World Bank rejects El Salvador request for Bitcoin help
bbc.comI feel like a lot of people posting in this thread would benefit from reading Dang's post [0] from a few days ago about how shallow cryptocurrency discussions tend to be on HN and how we should all aim for a better level of discourse.
Maybe it's because Bitcoin is pretty shallow topic on the technical side?
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.
The original idea of blockchains might be simple(shallow) but it is still technically a very deep and interesting topic. Do you think proof of stake is the ultimate invention which resolves all current and future trust and scaling issues? Do you think the current implantation of smart contracts is the epitome of engineering? There isn't even (to my knowledge) a blockchain which enables a smart marketplace for compute time. (The computecoins I investigated fell very short of the promise of being a serverless AWS competitor).
Is there a term for this kind of "shallow" discussions/responses? E.g. if headline is about X but in the vicinity of Y the thread gets filled with generic comments about Y that have nothing to do with X.
It's obviously not exclusive to HN. I keep seeing it on reddit all the time and it's really tiring.
> E.g. if headline is about X but in the vicinity of Y the thread gets filled with generic comments about Y that have nothing to do with X
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
It’s sort of like “topic drift” except that it’s closer to the topic, broadly defined. (Ironically, this side conversation is also topic drift, of the meta variety.)
I just call it appealing to the lowest common denominator.
Bike-shedding isn't binary, it's a continuum. Shallow discussions are a result of audience size and loss of focus.
Dang has had to post that admonition so many times the past few weeks, he really out to just auto-pin it at the top of the main page. Make it “Readme First” FAQ thread or something.
Since HN runs on its own software, it could literally enforce a "read me first" before posting requirement. For certain keywords in the title that might be an interesting way to influence discussion style (and keep it good over time).
A lot of these Bitcoin threads get old. The detractors, the pumpers, the bag hodlers ... it's all so tiresome.
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.
I agree strongly with the tiresome comment, and I am a bag holder and have been interested in monetary policy and economics my entire life - but not enough to read the same 10 comments over and over every day.
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.
> 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).
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.
You're wrong about lightening. It costs a fraction of a cent per transaction and is meant for everyday transactions. For very large transactions, it is wiser to use the main BTC network since there is lower risk.
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.
Yes I agree with the cost and speed (which I mentioned) however lightning does require being connected over the internet.
Great comment, thanks. Yeah, I'm kind of beyond talking about the philosphy of Bitcoin or crypto or monetary policy on this website. Too much FUD and flamebait and all that. Maybe it'll die down in the future. Still, I find the technical questions of "suppose we wanted to 'do BTC' how would we do it?" interesting.
You're wrong about BTC transactions happening on physical paper with no connection to the network. It's not possible.
Technically yes, a “transaction” is on-network - but one can trade wallets (eg: trading paper keys or “Physical bitcoins”). The definition of the word “transaction” is the important bit here.
You can give me the private key to a wallet, but if I'm not connected to the network to see how much money it controls, that's not much good. Even if I trust you temporarily, at some point a network connection is required. Otherwise, it doesn't have anything to do with BTC.
Edit: Additionally, as someone else pointed out, you could have kept your own copy of the key and could empty the wallet before me.
Some physical Bitcoin products solve that too - but I agree completely with you here. That’s why I made it clear that it’s only -technically- possible, but not remotely practical.
Yep, dead wrong. If you hand someone a private key, you now both have control of those coins.
They’re impractical, but checkout Physical bitcoins: https://medium.com/the-capital/everything-you-need-to-know-a...
I did say -technically- and I do mean that - I’m not suggesting this is practical.
I don’t believe there is such a requirement. I suppose it depends how deep of an integration you’re imagining. At the no-tech level you can simply have crypto backed redeemable notes - like the old gold standard.
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.
" At the no-tech level you can simply have crypto backed redeemable notes - like the old gold standard."
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.
Mature internet infrastructure? No. Only perhaps if you want a whole bunch of validating (full) nodes, and only then for the initial bootstrapping and the whole hassle of downloading the entire blockchain up to that point, but past that, even for non-custodial wallets (AKA your keys therefore your coins), broadcasting a transaction takes very little.
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.
So a buyer can pay a seller in Bitcoin with minimal internet connection.
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.
There is, along with all other modern forms of commerce, jit, logistics, and delivery systems.
If your argument is btc doesn't work without the internet, you should keep in mind that nothing else does either.
In theory, only the person recieving payment needs a trusted connection to the network. The person sending a payment just needs a device which can cryptographically sign a "check" addressed to the reciever, and then send the "check" to the reciever who can send it to the network and wait for it to be accepted.
not really. Just an internet connection.
