the top five really only BTC & ETH are PoW and soon it will just be BTC.
That's because "pure" PoS is a pipe dream. For PoS to work the network needs to start with PoW or a pre-sale (ETH did both). Staking 0 value tokens doesn't work. PoW is the most efficient method to convert raw energy to a digital and secure token. The value off all BTC in existence === all energy spent since the genesis block
All PoW miners are rational actors that choose to spend energy to secure the network. We can and should push that the energy is generated cleanly and renewably, thus pushing clean energy further as there is a clear incentive for use, regardless of external load or demand.
Don't attribute to stupidity what can be explained by malice.
Only litecoin and Dogecoin are cheaper in the top 25. Yeah ok polygon is the cheapest ($<0.01) if you include EVM chains but the rest of them are much more expensive ($1tx+).
2. PoW is security. Rather than crusade against “work”, maybe we should be crusading against fossil fuels?
Because that will only work as soon as we reached full saturation of renewable energy production and consumption.
Otherwise it will always be more lucrative to consume the renewable through Bitcoin than using it for everything else.
A EV car fuel consumption would need to cost more than what Bitcoin can make. A very unhealthy relationship Bitcoin has on consuming energy.
The only real possibility is creating a Bitcoin heater system but most of the time I see Bitcoin mines I'm seeing also AC's which increases the energy consumption even further.
And no, the demand for renewable from Bitcoin will not mean we will create and invest more money into renewable energy overall with a net positive it will only add to more Bitcoin mining.
My take on what you are saying is that you deem other uses of energy more appropriate — “you can’t use it that way! You must use it in this way”. Ultimately it is market forces that determine if using energy for a particular purpose. If there are no pollution externalities to add complexity, it is up to whomever is paying the bill on what they want to spend it on.
I appreciate that some miners will find it rational to use their entire renewable power to mine Bitcoin; and that is ok. Not everyone wants to mine. For some, the utility of an EV is greater than that of mining, and so just looking at a energy/cost ratio ignores demand and utility.
Additionally, the PoW paradigm was invented, and exists today, and there is not a lot one can do to stop it. From 2009 onwards, humanity has decided to dedicate some percentage of global energy output and to the purposes of maintaining ledger security. I have always said this is a good thing, and if you have a problem with this, complaining about it achieves nothing.
And it's not just me who thinks 'other' uses are more critical: even you prefer light over bitcoins. You probably prefer goods and services also higher than Bitcoin hashes.
And in a world hurt by co2, everyone who has to suffer the consequences from climate change would also tell you what they think if they knew and could tell you.
You better not own a clothes drier or a set of Christmas tree lights (2 things that use more energy globally than Bitcoin) because in a world hurt by co2, everyone has to suffer the consequence from climate change.
I have not mentioned IF I think those use cases are less or more bad than Bitcoin. Your argument becomes irrelevant when I say 'yes! Good point let us also stop doing Christmas lights etc.
Independent of this, I even have the feeling that I read the exact example before on hn.
But just for the fun of it: yes we need to do much much more. It would be a good way to list the biggest energy consumers and rank them based on alhow helpful they are for the whole world and how critical.
Bitcoin would be below plenty of things.
Anyway I can and will continue to advocate against Bitcoin as it consumes terrawatts of energy, has very little benefit to the rest of the world and people try to play this issue down by putting weird renewable arguments out there which are just lie's.
We need to push back. Most of us are getting hurt by Bitcoin. Either to additional climate change, speculation/gambling or by hardware supply issues.
I bet 99% people here paid for Bitcoin more than they made through it. The higher GPU price, higher taxes through climate changehigher utility costs.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
Don't forget that bitcoin still has the throughput of a dialup modem.
https://mempool.space is a better indication of cost. I only ever pay 1sat/vbyte (min cost) myself, and have for years. I am able to wait a few hours to get such low fees if required. Real time payments are to be done via Lightning network. The network is reasonable congested today so the high priority tx is 12sat/vbyte or 67 cents.
That “dial up modem” seems fine. We can look at incremental changes if the need arises. It doesn’t today.
Real time payments are to be done via Lightning network
Real time between two people on the exact same tiny side chain with no one else on it. This is not the same as people sending a transaction to each other on the actual bitcoin chain.
The network is reasonable congested today
You can see in the chart I linked that it is not.
That “dial up modem” seems fine. We can look at incremental changes if the need arises. It doesn’t today.
