At this stage all the interesting aspects of Bitcoin are economic, political or philosophical rather than technical, especially since most of the latter has been discussed to death.
It's obviously not exclusive to HN. I keep seeing it on reddit all the time and it's really tiring.
Exactly! I created an ASK HN a while back on this. It received a lot of feedback. It appears many long-time HN readers are tired of it.
You can see it here; https://news.ycombinator.com/item?id=27287700
Here's something I want answered (all three parties are invited to respond): Is there a dependency on mature internet infrastructure that exists for a country to adopt BTC as its currency? Seems like there is to me, but maybe I'm not fully appreciating how this works or am overestimating the connectivity requirements for running BTC at scale in a modern economy.
In answer to your question, technically no, but realistically yes.
Technically, BTC “transactions” can happen "on paper", the keys can be physically handed off to each other, etc (there are plenty of possible answers here that are all fairly vague and hand-wavey). There are many problems with this that make it wildly impractical though (see replies to this comment).
In reality, El Salvador (if I've understood correctly) was going to use a lightning "side-chain" for dramatically faster and cheaper transactions - this would require connecting to a known (and centralized) main service. I would guess though that this isn't exactly intended to replace their currency as a day-to-day usage, but rather for large transactions (like the down payment on real-estate) which is already an "internet-strictly-required" transaction, even in developing nations.
I hope that answers the question - if BTC was meant as a replacement for buying a can of coke, you'd be 100% correct that the internet infrastructure is nowhere near sufficient - but despite what the "I hate bitcoin so much my mouth is foaming" and the "my entire life depends on the price going up" crowds say, BTC is not being suggested as the only currency for El Salvador, just as "legal tender" as an alternative option for its citizens to store their wealth in a system that is not controlled by banks that are outside of El Salvador. Personally, I think it's quite nice that developing nations now have a lever they can use against, for example, the World Bank.
For large transactions using microSD cards is the recommended way actually. There are multiple hardware wallets that support partially signed bitcoin transactions (PSBT), and using SD cards both make it easier to verify the communication between the signing device and the Bitcoin network, and make it easier to sign the transactions using multisig at multiple different locations before publishing them on the network.
Edit: I'm forbidden to reply but not to edit, so I'll reply to your comment below here.
Reply: Yes. The thing you were wrong about was that lightning is not meant for everyday transactions. It actually is.
There are also things like M Pesa/MobileMoney which have half a billion users in sub Saharan Africa. Simply an account balance held by telcos, accessible from any GSM phone. It’s custodial but could easily swap in crypto and extend to the rest of the network if there was a movement to do so.
But even without all that, vanilla crypto transactions don’t really take much bandwidth. You do need a connection of some sort but just running a light client is not very demanding by any means.
If the government had any credibility whatsoever, the could already do this with any number of backing mechanisms.
If they want to 'go hard' they can buy gold.
Their plan is to mine BTC for solvency anyhow - mine some BTC, buy gold, and voila - reserves.
But realistically, if they were competent enough for that, they could also issue a well managed fiat, which would allow them to be much more nimble.
The 'tech' required for those who can use it should not be that hard, much easier than BTC. BTC 'wallets' are not really suitable for regular consumer consumption anyhow.
The point is, none of this has to do with BTC it has to with the credibility of the government, which is very limited.
If they sorted out their leadership, not only would they have a sound monetary system ... they'd have a sound financial and legal system and a healthy country overall.
For context, I'm running a full node from Venezuela. The initial bootstrapping was... painful, but keeping up with the rest of the network doesn't take much.
Note that the volatility of Bitcoin introduces a another requirement: Both parties also need fairly recent data from a Bitcoin exchange to find a price at which the transaction is mutually beneficial.
If your argument is btc doesn't work without the internet, you should keep in mind that nothing else does either.
of course the more people that adopt it means the more people needs a reliable internet connection. so if you go from 35% of the population with reliable internet to 80% of the population wanting to/being forced to use BTC then you may have a maturity issue...
I have a litmus test I use when discussing global financial politics with friends - "What were the main factors you think lead to Ghaddafi's killing?"
In fact, the fact that bitcoin has no on-chain notion of credit is a major limitation that relegates it to being digital gold, not a digital dollar.
Defi, you say. Show me a defi project that lets people borrow more money than what they have in the first place. Show me a defi project where I actually take the credit risk for the borrowers when lending the money to them. (Show me those and I show you an emerging fractional reserve bank and uncontrolled money creation by the said bank...)
