4 ms·

Yes. But, which of those two options is actually happening?

by mindcandy 5y ago

lefrenchy 5y ago
Touché
- arcticbull 5y ago
  A volatile currency with direct transaction fees ranging from $0.05-60 [edited per FreeRadical - thanks!] and indirect transaction fees of roughly $90 (socialized block reward). Whose value dropped 50% in a month then went up 50% in a month (which of course still leaves it 25% below its near-term highs). I don't think even the Cuban Peso performs like that. Think about both of those in terms of the average salary of a Cuban national. How about the minimum wage? $0.44 per hour. [edit, and while I'm in here] And why did it drop 50% in a month? Because the worlds 25th largest automaker decided it was a bad medium of exchange for buying electric cars. Perhaps unsurprisingly in Venezuela, they decided to go the other way, dollarizing. They moved 66% of all transactions to the USD, forcing the Maduro government's hand, and leading to their major banks offering USD deposit accounts. [1] If anything they need USDC not BTC. This is just gambling in a regulatory and legal void. The Mad Max of finance. [1] https://www.bloomberg.com/news/articles/2021-01-13/venezuela-plans-to-expand-use-of-foreign-currency-bank-accounts https://www.bloomberg.com/news/articles/2021-01-13/venezuela...
  - FreeRadical 5y ago
    Direct transaction fees have been $0.05-0.2 for a long while now, mostly being below $0.1 See: https://mempool.space/ https://mempool.space/
    - deleted 5y ago
      [deleted]
  - tenuousemphasis 5y ago
    Indirect transaction fees are a really pointless statistic.
    - deleted 5y ago
      [deleted]
  - wesleywt 5y ago
    Bitcoin was a saviour for many ordingary folk in Venezuela during the hyperinflation crisis. It worked as intended. https://www.dw.com/en/venezuelans-try-to-beat-hyperinflation-with-cryptocurrency-revolution/a-57219083 https://www.dw.com/en/venezuelans-try-to-beat-hyperinflation... Why would a country embargoed by the USA use USD?
    - arcticbull 5y ago
      Your link doesn't mean much, as after all 66% of all transactions in Venezuela are USD denominated now per my link. The people of Venezuela had the choice: BTC or USD. They spoke, and they said USD. Likely only the wealthy laundering money, probably connected to the Maduro government are playing BTC. Only certain entities and individuals connected to the Maduro government are under sanctions, not everyone in Venezuela - which is why USD remittances are possible in the first place. Folks are using USD because Bitcoin is wildly inappropriate for use as a currency. [edit] Consider that at the time that article was written the average BTC transaction fee with multiple months minimum wage for the average Venezeulan.
    - notahacker 5y ago
      Because Venezuelans have been buying and selling things locally in black market dollars for decades, and even if they want to hold their dollars in offshore accounts, the US isn't interested in stopping them unless they're a regime insider (quite the opposite actually) As for Maduro, he's just trying to stop capital flight.
    - lottin 5y ago
