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To add on to that, it's been used pretty nicely in the El Zonte beach town [1]. 1: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-el-salvador-vill

To add on to that, it's been used pretty nicely in the El Zonte beach town [1]. 1: https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-el-salvador-village-adopts-bitcoin-as-money/?sh=1c8a51bb2044 https://www.forbes.com/sites/tatianakoffman/2020/07/14/this-...

CyberDildonics 5y ago
When that article was written the transaction fees were around $1.50-$2.00 USD which is already a lot for meals and snacks. Now that the average transaction fees are anywhere from $7 - $60 I doubt people are buying much with bitcoin's dialup throughput. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m https://bitinfocharts.com/comparison/bitcoin-transactionfees...
- atweiden 5y ago
  Doesn’t the Lightning Network scale to millions of transactions per second, which is what El Salvador will be using? Fees are miniscule on LN, as well.
  - CyberDildonics 5y ago
    That would mean people aren't actually using bitcoin, they are using this wallet's centralized lightning network balance. If they want to actually send money to someone using bitcoin, they will have to get their balance on to the main chain, which means that they will have to take it off this wallet and then incur the transaction fees for getting to the bitcoin chain. Then they will have to take the hit of the transaction fees again to get their actual bitcoin balance somewhere else. This is what happens when you use a purposely crippled cryptocurrency like bitcoin. They could use litecoin, monero or bitcoin cash directly and not have any 'wallet app' that keeps their balance. Then they would be in control of their own money.
    - atweiden 5y ago
      > If they want to actually send money to someone using bitcoin, they will have to get their balance on to the main chain Strike payment recipients can withdraw their USD balance as BTC to any Lightning-enabled wallet (or any other wallet, for that matter) [1]: How to purchase bitcoin with Strike 1. Open a Lightning wallet or Bitcoin wallet of your choice. (If you do not already have one, see our recommendations below) 2. Generate a receive address or invoice for the amount of btc you wish to purchase. 3. Scan with Strike and hit send. Done! You have just converted USD from Strike to btc in your wallet. [1]: https://strike.me/faq/howtopurchase https://strike.me/faq/howtopurchase
    - Vecr 5y ago
      I don't think so, if I have inbound capacity on my lightning node (hooked to my full node, so not centralized), they can just send money to me as long as the routes through the network have enough capacity.
  - tomtomtom777 5y ago
    > .. millions of transactions per second, which is what El Salvador will be using? Why would that be what El Salvador is using? That is such a weird notion, and one of the reasons Bitcoin is often incorrectly called unscalable. How many financial transactions do you think an average person does per day? I don't know but probably not much more than one, maybe even less. If you handle special B2B cases like high frequency trading separately, financial transactions ceases to be big data.
    - wokwokwok 5y ago
      You think the average person does less than one financial transaction per day? O_o I mean, sure, not everyone is out getting a coffee every morning, but that strikes me as roughly an order of magnitude below reality. Let’s say, shopping three times a week, with 5 transactions per shopping trip; that’s already an average of 2 transactions a day, but worse, since it’s clustered in small time intervals. How do possibly get 0-1 transactions per day per person? That’s.. a society where people don’t use money. It’s not a thing.
      - yorwba 5y ago
        Over the last three months, I've made on average slightly more than two transactions per week, most of which is due to buying food every 3 or 4 days. Everything else is a rounding error. Now I won't claim my consumption pattern is typical, but it certainly shows that 0-1 transaction per day is possible. (What are the five shops you visit three times a week?)
        ben_w 5y ago
        Working from home during the pandemic, I’ve been making 4.3 transactions per week. If I was still commuting, I’d add at least 5 a week for lunches, might add another 5 a week for train station Brötchen and cookie. If the restaurants were back to normal, might add two more per week for evening meals. I think I prefer my new normal of the bulk shopping being a once a week collection, so that probably won’t go back to my old habit of whatever/wherever, but even then the local doesn’t have everything I want, so there will be a few additional transactions with grocery stores. (My commute costs will likely be a once-per-year expense, so a rounding error for transactions per week).
  - ulzeraj 5y ago
    Apparently they are already using it. There is a local company running nodes and publishing their wallet for people to use.
- rawtxapp 5y ago
  Strike is using lightning where the fees are barely a few satoshis (much smaller than cents) most of the time. This isn't the Bitcoin of 2015, there has been lots of new development, lightning is here and is being used with growing adoption (1ml.com), there are other changes coming to improve the base layer itself (taproot, eltoo, etc).
  - CyberDildonics 5y ago
    > This isn't the Bitcoin of 2015 I agree, because I used bitcoin in 2015 and it actually worked well instead of being crippled to a few transactions per second for the whole network. How are they getting their balance on to the bitcoin chain? How much does that cost? Once they are in control of their money and actually have it on the real chain and not some wallet app maker's sub-chain they still have to eat more giant transaction fees. This approach will only work for people using this app, which defeats the whole purpose.
    - staktrace 5y ago
      Maybe you should try to actually read up on what the lightning network is before you argue against some ill-informed strawman version of it.
      - arcticbull 5y ago
        No, CyberDildonics is right - and asking the pertinent question. Strike doesn't denominate customer deposits in any kind of crypto. They're a traditional custodial wallet for fiat deposits, and a registered money services business. They appear to be using the lightning network to move money between Strike's own accounts. They seem to use their own lightning nodes - that they don't allow third parties onto - to move money between their own accounts, rather than amending the centralized database of who owns how many dollars directly. However, it's all closed and internal, and I simply do not get why they would do this.