It is not fine. That's why transaction fees have spiked in the past, that's cheap transactions no longer exist, that's why there is an awkward second layer that few use and no one wants.
It has been 12 years and every other currency has proved that restricting a chain to a few kilobytes per second is ridiculous.
What are you advocating? 10MB Bitcoin blocks? When did you last use Bitcoin?
LN is the fastest growing cryptocurrency network by nodes. Lots of people are using it. I know it doesn’t fit the big block Bcasher story, but we stopped listening to those fools in 2017.
I'm showing you what people are paying. It's the truth, nothing more.
10MB Bitcoin blocks
That would be about 16KB/s
LN is the fastest growing cryptocurrency network by nodes. Lots of people are using it.
The difference is that I backed up what I said with real information.
I know it doesn’t fit the big block Bcasher story, but we stopped listening to those fools in 2017.
Every cryptocurrency has more throughput than bitcoin. There is no reason not to. You can throw around labels and propaganda nonsense, but there is no technical reason to restrict a cryptocurrency to the throughput of a 28.8 modem. It destroys all the reasons for a cryptocurrency to exist in the first place.
The real question is why someone would use an awkward second layer that completely fragments who you can send and receive from when every other cryptocurrency works without it because they aren't limited to 1 KB/s. An office laser printer can print characters on paper at a higher throughput than 1 KB/s.
It is a bizarre and absurd world where a currency that is supposed to work for everyone pragmatically allows everyone in the world a single transaction for their entire lifetime.
There are many technical reasons for constraints like block size, block time, tx complexity, etc. most of these are for an availability or reliability metric. It is really important that low powered hardware can run a node if it is to be universal.
So far unbounded solutions have presented fragile constructions on unproven math; low reliability with multiple hours long outages; very high compute and storage requirements for node hosting.
We use a so called awkward second layer because we have realized that maybe not every tx needs to be recorded for all eternity for all to see in a data structure. Lightning provides a similar value exchange of satoshi like BTC mainnet txs, with better privacy and lower fees.
Why would nodes need to be low powered and how lower powered do you think they need to be? A $35 raspberry pi with an SD card or a $10/month VPS can run a node, even though these nodes don't really matter. This is propaganda that has no technical merit. You are repeating the same nonsense that gets repeated for the last 8 years, but never with any technical details, reasoning or explanation. This assertion is as deep as it goes.
So far unbounded solutions have presented fragile constructions on unproven math; low reliability with multiple hours long outages; very high compute and storage requirements for node hosting.
I have no idea what you are talking about here since you gave no examples, details, numbers or real information of any kind. Every cryptocurrency besides bitcoin has more throughput. Ethereum, doge coin, lite coin, bitcoin cash and many others. Bitcoin is the only one that is artificially constrained to a pathetic trickle of data. Who would attach themselves to something that can't scale? If I give you an address, you can't send to it through the lightning network. Why use a side chain when you can just use a chain that actually works?
El Salvador is mostly an informal economy.
You vastly over-estimate the extent and value of illegal activities in a country. It may be huge for an individual but it is always a small fraction of (what you call) "formal" GDP.
60+% is not a 'small fraction'. You're factually incorrect.
remember that GDP per capita is an average, meaning that a good amount of people in the country earn much less than that.
People in Salvador are actually quite poor, regardless of how much "informal" economy is going on in the country.
edit: I woould actually argue that an high volume of unofficial economy is a strong indicator that the country has a very weak economy in general. You can find the same conditions in all the poorer countries in the world, except maybe dictatorships such as North Korea ( we actually can't tell, because we don't have access to their economic indicators)
Bringing up GDP as it pertains to the $30 wasn't even introduced by me, it was introduced by the person I responded to. I think you're replying to the wrong person if you have some issue with the GDP as it pertains to this topic. In fact I was on your side, explaining the issues with going off of the official GDP.
Highly doubt it, would like to see a source for that.
Edit: Found it, 40% [1], I'm honestly surprised, that's waaaay higher than I thought it'd be.
1:https://www.worldeconomics.com/Informal-Economy/El%20Salvado...
[0] https://www.statista.com/statistics/1039952/informal-employm....
The project a giant expression of corruption, and also a complete disaster.
The impetus for this was about as legit as the WeWork leadership wanting to 'end world hunger' etc. - and doing so at a very high cost and risk to the wellbeing of the nation.
And of course, there's no upside.