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 believe internet is required. It doesn't need to be fast or high bandwidth.
You can always issue centralized physical bearer notes like cash.
They cite environmental and transparency concerns, but somehow I believe it's more about control and ensuring the continuation of the debt based fiat systems.
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?"
The debt based system will not go away if we ever move the entire economy to bitcoin (laughable as that idea is). You'll have fractional bitcoin reserve banking with absolutely no difference compared to today.
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.
This. So much this. The disruption in finance was moving from things as money to debt as money. And somehow the people who think current crop of crypto could work as money are so delusional that they fail to understand they are trying to turn the clock backwards, not forward. The thought that bitcoin would somehow limit the amount of money (as currently defined, I am talking about M0, M1 etc) in circulation is simply nothing short of delusional. Bitcoin will not stop people wanting to borrow and loan money and it will not stop people using other entities debt as a mean to pay other people (money, that is.)
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...)
Let's say we had a situation where everything was backed by bitcoin (as a reserve currency).
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?
> In fact, the fact that bitcoin has no on-chain notion of credit
Precisely that was the OPs point why it is a good alternative to the debt-based financial system we have.
I first addressed GP's point by observing that, were the global economy to adopt bitcoin as a store of value, they would likely still continue to use fractional reserve banking and continue the debt based economy, jjust dde nominating debt in BTC instead of dollars or other currencies. They are unrelated, especially as long as the BTC block chain isn't even close to fast enough to be used as a medium of exchange for a small town, nevermind the global economy.
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.
The dollar was once backed by gold, so not the best comparison.
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.
It's very simple: you have a banking app that shows you an amount in bitcoin. If you want to send someone else money, you get their own bank account number, and ask your bank to wire that person 1 bitcoin. Your bank talks to their bank and tells them that they are now owed 1 bitcoin.
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.
El Salvador is using Lightning Network on top of Bitcoin for virtually free, instant payments without fractional reserves. Instead of using debt or fractional reserves, Lightning allows 100% reserve asset-backed exchanges.
> the dollar was once based on gold. We've moved on from that after realizing that doesn't work.
Citation needed.
My understanding is that governments moved off the gold standard because they couldn’t debase the gold-backed currency without getting caught. Moving off the gold standard was devastating for citizen’s savings and the constant debasement was used to pay for endless wars.
WWI was only made possible becauuse countries were debasing their currencies instead of raising taxes.
The world moved on from the gold standard briefly at the start of WWI, but then returned. Then, during the Great Depression, the need to better control their currency and do large financial transactions for which they simply didn't have enough gold spurred most countries to move away definitively from it. This spurred recovery from the Great Depression and allowed huge investments in needed work.
All of a sudden, it became clear that well functioning economies could reliably promise money that would become available tomorrow, and use it to start getting there today. This is a major boon to any country, and having to save up resources until you can start huge infrastructure projects would be a return to terrible times.
Later edit: As for the claim that El Salvador would use the Lightning Network, I highly doubt that the citizens of El Salvador will each have a bitcoin wallet and lightning channel connected to it. Much more likely, some citizens will have some account with a bank (exchange) that will facilitate payments through the LN or whatever other mechanism they chose to use internally, that no one will really care about.
Of course, with bitcoin as volatile as it is, no one in their right mind would pick up a credit in BTC, so the greatest need for fractional reserve banking will be far away. Even so, if people start buying heavily into bitcoin, I wouldn't be surprised to see banks/exchanges start to offer BTC that they don't yet own.
My understanding is that the only defect of a gold standard for countries was that they couldn't easily debase their currencies, which historically has been the easiest way to fund wars. Currency debasement hurts the citizens, particularly savers so the individuals never benefit from currency debasement.
For dishonest governments who wish to spend without limit but don't want to raise taxes, fiat currencies allow debasement which benefits dishonest politicians. It does not benefit the people - ever.
This only works if people don't insist on custody of their bitcoin. Also, as was already mentioned, lightning network solves scaling problems while preserving users' custody
You do not need to issue any new bitcoin. What you need is a trustworthy entity that borrows your bitcoin and gives you an IOU slip, which you can then use as a means to pay other people. That slip, stating that whoever owns the slip is entitled to one bitcoin from the trustworthy entity, is from economical point of view as good as bitcoin. And if people want to increase the amount of those slips, there is nothing in bitcoin that stops it. Ergo, in bitcoin economy money supply is not restricted.
As I mentioned elsewhere, this only works if people don't insist on custody of their bitcoin, and a lot of people (although not a majority) would.
Also, do you have some strong historical evidence fractional reserve banking is good economically over long periods (100+ years)?