  - dariusj18 5y ago
    I still don't understand how the lightning network works and maintains the important blockchain feature of bitcoin.
- bubersson 5y ago
  Transaction fees are 5 cents in the last couple days. The mempool is empty (see https://mempool.space/ https://mempool.space/). If you are paying more, then that's an issue with the exchange or wallet that you are using.
  - CyberDildonics 5y ago
    No they aren't, you are misunderstanding that link. It gives an 'estimate' of 1 satoshi per byte. The actual current block is 12 satoshis per byte. Transactions are not a single byte of course. This is why the average transaction fee is $7 right now and was $60 a few weeks ago. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m https://bitinfocharts.com/comparison/bitcoin-transactionfees...
    - bubersson 5y ago
      Maybe you should actually check the blocks. If your transaction pays fee 5 cents it would easily get included in the mined blocks. Often immediately. As I mentioned, if people are using wallets or exchanges that set the fee higher, that's their fault. They are stupidly overpaying and that's why average is high. Since mempool is currently empty, the blocks include transactions with 1 sat/vB. For average transaction with 140vB that would be 140 sats, which is currently ~0.05 USD.
- landemva 5y ago
  The fees do fluctuate, thus layer 2 solutions. A few days ago I moved some bitcoin and two transaction fees were equivalent of USD 0.78 and 0.72. For finality in a few minutes, I thought it was reasonable.
  - lottin 5y ago
    It depends on what country you live in. A few transactions like these every day would amount to $20-30 per month. Whereas you could use cash and pay no fees.
    - incrudible 5y ago
      > A few transactions like these every day... You don't do "a few of these" every day. It's for moving significant amounts of money, where security starts to matter. Lightning network is for small transactions. You don't need your daily purchase of a coffee to be on the Bitcoin blockchain for the rest of history. > Whereas you could use cash and pay no fees. Somebody still has to spend time and money managing all that cash, particularly in less safe countries.
      - lottin 5y ago
        > Lightning network is for small transactions. That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate. > Somebody still has to spend time and money managing all that cash. I don't know how you manage your cash, I manage it myself, and I certainly don't know anyone who pays $20 a month to have their cash "managed". Especially in a third-world country, it seems unimaginable.
        atatatat 5y ago
        They mean not being robbed.
        incrudible 5y ago
        > That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate. Lightning network has virtually no fees. You were replying to someone who managed to get a "real" Bitcoin blockchain transaction through for less than a dollar. > I certainly don't know anyone who pays $20 a month to have their cash "managed" I was thinking of the people managing cash registers.
PragmaticPulp 5y ago
According to the article, someone donated "six-figure" amounts of Bitcoin to the town each year on the condition that they learn how to use Bitcoin: > Beneficiaries of the digital currency had to learn how to use the Bitcoin itself, creating a Bitcoin economy. If you give a relatively poor town the option to take free money as long as they learn how to use Bitcoin, of course they're going to learn how to use Bitcoin. The real test is whether Bitcoin makes sense in an otherwise functioning economy where people aren't given free Bitcoin and they have the option to use a credit card that comes with a lot of consumer protections and zero (or even negative) fees.
- deleted 5y ago
  [deleted]
- samatman 5y ago
  The payment system mentioned in the Fine Article is built on top of Bitcoin, using Lightning Network. There's nothing stopping them from putting various consumer protections and rewards programs on top of that, and plenty of motive to do so. It's definitely a wait-and-see sort of thing, but I don't see as to how betting against it is the obvious move.
  - arcticbull 5y ago
    Why does the Strike app use LN or crypto at all? I just can't wrap my head around this. They're a custodial wallet for your fiat currency, right? You deposit fiat with them. You withdraw fiat from them. You move it between accounts on their service. They, or a designed entity must hold that fiat on deposit on behalf of users. When you 'send' that money (according to Jack Maller), they buy BTC for you, send it over the LN network, then convert it into a stablecoins. Which ends up, notionally, in one of the Strike custodial accounts. So this Rube Goldberg machine of crypto is used for internal account transfers within Strike? Am I missing something? They're a centralized, trusted custodian (and a registered money services business). Why are they sending money from a Strike-owned account to another Strike-owned account this way? Could they not simply record a debit on one account and a credit on another account in any kind of traditional store? One they clearly already have? Why wouldn't they have one account for each country, a small slush fund and/or debt facility to cover near-term transfers, then just record how much of the pot is attributed to each user account - and if money has to move across borders, send a wire from time to time. Is this really just the most complicated intra-company account transfer of all time? Or are they just doing it to avoid regulation?
habibur 5y ago
How a large a "cut" they take from every transaction is the question here. As for cash,there's no cut taken by any middle man. And when the central government or bank is involved in pushing a legal currency -- there shouldn't be any cut.
- toxik 5y ago
  You know damn well that banks and credit card institutions take cuts of transactions. Why this aversion to Bitcoin on HN, even with LN?
  - imtringued 5y ago
    I agree, why would anyone provide payment infrastructure if they don't get paid?
    - antb123 5y ago
      1) information - which might be scary. 2) government control of some kind -
  - arcticbull 5y ago
    Why the horror when someone asks how a free service is making their money, and how much? The quantification matters because we want to know if, in the future once they've spent all their VC money and have to make payroll themselves, it represents a better deal or not.
- lowkey 5y ago
  As for cash, the “cut” that is taken is via inflation. Governments print money increasing the total supply of currency and decreasing the purchasing power of your cash. It’s also called currency debasement and has a history almost as old as currency itself.