Digital banking would have been a great idea, Estonia is leading the way with some really cool government digitization etc..
But even then, it would not have changed material fundamentals.
This is just economic chaos, it's sad, it's why they will remain poor.
Edit:
Burkele [1]
It's odd how people do not recognize how institutional and foundational a sound financial system is, and how there are a lot of moving parts to it.
Who knew? But thank you El Salvador for making it even more painfully obvious.
A digital dollar (CBDC) could easily undermine every argument for Bitcoin except one --- paranoia/distrust of government.
An economy is defined as the flow of goods and services. Currency is the medium through which goods and services flow. Deflation encourages people to not spend their money. Not spending money means goods and services don't flow, means an economy collapses.
That bitcoin / crypto people keep harping that deflation is a good thing proves to me that these people know nothing about economics and should never be trusted as such.
They're desperately seeking a store of value (which isn’t wealth; it’s only wealth if productive or others need it and will trade something for it) that can't be devalued by humans, with expected results (value is constantly changing and subjective). As you mention, it shows a lack of economic understanding.
That's because "since WWII, one country has come close to having both a depression and a deflation: Japan in the late 1990s" [1]. The source of policymakers' hesitance with deflation "seems to stem from the experience of the Great Depression, in which deflation and depression appear to have been tightly linked."
We have limited data suggesting moderate deflation is any more damaging than moderate inflation. We have better-tested tools for fighting inflation. But with negative interest rates and QE (implying the existence of its inverse, i.e. the central bank selling short), deflation is less scary.
The problem with Bitcoin is its fixed supply. Bitcoin would not produce steady deflation. It is inherently volatile, as the bullwhip effect of the credit system is left unmoderated. The failures of fixed-supply currencies are documented beyond the domain of "opinion or ideology," e.g. in studies around currency substitution [2].
[1] https://www.nber.org/system/files/working_papers/w10268/w102...
You don't need data to understand how people would simply stop working and wait for their cash to appreciate as they do nothing.
Except you can't consume or eat cash and also life is short and tomorrow is not guaranteed so when you decide that it's time want to spend it you'd not be better off in any way even after deflationary appreciation because everybody had the same brilliant idea and the huge mass of people stopping working caused a collapse in raw output of products and services.
Part of me wishes this actually happens, because those who operate countercyclically and keep working when everybody stops to sit on their couch hoping for deflation to make them rich, would eventually make a fortune when sanity comes back and people realize they can't eat the zeros and ones in their bank account.
You do need data to confirm how these people affect the economy in aggregate. Based on our current evidence, when there is a steep supply curve, deflation is fine [1]. (People hoarding money and delaying consumption and production doesn't change output because (a) there is excess demand and (b) production is constrained by non-price factors.)
[1] https://www.nber.org/system/files/working_papers/w10329/w103...
Where is this excess supply at? Have you seen gas prices? Are you aware that the US had to use oil reserves from the strategic reservoir for the first time in decades?
Europe is looking at legal measures to shrink its energy consumption such as regulating thermostats in public offices, schools and universities!
OPEC is also using this as an opportunity to shore up its state balance sheets after COVID, they will come through but not before they waste even more time to make sure they milk the West up to the very last politically acceptable petrodollar
This isn’t what a steep supply curve means. And I wasn’t claiming we are currently in a steep supply curve environment (though we are seeing evidence of it).
They did not “have to” release oil from the strategic reserve, they chose to.
Or maybe you're saying that any period of deflation will inevitably be followed by a period of inflation, as production collapses due to the deflation? And you also think that people (other than you) won't realize that, and so behave as if the deflation is permanent, causing the problem?
It seems to me that as long as the deflation is less than the natural real interest rate (so nominal interest rates are still positive) there is no problem of this sort. It's no more a worry than thinking that anyone with a bit of money in the bank will decide to just live off the interest rather than work. There are such people, but most working-age people either don't have enough money for that, or want to work anyway.
The usual argument against deflation involves supposedly "sticky" wages that don't adjust downwards fast enough. Maybe that's the case, but it depends on particular social factors (eg, embarrassment at getting a pay cut).
Many economies have collapsed or people have been severely harmed from runaway inflation. Even now in the US, the wealthy aren’t terribly affected by inflation, especially with home and stock prices rising more than enough to offset them, while the poor are increasingly struggling with currently no end in sight.