Governmental budgets are one of the most obvious ways in which political decisions manifest themselves and become relevant for everyday life.
Do I get this right? You think that governmental budgets would look absolutely no different in such a bitcoinized world compared to how they look in the current centralbank issued money world?
You don't think the fact that central banks mostly support governmental debt shapes these budgets in a non trivial way?
Precisely that was the OPs point why it is a good alternative to the debt-based financial system we have.
In this phrase I was just pointing out that, given fractional reserve banking is here to stay, with or without bitcoin, it would have been better if bitcoin had embraced it and actually made it possible to put the real transactions on chain, so that at least you could in principle have a BTC bank that is transparent about the kinds of reserves it actually holds, without being forced to hold a full reserve while competing with banks with fractional reserves.
Also, I don't see a way to make fractional Bitcoin reserve banking work in practice. You can't simply issue Bitcoin you don't have.
At no point does this bitcoin have to live in the BTC wallet of you, your bank, your friend's bank, or your friend. In fact, this BTC can be entirely fictional. As long as your bank has enough BTC in their actual wallet that they are at no serious risk of running out if a realistic proportion of their customers wanted to withdraw their BTC, as determined by the Fed or other national entity, then all is well.
This is anyway the only realistic possible use of BTC itself, as the blockchain is far, far too slow to use for day to day transactions even in a large village/small town. I can also promise you that this is exactly what day to day use of BTC in El Salvador will look like, more or less, if they do go through with it.
Edit to add: the dollar was once based on gold. We've moved on from that after realizing that doesn't work. Today's dollar is very much not tied to gold, and it is used in ways gold is not.
True, and I don't claim it's fact (discussed in sibling comments) - just something to consider. But there's also a difference between floating the idea, and amassing enough gold to actually pull it off, and he was acquiring quite the stack from what I hear.
>Your suggested link between Ghaddafi's killing and "debt based fiat systems" is a conspiracy theory promoted by Russian propaganda channels like RT, but not backed up by facts.
There's that phrase again. Not everything RT says is a lie. I don't make the claim to know the inner workings of the global political elite. I just like to see which of my friends only get their propaganda from MSNBC/CNN/Fox, and which like to sprinkle in a little zerohedge and RT
https://en.m.wikipedia.org/wiki/Alleged_Libyan_financing_in_...
It would be a disaster for US, because US enjoys benefits of printing as much money as it needs to purchase anything from abroad exchanging zeros and ones that cost nothing for real natural resources and goods from other countries.
Just about any country leader that announced plans to stop using USD for trade, was killed in some way.
Or, if USA isn't brave enough to openly attack the country, they declare it "hostile" and try to suffocate using sanctions (e.g. Iran).
Second largest economy in the world
Second-fourth largest industrial country in the world
...
costs nothing
But the real smart people who have the special knowledge know that it was obviously <<insert conspiracy theory here>>.
The thing is, geopolitics is messy and there are quite a number of 'factors' many of them true to some extent. The Gulf tribal leaders absolutely hated him and they (i.e. Qatar) lent their special forces more or less as 'personal vendetta' than anything.
There are definitely arguments about Oil and related contracts - but Gaddaffi through the diplomacy of his son was well on his way to 'public reconciliation' to the point where there was a lot of money being made there, and it's entirely doubtful that some new, unknown clan would make it any easier for Westerners to make money.
If there were an obvious and very popular contender for power who was on the precipice of uniting the nation and he was already tacit 'backed by the west' - then you could make the argument that the intervention was on the style of the overthrow of Mossadegh in Iran, but this really wasn't that situation.
The question says more about the person asking it than the answer.
The real question to ask someone when they are talking about 'Bitcoin' is how much Bitcoin (or other crypto) do you own? Because I find it's like talking to people in Amway or Scientology.
If a country that doesn't have vast amounts of oil "declares imminent genocide", would US or EU intervene? Of course, no.
Also we all know that Iraq had "weapons of mass destruction".
Yes, exactly. It's not that I know I am right, or that there's one answer. But it is interesting only one of the discussions is allowed, and one very plausible explanation is universally labeled as a "conspiracy theory".
>The real question to ask someone when they are talking about 'Bitcoin' is how much Bitcoin (or other crypto) do you own? Because I find it's like talking to people in Amway or Scientology.
