9 ms·

El Salvador to airdrop $30 in Bitcoin to up to 6M citizens

62 points by lowkey 5y ago

simonebrunozzi 5y ago
This is a really good move. It will "force" people to setup wallets, study how it works, etc.
- NicoJuicy 5y ago
  It is, if you want to receive business for money laundering and want to obfuscate it by using civilians. I don't see another reason to go down this path...
  - WinstonSmith84 5y ago
    Like the OP said, it will force their citizen to understand how it works. One can speculate that the average Salvadorian will understand more about Bitcoin than the average HN reader.
    - chedine 5y ago
      Average HN is a salty nocoiner.
      - zenincognito 5y ago
        Thats a gross generalisation. One would think, that average HNer would be a coiner because of their background.
        chinathrow 5y ago
        Why would I be a coiner? Bitcoin is still wasteful as fuck.
        Danieru 5y ago
        Nope, lots of people here are just like me: proud salty nocoiners. We poor old salty nocoiners can only wipe our flowing tears with the 100$ rags from our fat wallets. Oh poor us, we foolishly put our wealth into cashflow producing assets. Oh the sorrow every quarter as the dividends are deposited in our flash-loan-hack-proof bank accounts.
        Tenoke 5y ago
        Thats a weird thing to brag about - if talking about past returns there's few 'cash flow producing assets' that'd have done as well as just putting the money in btc. Also flash loans don't take anything out of your wallet/account either and I know of people whose bank accounts have been hacked. There's plenty to complain about btc but you've somehow chosen the least convincing argument for why you are a noncoiner.
        Clewza313 5y ago
        Bitcoins do not produce any cash flow, the only way to profit is to sell them to a greater fool.
        Tenoke 5y ago
        There's plenty of crypto (including e.g. ETH) that does so via staking but that wasn't the point anyway.
        Clewza313 5y ago
        No, this was the GP's point. Many of those "salty nocoiners" are invested in assets that produce reliable cash flow, which is considerably safer than holding a purely speculative asset like crypto.
        deleted 5y ago
        [deleted]
        5y ago
        celticninja 5y ago
        What happens is that many on HN were around in 2009-2011 when it first appeared and was cheap. Everyone who didn't buy in then has a vested interest in it failing because then they feel like they didn't miss out and that their decision not to get involved was validated. It is becoming apparent as time goes by that there are very many of them here. I seem to have attracted some that downvote every comment I make.
        southerntofu 5y ago
        I owned Bitcoin back in 2012-2014 when i thought it was going to be an actual currency to exchange goods and services. Since then, it has become a tool for speculation and an ecological disaster, both of which are strongly opposed to my ethos. I now own precisely 0€ worth of Bitcoin and strongly recommend all my friends never to fall into that kind of trap. Because capitalism and speculation ruins lives, whether you trade stocks or magic BTC numbers. I'm not alone: https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disaster.html https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disas...
        celticninja 5y ago
        >capitalism and speculation ruin lives And yet here you are on hackernews, owned and run by ycombinator, an organisation that exists to capitalise on both of these things, with the aim of making a small group of investors and founders very very rich. https://www.ycombinator.com/topcompanies/ https://www.ycombinator.com/topcompanies/ Are you aware of the cognitive dissonance in your position?
        southerntofu 5y ago
        > Are you aware of the cognitive dissonance in your position? I am more than aware of my position and my surroundings. But i don't feel any dissonance, though i do feel a lot of ethical/ideological conflict in these forums (which i'm happy to take part in on occasion).
        celticninja 5y ago
        For reference I also got involved in a similar period and used it successfully to transact business with people in foreign countries at a much lower cost than via bank transactions. Yes bitcoin has pivoted now to a store of wealth or even a cheap way to move large sums and it is less efficient for smaller transactions, but lightning network solves this problem sufficiently. Again pivoting is not something unique to bitcoin and many tech firms have pivoted to find their niche. Being able to react and respond is a feature not a bug.
        lowkey 5y ago