Gaddafi had launched the idea of a pan-African gold dinar at least since 2002. He was killed in 2011. The driving force for military action against Lybia in 2011 was not the US, but France. Obama and Hillary Clinton only reluctantly went along with Sarkozy's initiative for military action. 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.
>Gaddafi had launched the idea of a pan-African gold dinar at least since 2002. He was killed in 2011.
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
And there's a nice angle that Sarkozy's election campaign was maybe financed by Lybian money ( the court case is ongoing as of now)
https://en.m.wikipedia.org/wiki/Alleged_Libyan_financing_in_...
Oh, is it that he refused to give up the key to his crypto wallet?
It can be both. There is no control, or transparency AND we might mess up the environment more? Pass.
It may be but what is your litmus test about? Can you elaborate on it?
Ghaddafi planned to stop selling oil for dollars and sell it for gold.
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).
> ones that cost nothing
Second largest economy in the world
Second-fourth largest industrial country in the world
...
costs nothing
More military spending than the rest of the world's superpowers and their vassal states combined...
Costs nothing!
1.5 trillion in trade with EU, China and Japan alone.
But yeah, sure. The dollar is a worthless piece of paper that has nothing behind it except the military.
USA has a huge and constantly increasing trade deficit, meaning that it buy more goods and resources than it produces itself. It's an unequal trade that greatly benefits US and makes all the other world poorer with each batch of printed money.
Industry output percent in the USA GDP is small and becoming smaller with every year, while US consumes about order of magnitude more energy per capita than even EU countries.
This is why US needs most expensive army in the world and the need to rig elections, organize coups and revolutions in almost every other country.
I used the same ironic "Costs nothing" phrase as you did.
But yeah, sure. Get all defensive about someone agreeing with you. :)
It's hard to translate sentiment and emotions through short text in the internet :)
Conspiracy theory about moving off the petrodollar, presumably.
It's not a conspiracy theory that he wanted to create a gold backed Pan-African currency. He openly promoted it. It's not a conspiracy theory that this would have very possibly undermined the petrodollar and all Western currencies. It's not a conspiracy theory that the United States and its allies have supported coups, rebellions, and the like to maintain their power in the past.
The people who believe this think we have constant secret inflation in the US, except they also think we don't have inflation because the "petrodollar" forces everyone else to absorb USD, except they also don't explain why other countries like Japan printing JPY doesn't cause inflation.
I don't think a mere thing like what currency you use stops the FBI from assuming everything in the world is their jurisdiction.
One other thing - I hate the term "conspiracy theory". It was literally coined by the CIA to discredit discussion of actual conspiracies. But that's just another crazy conspiracy theory for another HN thread.
> The Oxford English Dictionary defines conspiracy theory as "the theory that an event or phenomenon occurs as a result of a conspiracy between interested parties; spec. a belief that some covert but influential agency (typically political in motivation and oppressive in intent) is responsible for an unexplained event". It cites a 1909 article in The American Historical Review as the earliest usage example,[37][38] although it also appeared in print as early as April 1870.[39]
And it seems they even used time travel to do it.
Sorry, popularized would have been more accurate. Or perhaps weaponized. The term did exist before then, but the usage wasn't prevalent, and more directed at actual "conspiracies" - multiple entities, such as businesses or political rivals, working together illicitly
The public justification for killing Gaddafi is 'stopping the imminent genocide', which by the way, he literally declared he was about to commit.
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.
The public justification for killing Gaddafi is 'stopping the imminent genocide', which by the way, he literally declared he was about to commit.
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".
>The public justification for killing Gaddafi is 'stopping the imminent genocide', which by the way, he literally declared he was about to commit. >The thing is, geopolitics is messy and there are quite a number of 'factors' many of them true to some extent.
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.
> But it is interesting only one of the discussions is allowed
Is someone stopping you?
Having people not be convinced is not the same as preventing discussion.
The rhetoric used stops me from bringing it up, in certain circles. I really only can bring it up with close friends/family, or anonymously on the web. I've been called anti-semitic, racist, alt-right, my intelligence insulted. Again, related to another comment in this thread, it's seen as a "conspiracy theory". The mainstream news media didn't cover it, but certain less tasteful websites did.
I mean, you presented the theory with no evidence that it happened. Your argument is basically that the united states could have done it, had motive to do it, and has a history of doing underhanded things in the past. Even if for the sake of argument i grant all of those things, its still not any more plausible than the official story. If you don't want people to call it a conspiracy theory, get some actual evidence that they actually did do it. Saying they could have done it and might have wanted to isn't enough.