FWIW, basically none. Might have an old wallet on the computer in my closet with ~.1 left on it, from back when I used to buy drugs off the silk road. But I'm not a crypto fanatic, though I do find it interesting.
There's a longstanding tendency across financial systems historically to use the law to bar access to the "real" products for various reasons that happen to favor the incumbent elite. Instead, if you get any access, it's the version mediated by a middleman of some kind. There is often a rationalization in play, but the effective control over societal outcomes is the same.
Want to found a disruptive company in 16th century Europe? You had better have a royal charter.
Maybe it's the 19th century and you have a great invention: "Patent fees for England alone amounted to £100-£120 ($585) or approximately four times per capita income in 1860." [0]
You're a laborer in 1900, and you've pooled a little nest egg you want to use to trade stocks? You can't afford the real stuff, so you will have to play in a bucket shop.
You're a middle-class Black person in the 1950's US and you want to own a home or start a business? Redlining ensures that you won't get a good deal or your neighborhood of choice, neither will you get a loan from the major banks(at least, not one on reasonable terms).
And so I have to conclude that the whole basis of the debt system is always subject to some form of gatekeeping, at some point, and that's what has drawn people back to precious metal exchange over centuries, despite its limits. We've been through a long period where debt worked really well, because our economies experienced industrial growth patterns and could coexist within a stable framework(some world wars and interventions notwithstanding). That does not mean it's better or forever.
The same kind of framework is in the process of being enforced in cryptocurrency; cypherpunk-friendly privacy coins that have some adherence to Bitcoin's original spirit like Monero or ZCash have been delisted from most exchanges through regulatory pressure, while defanged "blockchain economy" tokens have stones-throw availability and heavy promotion. Meanwhile a substantial number of token exchange services will play games with your ability to withdraw to keys you own.
But I think that's going to be about as hopeless an endeavor as stopping music piracy was; it's abundantly clear that we're headed towards a long term trend of breakdown in "trust me" debt economies and their model of operation, even if some of the leaks get plugged in the near term in the way that Spotify "solved" piracy[1]; what "trust me" now results in at Internet scale is increasingly sophisticated ransomware hacking. So, while debt and lending itself could still exist and be a rewarding venture, tokens lacking credible mechanisms to back their fundamental value and consensus are going to wash out.
(I also think the El Salvador plan is a stunt - a way of marketing the country with a side of personal benefit - albeit one that could become consequential in surprising, unpredictable ways, in the way Bitcoin has been generally.)
[0] https://eh.net/encyclopedia/an-economic-history-of-patent-in... [1] https://www.digitalmusicnews.com/2018/03/22/music-piracy-spo...
And I switched from a mild crypto believer to a metal stacker a couple of years ago.
I think one of the next big avalanches will be some more issues with crypto exchanges. There's a lot of people in the crypto space without the technical knowledge to properly secure their assets. I was one of the people who got burned by Mt. Gox. It wasn't everything, I had multiple wallets under my own control, but it was enough to hurt. And that wasn't a one time event.
edit: but it's sad how little attention people pay. Ghaddafi predicted the mass-immigration problems that Europe now faces. Libya, for all it's faults, was the place to go for anyone born in Africa looking to pull themselves up by their bootstraps. Not just free education - salaried education. Free electricity. Free farmland and equipment. He did plenty of wrong in his life, but he also did some things right as a political leader.
Not that I want to disregard Gadaffis warning here, but the UN itself predicted that this will happen and asked the countries to please provide more money to help the people in the camps or they will move on to Europe. No one listened, people moved on. This was not some kind of secret knowledge, more a type of "it's not yet a problem, ignore it"
innovation of blockchain is not entirely the tech, but what it ultimately enables socio-politically.
Examples of bigger breakthroughs in the field of p2p communication: the internet. Distributed hash tables.
Can you list ten of these problems if there are a lot of them?
- consensus
- distributed computation
- statefulness
- peer to peer identity
- peer to peer reputation of nodes
- resistance against many classic failure modes (e.g. Sybil attacks)
- peer to peer source of truth (e.g. Namecoin/DNScoin)
- verifiable code execution (smart contracts)
- immutability/ tamper proof
- and (obviously) peer to peer payments
Granted, some of these overlap with each other, but the point still stands. The pearl clutching over cryptocurrency seems extremely inauthentic when you consider the vast sums of energy tech giants expend to target us with ads.
I would consider kademlia (or overlay networks in general) a bigger breakthrough though.