CyberDildonics 5y ago

When that article was written the transaction fees were around $1.50-$2.00 USD which is already a lot for meals and snacks. Now that the average transaction fees are anywhere from $7 - $60 I doubt people are buying much with bitcoin's dialup throughput. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m https://bitinfocharts.com/comparison/bitcoin-transactionfees...

atweiden 5y ago
Doesn’t the Lightning Network scale to millions of transactions per second, which is what El Salvador will be using? Fees are miniscule on LN, as well.
- CyberDildonics 5y ago
  That would mean people aren't actually using bitcoin, they are using this wallet's centralized lightning network balance. If they want to actually send money to someone using bitcoin, they will have to get their balance on to the main chain, which means that they will have to take it off this wallet and then incur the transaction fees for getting to the bitcoin chain. Then they will have to take the hit of the transaction fees again to get their actual bitcoin balance somewhere else. This is what happens when you use a purposely crippled cryptocurrency like bitcoin. They could use litecoin, monero or bitcoin cash directly and not have any 'wallet app' that keeps their balance. Then they would be in control of their own money.
  - atweiden 5y ago
    > If they want to actually send money to someone using bitcoin, they will have to get their balance on to the main chain Strike payment recipients can withdraw their USD balance as BTC to any Lightning-enabled wallet (or any other wallet, for that matter) [1]: How to purchase bitcoin with Strike 1. Open a Lightning wallet or Bitcoin wallet of your choice. (If you do not already have one, see our recommendations below) 2. Generate a receive address or invoice for the amount of btc you wish to purchase. 3. Scan with Strike and hit send. Done! You have just converted USD from Strike to btc in your wallet. [1]: https://strike.me/faq/howtopurchase https://strike.me/faq/howtopurchase
  - Vecr 5y ago
    I don't think so, if I have inbound capacity on my lightning node (hooked to my full node, so not centralized), they can just send money to me as long as the routes through the network have enough capacity.
- tomtomtom777 5y ago
  > .. millions of transactions per second, which is what El Salvador will be using? Why would that be what El Salvador is using? That is such a weird notion, and one of the reasons Bitcoin is often incorrectly called unscalable. How many financial transactions do you think an average person does per day? I don't know but probably not much more than one, maybe even less. If you handle special B2B cases like high frequency trading separately, financial transactions ceases to be big data.
  - wokwokwok 5y ago
    You think the average person does less than one financial transaction per day? O_o I mean, sure, not everyone is out getting a coffee every morning, but that strikes me as roughly an order of magnitude below reality. Let’s say, shopping three times a week, with 5 transactions per shopping trip; that’s already an average of 2 transactions a day, but worse, since it’s clustered in small time intervals. How do possibly get 0-1 transactions per day per person? That’s.. a society where people don’t use money. It’s not a thing.
    - yorwba 5y ago
      Over the last three months, I've made on average slightly more than two transactions per week, most of which is due to buying food every 3 or 4 days. Everything else is a rounding error. Now I won't claim my consumption pattern is typical, but it certainly shows that 0-1 transaction per day is possible. (What are the five shops you visit three times a week?)
      - ben_w 5y ago
        Working from home during the pandemic, I’ve been making 4.3 transactions per week. If I was still commuting, I’d add at least 5 a week for lunches, might add another 5 a week for train station Brötchen and cookie. If the restaurants were back to normal, might add two more per week for evening meals. I think I prefer my new normal of the bulk shopping being a once a week collection, so that probably won’t go back to my old habit of whatever/wherever, but even then the local doesn’t have everything I want, so there will be a few additional transactions with grocery stores. (My commute costs will likely be a once-per-year expense, so a rounding error for transactions per week).
- ulzeraj 5y ago
  Apparently they are already using it. There is a local company running nodes and publishing their wallet for people to use.
rawtxapp 5y ago