      > Bitcoin was a saviour for many ordingary folk in Venezuela during the hyperinflation crisis. During a hyperinflation crisis everything that isn't money appreciates rapidly by definition. This means the often touted usefulness of bitcoin as "inflation hedge" is rather meaningless, because literally any asset that isn't money is an "inflation hedge". The shoes that I'm wearing right now are an "inflation hedge" just as good as bitcoin. In fact they're a better inflation hedge than bitcoin because their price is more predictable.
  - jmstfv 5y ago
    > A volatile currency with direct transaction fees ranging from $0.05-60 [edited per FreeRadical - thanks!] You don't need to transact on-chain (i.e. settlement layer). There's a lightning network, where transactions are instantaneous, and fees are a few satoshis. It's amusing how most Bitcoin critics focus on on-chain fees and pretend that lightning doesn't exist. > And why did it drop 50% in a month? Because the worlds 25th largest automaker decided it was a bad medium of exchange for buying electric cars. That wasn't the main reason. It was the China FUD and the lack of Grayscale's neutral arbitrage, which took out the biggest buyer off of the market.
    - arcticbull 5y ago
      > You don't need to transact on-chain (i.e. settlement layer). You can use a lightning network, where transactions are instantaneous, and fees are a few satoshis. Sure, however LN is not sufficient because it requires an on-chain transaction to open a channel. To open a channel for everyone on earth would cost up to a third of a trillion dollars and take over 75 years, plus or minus deaths and births. Like getting a phone line in the Soviet Union. Further, complexity of routing is quadratic and will quickly exceed our patience. > It's amusing how most Bitcoin critics focus on on-chain fees and pretend that lightning doesn't exist. Well, that's because the underlying that LN is strapped to is so incredibly inefficient LN is a rounding error at the limit.
      - copirate 5y ago
        > To open a channel for everyone on earth would cost up to a third of a trillion dollars and take over 75 years Not with the upcoming[1] "channel factories"[2]. [1] http://anyprevout.xyz/ http://anyprevout.xyz/ [2] https://bitcoin.stackexchange.com/questions/67158/what-are-channel-factories-and-how-do-they-work https://bitcoin.stackexchange.com/questions/67158/what-are-c...
        arcticbull 5y ago
        By how much do you think it would reduce the L1 load? That article suggests if you can get 10 people together it would reduce the load to 1/10, so still almost a decade. And that's iff you happen to find 10 people who fit the specific shape exactly. That's still wildly unacceptable if true, and also unbelievably unlikely. LN has always been a "but wait! we've got a solution just around the corner - please don't give up!" feature - but there's nothing around the corner. There never has been. Not to mention it does nothing to address the quadratic routing criticism.
  - CryptoPunk 5y ago
    They could also use a decentralized stablecoin that doesn't rely on fiat backing, like RAI, if they fear potential regulatory crackdowns on USD-backed stablecoin use in their country. Though so far US government authorities have been supportive of USD-based stablecoin use by people living under repressive anti-US governments, even going as far as facilitating transfers of USDC, via Ethereum, to medical and humanitarian groups in Venezuela: https://www.coindesk.com/circle-usdc-venezuela-airtm https://www.coindesk.com/circle-usdc-venezuela-airtm
IfOnlyYouKnew 5y ago
Neither…