        It may be a gross generalization but based on the majority of comments on HN, it is unfortunately an accurate one. Not only are the comments salty, they are generally ill-informed. See Dang’s recent call to HN for more insightful comments and less vitriol for example. It hurts me to say this about HN because on other topics comments are often deeply insightful but when it comes to Bitcoin (and other cryptos) HN comments are often ignorant and dismissive.
      - eur00t 5y ago
        I notice that hn largely ignores blockchain tech. It almost feels luddite.
        h4kor 5y ago
        Most (software) engineers understand rather quickly that blockchains are a wasteful solutions to problems that are already solved by other methods.
        Tenoke 5y ago
        There's a lot of very pro and very anti blockchain people here and I'm not even sure which are the majority.
        eur00t 5y ago
        Yeah, the blockchain-related discussions become highly polarized. This one has been removed by mods rather quickly.
        tffgg 5y ago
        Because it is over hyped by coin owners who want you to buy coins and make them rich
        bellyfullofbac 5y ago
        Yeah, pro-coiners probably fail to realize, if they've put their money in it, that means they've bought the hype. And people don't like to believe they're stupid, but since they also have a confirmation bias, they also look for proof that they're right, and all the stories from random websites saying "Crypto is the future!" remain in their minds, while all the skeptical articles, they just say "Pah, another luddite!" and dismiss.
        NicoJuicy 5y ago
        That's not true. Blockchain tech is unrelated to bitcoins/crypto's. Just like Stackoverflow doesn't correlate with the value of the .Net framework or HN doesn't correlate with the value of the ARC programming language ( since it's build on that tech) It's an example of the tech, but the value of blockchain does not have a correlation with any of the 8000 implementations as crypto. Additionally, the implementation of El Salvador uses Lightning network and since that obfuscates transactions off-chain to a centralized authority. It's not what i'd call blockchain anymore.
      - SideburnsOfDoom 5y ago
        The opinions of any person seriously using the label "salty nocoiner" can be safely ignored now, and in future.
  - rocqua 5y ago
    I think el-salvador is going down this path because their current path doesn't work. So instead, they are trying another monetary theory. Short term profits might come, not from money laundering, but from bitcoin whales that are true believers and decide to come live there. Some of those whales might have gotten their bitcoin illegally, and are happy to avoid a fiat off-ramp. I suppose that might be money-laundering in some sense.
    - NicoJuicy 5y ago
      The core problem about this is that they don't have money. My statement about money laundering is their attempt to fix it partially. But Bitcoin by itselve won't fix their core issue. Another one is is connectivity ( to make faster payments and not take the bus), bitcoin won't fix that either. They are pushing internet access to help Bitcoin, but it creates a false dogma. Since Bitcoin was not the answer, it was internet access for all to make faster payments. PS. Africa has payments by text, this could have worked there too without Bitcoin: https://onereach.ai/what-the-u-s-can-learn-from-mobile-payments-in-africa/ https://onereach.ai/what-the-u-s-can-learn-from-mobile-payme...
    - Clewza313 5y ago
      I don't think blockchains are particularly well suited for solving El Salvador's actual problems, like gang violence. There's a not entirely implausible theory that says Bukele is going for Bitcoin specifically because El Salvador uses the US dollar and is thus prevented from taking the typical path of printing more its own currency to "solve" problems. With Tether and various dodgy custom apps in the mix, they can now print money. https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-official-currency-printing-money/ https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-off...
      - rocqua 5y ago
        Printing money in bitcoin requires some really weird stuff to happen. Essentially, either you need to scam others with Tether, or you need your apps to literally lie to their users. Bitcoin was made to be deflationary. That means it was made not to allow anyone to print money. It would have made more sense for them to pick ethereum if they wanted the ability to print money. Really, the only thing I can imagine is using colored coins in bitcoin, or switching to some other currency later.
- Tenoke 5y ago
