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How much money is there to be mined per year? On the order of 10 billion dollar? What share of the total hash rate could you realistically buy and power with yo

How much money is there to be mined per year? On the order of 10 billion dollar? What share of the total hash rate could you realistically buy and power with your volcano? One percent? Probably not ten percent. What would the investment for the hardware be? I have a hard time imagining that you could make a noticeable difference this way even for an economy like Salvador's. And there are probably many better ways to spend money than buying mining ASICs.

29athrowaway 5y ago
Mining more bitcoin won't make its market capitalization go up.
mtalantikite 5y ago
I think this is only one part of the story for them. If 70% of their country is un-banked, many transactions are probably in cash, and there probably are a lot of undeclared sales and income that is not being taxed. If they can really get their population using tools that would make it easier for the government to collect taxes, make it easier for tourists to visit and spend money, etc then the mining rewards are only one small part of their plan. Of course none of this really needs to happen with crypto, they certainly could solve these problems in other ways, but I can't really blame them for trying this out.
- sanderjd 5y ago
  Even if crypto is a good solution for all this, bitcoin is a bad one.
  - defgeneric 5y ago
    I understand this argument, but if I had to choose right now which coin would be the best for my country, I would still go with Bitcoin. You don't get to choose which coin has the most backing, or the most diverse set of players from around the world.
    - sanderjd 5y ago
      But those are not important metrics for a legal tender currency. Bitcoin is a fine deflationary asset but a very bad currency.
  - charlesdm 5y ago
    Maybe. But it is better than the alternative? It's the quickest solution. Have a look at what happened when Venezuela ended up launching the Petro.
    - sanderjd 5y ago
      There are other possibilities between poorly executing a bespoke cryptocurrency and using bitcoin even though it's not a good currency. There are options that already exist which have low volatility, low transaction costs, and don't require injecting more and more energy for security. If those options don't seem mature enough (they do to me, but I dunno, maybe they're not), then a good option would be to wait.
- adrianN 5y ago
  If taxing and replacing cash transactions were the main goals, they should maybe use GNU Taler instead of bitcoin.
sanderjd 5y ago
And if you're going to rig up a volcano for power production, maybe use that power for something useful in your own country.
- deviantfero 5y ago
  Geothermal power in El Salvador represents 25% of the country's total electricity production.
  - vidarh 5y ago
    And that's been rising rapidly.
  - sanderjd 5y ago
    Excellent! Seems like they could go further if they have extra to use for asics running hashes.
    - deviantfero 5y ago
      there are storage and distribution limitations for producing even more energy, that's why surplus is sold to neighboring countries currently.
      - sanderjd 5y ago
        Is it a distribution problem? They can't build enough power cables, or they've already built them over as far an extent as is manageable? I can see how it's easier to just put a big data center on site, but it seems like it would be better to invest differently.
        rsj_hn 5y ago
        To invest in a data center requires things like reliable property rights, a functioning judicial system, peace and security, network connectivity and other supply chain issues. You want rule of law, peace, security and infrastructure. The advantage of bitcoin is that once you mine the coins, it is a lot harder for someone to come and take them from you, whether that someone is a rebel group or a corrupt government official or just a local crime syndicate. Moreover you are not dependent on available network backbones or any of the other required infrastructure that a data center depends upon.

29athrowaway 5y ago

Mining more bitcoin won't make its market capitalization go up.

mtalantikite 5y ago

I think this is only one part of the story for them. If 70% of their country is un-banked, many transactions are probably in cash, and there probably are a lot of undeclared sales and income that is not being taxed. If they can really get their population using tools that would make it easier for the government to collect taxes, make it easier for tourists to visit and spend money, etc then the mining rewards are only one small part of their plan. Of course none of this really needs to happen with crypto, they certainly could solve these problems in other ways, but I can't really blame them for trying this out.

sanderjd 5y ago
Even if crypto is a good solution for all this, bitcoin is a bad one.
- defgeneric 5y ago
  I understand this argument, but if I had to choose right now which coin would be the best for my country, I would still go with Bitcoin. You don't get to choose which coin has the most backing, or the most diverse set of players from around the world.
  - sanderjd 5y ago
    But those are not important metrics for a legal tender currency. Bitcoin is a fine deflationary asset but a very bad currency.
- charlesdm 5y ago
  Maybe. But it is better than the alternative? It's the quickest solution. Have a look at what happened when Venezuela ended up launching the Petro.
  - sanderjd 5y ago
    There are other possibilities between poorly executing a bespoke cryptocurrency and using bitcoin even though it's not a good currency. There are options that already exist which have low volatility, low transaction costs, and don't require injecting more and more energy for security. If those options don't seem mature enough (they do to me, but I dunno, maybe they're not), then a good option would be to wait.
adrianN 5y ago
If taxing and replacing cash transactions were the main goals, they should maybe use GNU Taler instead of bitcoin.

sanderjd 5y ago

And if you're going to rig up a volcano for power production, maybe use that power for something useful in your own country.

deviantfero 5y ago
Geothermal power in El Salvador represents 25% of the country's total electricity production.
- vidarh 5y ago
  And that's been rising rapidly.
- sanderjd 5y ago
  Excellent! Seems like they could go further if they have extra to use for asics running hashes.
  - deviantfero 5y ago
    there are storage and distribution limitations for producing even more energy, that's why surplus is sold to neighboring countries currently.
    - sanderjd 5y ago
      Is it a distribution problem? They can't build enough power cables, or they've already built them over as far an extent as is manageable? I can see how it's easier to just put a big data center on site, but it seems like it would be better to invest differently.
      - rsj_hn 5y ago
        To invest in a data center requires things like reliable property rights, a functioning judicial system, peace and security, network connectivity and other supply chain issues. You want rule of law, peace, security and infrastructure. The advantage of bitcoin is that once you mine the coins, it is a lot harder for someone to come and take them from you, whether that someone is a rebel group or a corrupt government official or just a local crime syndicate. Moreover you are not dependent on available network backbones or any of the other required infrastructure that a data center depends upon.