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Found this interesting deck[1] on El Salvador's digital climate while looking for smart phone adoption statistics. It would appear that there are more than enou

Found this interesting deck[1] on El Salvador's digital climate while looking for smart phone adoption statistics. It would appear that there are more than enough smart devices to allow for such a transition successfully. Already on Twitter we're seeing crypto-punks there using Bitcoin to pay for their McDonalds, paying something like 0.000002 Bitcoin. I can't help but wonder what the outcome +1 year / + 5 years will be. [1] https://datareportal.com/reports/digital-2021-el-salvador https://datareportal.com/reports/digital-2021-el-salvador

hsavit1 5y ago
what an awful waste of energy. Each bitcoin transaction uses the energy equivalent the entire lifespan of a tree. Effectively, each bitcoin transaction is cutting down of tree... in this case, for a hamburger
- bethecloud 5y ago
  Nope. Bitcoin use and mining power are completely uncorrelated. By mining bitcoins, your earn as much as the computational fraction you are representing. So, indeed, there was a race to more and more mining power in the recent years but it can completely be reversed. For example if electricity prices rises. Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users.
  - simiones 5y ago
    > Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users. No, that is completely inaccurate. First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. And if the parameters were adjusted such that it would be that easy to mine blocks, bitcoin would become valueless, as everyone with a laptop could produce their own longest blockchain where they have half of all bitcoin. Proof of work systems will always require absurd wastes of energy - that is, by definition, the only way they ensure the correctness of the blockchain.
    - xur17 5y ago
      > No, that is completely inaccurate. > First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. If you settle everything onchain, maybe (I haven't done the math on this, so I honestly don't know), but storing every transaction for a cup of coffee in a datastore that persists across tens of thousands of computers for the rest of time is absurd. Long term Bitcoin layer 1 (onchain) is likely to be the settlement layer for large transactions, and other layers (lightning network, etc) will be used for every day activities like buying coffee, sending funds to a friend, etc.
      - simiones 5y ago
        But the total amount of data stored in the Lightning network is even more absurd. Not only do we store "A has paid B 1 SAT" for all time, we actually store "A is paying C 1SAT for B; C is paying D 1SAT for B; E is paying F 1SAT for B; F is paying B 1SAT".
        SamPatt 5y ago
        Not everyone is forced to store it though. You don't need consensus about the state of the entire network on layer 2 like you do on layer 1. So it's not really a problem.
        xur17 5y ago
        More specifically, only the channel participants have to store it, and only as long as the channel is open.
        datadata 5y ago
        The transactions within an open channel are only stored by the two owners of the channel. The entire network does not need to store, nor does it even get to see these transactions. They can even be private. When the channel is closed none of the channel transactions need to be committed to the blockchain, only the final balances of the channel between the two participants. A lightning channel does require an onchain bitcoin transaction both to be opened and closed, but while open it supports unlimited transactions within the channel while it is open without increasing the onchain storage burden on the network validation nodes further beyond the two transactions to open and close the channel.
  - geofft 5y ago
    That's not how either Bitcoin or electricity pricing works. Bitcoin is secure only under the assumption that a 51% attack is computationally difficult, i.e., that it is not cheaper to acquire more mining capacity than the non-malicious miners collectively have (whether by creating a conspiracy of existing miners, or by becoming new miners) than to actually pay whatever transaction you're trying to get away with not paying. This means two things (which are, in a sense, the same thing in two different directions). First, Bitcoin needs to have a nontrivial fraction of the world's computational power in order to be secure. If mining happens on a laptop, well, I personally own at least two laptops, so I can easily double-spend coins, making the currency worthless. It doesn't have to be 51% of the world's total computational power, but it has to be enough that nobody can easily and cheaply put together enough additional power to mine false chains at a rate that keeps up with the non-malicious miners. Second, if it were ever the case that secure mining was happening on a single laptop, that would mean that this one laptop represents a huge portion of humanity's computing power, meaning that, first of all, the fair market value of being able to use this laptop would be incredibly high (both because it needs to be high enough that a double-spend attack isn't profitable, and because of simple supply and demand), and second, there would be a separate moral question of why we're using this laptop to mine Bitcoin instead of, say, powering any of the scientific research (like vaccine development) that now has to happen on TI-83s. It is technically true that Bitcoin could "work" with mining only happening on a laptop (and probably did "work" in this sense when Satoshi was developing it on his personal laptop), but that's like saying that, say, MD5 is a "secure" hash provided the attacker only has pen and paper. True, but that's not what anyone means by "secure."
  - only_as_i_fall 5y ago
    Isn't the security of the blockchain fundamentally tied to the mining difficultly? I don't see how you could significantly reduce the energy usage without sacrificing security (unless you make structural changes such as moving to POS)
    - topranks 5y ago
      You could reduce the energy use per-transaction if the block size limit was increased. That's not gonna happen at this stage however.
- option_greek 5y ago
  They are using lightning wallets. So no on chain settling. No (extra) trees were harmed for hamburgers (though obviously opening and closing of channels and initial mining it self is energy intensive).
  - simiones 5y ago
    Actually, they are not even using lighning wallets. They are using a centralized payment processor that has personal accounts for users, like any other payment app. This centralized processor happens to use lightning wallets in its backend, but there is no 1:1 mapping of payment_account:lightning_wallet. And since Lightning itself doesn't interact with the blockchain except when you open/close payment channels, there is no actual use of bitcoin in the whole scheme. Which is of course to be expected, as the bitcoin network is entirely unable to process the transactions of a small rural town. Basically, people in El Salvador will use a centralized payment app that happens to denominate prices in Bitcoin. It will be interesting to see how much this actually works with the extreme volatility of Bitcoin, but for a country that is apparently desperate to get foreign value into the country it may be the worse option, except for all the others.