  As far as I can tell they are using some lightning network app so it's cheap but likely doesn't really teach you to setup more than an app.
emptyfile 5y ago
A small developing country with little industry, high inequality and some of the worst murder rates in world decides to spend their very limited money and attention on populist nonsense like this. I guess the gangs will appreciate it?
- mjburgess 5y ago
  About 1/4 of the citizen's wealth comes from US dollar transfers from abroad (ie., from immigrant families). (Their currency is the US dollar.) Presently very high transaction fees and poor banking-system support eats up a significant amount of this wealth. Can you see why this isn't "populist none-sense" ?
  - xiphias2 5y ago
    Transaction fees is one thing, but going to the city by bus to pick up the money is extra cost and hours of time. I sometimes wish people from US would travel to these places to understand the life other people were born into.
    - errantmind 5y ago
      I have traveled extensively in developing countries (years) and see this cryptocurrency initiative serving a real need with remittances and electronic payments.
      - SideburnsOfDoom 5y ago
        How then does it compare to M-Pesa?
        errantmind 5y ago
        I'm not overly familiar with M-Pesa. That said, a primary distinction is centralized vs decentralized. I prefer to have full control and trust in my currency. Crypto is volatile, but there also isn't a central bank to inflate away its value. From my perspective that is the totality of the value from distributed / decentralized consensus in currencies
reilly3000 5y ago
I shudder to think of the transaction fees for sending money to 6M wallets.
- aaronhayes 5y ago
  Will be on lightning network. Essentially free
  - gnrlst 5y ago
    Yikes, that's not going to be smooth.
    - aaronhayes 5y ago
      You've never used the lightning network have you?
      - bruce343434 5y ago
        You clearly haven't
    - h4kor 5y ago
      What's the problem with this? I thought lightning was invented to solve these kinds of problems?
  - tffgg 5y ago
    Source?
  - rocqua 5y ago
    Opening 6M channels on lightning is not free. Not at all.
- char8 5y ago
  done on lightning network, so very little indeed.
Hnrobert42 5y ago
I wonder what kind of fraud/security controls they are using.
- Normille 5y ago
  This is what I was wondering. If such a thing existed as an El Salvador based VPN, would using that to download the wallet be enough to secure you your 30USD worth of Bitcoin? And what about people within El Salvador downloading it to multiple devices from different IP addresses? I'm sure this has been considered and there's more to it than just... 1: download wallet 2: Profit! ...as all the press reports I've seen seem to be suggesting.
altacc 5y ago
The current bitcoin transaction fee is about $7, so nobody is going to be using this for everyday transactions, making $30 not much of an incentive. It sounds like there will be the option of choosing to accept cash instead, so it will be interesting to see how many prefer $30 of real, spendable cash over $23 of virtual, difficult to spend tokens. Edit: Perhaps I was a bit glib as using the lightning network will probably solve the transaction fee issue. This could become an partially isolated transactional network, with less common transactions into or out of the network, like some SMS-based transactional networks in other parts of the world. In those cases uptake was quick as it was so easy to use (you only needed an SMS enabled phone). I am truly curious about how this turns out.
- celticninja 5y ago
  As has been said before on almost every thread about this, lightning network alleviates the issue of high transaction costs for small transactions. https://www.coindesk.com/strike-launches-bitcoin-lightning-payment-app-in-el-salvador-full-eu-support-is-next https://www.coindesk.com/strike-launches-bitcoin-lightning-p...
  - tffgg 5y ago
    How secure is it compared to real transactions?
    - xiphias2 5y ago
      As far as I know you have to be on the internet at least once in 30 days, so it's good only for hot wallets. Also for payments over $1k probably right now Bitcoin transaction is more practical (I have heard of $100k lightning transactions though).
    - rocqua 5y ago
      There are risks, you need to remain online to catch your counter-party cheating. There are ways to outsource this to so-called watchtowers. This can generally be done privately, and the watchtowers generally get to take at least some of the cheater's money. I haven't heard of any successful malicious channel theft. I have read quite a few stories of people losing local data making it much harder to recover the money in the channel.