The point is not to determine the actual reason(s) - us plebs will likely never know. The point is to examine the possibility that sometimes alternative explanations to the official narrative could be plausible. Which loops back to how this all started and my original comment, that there's a narrative of electrical power usage and transparency issues - which are real. But there's other plausible explanations - political power and control. Even if the latter were true, it's unlikely the World Bank would cite them in their response.
Most of this thread stemming from my comment has been around "conspiracy theories" and such, which I find disappointing, because there is a healthy level of skepticism and distrust that should be applied to these institutions.
It's perfectly reasonable to bring up the fact that Gaddaffi, Saddam and all sorts of other characters suggest moving on form the petro dollar.
It's not covered by mainstream news, because it's not really a news item.
It's also reasonable to suggest that this will catch the ire of the US and their diplomatic corps, but it's really not an important thing.
It's 'conspiratorial' to suggest that this was in any way a primary reason for killing Gaddafi.
Gaddafi was already getting increased investment from many Western firms, and the US was literally looking to pass his public image to the extent that he provided reparations for Lockerbee and stopped acting crazy. Everyone was keen on 'being normal and making money'.
But the Arab Spring happened, and he made public statements that went to far, people feared the worst and that was the straw that broke the camels back.
The decision to intervene was barely a consensus, nobody really wanted to do it, Obama was super reluctant.
If Gaddafi were to have made a different public statement about his intentions, and were to have signalled in some way that he was unwilling to commit to blood or something ... he would have suppressed the insurrection and probably be still ruler today.
Qatari special forces that ended up killing him were only able to act because of the various forms of American cover and intel. support and of course the chaos of the war with him on the run.
The petrodollar is an important part of American foreign policy and they will get 'really mad' if people try to move away from it, but that's a far cry from the conspiracy stories.
Also, BTC is a giant distraction from reality, it serves to fuel hype and headlines as much as anything.
What if the argument was simply that NATO powers went to war over false pretenses in Libya just like they did in Iraq (Where WMD?) and so many countries before.
I am Canadian and I remember when we would send peacekeepers to stabilize a country under the name of the UN. In this case the UN authorized a nofly zone. Western powers took that as their opportunity to bomb Libya into the stone age and before the NATO-backed rebels were even in power they immediately established a central bank linked to the bank of international settlements [1].
Instead of installing peacekeepers to stabilize the region, once the “dictator” was disemboweled (instead of facing a fair trial) NATO powers left the country to it’s own devices. Shortly after the country devolved to the point where open air slave markets are a thing in the 21st century. Thanks NATO! [2] I would argue if a group of nations violently overthrow a government, then they are responsible for the consequences.
As such the US, Canada, France, UK, and Italy all have the blood of slaves on their hands in Libya. Curious how the mainstream news so rarely connects the dots on that one.
[1] https://www.cnbc.com/2011/03/28/libyan-rebels-form-their-own...
Because that's a conspiracy theory.
You've offered no evidence of 'false pretenses' and not illustrated any rational benefit for Western powers. Just the opposite - SNC Lavalin (Montreal) and others lost lucrative contracts.
And this "As such the US, Canada, France, UK, and Italy all have the blood of slaves on their hands in Libya" - is completely ridiculous. It's reddit-rhetoric, essentially to blame one 3rd party for incidental actions in some other area, at the same time not holding primary antagonists accountable for their actions. Like blaming the US for bombing Japan ... after Japan spent 35 years invading, mass murdering, mass raping, looting, firebombing, all sorts of countries, 100's of millions of people displaced or killed in SE Asia ... and then attacked the US.
Gaddifi, a known antagonist who blew up a civilian airliner, publicly stated he was going to commit mass murder in E. Libya. That's a legitimate pretense.
Did the Western powers stretch their mandate by continuing to support forces in E. Libya after NATO destroyed advancing columns? Yes, but that's completely within the boundaries or rational action.
Libyans did most of their own fighting, NATO provided air cover and Intel, and other ME forces (i.e. Qatar etc.) chose to work on the ground. Their choice.
That some rebels, who were temporarily victorious were able to set up bank accounts for clearing payments is not suspicious. That would be the #1 thing they, and we, would want them to do. To the extent that they seem like 'the best choice out of bad options, good enough to lead the country', then it's reasonable that other countries recognize the new leadership. It's each countries choice to do that.
"Instead of installing peacekeepers" ... this is not what peacekeepers do.
I'm also Canadian, and was in the Armed Forces, and am deeply acquainted with this type of mission.
The notion of 'peacekeeping' is misunderstood by the general public to the point of dangerous naivete.