Yes. But, which of those two options is actually happening?

lefrenchy 5y ago

Touché

arcticbull 5y ago
A volatile currency with direct transaction fees ranging from $0.05-60 [edited per FreeRadical - thanks!] and indirect transaction fees of roughly $90 (socialized block reward). Whose value dropped 50% in a month then went up 50% in a month (which of course still leaves it 25% below its near-term highs). I don't think even the Cuban Peso performs like that. Think about both of those in terms of the average salary of a Cuban national. How about the minimum wage? $0.44 per hour. [edit, and while I'm in here] And why did it drop 50% in a month? Because the worlds 25th largest automaker decided it was a bad medium of exchange for buying electric cars. Perhaps unsurprisingly in Venezuela, they decided to go the other way, dollarizing. They moved 66% of all transactions to the USD, forcing the Maduro government's hand, and leading to their major banks offering USD deposit accounts. [1] If anything they need USDC not BTC. This is just gambling in a regulatory and legal void. The Mad Max of finance. [1] https://www.bloomberg.com/news/articles/2021-01-13/venezuela-plans-to-expand-use-of-foreign-currency-bank-accounts https://www.bloomberg.com/news/articles/2021-01-13/venezuela...
- FreeRadical 5y ago
  Direct transaction fees have been $0.05-0.2 for a long while now, mostly being below $0.1 See: https://mempool.space/ https://mempool.space/
  - deleted 5y ago
    [deleted]
- tenuousemphasis 5y ago
  Indirect transaction fees are a really pointless statistic.
  - deleted 5y ago
    [deleted]
- wesleywt 5y ago
  Bitcoin was a saviour for many ordingary folk in Venezuela during the hyperinflation crisis. It worked as intended. https://www.dw.com/en/venezuelans-try-to-beat-hyperinflation-with-cryptocurrency-revolution/a-57219083 https://www.dw.com/en/venezuelans-try-to-beat-hyperinflation... Why would a country embargoed by the USA use USD?
  - arcticbull 5y ago
    Your link doesn't mean much, as after all 66% of all transactions in Venezuela are USD denominated now per my link. The people of Venezuela had the choice: BTC or USD. They spoke, and they said USD. Likely only the wealthy laundering money, probably connected to the Maduro government are playing BTC. Only certain entities and individuals connected to the Maduro government are under sanctions, not everyone in Venezuela - which is why USD remittances are possible in the first place. Folks are using USD because Bitcoin is wildly inappropriate for use as a currency. [edit] Consider that at the time that article was written the average BTC transaction fee with multiple months minimum wage for the average Venezeulan.
  - notahacker 5y ago
    Because Venezuelans have been buying and selling things locally in black market dollars for decades, and even if they want to hold their dollars in offshore accounts, the US isn't interested in stopping them unless they're a regime insider (quite the opposite actually) As for Maduro, he's just trying to stop capital flight.
  - lottin 5y ago
    > Bitcoin was a saviour for many ordingary folk in Venezuela during the hyperinflation crisis. During a hyperinflation crisis everything that isn't money appreciates rapidly by definition. This means the often touted usefulness of bitcoin as "inflation hedge" is rather meaningless, because literally any asset that isn't money is an "inflation hedge". The shoes that I'm wearing right now are an "inflation hedge" just as good as bitcoin. In fact they're a better inflation hedge than bitcoin because their price is more predictable.
- jmstfv 5y ago
  > A volatile currency with direct transaction fees ranging from $0.05-60 [edited per FreeRadical - thanks!] You don't need to transact on-chain (i.e. settlement layer). There's a lightning network, where transactions are instantaneous, and fees are a few satoshis. It's amusing how most Bitcoin critics focus on on-chain fees and pretend that lightning doesn't exist. > And why did it drop 50% in a month? Because the worlds 25th largest automaker decided it was a bad medium of exchange for buying electric cars. That wasn't the main reason. It was the China FUD and the lack of Grayscale's neutral arbitrage, which took out the biggest buyer off of the market.
  - arcticbull 5y ago
    > You don't need to transact on-chain (i.e. settlement layer). You can use a lightning network, where transactions are instantaneous, and fees are a few satoshis. Sure, however LN is not sufficient because it requires an on-chain transaction to open a channel. To open a channel for everyone on earth would cost up to a third of a trillion dollars and take over 75 years, plus or minus deaths and births. Like getting a phone line in the Soviet Union. Further, complexity of routing is quadratic and will quickly exceed our patience. > It's amusing how most Bitcoin critics focus on on-chain fees and pretend that lightning doesn't exist. Well, that's because the underlying that LN is strapped to is so incredibly inefficient LN is a rounding error at the limit.
    - copirate 5y ago
      > To open a channel for everyone on earth would cost up to a third of a trillion dollars and take over 75 years Not with the upcoming[1] "channel factories"[2]. [1] http://anyprevout.xyz/ http://anyprevout.xyz/ [2] https://bitcoin.stackexchange.com/questions/67158/what-are-channel-factories-and-how-do-they-work https://bitcoin.stackexchange.com/questions/67158/what-are-c...
      - arcticbull 5y ago
        By how much do you think it would reduce the L1 load? That article suggests if you can get 10 people together it would reduce the load to 1/10, so still almost a decade. And that's iff you happen to find 10 people who fit the specific shape exactly. That's still wildly unacceptable if true, and also unbelievably unlikely. LN has always been a "but wait! we've got a solution just around the corner - please don't give up!" feature - but there's nothing around the corner. There never has been. Not to mention it does nothing to address the quadratic routing criticism.
- CryptoPunk 5y ago
  They could also use a decentralized stablecoin that doesn't rely on fiat backing, like RAI, if they fear potential regulatory crackdowns on USD-backed stablecoin use in their country. Though so far US government authorities have been supportive of USD-based stablecoin use by people living under repressive anti-US governments, even going as far as facilitating transfers of USDC, via Ethereum, to medical and humanitarian groups in Venezuela: https://www.coindesk.com/circle-usdc-venezuela-airtm https://www.coindesk.com/circle-usdc-venezuela-airtm

IfOnlyYouKnew 5y ago

Neither…