Reason077 5y ago
If you’re distributing $180m in Bitcoin to 6 million wallets, do you pay transaction fees (currently about $6) once, or 6 million times?
- awestroke 5y ago
  Somewhere in between. You pay per byte.
- justsomeperson 5y ago
  if you send them all as a single transaction i.e one transaction with 6 million outputs, you would pay 1 transaction fee. However I dont think that is what is happening here. All the transactions are likely to made on the lightning network, which is a layer on top of bitcoin, designed to facilitate smaller transactions with lower fees.
  - bruce343434 5y ago
    > All the transactions are likely to made on the lightning network How?
- lalaland1125 5y ago
  Transaction fees are per byte of data so you would be paying a huge fee.
bluepnume 5y ago
Before you post a comment about Bitcoin fees, please take a little time and try out lightning. It's come an incredibly long way, it's very fast, and very cheap, and very easy using a mobile wallet.
- chinathrow 5y ago
  What happens if you lose your mobile wallet?
  - justsomeperson 5y ago
    You can restore from a backup surely? Unlike losing a physical wallet, which in most cases, means losing the cash it holds at least, but possibly getting things like your ID returned. If you lose your mobile, you will likely never have it returned, but any funds or accounts you have on it can be reinstalled on a new mobile.
    - chinathrow 5y ago
      Go tell 6M citiziens to back up their mobile wallet - how exactly is the key here.
      - varajelle 5y ago
        The key is just a bunch of words which one need to write down with pen and paper and store in a safe place nobody can access. One can imagine better schemes of course, to hide or share the secrets.
bellyfullofbac 5y ago
It seems like many here don't get what I think they're doing: government buys 180 million USD worth of Bitcoin, stores it in their wallet, and creates an SQL database (well, with a bank as a wrapper) with 6 million entries with $30 (or whatever that is in BTC) each. The transactions can just be recorded in this SQL database, and the "reserve" would be untouched. If someone wants to exchange their BTC to USD or Euro, they can go to a money changer, their SQL database entry will be decreased, the money changer's SQL database entry will be incremented, and the total BTC in the reserve remains. Hmm, I think I just described the so-called Lightning Network, which means in the end you have to trust a central authority after all. (EDIT: After reading about LN, it seems this isn't how the Lightning Network works). They might as well make something like "El-Salvador-Coin" without needing dumb blockchain stuff.
- amelius 5y ago
  But what if someone wants to pay in BTC?
- jl2718 5y ago
  Interesting. So what they are actually building, is a Bitcoin reserve for a central digital currency, replacing USD, SDR, or gold reserves. The trick here is that it is a one-way accumulator. Bitcoin comes into the reserve but never leaves. The initial money may come from existing USD reserves, or it may be undercapitalized fiat Bitcoin. Every currency has a value theory. USD has military hegemony and financial market centralization. China has exports and foreign land holdings. CHF is backed by gold. The Euro is trying to become a regional 3rd world reserve through remittances. Labor-based currency has been tried, but, you probably don’t want to know about it.
  - bellyfullofbac 5y ago
    TBH it's just my speculation, if I wanted to attach my implementation to the hype-train of crypto, that's how I would do it.
- rocqua 5y ago
  It would be interesting if this is indeed the case. With the government not giving salvadorians custodial wallets. That also explains the idea lower down this thread [1]. That stated this might be done so the government can print their own money. With the SQL database, that would be quite easy. With actual bitcoin wallets (or the lightning network) essentially not doable. [1] https://news.ycombinator.com/item?id=27628739 https://news.ycombinator.com/item?id=27628739 p.s. for people wondering what LN is, it is essentially: Pairs of people agree to split some locked up bitcoin a certain way. If they want to exchange bitcoin, they agree on a different split. If someone tries to cheat, Hashed Time-locked contracts (the crypt magic that makes this work) means you get to take all of the locked up bitcoin".
Tenoke 5y ago
Another rejected thread. Presumably because of malicious flagging rather than done by the mods.
tdeck 5y ago
Is there anything that prevents one million of these recipients from all being the same corrupt official?
runbathtime 5y ago
Is it actually bitcoin being airdropped or tether?