Perhaps a Bitcoin w/ 2% inflation would have been better than a deflationary one, but I still question whether the average person in the average country is better off with the risk that their government mismanages target inflation than with an algorithmic deflationary Bitcoin.
I also question whether Bitcoin being deflationary is really a bad thing when it’s also a store of wealth and not the only means of exchange in a country.
And the USA's economy was ruined in the 1930s by runaway deflation.
The poor don't like inflation _OR_ deflation. Both suck. The rich has the ability to move money around to maximize their gains in any situation, so the rich aren't really harmed by either.
False dichotomy. The last 50 years of monetary policy in developed countries show that you can have moderate inflation (yes, sometimes a bit too much, like now, but moderate overall) without hyperinflation.
America showed that you could have hundreds of years of stable democracy until a simple combination of cable news, Twitter and a narcissistic president almost led to a coup.
The Roman republic was stable for hundreds of years until it collapsed.
The Turkish lira has lost more than 97 per cent of its value against the US dollar since January 2021.
I agree with you that the 1950-2010 world order and U.S. monetary system was better than Bitcoin. Where we disagree I think, is with our confidence in the stability of human institutions and the likelihood that the world necessarily remains stable in that world order for the next 1,000.
How is that a store of wealth?
In recent history (say the past 50 years), how many countries have experienced serious inflation problems that were caused by orthodox, well-founded attempts to manage target inflation?
As far as I know, the answer is none. If you have a country where the leadership (usually dictatorial, autocratic, one-party or some variation thereon) has adopted policies that are already leading to economic disaster, then hyperinflation is something you tend to get along with - it's a symptom, not a cause.
Huh? What? Dow, Nasdaq and S&P all down over the past year. Is there a sector performing well atm?
Sounds good doesent it, saving is good.
But it also means the company selling that small car wont sell that car, meaning they wont produce as many, meaning they wont employ as many people.
Essentially demand would go down to only essentials, supply would follow, unemployment would skyrocket, total production would plummet.
You dont want the Japan example, then how about The Great Depression.
Inflation on the other hand encourages spending, increases total economic output and encourages investment.
A deflationary store of value is good, and an inflationary currency is good. The problem is that crypto is trying to be both, so its failing at both.
The gold standard isn't a fixed-supply currency. Gold was mined throughout the nineteenth century, coïncidentally, at about the rate of economic growth. When growth kept going while mining stalled, a series of economic crises pushed developing nations away from the standard.
“Most of the time, deflation is unambiguously a positive trend for the economy, but it can also under certain conditions occur along with a contraction in the economy.”
Now deflation caused by a deflationary currency is probably not unambiguously good in the same way as deflation caused by increased production.
But are there not any respectable economists who would argue that a deflationary currency might not be so bad?
Oh the horrors! Maybe people will not spend their money on stupid shit, they might conserve instead of destroy the environment. Maybe the middle class wont be forced into participating in the casino-for-privileged-mbas that is the stock market. Maybe we will stop having a siphon that steals the labor value from the lower class and drops it on the doorstep of the rich.
People having savings is a sign of a healthy economy. With savings there are more people that have an opportunity to invest. Investment provides real growth.
A significant portion of our economy is reliant on discretionary spending, and when discretionary spending drops we usually end up in recessions, as companies that rely on that spending start layoffs.
Both your run of the mill, deposit money in the bank which loans it out so all sorts of businesses can be built, and people can buy houses, cars, etc., and your more exotic VC and hedge fund investments.
How do we square that with the unending flow of junk that is produced with obsolescence baked in and disposed of? How do we square "economic growth uber alles!" with the constant warnings of man-made climate change and our impending doom due to wasting our resources on cheap shit from China?
I would argue that the short-term time preference should balance the effects of inflation. I don't really care that a Lamborghini might cost half as much in 10 years. If I want to drive one TODAY bad enough, I will still buy it. If my umbrella has a hole in it and it's raining, if I want to be dry RIGHT NOW, I don't care that an umbrella is cheaper tomorrow.
I would also argue that technological improvement is inherently deflationary, and that technological improvement is all about resource efficiency: accomplishing the same work with a smaller expenditure of resources. Even if rising demand were to lead to higher equilibrium prices, we should be balancing the economy in such ways that prices still fall or at worst remain static, to reflect the diminishing resource requirements for a given unit/widget produced.
Maybe you should question your first principles more.
As in those who paid nearly $70k per Bitcoin after El Salvador declared it an official currency 7 months ago are probably feeling kinda depressed right now.