Strike is using lightning where the fees are barely a few satoshis (much smaller than cents) most of the time. This isn't the Bitcoin of 2015, there has been lots of new development, lightning is here and is being used with growing adoption (1ml.com), there are other changes coming to improve the base layer itself (taproot, eltoo, etc).
- CyberDildonics 5y ago
  > This isn't the Bitcoin of 2015 I agree, because I used bitcoin in 2015 and it actually worked well instead of being crippled to a few transactions per second for the whole network. How are they getting their balance on to the bitcoin chain? How much does that cost? Once they are in control of their money and actually have it on the real chain and not some wallet app maker's sub-chain they still have to eat more giant transaction fees. This approach will only work for people using this app, which defeats the whole purpose.
  - staktrace 5y ago
    Maybe you should try to actually read up on what the lightning network is before you argue against some ill-informed strawman version of it.
    - arcticbull 5y ago
      No, CyberDildonics is right - and asking the pertinent question. Strike doesn't denominate customer deposits in any kind of crypto. They're a traditional custodial wallet for fiat deposits, and a registered money services business. They appear to be using the lightning network to move money between Strike's own accounts. They seem to use their own lightning nodes - that they don't allow third parties onto - to move money between their own accounts, rather than amending the centralized database of who owns how many dollars directly. However, it's all closed and internal, and I simply do not get why they would do this.
- dariusj18 5y ago
  I still don't understand how the lightning network works and maintains the important blockchain feature of bitcoin.
bubersson 5y ago
Transaction fees are 5 cents in the last couple days. The mempool is empty (see https://mempool.space/ https://mempool.space/). If you are paying more, then that's an issue with the exchange or wallet that you are using.
- CyberDildonics 5y ago
  No they aren't, you are misunderstanding that link. It gives an 'estimate' of 1 satoshi per byte. The actual current block is 12 satoshis per byte. Transactions are not a single byte of course. This is why the average transaction fee is $7 right now and was $60 a few weeks ago. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m https://bitinfocharts.com/comparison/bitcoin-transactionfees...
  - bubersson 5y ago
    Maybe you should actually check the blocks. If your transaction pays fee 5 cents it would easily get included in the mined blocks. Often immediately. As I mentioned, if people are using wallets or exchanges that set the fee higher, that's their fault. They are stupidly overpaying and that's why average is high. Since mempool is currently empty, the blocks include transactions with 1 sat/vB. For average transaction with 140vB that would be 140 sats, which is currently ~0.05 USD.
landemva 5y ago
The fees do fluctuate, thus layer 2 solutions. A few days ago I moved some bitcoin and two transaction fees were equivalent of USD 0.78 and 0.72. For finality in a few minutes, I thought it was reasonable.
- lottin 5y ago
  It depends on what country you live in. A few transactions like these every day would amount to $20-30 per month. Whereas you could use cash and pay no fees.
  - incrudible 5y ago
    > A few transactions like these every day... You don't do "a few of these" every day. It's for moving significant amounts of money, where security starts to matter. Lightning network is for small transactions. You don't need your daily purchase of a coffee to be on the Bitcoin blockchain for the rest of history. > Whereas you could use cash and pay no fees. Somebody still has to spend time and money managing all that cash, particularly in less safe countries.
    - lottin 5y ago
      > Lightning network is for small transactions. That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate. > Somebody still has to spend time and money managing all that cash. I don't know how you manage your cash, I manage it myself, and I certainly don't know anyone who pays $20 a month to have their cash "managed". Especially in a third-world country, it seems unimaginable.
      - atatatat 5y ago
        They mean not being robbed.
      - incrudible 5y ago
        > That's why I said a few transactions every day on average, as in 2 or 3, which seems a conservative estimate. Lightning network has virtually no fees. You were replying to someone who managed to get a "real" Bitcoin blockchain transaction through for less than a dollar. > I certainly don't know anyone who pays $20 a month to have their cash "managed" I was thinking of the people managing cash registers.