62 points by lowkey 5y ago

simonebrunozzi 5y ago

This is a really good move. It will "force" people to setup wallets, study how it works, etc.

NicoJuicy 5y ago
It is, if you want to receive business for money laundering and want to obfuscate it by using civilians. I don't see another reason to go down this path...
- WinstonSmith84 5y ago
  Like the OP said, it will force their citizen to understand how it works. One can speculate that the average Salvadorian will understand more about Bitcoin than the average HN reader.
  - chedine 5y ago
    Average HN is a salty nocoiner.
    - zenincognito 5y ago
      Thats a gross generalisation. One would think, that average HNer would be a coiner because of their background.
      - chinathrow 5y ago
        Why would I be a coiner? Bitcoin is still wasteful as fuck.
      - Danieru 5y ago
        Nope, lots of people here are just like me: proud salty nocoiners. We poor old salty nocoiners can only wipe our flowing tears with the 100$ rags from our fat wallets. Oh poor us, we foolishly put our wealth into cashflow producing assets. Oh the sorrow every quarter as the dividends are deposited in our flash-loan-hack-proof bank accounts.
        Tenoke 5y ago
        Thats a weird thing to brag about - if talking about past returns there's few 'cash flow producing assets' that'd have done as well as just putting the money in btc. Also flash loans don't take anything out of your wallet/account either and I know of people whose bank accounts have been hacked. There's plenty to complain about btc but you've somehow chosen the least convincing argument for why you are a noncoiner.
        Clewza313 5y ago
        Bitcoins do not produce any cash flow, the only way to profit is to sell them to a greater fool.
        Tenoke 5y ago
        There's plenty of crypto (including e.g. ETH) that does so via staking but that wasn't the point anyway.
        Clewza313 5y ago
        No, this was the GP's point. Many of those "salty nocoiners" are invested in assets that produce reliable cash flow, which is considerably safer than holding a purely speculative asset like crypto.
        deleted 5y ago
        [deleted]
        5y ago
      - celticninja 5y ago
        What happens is that many on HN were around in 2009-2011 when it first appeared and was cheap. Everyone who didn't buy in then has a vested interest in it failing because then they feel like they didn't miss out and that their decision not to get involved was validated. It is becoming apparent as time goes by that there are very many of them here. I seem to have attracted some that downvote every comment I make.
        southerntofu 5y ago
        I owned Bitcoin back in 2012-2014 when i thought it was going to be an actual currency to exchange goods and services. Since then, it has become a tool for speculation and an ecological disaster, both of which are strongly opposed to my ethos. I now own precisely 0€ worth of Bitcoin and strongly recommend all my friends never to fall into that kind of trap. Because capitalism and speculation ruins lives, whether you trade stocks or magic BTC numbers. I'm not alone: https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disaster.html https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disas...
        celticninja 5y ago
        >capitalism and speculation ruin lives And yet here you are on hackernews, owned and run by ycombinator, an organisation that exists to capitalise on both of these things, with the aim of making a small group of investors and founders very very rich. https://www.ycombinator.com/topcompanies/ https://www.ycombinator.com/topcompanies/ Are you aware of the cognitive dissonance in your position?
        southerntofu 5y ago
        > Are you aware of the cognitive dissonance in your position? I am more than aware of my position and my surroundings. But i don't feel any dissonance, though i do feel a lot of ethical/ideological conflict in these forums (which i'm happy to take part in on occasion).
        celticninja 5y ago
        For reference I also got involved in a similar period and used it successfully to transact business with people in foreign countries at a much lower cost than via bank transactions. Yes bitcoin has pivoted now to a store of wealth or even a cheap way to move large sums and it is less efficient for smaller transactions, but lightning network solves this problem sufficiently. Again pivoting is not something unique to bitcoin and many tech firms have pivoted to find their niche. Being able to react and respond is a feature not a bug.
      - lowkey 5y ago