'Blue Helmet' style peacekeepers can generally only work in situation where most parties have agreed to end hostilities, and usually where the forces aren't very powerful or advanced. They are observers, and generally unable to project force in a manner that would keep the situation under wraps. Literally they observe, make notes and generally don't have the established rules of engagement (or force) to be able to do anything material.
Only 'vastly more powerful application of force' can forcibly 'keep the peace' between antagonizing powers. The US occupation of Iraq, for example, would be truly what we think of as a 'peace keeping operation'. The chaos and tumult and even low-grade violence that was common there is normal and expected. That's what 'actual peacekeeping' looks like.
Because of the reluctance of Western powers to put any physical presence (i.e. 'boots on the ground') they opted to support a group that could somehow, possibly form enough of a coalition to keep the situation intact.
... but because of how Gaddafi adeptly managed to keep the tribes fragmented, at each other's throats, disunited and feckless ... there was nothing reproaching a legitimate political opposition or even coalition that could provide leadership.
And so you have what you have today, which is probably worse than what you have in Iraq.
Paradoxically - Libya would have been much easier to occupy than Iraq. They don't share a border with powerful antagonists (Syria, Iran), they don't have individually powerful groups, they don't have deep infiltration of more radical elements (Al Queda, ISIS etc. - although that could happen) and there's no way for them to be supplied. Algeria, Tunisia and Egypt are not going to allow shenanigans across their borders. The desert route is too long and the areas to the south are hostile.
A NATO-led coalition occupation might have been 'the most ideal of a list of bad options', but it would have to have been on a large scale, there would have been low-grade violence on the news, and garrisons could be expected to be there for decades. Only the US has the ability to really do that, but neither they nor most other advanced nations have the appetite for it.
>Gaddifi, a known antagonist who blew up a civilian airliner
I would like to point out that you are now the one stating "conspiracy theories" without evidence. A government employee of Ghaddafi's blew up an airliner. I'm not aware of any evidence, one way or the other, that he was personally involved with the planning or execution of it.
I wouldn't doubt it. But you're demanding one set of standards of information while not adhering to it yourself.
What is a Jamahiriya? [1]
[1] https://en.m.wikipedia.org/wiki/Jamahiriya_(disambiguation)
You don't even have to look to geopolitical analogies. It's an everyday thing, all the way down to basic "exclusive club" gatekeeping.
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...
This is a great comment. Great examples of gatekeeping. I think you're right on the breakdown of "trust me" models. I also see a problem with fundamental value in the crypto space.
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.
Who are your friends? Not even my most educated friends would be able to provide an answer at all.
Mostly crazy people.
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.
> FWIW 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 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"
Was it along the lines of, trying to convince OPEC to stop accepting dollars?
This is such a stupid story. The World Bank isn’t set up to finance side projects. In a similar vein, Micronesia wants to send coral to space and the World Bank refused to support—scandalous!
We keep talking about how tech should be used to make a net positive change yet we allow this glorified linked list that has 0 real world benefits after a decade to get a pass because some man children run around promising it's the future.
I think it's censorship resistant and permissionless properties make it pretty impressive.
I don't think its cencorship resistence is that impressive. The amount of data you can publish is pretty limited, which is a key property of cencorship resistence.
There are other blockchains with more available space than Bitcoin, such as Bitcoin Cash.
Is it censorship resistant? Couldn't state easily enough attack it at any sufficiently large point it contacts with real economy? They degree certain wallets being tainted. And then promise to jail anyone who deals with coins from these, receive them and transmit on to anywhere but government controlled wallets and face jail time? For one scenario, or just tell exchanges or like to confiscate any coins coming from certain addresses...
Sanction resistant too.
"glorified linked list" is a pretty big straw-man, besides being short-sighted.
innovation of blockchain is not entirely the tech, but what it ultimately enables socio-politically.
That "glorified linked list" solves a lot of problems in peer to peer computing. In fact, blockchains are arguably the biggest breakthrough that subfield of computer science has ever seen.
Meh, bitcoin is an interesting solution to a difficult to solve problem, but "biggest breakthrough" is rediculously hyperbolic. The applications beyond decentralized trustless tradeable tokens have mostly been toy examples.
Examples of bigger breakthroughs in the field of p2p communication: the internet. Distributed hash tables.
> solves a lot of problems in peer to peer computing.
Can you list ten of these problems if there are a lot of them?
Sure:
- 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.
> The pearl clutching over cryptocurrency seems extremely inauthentic when you consider the vast sums of energy tech giants expend to target us with ads.
The amount of energy they expend on ads is dwarfed by the amount of energy spent on doing the amount of "distributed computation" that can be run on a Raspberry Pi ten times over.