That's not actually a pro-Bitcoin argument. It's just an artifact the peculiar ideologies that influenced Bitcoin's creator. Deflation hurts economic activity, but benefits hoarders.
Except Bitcoin is not deflationary. It's fixed supply. Those are separate, if related, characteristics. In the last year it's been roughly flat, with the word "roughly" doing a lot of work, given its volatility that would make a Zimbabwean central banker blush.
This assumes the whole world uses the currency, which is untrue for every currency in the history of humanity, and that per capita output per person using the currency is at least flat, which is also questionable.
Demographics are an input into monetary policy. But the effect is way fuzzier than you imply [1].
[1] https://ssl.nbp.pl/publikacje/materialy_i_studia/284_en.pdf
This is a claim made repeatedly by Bitcoin proponents and opponents, based on various ideological differences.
But the statement is nonsensical. The statement "Bitcoin is deflationary" is exactly equivalent to the statement "Bitcoin will always increase in value".
Hmm, I wonder why.
I think this aught to make us consider the antidemocratic effects of poverty and inequality too.
None of these are being proposed. Implementing all of these would require changing the constitution.
In other words, your comment is an example of the paranoia I referred to.
Cry me a river of unfounded paranoia.
It's not that I agree or disagree with your example - honestly, I've no idea, I haven't really tracked that story I presume you're talking about. What I suspect, though, is that ultimately, it's all a matter of trust. Which is a highly subjective matter.
What I wanted to say is that it might not exactly be a good idea, tone-wise, to call it a "paranoia", when it's just a matter of disagreement about subjective things.
Dr. King and Gandhi were also committing crimes by "impeding and infringing on the rights of other citizens"
A statement like this requires being explicit about the country or set of countries in question, narrowing down the set of constitutions that would require amendments.
If the legal system of a country does not explicitly require merchants to accept cash (some places do, some don't - just like in some places a merchant may refuse a customer and in some they can't), it is technically possible to create a practically cashless environment without having to explicitly lock anything down explicitly, but merely by creating an incentive to not accept cash. There's barely any practical difference between no one (save a few die-hards acting on a principle) accepting cash because it's inconvenient to deal with (or simply unfashionable, hah) and actually blocking cash acceptance - the model is indeed different but outcome is ultimately the same.
For an imaginary extremely powerful and nefarious adversary the former model is even preferential, as it provides a plausible deniability. Whenever there's such and adversary with a will and power to do so is a separate question which I'll intentionally avoid.
Since we are talking about a digital dollar the country in question is the USA.
> Implementing all of these would require changing the constitution
This is naïve. Many countries, the US included, have variations of an emergency powers act, where the executive can get around the constitution in some ways. Even without that, though, you still can have things like Operation Choke Point [1], where the government merely makes suggestions/threats to private banks and payment processors to close the accounts associated with things they don’t like. So no, this has precedent. It’s not paranoia.
You have every right to disagree and protest --- but you don't have a right to illegally blockade bridges and prevent others from traveling to work or to the hospital if need be.
idk, keep pushing. Eventually we'll solve the problem with a more complete and final solution.
But then later the article says:
“Meanwhile, many living in tourist hot spots on the Pacific coast, where Bitcoin usage is highest, have transitioned to other crypto wallets, such as the privately developed Bitcoin Beach.”
So they’re using the currency, just not the government developed software.
And a weird phrasing here “[many] are using it to hold and transfer dollars, El Salvador’s official currency”, implying dollars are the only ‘official’ currency — when by definition, Bitcoin is too.
That’s the sleight of hand.
Calling Chivo app a 'bitcoin wallet' is an intentionally misrepresentation, if not by the confused writer of the article then of the government that confused the person writing it.
These people didn't 'ditch' a bitcoin wallet, or at least not the one mentioned, because Chivo never was one.
The headline says the customer's threw away their wallet that holds their cash.
In reality, they through away their debit card which, if everything goes right and their accounts aren't seized and their bank stays honest, they can pull out a wad of cash. They probably threw away this debit card because they already transferred their cash to a different bank.
A debit card is not a wallet of cash. Throwing away the debit card doesn't tell you anything of what you did with the cash the debit card could possibly access. Chivo is a debit card for maybe, hopefully controlling the ability to trade bitcoin held in custody somewhere else on the lightning network, not a wallet containing bitcoin. Calling it a bitcoin wallet is intentional deception, if not by the author then by the person that told them that.