    - doomroot 5y ago
      You have the first part right, but to insinuate that lightning is not using the bitcoin blockchain is entirely wrong. In the case of lightning, the bitcoin blockchain is only used in a dispute over funds. This is how you properly scale a decentralized blockchain.
      - simiones 5y ago
        So the way to scale the blockchain is to avoid putting transactions on it. If I promise you that if you give me your burger you'll have 5SAT from me, and later you ask for my water and offer to reduce my debt to 4SAT in exchange, did we use the bitcoin blockchain in our transaction? With ligthning, you're not using the bitcoin network to process transactions. If we opened a lightning channel for our 2 personal bitcoin wallets, and I paid you 1000SAT over the channel, and then someone checked my bitcoin wallet, they would see that I still have all those SATs (of course, I can't double spend them).
- drdeca 5y ago
  How do you reach that number? (CO2/block) / (transactions/block)? I imagine these transactions are being done over the lightning network or something like that(I could be wrong on this though), in which case that calculation wouldn’t give the right answer. In addition, I think I would evaluate the CO2 costs per transaction based on the contributions to the mining reward (because this is the part of transaction which has an influence on how much power people use to mine), which I think for bitcoin is still relatively small compared to the block reward part? Well, there’s also the influence on the price that making transactions has.
  - okl 5y ago
    Check the numbers. Bitcoin is just not worth it's ecological footprint: https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption
    - zsmi 5y ago
      That's new to me. It seems the argument hinges on this fact, "Bitcoin could therefore theoretically handle around 220 million transactions annually." I think the assumption that there will be no innovation in this space, optimizations will never decrease the amount of computing resources required for a bitcoin transaction, and nothing can be done, is probably incorrect. Some prospects: https://en.wikipedia.org/wiki/Bitcoin_scalability_problem#Efficiency_improvements https://en.wikipedia.org/wiki/Bitcoin_scalability_problem#Ef...
      - okl 5y ago
        The pollution is happening right now. You must realize that appealing to a hypothetical future solution doesn't excuse us from our obligation to do things right in the present.
        lostmsu 5y ago
        Can you outline how that could have worked for cars, trains, and all other automation, which were all extremely polluting and inefficient, and were slowly refined over a course of XX century?
- spraveenitpro 5y ago
  Dumbest comment I have seen today.
- buildbuildbuild 5y ago
  Not necessarily with the Lightning Network. Strike is actively advising El Salvador in this, they develop a lightning app.
- la_fayette 5y ago
  I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The developed world is responsible for climate change, so I guess the poorest have their right to use their money how they want and not in the way some banks or you consider it. The impact of the lightning network on energy consumption is even neglible...
  - fennecfoxen 5y ago
    > I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The fees are high because the costs are high. Existing remittance channels are shackled by anti-money-laundering, anti-organized-crime, anti-terrorism, know-your-customer compliance costs (typically enforced by the governments of multiple jurisdictions leaning on the money transfer operator's banking partners, who tend to be skittish about these things as a result). The world average of a ~$14 fee on a $200 remittance is easily in line with these costs; any crypto-remittance system which offers lower fees is only able to do so because it bypasses these controls. If you wanted to reform this in the existing world banking system, you'd need the US and El Salvador government to work with each other to some treaty which streamlines these channels; this would lower costs either directly or when competition arose.
    - exdsq 5y ago
      And all the other fees taken along the way too https://www.moneyandbanking.com/commentary/2018/2/18/the-stubbornly-high-cost-of-remittances https://www.moneyandbanking.com/commentary/2018/2/18/the-stu...
    - tehjoker 5y ago
      El Salvador was the site of Ronald Regan's financing of death squads in the 1980s. The cost of preventing these crimes and terrorism pales in comparison to the official terrorism that was perpetrated on that country. I'm not sure if there's a direct tie to Iran-Contra, but in Nicaragua Regan directly contravened a congressional funding ban and used Iranian and CIA drug money to fund the death squads there. Similar funding sources were probably at play in El Salvador.
- neilsense 5y ago
  Just spreading falsehoods without understanding anything...nice.
mytailorisrich 5y ago
I don't know the exact law in El Salvador, but in general "legal tender" does not imply an obligation to accept as payment in stores, it just means that most debts are discharged if the debtor offers (tenders) to settle the debt using a 'legal tender'. So, for instance, if your plumber did some work for you and sends you an invoice afterwards then that debt is discharged if you offer to settle it using a 'legal tender'. However, shopping in a store is usually not the same because payments do not settle an existing debt. Again, I'm not sure exactly what El Salvador's new law entails.
- space_rock 5y ago
  In El Salvador it means an obligation to accept it. Which is good for bitcoin adoption but does reduce people's freedom to refuse it
  - throwdecro 5y ago
    I'm envisioning a lot of dirty looks from paper cash-preferring shopkeepers to crypto tourists when the tourists buy up all shop's inventory and leave the shopkeeper with just a few numbers in some app. EDIT: To be clear, I mean tourists each individually buying a normal amount of things using BTC, which adds up to the store exchanging it's inventory for a number in the app.
    - carnitine 5y ago
      Didn’t the grandparent comment explain that in such a case, legal tender doesn’t apply? There’s no debt in a normal shopping transaction, the shopkeeper is free to accept whatever they wish or reject the transaction entirely.
      - deleted 5y ago
        [deleted]
      - arcticbull 5y ago
        That's how it works in the US but it's mandatory in El Salvador. I believe the dictator there has been threatening folks who don't accept Bitcoin with punishment. Needless to say this is good for Bitcoin. [1] [1] https://u.today/el-salvador-government-to-punish-businesses-that-dont-accept-bitcoin https://u.today/el-salvador-government-to-punish-businesses-...