>I'd argue the biggest breakthrough was the Turing machine
Witty, but that's not peer to peer computing.
The US is a proximate root cause for the loss of ES’s currency. I could see why they would want an alternative to the USD as legal tender.
It also appears that the concerns are not strong, more wishy-washy comments that could be disputed or clarified eventually. Wonder what they say if/when more countries do inquiries and adopt Bitcoin.
Does the World Bank get to choose which member requests it responds to? I would think they have an obligation to give every request at least a cursory evaluation.
No, not really. The World Bank answers the questions their members ask them.
In this case El Salvador's president asked the World Bank to help him out implementing his plan to adopt Bitcoin as a parallel legal currency, but the World Bank rejected the request citing environmental and transparency concerns.
If anything, the only big thing in this story is that El Salvador's president made a promise to adopt a new currency even though he has no clear plan, or realistic, to pull it off.
My local bank would also respond to a request for $1 billion dollars to buy Bitcoin.
Their statement is clear.
They very politely and in so many words saying:
1) To start you are corrupt and none of this will work without solving that 2) it makes no financial sense and 3) there are real environmental concerns.
When they sat 'transparency' what they mean is 'you are corrupt'.
When they cite 'regulatory, financial and legal concerns' they meant it.
And the environmental concerns are legit.
It's exactly and predictably the answer that any of their sane financial leaders would expect.
- How about people stop accepting laundered bitcoins first and foremost?
- Any bitcoins that have provably been involved in illegal stuff
- Any monero/whathaveyou that come from exchanges that accept bitcoin that have received Bitcoins that were involved in illegal stuff
Regarding quantum computers: Quantum computers are not known to be exponentially faster at hashing than normal computers, so they pose no threat to bitcoin.
On the other hand, while I'm (unfortunately for this discussion) not an expert in money laundering laws, the police tend to confiscate money that is known to have been laundered (or even before they know for sure apparently). Since Bitcoins are trackable, tumbled bitcoins should be "confiscated" (by marking them as illegal for use in @countries in some kind of database) and then, if the previous owner proves that they weren't doing anything illegal, unmarked. Once there is proof of illegal activity, the previous owner could be forced to return them to the rightful owner (if a rightful owner exists, such as in the case of ransomware), or either kept marked as confiscated or even marked as permanently invalid.
How do people know its laundered? If they know, its likely they're complicit so unlikely to stop if being asked to...
> - Any bitcoins that have provably been involved in illegal stuff
See above
> - Any monero/whathaveyou that come from exchanges that accept bitcoin that have received Bitcoins that were involved in illegal stuff
See above also
>- Will bitcoin still have value when quantum computers are around?
Why not? Its reasonable to assume that any increasing capability in hardware will likely also benefit design and capability of software. They'll just make the maths a lot lot harder (to be absurdly simplistic)
You can keep using Bitcoins in non-cooperating jurisdictions, sure. But they'll automatically be less valuable or worthless because you can't use them in many countries.
People with development experience in Bitcoin could implement this in a jiffy. Doesn't even take a government really, you could probably build a startup whose main thing is to provide this information. Then people/exchanges/etc. could decide on their own if these Bitcoins have value or not.
Link to his talk https://youtu.be/3x1b_S6Qp2Q?t=2580 (43:00)
Bitcoin has a public ledger, so once you know who the owner is of a particular address, you can view all of their past transactions and all the addresses of those transactions, potentially exposing a lot of metadata of their activities
no it doesn't.
Most drug runners/dealer are not chemical engineers... they just hire guys that know what they're doing.
Same in the crypto space.
The tech isn't inherently evil or criminal, its the people that use it that way that make their activities using it criminal.
So you can't walk into a shop, ask for a pack of ciggies, and then insist the shopkeeper accepts a £50 note (or a bucketful of 1p coins, for that matter).
At the same time lots of core developers, lightning network developers and the best bitcoin companies already offered lots of technical help, so I'm quite skeptical about the ,,request for Bitcoin help'' part.
TFA says "The new law means every business must accept Bitcoin as legal tender". It says the USD is also legal tender. Is there an official exchange rate? Or an official bank that buys and sells BTC? Do they send out tax bills with both values?
Bitcoin can finance the energy generation and later transmission infrastructure can be added.
Obviously, Bitcoin users want the opposite for the most part.
They don't even try to hide their love for the so-called Wild Wild Financial West.