Most of the problems that this "breakthrough" supposedly solves are solved either extremely poorly, inefficiently, or not at all.
And the reason is simple. Blockchain is a distributed append-only log with an extremely inefficient and expensive way to append logs to it. And that's it. Anything else you ascribe to this breakthrough is wishful thinking.
Excuse me? The only concept blockchain introduced was a distributed ledger. Most of those advantages you listed were already present in distributed computing way before blockchain paper was out, it's what blockchain was based on, not what it brought about. Distributed databases like Cassandra were using those even before bitcoin, please educate yourself before spreading misinformation.
It's a kademlia based app, this shit was around in the 90s. I'd argue the biggest breakthrough was the Turing machine but sure the consensus math is interesting.
Did i miss something? I didnt think bitcoin used kademlia.
I would consider kademlia (or overlay networks in general) a bigger breakthrough though.
Kademlia had no consensus mechanism.
>I'd argue the biggest breakthrough was the Turing machine
Witty, but that's not peer to peer computing.
Can you identify someone expressed both of those beleifs? Maybe they're separate people, who are obviously entitled to have conflicting opinions.
Countries that use the USD for their official currency, and are not a part of the US, have a broken financial system. They need to fix that to a point where they can implement their own sovereign currency.
Maybe it's not as simple as you think? These countries generally chose to use USD, do you really believe that they all just made a stupid decision with no upsides?
You are right. It isn't easy. But no one ever said running a country would be easy. If you are choosing to use another country's currency for your economy, you carry all the risks associated to that currency
In the case of El Salvador, they adopted the US dollar when their native currency collapsed after a bloody 12 year long civil war. Notably the civil war was covertly funded by the United States in order to support regimes aligned with US interests. At the height of the war, the US was funneling $1-2 million USD per day (1980 dollars) to fund an army of child soldiers. [1]
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.
In general the USD or the euro emerges as defacto form of legal tender on the other side of some sort for societal collapse. It can be a temporary thing, but it is not a healthy thing.
Countries that use the Euro for their official currency, and are not the European Union, have a broken financial system. They need to fix that to a point where they can implement their own sovereign currency.
Doesn't really change anything which foreign currency they would use, be it pound, yuan, franc, riyal etc....
Yes. That is the case too.
Besides the blatant whataboutism, is there anything in OP's message that you don't agree with?
The world bank responding to such a request shows how big of a thing Bitcoin has become.
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.
> The world bank responding to such a request shows how big of a thing Bitcoin has become.
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.
It did respond, but it responded with a "no" (not unusual for a bank). There is no international right to obtain whatever assistance you want from the world bank.
> The world bank responding to such a request shows how big of a thing Bitcoin has become.
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.
> The world bank responding to such a request shows how big of a thing Bitcoin has become
My local bank would also respond to a request for $1 billion dollars to buy Bitcoin.
The World Bank would respond to such a request from a Government, it doesn't mean it's a 'big deal'.
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.
What are the regulatory, financial and legal concerns? Why are they a deal-breaker? If there were no concerns El Salvador wouldn’t need to ask any help, would it?
KYC and AML are some of the biggest regulatory and legal hurdles for bitcoin. On the financial side, tying your country to a coin whose value you can't control, and is known to fluctuate wildly, is obvious financial insanity.
You could say the same thing about cash.
Also, gold's value seems to fluctuate quite a bit and it was / is the basis for some currencies
Yes, cash is problematic for KYC and AML. That's why cash transactions and ownership are highly regulated in most of the world.
And gold's day-to-day value doesn't fluctuate nearly as much as bitcoin. Still, it does fluctuate too much, which is why the entire world has abandoned the idea of using it as a representation of the value of money.
Currently there are no currencies that are based on gold. Must be a reason for that.
Other random bitcoin concerns (apart from the environmental ones):
- 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
I'm pretty much the opposite of a bitcoin fan, but I think if you replaced "bitcoin" with "dollars" in your comment you would see that it sounds a bit weird. I bet most dollars have been involved in shady business at some point during their life. With bitcoin you have a better chance at figuring this fact out I guess.
Regarding quantum computers: Quantum computers are not known to be exponentially faster at hashing than normal computers, so they pose no threat to bitcoin.
That is true.
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.
Best of luck enforcing that. Just like cash, most people are not going to care if someone pays them with laundered BTC, and will ignore the law. Even if they do manage to get enforcement in place years down the road, that kind of activity will not happen with BTC. People who value privacy in their transactions already use Monero, which is superior to BTC in that respect
Quantum issue is not with hashing but with private key derivation
Oh I didn't know that! Thanks for pointing it out.
