El Salvador hopes to becomes the world’s first country to adopt bitcoin as legal tender

[Pekelo]

You made some good points.

1. A stablecoin on Ethereum L1 would cost more in transaction fees than the bitcoin on the Lightning Network which allows micro payments (pennies transaction value)

I really cringe when I hear BTC + LN. The answer is obviously not making an obsolete and not well designed coin more complicated but to switch to a newly and better designed crypto. Nano and other coins has incredibly low tx fees and their enviromental effect is also negligible.

Since the user/citizen wouldn't actually hold BTC during the transaction, why not choose an effective, fast and enviromentally friendly crypto as the transaction vehicle?? That is the main question...

Not to mention since this is government sanctioned, they could just give a national bank debit cards to the citizens, if underbanking is a problem. Using a phone app they could transfer money free or very cheap. (after all the Prez controls the fees)

The point is; on the national level using crypto doesn't solve anything what debit accounts and money apps already don't do.

Fun fact: El Salvador's currency used to be the colon.

Anything is better than the colon, I guess....

 

[Sig]

Strike has very little cost for fiat to btc or vice-versa conversions, its similar to payment for order flow. im sure they will charge for something but BTC LN is so cheap. on the fiat side they allow the remitter to deposit via ACH or bank cards. it looks like they make some money if the remitter deposits via cards instead of ACH. other than that, most likely the service will be free or close to it as its the correct strategy for tech companies in order to accumulate users

I don't know how many times I have to say this for you to stop ignoring it: at the point you're using ACH or a card to deposit money you have access to any of a dozen existing solutions that already work just fine at the same low cost. Send the person in El Salvador a Transferwise (now Wise) card and you can load it for a few cents via ACH and they can pull the money out at any ATM or use it as a credit card, no exchange fees since they're already on USD. If you allow deposits of cash, you need an extensive network of locations in places where immigrants work that can take the cash and enter it into the BTC system. That takes brick and mortar locations, that takes employees, and that takes significant money and that is one reason why Western Union and the rest are relatively expensive. BTC isn't a magical thing that allows one to run all that on a fee of $.50 per $100 transaction. And you can't seriously be claiming initial low cost because a venture capitalist is subsidizing it long enough to get market share is a feature that requires BTC?

In addition to being able to understand what its like to be poor in El Salvador, you also need to understand what it takes to run a business. VCs only give money to companies that have the potential to make at least 9 figures in EBITDA. Do the math on how much money is remitted to El Salvador, the amount it will cost you to run the business, and the amount you'll earn on sub 1% in fees per transaction with most transactions being a few hundred bucks. It doesn't even come close to penciling out, even if you extend it to worldwide remittances if you're realistic about your costs. At the end of the day remittance by this magical system will cost the same as remittances by the many systems that are already available.

 

[Sig]

Maybe this will help

Come on now @Sprout you're better than the whole "you just don't understand crypto" meme. I have been playing with crypto for probably longer than most of the fanboys here and am quite fascinated by the technical working of blockchains in general. It's precisely because I understand how it works that I don't see it as a panacea like they do. They just get upset when I point out their magical thinking.

 

[mlawson71]

President of El Salvador

https://twitter.com/x/status/1402680890057166858

I heard. I am not sure how serious this is, to be honest.

 

[Daal]

I don't know how many times I have to say this for you to stop ignoring it: at the point you're using ACH or a card to deposit money you have access to any of a dozen existing solutions that already work just fine at the same low cost. Send the person in El Salvador a Transferwise (now Wise) card and you can load it for a few cents via ACH and they can pull the money out at any ATM or use it as a credit card, no exchange fees since they're already on USD. If you allow deposits of cash, you need an extensive network of locations in places where immigrants work that can take the cash and enter it into the BTC system. That takes brick and mortar locations, that takes employees, and that takes significant money and that is one reason why Western Union and the rest are relatively expensive. BTC isn't a magical thing that allows one to run all that on a fee of $.50 per $100 transaction. And you can't seriously be claiming initial low cost because a venture capitalist is subsidizing it long enough to get market share is a feature that requires BTC?

In addition to being able to understand what its like to be poor in El Salvador, you also need to understand what it takes to run a business. VCs only give money to companies that have the potential to make at least 9 figures in EBITDA. Do the math on how much money is remitted to El Salvador, the amount it will cost you to run the business, and the amount you'll earn on sub 1% in fees per transaction with most transactions being a few hundred bucks. It doesn't even come close to penciling out, even if you extend it to worldwide remittances if you're realistic about your costs. At the end of the day remittance by this magical system will cost the same as remittances by the many systems that are already available.

Love the condescending tone while you advocate people break the rules of the company
"
The Wise card is currently available for people and businesses with a Wise account in the UK, the US, Switzerland, Australia, New Zealand, Singapore, Japan, and most of the EEA. There are a few exceptions, so check the list of eligible countries.

We can’t issue the card to people who don’t live in these countries. "

Are you advocating the person in the US to issue a card on his name and then mail it to the person in El Salvador against the rules of the company? Yeah, like that is a sustainable solution to solve the global problem of remittances. I actually live in a 3rd world country (one that Wise doesnt give card access to and that requires paperwork from me from time to time, I actually use their service and deal with their crap) so dont give me your shit about not knowing how poor people live.