PragmaticPulp 5y ago

According to the article, someone donated "six-figure" amounts of Bitcoin to the town each year on the condition that they learn how to use Bitcoin: > Beneficiaries of the digital currency had to learn how to use the Bitcoin itself, creating a Bitcoin economy. If you give a relatively poor town the option to take free money as long as they learn how to use Bitcoin, of course they're going to learn how to use Bitcoin. The real test is whether Bitcoin makes sense in an otherwise functioning economy where people aren't given free Bitcoin and they have the option to use a credit card that comes with a lot of consumer protections and zero (or even negative) fees.

deleted 5y ago
[deleted]
samatman 5y ago
The payment system mentioned in the Fine Article is built on top of Bitcoin, using Lightning Network. There's nothing stopping them from putting various consumer protections and rewards programs on top of that, and plenty of motive to do so. It's definitely a wait-and-see sort of thing, but I don't see as to how betting against it is the obvious move.
- arcticbull 5y ago
  Why does the Strike app use LN or crypto at all? I just can't wrap my head around this. They're a custodial wallet for your fiat currency, right? You deposit fiat with them. You withdraw fiat from them. You move it between accounts on their service. They, or a designed entity must hold that fiat on deposit on behalf of users. When you 'send' that money (according to Jack Maller), they buy BTC for you, send it over the LN network, then convert it into a stablecoins. Which ends up, notionally, in one of the Strike custodial accounts. So this Rube Goldberg machine of crypto is used for internal account transfers within Strike? Am I missing something? They're a centralized, trusted custodian (and a registered money services business). Why are they sending money from a Strike-owned account to another Strike-owned account this way? Could they not simply record a debit on one account and a credit on another account in any kind of traditional store? One they clearly already have? Why wouldn't they have one account for each country, a small slush fund and/or debt facility to cover near-term transfers, then just record how much of the pot is attributed to each user account - and if money has to move across borders, send a wire from time to time. Is this really just the most complicated intra-company account transfer of all time? Or are they just doing it to avoid regulation?

habibur 5y ago

How a large a "cut" they take from every transaction is the question here. As for cash,there's no cut taken by any middle man. And when the central government or bank is involved in pushing a legal currency -- there shouldn't be any cut.

toxik 5y ago
You know damn well that banks and credit card institutions take cuts of transactions. Why this aversion to Bitcoin on HN, even with LN?
- imtringued 5y ago
  I agree, why would anyone provide payment infrastructure if they don't get paid?
  - antb123 5y ago
    1) information - which might be scary. 2) government control of some kind -
- arcticbull 5y ago
  Why the horror when someone asks how a free service is making their money, and how much? The quantification matters because we want to know if, in the future once they've spent all their VC money and have to make payroll themselves, it represents a better deal or not.
lowkey 5y ago
As for cash, the “cut” that is taken is via inflation. Governments print money increasing the total supply of currency and decreasing the purchasing power of your cash. It’s also called currency debasement and has a history almost as old as currency itself.