Now if I told you everyone threw away the wallet that held their national cash, that would paint a very different portrait than saying they all threw away their debit cards to a particular insecure bank that they already transferred their national cash out of. The first would imply they gave up national cash (bitcoin), the second would just imply they gave up on one particular stupid bank that might give them access to their national cash (chivo).
>Not a single person in the general public would even know half of the buzzwords you just used and the other half isn't interested in technicalities. The wallet is used to pay and receive bitcoin. It's a bitcoin wallet at least for 99% of people on the planet.
And yet apparently many El Salvadorans apparently did. Because they chose to transfer their assets to 'more secure' apps and actual bitcoin wallets. The thing is, when it concerns someones money, they tend to learn very fast. The same country boy that may laugh at nerds and chemical terms and academic 'buzzwords', may actually learn and know a ton about chemistry when it comes to maintaining their crops. People in Central America are not stupid.
Did you not read the article? It literally quoted people talking about using other apps instead. Operative words: "Have transitioned." I didn't say EVERYONE transitioned, sure some likely did ditch 'bitcoin' entirely.
"Meanwhile, many living in tourist hot spots on the Pacific coast, where Bitcoin usage is highest, have transitioned to other crypto wallets, such as the privately developed Bitcoin Beach."
>Still not really helping grandma or the other 45% of the population that don't have a bank account.
Crypto and bitcoin doesn't require a bank account. Transitioning from chivo doesn't require a bank account.
>learned really fast is NIL.
Come again? Is this supposed to be some racist dig at Salvadorans to suggest they can't learn quickly? For many people using crypto can be more accessible than signing up for a bank account.
Racist my ass, you entitled first world country geek.
You paint a picture of people in El Salvador that simply isn't the case. The supermajority CAN get access to internet if they like. I have lived in the third world, including places poorer than even El Salvador, and for less than a common days wage even in war-torn syria you can pay a shop-keep for internet access at a cafe. Those of us who have spent time in the third world understand that people often share resources there, including computers and smartphones, so seeing the proportion of people who say have a smartphone is only a slice of the picture of who can actually get access to one (as an example, if only the wife of every household had a smartphone then the whole nuclear family would still effectively have access despite a much smaller number reflected on the statistics). Even having a cousin / uncle / whatever can be enough to be good for the extended family, as that person can serve as a nexus to internet based utilities to the family. These types of relationships often aren't reflected on the statistics, but people in the first world often don't understand this.
[0] https://datareportal.com/reports/digital-2022-el-salvador#:~...).
I'm glad you finally acknowledge this point and have walked back from your prior odd rhetoric that suggested it was improper to think that someone without a bank account could understand crypto ("you are talking about learning to use crypto when they didn't even use a normal bank or google before.") And I'm glad you've walked back from your prior rhetoric thinking the ability of the people of El Salvador to have "learned really fast is NIL."
Characterizing an El Salvadorian as someone who "didn't even use google before" sounds a bit presumptuous, by the way, and probably isn't even representative.
You finally agree people aren't inept of learning but simultaneously believe they can't learn how to use crypto? Only a bit over 50% of El Salvador are women, does that mean it's useless to teach things that pertain almost exclusively to women? The fact that only the majority and not supermajority have regular personal internet access isn't an argument against the ability or even the notion that many or even most people having knowledge of crypto if they so desire it.
The fact that only the majority have personal ready access to internet does not discount utility of what's available to them on the internet.
We all know cash is practical. Cash has disadvantages and disadvantages. Some people will choose to dip into alternatives, some will not.
>Shared phones and computers... how practical
Sorry but sharing is third world survival 101... when resources are more dear expensive items often become shared so they can provide the most utility. Very practical.
> you overlooked the smartphone penetration
Can you cite your claims regarding smartphone penetration? You really didn't provide enough information for me to comment on. Internet and crypto access comes through many forms, so it's difficult for me to comment purely based on uncited figures regarding smartphones. You stated most people don't have smartphones, which I think is probably true, but difficult for me to comment on uncited.
It's not feasible for the majority ( ;) ) of El Salvadorians to use crypto as a cash replacement because there is simply not enough digital infrastructure for it. Maybe your boy Elon will drop some Starlinks. lmao.
PS: I really hope you are just an edgy troll and that's not your real persona ;0)
And now you've finally walked back far enough to simply say most won't use it as a cash replacement by majority at present. I think that's fair -- I've never said I expect bitcoin to completely replace cash. Cash is of course practical, and has its place.
