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World Bank rejects El Salvador request for Bitcoin help

68 points by verginer 5y ago

deadalus 5y ago
Will the big banks, institutions and governments make a move against DeFi soon? Seems like it.
- sildur 5y ago
  Of course, they don't want to lose their part of the pie.
  - delaaxe 5y ago
    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
    - errantmind 5y ago
      They are a little late for that. The genie is out of the bottle
- AshamedCaptain 5y ago
  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.
- delaaxe 5y ago
  Big banks are already building on Ethereum, in case you didn't know
  - senectus1 5y ago
    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.
sildur 5y ago
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.
- leppr 5y ago
  How does exploiting remote energy sources for Bitcoin have a positive environmental impact?
  - reedjosh 5y ago
    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.
    - smhost 5y ago
      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.
      - desine 5y ago
        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.
        tsimionescu 5y ago
        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.
elevenoh 5y ago
>"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/1 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.
- LegitShady 5y ago
  >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.
- mmaunder 5y ago
  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.
  - nathias 5y ago
    Can you make me a list of real vs pretend work so I can base my ethical decisions on it?
deleted 5y ago
[deleted]
justinzollars 5y ago
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.
- 29athrowaway 5y ago
  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_Interbank_Financial_Telecommunication#U.S._government_involvement https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...
- NegativeLatency 5y ago
  https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man 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.
- bawolff 5y ago
  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
  - errantmind 5y ago
    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
    - bawolff 5y ago
kerng 5y ago
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.
- jollybean 5y ago
  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.
  - LudwigNagasena 5y ago
    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?
    - tsimionescu 5y ago
      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.
      - errantmind 5y ago
        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
desine 5y ago
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?"
- grahamlee 5y ago
  Oh, is it that he refused to give up the key to his crypto wallet?
- cassepipe 5y ago
  It may be but what is your litmus test about? Can you elaborate on it?
  - astrange 5y ago
    Conspiracy theory about moving off the petrodollar, presumably.
    - desine 5y ago
      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.
      - astrange 5y ago
        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.
gman83 5y ago
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?
- zakember 5y ago
  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
  - lxgr 5y ago
    Coin mixers can make this much harder.
  - senectus1 5y ago
    > 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.
  - rntksi 5y ago
    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.
- ddtaylor 5y ago
  I'm pretty sure cartels and gangs are using fiat right now...
qiqitori 5y ago
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 - Will bitcoin still have value when quantum computers are around?
- adrianN 5y ago
  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.
  - delaaxe 5y ago
    Quantum issue is not with hashing but with private key derivation
    - adrianN 5y ago
      Oh I didn't know that! Thanks for pointing it out.
  - oritsnile 5y ago
    But quantum computer can break currently used Public-Key Algorithms, like ECDSA, which is used by Bitcoin.
  - qiqitori 5y ago
    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.
JumpCrisscross 5y ago
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!
sub7 5y ago
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.
- Romanulus 5y ago
  I'm not sure which system you're referring to exactly.
- ddtaylor 5y ago
  I think it's censorship resistant and permissionless properties make it pretty impressive.
  - lugged 5y ago
    Sanction resistant too.
  - bawolff 5y ago
    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.
    - ddtaylor 5y ago
      There are other blockchains with more available space than Bitcoin, such as Bitcoin Cash.
  - Ekaros 5y ago
    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...
- 5y ago
throwaway4good 5y ago
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.
- joosters 5y ago
  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?
  - zakember 5y ago
    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
    - throwaway4good 5y ago
      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.
    - lowkey 5y ago
      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. [1] https://en.wikipedia.org/wiki/Salvadoran_Civil_War https://en.wikipedia.org/wiki/Salvadoran_Civil_War
- vermilingua 5y ago
  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.
myle 5y ago
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.
- errantmind 5y ago
  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
remarkEon 5y ago
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.
- senectus1 5y ago
  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...
- lugged 5y ago
  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.
- deleted 5y ago
  [deleted]
- erulabs 5y ago
  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.
taylorfinley 5y ago
I 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. [0] https://news.ycombinator.com/item?id=27497207 https://news.ycombinator.com/item?id=27497207
- Kiro 5y ago
  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.
  - kemonocode 5y ago
    I just call it appealing to the lowest common denominator.
  - mclightning 5y ago
    > 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 https://news.ycombinator.com/item?id=27287700
  - skybrian 5y ago
    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.)
  - karmakaze 5y ago
    Bike-shedding isn't binary, it's a continuum. Shallow discussions are a result of audience size and loss of focus.
- SkyMarshal 5y ago
bawolff 5y ago
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?
- tracedddd 5y ago
  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.
denton-scratch 5y ago
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).
xiphias2 5y ago
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.
jfengel 5y ago
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?