        It may be a gross generalization but based on the majority of comments on HN, it is unfortunately an accurate one. Not only are the comments salty, they are generally ill-informed. See Dang’s recent call to HN for more insightful comments and less vitriol for example. It hurts me to say this about HN because on other topics comments are often deeply insightful but when it comes to Bitcoin (and other cryptos) HN comments are often ignorant and dismissive.
    - eur00t 5y ago
      I notice that hn largely ignores blockchain tech. It almost feels luddite.
      - h4kor 5y ago
        Most (software) engineers understand rather quickly that blockchains are a wasteful solutions to problems that are already solved by other methods.
      - Tenoke 5y ago
        There's a lot of very pro and very anti blockchain people here and I'm not even sure which are the majority.
        eur00t 5y ago
        Yeah, the blockchain-related discussions become highly polarized. This one has been removed by mods rather quickly.
      - tffgg 5y ago
        Because it is over hyped by coin owners who want you to buy coins and make them rich
        bellyfullofbac 5y ago
        Yeah, pro-coiners probably fail to realize, if they've put their money in it, that means they've bought the hype. And people don't like to believe they're stupid, but since they also have a confirmation bias, they also look for proof that they're right, and all the stories from random websites saying "Crypto is the future!" remain in their minds, while all the skeptical articles, they just say "Pah, another luddite!" and dismiss.
      - NicoJuicy 5y ago
        That's not true. Blockchain tech is unrelated to bitcoins/crypto's. Just like Stackoverflow doesn't correlate with the value of the .Net framework or HN doesn't correlate with the value of the ARC programming language ( since it's build on that tech) It's an example of the tech, but the value of blockchain does not have a correlation with any of the 8000 implementations as crypto. Additionally, the implementation of El Salvador uses Lightning network and since that obfuscates transactions off-chain to a centralized authority. It's not what i'd call blockchain anymore.
    - SideburnsOfDoom 5y ago
      The opinions of any person seriously using the label "salty nocoiner" can be safely ignored now, and in future.
- rocqua 5y ago
  I think el-salvador is going down this path because their current path doesn't work. So instead, they are trying another monetary theory. Short term profits might come, not from money laundering, but from bitcoin whales that are true believers and decide to come live there. Some of those whales might have gotten their bitcoin illegally, and are happy to avoid a fiat off-ramp. I suppose that might be money-laundering in some sense.
  - NicoJuicy 5y ago
    The core problem about this is that they don't have money. My statement about money laundering is their attempt to fix it partially. But Bitcoin by itselve won't fix their core issue. Another one is is connectivity ( to make faster payments and not take the bus), bitcoin won't fix that either. They are pushing internet access to help Bitcoin, but it creates a false dogma. Since Bitcoin was not the answer, it was internet access for all to make faster payments. PS. Africa has payments by text, this could have worked there too without Bitcoin: https://onereach.ai/what-the-u-s-can-learn-from-mobile-payments-in-africa/ https://onereach.ai/what-the-u-s-can-learn-from-mobile-payme...
  - Clewza313 5y ago
    I don't think blockchains are particularly well suited for solving El Salvador's actual problems, like gang violence. There's a not entirely implausible theory that says Bukele is going for Bitcoin specifically because El Salvador uses the US dollar and is thus prevented from taking the typical path of printing more its own currency to "solve" problems. With Tether and various dodgy custom apps in the mix, they can now print money. https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-official-currency-printing-money/ https://foreignpolicy.com/2021/06/15/el-salvador-bitcoin-off...
    - rocqua 5y ago
      Printing money in bitcoin requires some really weird stuff to happen. Essentially, either you need to scam others with Tether, or you need your apps to literally lie to their users. Bitcoin was made to be deflationary. That means it was made not to allow anyone to print money. It would have made more sense for them to pick ethereum if they wanted the ability to print money. Really, the only thing I can imagine is using colored coins in bitcoin, or switching to some other currency later.
Tenoke 5y ago
As far as I can tell they are using some lightning network app so it's cheap but likely doesn't really teach you to setup more than an app.