 

[Sprout]

1. A stablecoin on Ethereum L1 would cost more in transaction fees than the bitcoin on the Lightning Network which allows micro payments (pennies transaction value)

2. Their own stablecoin meant they would need to have the developer skills and the time to support, upgrade and maintain the network

3. Bitcoin btc has been working for years in El Salvador. It will now be stress-tested on a national level

The reason the President chose to make btc a legal tender is because of the Bitcoin Beach that was there for years (see below on the story)

Let's be honest, this is a new frontier for bitcoin and El Salvador

There's legit criticisms on the difficulties this will pose on every single Salvadoran merchant or service provider as they are required by law to accept bitcoin (if offered) as payment starting today

It smells of authoritarian decree on the struggling citizens

In the short term there will be growing pains

I think there is a marketing side to this that the millennial president is trying to put El Salvador in a leadership status by having the first-mover advantage

Imagine if the blockchain companies such as Binance, Bitfinex, Tron foundation and mining companies all setup offices and operations in the country?

These companies will be welcomed and supported by a friendly government to their cause

Think of all the jobs and revenues it will bring in

During the Twitter spaces last night, the president said he has a scheduled meeting with the IMF next week. I wonder if "they" will tell him to stop or reverse "this"


https://www.forbes.com/sites/tatian...-el-salvador-village-adopts-bitcoin-as-money/

Great success story

 

[Sprout]

I'm pretty familiar with El Salvador's electrical grid, this is my business and I've done some work in an adjacent country. I'm not at all familiar with where this "wasted 644 MW" of geothermal energy is unless they're saying it's heat in the ground that hasn't yet been exploited by drilling the wells and building a geothermal plant? I mean it's gotta be because there is only about 150 MW of geothermal in existence there. If that's it, then refer to my previous 5 year timeline to actually plan, finance, and build a geothermal plant. Also, if they're using that logic, there is also a few GW of "wasted" solar and wind energy there as well.

And while we're at it, the country has about 675 MW of fossil fuel generation fueled by pretty expensive imported LNG. Why in the world would you continue to import LNG to power those while simultaneously using about the same amount for BTC mining? From an opportunity cost perspective, that's the same as mining for bitcoin with imported LNG generated power. Doesn't make any sense from a economic or development perspective.

More details

https://twitter.com/x/status/1402714926800674827

 

[Sprout]

Come on now @Sprout you're better than the whole "you just don't understand crypto" meme. I have been playing with crypto for probably longer than most of the fanboys here and am quite fascinated by the technical working of blockchains in general. It's precisely because I understand how it works that I don't see it as a panacea like they do. They just get upset when I point out their magical thinking.

Maybe there comes a time when a never-coiner has their ‘Bitcoin moment.’

Learning the history of sound money, the development of fiat as a debt-based instrument, the cycle of empire and currency debasement, the decoupling of fiat from an asset class as gold to finance never-ending war, etc was that moment for me.

While I don’t know too much about the payment rails you describe, I do know that I prefer to have my productivity stored in something durable. While the jury is out on whether that is BTC only time will tell but the odds are it would be something that is not a debt-based instrument.

Currently I can store a wide variety of productive crypto assets earning interest that can easily be converted and swapped into anything I want including usd. I also have access to synthetics such as gold, sliver and a growing list of tokenized equities. The ease and exposure to opportunity puts most mobile banking to shame.


I’m spinning up my first BTC node on a little raspberry pi now and will then be able to understand more of the features and benefits of the LN. Perhaps I can provide better answers to your valid questions then.

 

[Pekelo]

https://www.reddit.com/r/path%3D%252Fr%252FButtcoin%252Fcomments%252Fnwxhvj%252F

 

[johnarb]

You made some good points.



I really cringe when I hear BTC + LN. The answer is obviously not making an obsolete and not well designed coin more complicated but to switch to a newly and better designed crypto. Nano and other coins has incredibly low tx fees and their enviromental effect is also negligible.

Since the user/citizen wouldn't actually hold BTC during the transaction, why not choose an effective, fast and enviromentally friendly crypto as the transaction vehicle?? That is the main question...

Not to mention since this is government sanctioned, they could just give a national bank debit cards to the citizens, if underbanking is a problem. Using a phone app they could transfer money free or very cheap. (after all the Prez controls the fees)

The point is; on the national level using crypto doesn't solve anything what debit accounts and money apps already don't do.

Fun fact: El Salvador's currency used to be the colon.

Anything is better than the colon, I guess....

The bitcoin purists do not want a bloated blockchain, the idea is that for anyone to be able to run a full node

Currently, you can run a full bitcoin node on a raspberry pi with a big enough storage (400GB blockchain size, but growing, so 1TB recommended)

To scale Bitcoin and for immediate transaction settlement and very low fees to support micro payments; Lightning Network or any L2 type solution (PayPal, Visa, MC, Square)

Any coin that uses the L1 blockchain for all transactions (on-chain) will get bloated. See Ethereum and the size of the blockchain. Yes, it can be argued there's sharding, pruning, and other solutions, but to go back to the basic design of the blockchain, it's to be able to see the full history of everything

The full truth available to anyone who runs a full node. This is what makes Bitcoin the hardest money in existence. You do not need to trust anyone. You can have the full unadulterated, uncensored, immutable truth going back to the genesis block by running a full bitcoin node


El Salvador will allow people to hold bitcoins for savings/investment purposes

Let's say you're a Salvadoran fruit vendor, you will be able to convert all transactions to US $ within 30 minutes (I heard on the Twitter Spaces with the president) if you use the government version of the wallet. I believe you can choose not to convert

Also, you can use any bitcoin wallet. You do not have to use the government version of the wallet. If you do this, you will be holding the bitcoin for investment/savings purposes

Think of it as a TD Ameritrade account for any Salvadorean. If the wallet the person is using, i.e. Trust Wallet, allows for exchange with other coins such as Ethereum or Nano, then the Salvadorean is technically a full blown crypto investor/trader/speculator


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https://www.coindesk.com/what-is-sharding-ethereum