68 points by verginer 5y ago

deadalus 5y ago

Will the big banks, institutions and governments make a move against DeFi soon? Seems like it.

sildur 5y ago
Of course, they don't want to lose their part of the pie.
- delaaxe 5y ago
  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
  - errantmind 5y ago
    They are a little late for that. The genie is out of the bottle
AshamedCaptain 5y ago
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.
delaaxe 5y ago
Big banks are already building on Ethereum, in case you didn't know
- senectus1 5y ago
  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.

sildur 5y ago

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.

leppr 5y ago
How does exploiting remote energy sources for Bitcoin have a positive environmental impact?
- reedjosh 5y ago
  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.
  - smhost 5y ago
    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.
    - desine 5y ago
      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.
      - tsimionescu 5y ago
        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.

elevenoh 5y ago

>"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/1 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.

LegitShady 5y ago
>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.
mmaunder 5y ago
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.
- nathias 5y ago
  Can you make me a list of real vs pretend work so I can base my ethical decisions on it?

deleted 5y ago

[deleted]

justinzollars 5y ago

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.

29athrowaway 5y ago
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_Interbank_Financial_Telecommunication#U.S._government_involvement https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...
NegativeLatency 5y ago
https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man 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.
bawolff 5y ago
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
- errantmind 5y ago
  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
  - bawolff 5y ago

kerng 5y ago

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.

jollybean 5y ago
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.
- LudwigNagasena 5y ago
  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?
  - tsimionescu 5y ago
    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.
    - errantmind 5y ago
      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

desine 5y ago

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?"

grahamlee 5y ago
Oh, is it that he refused to give up the key to his crypto wallet?
cassepipe 5y ago
It may be but what is your litmus test about? Can you elaborate on it?
- astrange 5y ago
  Conspiracy theory about moving off the petrodollar, presumably.
  - desine 5y ago
    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.
    - astrange 5y ago
      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.

gman83 5y ago

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?

zakember 5y ago
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
- lxgr 5y ago
  Coin mixers can make this much harder.
- senectus1 5y ago
  > 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.
- rntksi 5y ago
  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.
ddtaylor 5y ago
I'm pretty sure cartels and gangs are using fiat right now...

qiqitori 5y ago

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 - Will bitcoin still have value when quantum computers are around?

adrianN 5y ago
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.
- delaaxe 5y ago
  Quantum issue is not with hashing but with private key derivation
  - adrianN 5y ago
    Oh I didn't know that! Thanks for pointing it out.
- oritsnile 5y ago
  But quantum computer can break currently used Public-Key Algorithms, like ECDSA, which is used by Bitcoin.
- qiqitori 5y ago
  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.

JumpCrisscross 5y ago

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!

sub7 5y ago

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.

Romanulus 5y ago
I'm not sure which system you're referring to exactly.
ddtaylor 5y ago
I think it's censorship resistant and permissionless properties make it pretty impressive.
- lugged 5y ago
  Sanction resistant too.
- bawolff 5y ago
  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.
  - ddtaylor 5y ago
    There are other blockchains with more available space than Bitcoin, such as Bitcoin Cash.
- Ekaros 5y ago
  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...
5y ago

throwaway4good 5y ago

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.

joosters 5y ago
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?
- zakember 5y ago
  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
  - throwaway4good 5y ago
    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.
  - lowkey 5y ago
    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. [1] https://en.wikipedia.org/wiki/Salvadoran_Civil_War https://en.wikipedia.org/wiki/Salvadoran_Civil_War
vermilingua 5y ago
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.

myle 5y ago

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.

errantmind 5y ago
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

remarkEon 5y ago

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.

senectus1 5y ago
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...
lugged 5y ago
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.
deleted 5y ago
[deleted]
erulabs 5y ago
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.

taylorfinley 5y ago

I 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. [0] https://news.ycombinator.com/item?id=27497207 https://news.ycombinator.com/item?id=27497207

Kiro 5y ago
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.
- kemonocode 5y ago
  I just call it appealing to the lowest common denominator.
- mclightning 5y ago
  > 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 https://news.ycombinator.com/item?id=27287700
- skybrian 5y ago
  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.)
- karmakaze 5y ago
  Bike-shedding isn't binary, it's a continuum. Shallow discussions are a result of audience size and loss of focus.
SkyMarshal 5y ago

bawolff 5y ago

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?

tracedddd 5y ago
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.

denton-scratch 5y ago

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).

xiphias2 5y ago

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.

jfengel 5y ago

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?