emptyfile 5y ago

A small developing country with little industry, high inequality and some of the worst murder rates in world decides to spend their very limited money and attention on populist nonsense like this. I guess the gangs will appreciate it?

mjburgess 5y ago
About 1/4 of the citizen's wealth comes from US dollar transfers from abroad (ie., from immigrant families). (Their currency is the US dollar.) Presently very high transaction fees and poor banking-system support eats up a significant amount of this wealth. Can you see why this isn't "populist none-sense" ?
- xiphias2 5y ago
  Transaction fees is one thing, but going to the city by bus to pick up the money is extra cost and hours of time. I sometimes wish people from US would travel to these places to understand the life other people were born into.
  - errantmind 5y ago
    I have traveled extensively in developing countries (years) and see this cryptocurrency initiative serving a real need with remittances and electronic payments.
    - SideburnsOfDoom 5y ago
      How then does it compare to M-Pesa?
      - errantmind 5y ago
        I'm not overly familiar with M-Pesa. That said, a primary distinction is centralized vs decentralized. I prefer to have full control and trust in my currency. Crypto is volatile, but there also isn't a central bank to inflate away its value. From my perspective that is the totality of the value from distributed / decentralized consensus in currencies

reilly3000 5y ago

I shudder to think of the transaction fees for sending money to 6M wallets.

aaronhayes 5y ago
Will be on lightning network. Essentially free
- gnrlst 5y ago
  Yikes, that's not going to be smooth.
  - aaronhayes 5y ago
    You've never used the lightning network have you?
    - bruce343434 5y ago
      You clearly haven't
  - h4kor 5y ago
    What's the problem with this? I thought lightning was invented to solve these kinds of problems?
- tffgg 5y ago
  Source?
- rocqua 5y ago
  Opening 6M channels on lightning is not free. Not at all.
char8 5y ago
done on lightning network, so very little indeed.

Hnrobert42 5y ago

I wonder what kind of fraud/security controls they are using.

Normille 5y ago
This is what I was wondering. If such a thing existed as an El Salvador based VPN, would using that to download the wallet be enough to secure you your 30USD worth of Bitcoin? And what about people within El Salvador downloading it to multiple devices from different IP addresses? I'm sure this has been considered and there's more to it than just... 1: download wallet 2: Profit! ...as all the press reports I've seen seem to be suggesting.

altacc 5y ago

The current bitcoin transaction fee is about $7, so nobody is going to be using this for everyday transactions, making $30 not much of an incentive. It sounds like there will be the option of choosing to accept cash instead, so it will be interesting to see how many prefer $30 of real, spendable cash over $23 of virtual, difficult to spend tokens. Edit: Perhaps I was a bit glib as using the lightning network will probably solve the transaction fee issue. This could become an partially isolated transactional network, with less common transactions into or out of the network, like some SMS-based transactional networks in other parts of the world. In those cases uptake was quick as it was so easy to use (you only needed an SMS enabled phone). I am truly curious about how this turns out.

celticninja 5y ago
As has been said before on almost every thread about this, lightning network alleviates the issue of high transaction costs for small transactions. https://www.coindesk.com/strike-launches-bitcoin-lightning-payment-app-in-el-salvador-full-eu-support-is-next https://www.coindesk.com/strike-launches-bitcoin-lightning-p...
- tffgg 5y ago
  How secure is it compared to real transactions?
  - xiphias2 5y ago
    As far as I know you have to be on the internet at least once in 30 days, so it's good only for hot wallets. Also for payments over $1k probably right now Bitcoin transaction is more practical (I have heard of $100k lightning transactions though).
  - rocqua 5y ago
    There are risks, you need to remain online to catch your counter-party cheating. There are ways to outsource this to so-called watchtowers. This can generally be done privately, and the watchtowers generally get to take at least some of the cheater's money. I haven't heard of any successful malicious channel theft. I have read quite a few stories of people losing local data making it much harder to recover the money in the channel.