I think you've been educated enough at this point we can stop here.
The thing with educating other people is that you need to have knowledge about the topic you are trying to educate people about and you just don't have it. The real world is not your high school debate club were you can just pull shit out of your head and get points for being witty. At least you didn't try to paint me as racist and sexist this time :D
Users should be aware and make a conscious decision about where their keys are kept, however this is usually something that doesn't matter until they either lose their phone or law enforcement freezes/seizes their money. It's pretty high up on Maslow's hierarchy of financial freedom.
Do you have evidence that the money secured by Chivo is actually 'secure.' If not then it fails to meet your own definition of a wallet. It's the constant HN semantic argument ("well it lets you log into something to trade something that isn't actually bitcoin but you could get bitcoin eventually so therefore it's a bitcoin wallet!!!") Yes if you want to play semantic games my work computer (sans bitcoin software) is also a bitcoin wallet because I can access my online banking which in turn allows me to, eventually, get bitcoin after a number of operations.
Having credentials that in turn allow you to trade on the lightning network that in turn allows you to get bitcoin does not a bitcoin wallet make.
[0] Assuming it's true, as a sibling comment says, that 70% of people have done something with it and 11% are using it for something.
The headline sounds like they gave up on bitcoin altogether. They didn't. They switched their bitcoins to a different wallet.
They could instead have said that. "Most Salvadorans have switched to a different bitcoin wallet." It's just not sensational at all, so they didn't use that.
Is that actually true? The article only says that "many living in tourist hot spots on the Pacific coast". "Many" is not the same as "most", and even then it's only talking about people in one region of the country.
The Satoshi protocol is about creating a mechanism to achieve distributed, trustless consensus. Plenty of applications for such a platform.
Whether it's achieving that goal is a separate debate (so far it has managed to establish itself as a crazy high risk forex medium that's only slightly less unwieldy than FIX) and I'm not convinced anyone in the builder space has even a vague understanding of the problems crypto has to overcome to be _practical_, let alone replace _the entire global financial system_.
Call me a pessimist but it's not gonna happen without violent revolution (and let's not please).
But we can stop saying vacuous things like "cryptography doesn't have a problem to solve", it's clearly always been about replacing trust with verification. Que KGB expression.
Name one that can't be achieved easier, faster and more efficiently by other means?
But BTC never was a big deal for graphics cards particularly. IIRC, Ethereum was the most profitable GPU coin. (Even if you were paid in BTC for mining through NiceHash or whatever, most miners would immediately sell for USD anyway to pay for electricity costs).
Coming down, yes. Back to normal? Not until 2024 I bet.
It's not an easy thing to kill.
this is so 2013
Here's a snippet from section 4, "Concluding Remarks" of the original paper [0]:
""" Despite these efforts and the incentive to use contactless payments caused by the COVID-19 pandemic, bitcoin is not widely used as a medium of exchange. While most citizens in El Salvador have a cell phone with internet, less than 60% of them downloaded Chivo Wallet, and 20% continued to use the app after spending their $30 sign-up bonus. Further, 5% of citizens have paid taxes with bitcoin, and despite its legal tender status, only 20% of firms—mostly large ones—accept bitcoin and 11.4% report having positive sales in bitcoin. In the first quarter of 2022, we find almost no new adopters and the share of remittances in bitcoin is at its lowest point since Chivo Wallet’s launch. Our results highlight the challenges that cryptocurrencies face to become widely accepted, even after a governmental big push and under favourable circumstances, and are relevant for countries studying their viability as currencies """
So, 60% adoption of Chivo, 20% (total, not of the 60%) still in current use. 20% of firms accept Bitcoin and, as far as I can tell presumably over half, 11.4%, of total firms report positive sales in Bitcoin (figure 8, page 24), with 2% (total) seeing losses and the rest, 87%, reporting no change.
It's not the large scale adoption that proponents had hoped for but 20% adoption by people and businesses still seems pretty large.
[0] https://bfi.uchicago.edu/wp-content/uploads/2022/04/BFI_WP_2...
[0]https://www.bloomberg.com/features/2022-bitcoin-travel-probl...
This is why it's a failure. A healthy system would be growing, its users would be singing its praise. As far as we can tell, that's absolutely not what's happening.
I seem to recall that remittances has been touted as crypto's #1 use case for a long time.