Chas. T. Main's former vice president Einar Greve, who first offered Perkins a job at the firm,[1]:10 initially affirmed the overall validity of the book:[12]
> Basically his story is true.… What John's book says is, there was a conspiracy to put all these countries on the hook, and that happened. Whether or not it was some sinister plot or not is up to interpretation, but many of these countries are still over the barrel and have never been able to repay the loans.
Ongoing geopolitical events on the other hand (e.g. rise of china, changing energy geopolitics) probably do a lot more to reduce usa's influence
https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...
Environmental as the #1 concern?
Bitcoin's enegery:market-cap ratio - a proxy for energy vs. value to humans - is >300x better than an airline & 60x better than JP Morgan & 20x better than google's.
https://twitter.com/Okcoin/status/1403405528462770183/photo/...
And the BTC"s electricity source trend is quickly toward renewable.
>Mr Zelaya also said that discussions with the International Monetary Fund (IMF) have been successful, saying the IMF was "not against" the implementation of Bitcoin.
Interesting.
Considering/speculating one incentive: If the world bank were to assist in implementing bitcoin in El Salvador, their general technical & financial competence would be transparently on display. And I doubt this fact appeals to them & their backers (powerful incumbents).
Reputation & optics are extremely important to incumbent institutions that yield influence. And as such it's a dissuading from entering open competitive markets.
Long term: Consuming less energy - which is tightly coupled with human prosperity - is futile. It's about the source of that energy.
Having worked for a similar international government type organisation before, this would mean:
1) Hiring someone like IBM to implement the project, who would charge roughly 10x per man hour what they would have to pay for an internal team to do it, as well as licensing fees for various IBMs products that they don't really need.
2) IBM would find a group of junior level developers to build it, who would work about as well as you would expect given the constantly changing requirements dictated by a comittee who can barely spell blockchain.
3) After an overrun of 6-12 months the project would be scrapped, and whichever C-level manager who was incharge of it at IMF would be able blame IBM.
4) Said manager would then be able to take this experience and find a similar level position in private industry, paying 10x what he was on before. He'd celebrate his new job, by playing a round of golf with his IBM buddies.
Even using those sources I believe it's "electricity" consumption not "energy" consumption.
This is absolutely the most contrived number I've ever seen put into the service of excuses for bitcoin's ghastly energy consumption. This is actuallly a new one on me.
It's especially good since "market cap" of a crypto is a made-up marketing number that tells you nothing about the price or its likely movements - it is, literally, the last speculative trading spot price multiplied by the number of coins someone thinks are in circulation.
A billion putative dollars of market cap can disappear in five minutes when the price goes down. Where did all that value go? Nowhere, it was imaginary.
I've never heard this before. What makes you think this?
If there's one thing I've learned, an open market is rarely wrong, esp. in the mid to long term.
Market cap is not, to me, any kind proxy for "value to humans". The utility of Bitcoin as an alternative to fiat is obviously unrelated to the number coins or their price.
How else would you place a value on a company or product's explicit worth to humans?
What is the value of money, viewed as a technology that facilitates the everyday exchanged of goods and services? My only answer to that is "incalculable", since I can't really imagine society without some variation of it. The value of that concept does not reduce to a number.
If we then move on to the discussion of different forms of money, say cash versus digital, or bank deposits versus cryptocurrencies, then I honestly don't see how "number of units times trading price" is any measure of the relative usefulness or value of each of those as technologies. It might be an answer to something, but not that question.
Actually, now that you've made me think about it, I might concede that market cap is useful measure of something's value as an investment object. But the value (rather, usefulness) of a currency is more than that. My salary is not an investment, it's a way of storing the value of my labour and convert it into the stuff I need to survive. So to me, that discussion needs to cover things like efficiency, resilience, and politics (e.g., who controls it). And to me, Bitcoin is very far from a winner in any of those.
Environmental concerns are very fashionable ways to get out of dealing with it, whether true or not. But on your point directly, bitcoin won't displace most financial companies so the implementation of bitcoin doesn't mean anything about that.
Bitcoin started with no connection to real money. Still the connection is quite flaky. Essentially people are buying pieces of the output of a program without any government/majority backing that has any worth. Then, they try to justify it, because for the time being, the main/practically only way to make money out of it, is to find someone else to sell party of this output.
I guess I am getting old and I can't understand how something with so high transaction fees, latency, environment impact, computationally inefficient (as a feature!) is something sought after by some people.