Reason077 5y ago

If you’re distributing $180m in Bitcoin to 6 million wallets, do you pay transaction fees (currently about $6) once, or 6 million times?

awestroke 5y ago
Somewhere in between. You pay per byte.
justsomeperson 5y ago
if you send them all as a single transaction i.e one transaction with 6 million outputs, you would pay 1 transaction fee. However I dont think that is what is happening here. All the transactions are likely to made on the lightning network, which is a layer on top of bitcoin, designed to facilitate smaller transactions with lower fees.
- bruce343434 5y ago
  > All the transactions are likely to made on the lightning network How?
lalaland1125 5y ago
Transaction fees are per byte of data so you would be paying a huge fee.

bluepnume 5y ago

Before you post a comment about Bitcoin fees, please take a little time and try out lightning. It's come an incredibly long way, it's very fast, and very cheap, and very easy using a mobile wallet.

chinathrow 5y ago
What happens if you lose your mobile wallet?
- justsomeperson 5y ago
  You can restore from a backup surely? Unlike losing a physical wallet, which in most cases, means losing the cash it holds at least, but possibly getting things like your ID returned. If you lose your mobile, you will likely never have it returned, but any funds or accounts you have on it can be reinstalled on a new mobile.
  - chinathrow 5y ago
    Go tell 6M citiziens to back up their mobile wallet - how exactly is the key here.
    - varajelle 5y ago
      The key is just a bunch of words which one need to write down with pen and paper and store in a safe place nobody can access. One can imagine better schemes of course, to hide or share the secrets.

bellyfullofbac 5y ago

It seems like many here don't get what I think they're doing: government buys 180 million USD worth of Bitcoin, stores it in their wallet, and creates an SQL database (well, with a bank as a wrapper) with 6 million entries with $30 (or whatever that is in BTC) each. The transactions can just be recorded in this SQL database, and the "reserve" would be untouched. If someone wants to exchange their BTC to USD or Euro, they can go to a money changer, their SQL database entry will be decreased, the money changer's SQL database entry will be incremented, and the total BTC in the reserve remains. Hmm, I think I just described the so-called Lightning Network, which means in the end you have to trust a central authority after all. (EDIT: After reading about LN, it seems this isn't how the Lightning Network works). They might as well make something like "El-Salvador-Coin" without needing dumb blockchain stuff.

amelius 5y ago
But what if someone wants to pay in BTC?
jl2718 5y ago
Interesting. So what they are actually building, is a Bitcoin reserve for a central digital currency, replacing USD, SDR, or gold reserves. The trick here is that it is a one-way accumulator. Bitcoin comes into the reserve but never leaves. The initial money may come from existing USD reserves, or it may be undercapitalized fiat Bitcoin. Every currency has a value theory. USD has military hegemony and financial market centralization. China has exports and foreign land holdings. CHF is backed by gold. The Euro is trying to become a regional 3rd world reserve through remittances. Labor-based currency has been tried, but, you probably don’t want to know about it.
- bellyfullofbac 5y ago
  TBH it's just my speculation, if I wanted to attach my implementation to the hype-train of crypto, that's how I would do it.
rocqua 5y ago
It would be interesting if this is indeed the case. With the government not giving salvadorians custodial wallets. That also explains the idea lower down this thread [1]. That stated this might be done so the government can print their own money. With the SQL database, that would be quite easy. With actual bitcoin wallets (or the lightning network) essentially not doable. [1] https://news.ycombinator.com/item?id=27628739 https://news.ycombinator.com/item?id=27628739 p.s. for people wondering what LN is, it is essentially: Pairs of people agree to split some locked up bitcoin a certain way. If they want to exchange bitcoin, they agree on a different split. If someone tries to cheat, Hashed Time-locked contracts (the crypt magic that makes this work) means you get to take all of the locked up bitcoin".

Tenoke 5y ago

Another rejected thread. Presumably because of malicious flagging rather than done by the mods.

tdeck 5y ago

Is there anything that prevents one million of these recipients from all being the same corrupt official?

runbathtime 5y ago

Is it actually bitcoin being airdropped or tether?