But quantum computer can break currently used Public-Key Algorithms, like ECDSA, which is used by Bitcoin.
>- How about people stop accepting laundered bitcoins first and foremost?
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)
Easy in the case of ransomware or any other cases where a victim has to pay Bitcoins. The entity who pays the ransom/whatever sends the money to a Bitcoin address. This money is immediately marked as "confiscated" in cooperating jurisdictions. That money will be mixed in a tumbler (operating in a non-cooperating jurisdiction) with other Bitcoins, which get the same treatment. Or exchanged for a different cryptocurrency in an exchange that facilitates money laundering, and all cryptocurrency that is traceable that goes through that exchange is immediately marked as "confiscated".
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.
Yes. Vitalik Buterin (Ethereum founder) talks about this in his talk with Lex Fridman. According to him, the overhead of running a Quantum computer will be higher than the speed-up advantage you get by using it for mining.
Link to his talk https://youtu.be/3x1b_S6Qp2Q?t=2580 (43:00)
I'm very ignorant about Bitcoin, but given El Salvador's big problem with crime, doesn't adopting Bitcoin give the cartels an extremely easy way to launder their money?
Depends on how tech savvy they are.
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
> Depends on how tech savvy they are.
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.
There was an article a while back on Hacker News top list where the blog author explained, in actually very simple steps, how to launder it through services such as Tornado, to disjoin the trail of money. Pretty intelligent piece of work.
Coin mixers can make this much harder.
I'm pretty sure cartels and gangs are using fiat right now...
The Salvadoreans (or perhaps it's the BBC) seem to take the view that "legal tender" means any trader must accept it. That's not what the term means here in the UK; it means that once a debt is incurred, an offer to clear it with legal tender prevents the creditor subsequently suing for non-payment.
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).
I'm not sure what the World Bank even could help, as they haven't worked with the code base and the cryptography of Bitcoin at all.
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.
I'm still unclear on what "legal tender" means in this context.
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?
The environmental impact of Bitcoin is positive, as Bitcoin allows us to use energy sources that are too remote or inaccessible to build cables to. For instance, waterfalls in remote locations. About transparency, it is the most transparent system, as all transactions are public. This is nothing but poor excuses.
How does exploiting remote energy sources for Bitcoin have a positive environmental impact?
In the case of El Salvador, Bitcoin mining will be used to bootstrap geothermal.
Bitcoin can finance the energy generation and later transmission infrastructure can be added.
Ok, but geothermal energy creates pollution. It's considered a cleaner alternative to tradition energy sources insofar as it replaces existing energy demands, not when the demand is being created ad hoc.
"Geothermal power plants do not burn fuel to generate electricity, but they may release small amounts of sulfur dioxide and carbon dioxide. Geothermal power plants emit 97% less acid rain-causing sulfur compounds and about 99% less carbon dioxide than fossil fuel power plants of similar size." - https://www.eia.gov/energyexplained/geothermal/geothermal-en...
What kind of pollution does geothermal create? Honest question. I was under the impression it's just steam spinning turbines. Akin to a nuclear plant but without all the problematic radioactive fuel.
Any construction project generates significant greenhouse gas - concrete and its production are major GHG generators, and disturbing the soil, displacing living plants also tends to generate emissions.
Building a new power plant in addition to all your existing ones will never reduce GHG emissions, regardless of how clean the new one is. We need to start tearing down old power plants and reducing consumption overall, not finding new things to spend countries' worth of energy on.
Fair enough but I can't see that as more harmful than any other energy production. El Salvador still does not generate enough power to serve all it's citizens, so they will be building more power plants regardless. Hopefully they can balance bitcoin mining in the off-peak hours, and not create new plants solely to support bitcoin mining.
But I fail to see how geothermal's environmental impact is problematic.
The point is Bitcoin in an imaginary ideal scenario is at best neutral, not positive.
Bootstrapping energy production in remote places could have a few nice side effects sure, it just doesn't help its environmental impact.
Governments want to know identities, not wallet addresses.
Obviously, Bitcoin users want the opposite for the most part.
I disagree with your transparency point. I see that a lot of Layer 2 solutions like Lighting started which basically can make it nontransparent like Monero.
Lightning is anything but transparent. It requires trusted nodes to operate.
You don't need to trust LN nodes
I don't get it, why is this the sort of thing the world bank would help with at all. Isn't it up to El Salvador to figure out how to do this? If they were just adopting a new fiat currency, wouldn't it be up to El Salvador to implement? Why would the world bank be involved?
I assumed it was one of those situations in which you ask around even though chances are slim because there is virtually no cost in doing so.
Will the big banks, institutions and governments make a move against DeFi soon? Seems like it.
This is absurd. Big banks, institutions and certain governments are amongst the first adopters of all of this.
They don't even try to hide their love for the so-called Wild Wild Financial West.
Big banks are already building on Ethereum, in case you didn't know
I think its mostly Ripple in Australian banking circles. but yeah... they are definitely seeing the upside to a lot of this technology and are using (abusing) it quietly in the background to their own benefits.
Of course, they don't want to lose their part of the pie.
They're not gonna lose their part of the pie by proposing all crypto services themselves, instead of seeing all that capital flee to exchanges
They are a little late for that. The genie is out of the bottle
The US uses the dollar as a weapon and it controls the world bank. So it makes sense that they won't help to de-dollarize the world.
https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit...
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.
One random (small) country adopting bitcoin doesn't do that.
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
I wouldn't discount it so fast. One country attempting this doesn't mean much but one success story? If they can make it work other countries will follow. Then game theory takes over
Yeah, but most other countries already have their own fiat currency. In the unlikely event this actually succedes,i still don't see why it would threaten US as global reserve currency or otherwise make a difference.
It threatens the US as a global reserve currency because everyone knows the US can inflate away the value of the dollar at will.
Decentralized trust is the exact reason why some digital currency, like bitcoin, may eventually replace the dollar as a reserve currency. That is the game theory aspect, in relation to the US dollar
Not so far from the truth, in the sense that global financial institutions are being used for political purposes (e.g.: implementing sanctions, freezing assets, seizing assets, controlling money supply)
https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...
>"While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings," they added.
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.
> 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.
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.
The absolute figures are bitcoin uses about the equivalent of Sweden’s energy consumption every year. Renewable energy isn’t free and should be replacing legacy sources, not being used to do pretend work. Environmental is a huge factor.
That's assuming Sweden's power grid is up 365 days a year, but we should subtract a few days to account for bitcoin ransomware attacks.
> The absolute figures are bitcoin uses about the equivalent of Sweden’s energy consumption every year.
Even using those sources I believe it's "electricity" consumption not "energy" consumption.
Why should renewable energy be replacing legacy sources rather than bitcoins sources?
Can you make me a list of real vs pretend work so I can base my ethical decisions on it?
It's not a comprehensive list, but a good rule of thumb is that any computer spinning around computing a number that no one cares about the value of is pretend work.
so BTC would be real work because a lot of people care about those numbers, right?
No, no one cares about the final numbers - they are just, as the Bitcoin paper explains, Proof of Work. The only point of doing those calculations is to prove that you have spent X processor cycles in service of Bitcoin. You could entirely replace the calculation (and checkers) with a different calculation and nothing whatsoever would change about bitcoin, because no one cares about the values.
Conversely, if you found an algorithm that could compute those same values in microseconds on a calculator, bitcoin would plummet in an instant, because suddenly anyone with a calculator could run 99% attacks on the bitcoin network. The numbers aren't improtant, the busywork is.
Well yes, the values existing are important, the values semantics aren't, that's why its a proof of work.
> Bitcoin's enegery:market-cap ratio
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.
>It's especially good since "market cap" of a crypto is a made-up marketing number
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.
> 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.
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.
So say this while offering zero other alternative.
How else would you place a value on a company or product's explicit worth to humans?
I can't give you one formula for that. It depends which kind of product, since most things are more than just investment objects.
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.
Why are you comparing energy:market-cap ratio instead of something like energy:transaction-volume ratio for example? I'm sure if you compare Bitcoin to Visa on that metric instead, it'd look pretty bad for Bitcoin.
The value Bitcoin provides to humans is about more than the transactions.
The value is primarily about security as a store of wealth.
This is why I use market cap.
The value it provides is a Ponzi scheme for elites and lumpens to quickly make money, nothing else.
Hope you try to avoid allowing jadedness to cloud your interpretation of & openness to reality.
>From the data & trend on % renewable energy use & the absolute figures compared to, for instance, energery use by [arguably displaceable] financial co's, that seems a little weak.
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.
The comments on Bitcoin threads make me realize how much people are happy to bend the truth (e.g. energy consumption) to justify what pays them (or they think it pays them.
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.
One reason: a central bank like the FED can't fuck it up. That is enough of a reason to give it value. Even if it was banned by Fincen, it wouldn't stop all countries from using it. That one reason is just too strong. Think about it, if you are some other country that isn't the USA, would you trust the USA not to inflate away the value of your foreign reserves? Bitcoin and other cryptocurrencies solve this game theory type problem