hsavit1 5y ago

what an awful waste of energy. Each bitcoin transaction uses the energy equivalent the entire lifespan of a tree. Effectively, each bitcoin transaction is cutting down of tree... in this case, for a hamburger

bethecloud 5y ago
Nope. Bitcoin use and mining power are completely uncorrelated. By mining bitcoins, your earn as much as the computational fraction you are representing. So, indeed, there was a race to more and more mining power in the recent years but it can completely be reversed. For example if electricity prices rises. Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users.
- simiones 5y ago
  > Bitcoin could be used by the whole world with mining only happening on a laptop. That would not change anything for Bitcoin users. No, that is completely inaccurate. First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. And if the parameters were adjusted such that it would be that easy to mine blocks, bitcoin would become valueless, as everyone with a laptop could produce their own longest blockchain where they have half of all bitcoin. Proof of work systems will always require absurd wastes of energy - that is, by definition, the only way they ensure the correctness of the blockchain.
  - xur17 5y ago
    > No, that is completely inaccurate. > First of all, with current parameters that would mean that you need a good few hundred years to process a few seconds of world-wide transactions. If you settle everything onchain, maybe (I haven't done the math on this, so I honestly don't know), but storing every transaction for a cup of coffee in a datastore that persists across tens of thousands of computers for the rest of time is absurd. Long term Bitcoin layer 1 (onchain) is likely to be the settlement layer for large transactions, and other layers (lightning network, etc) will be used for every day activities like buying coffee, sending funds to a friend, etc.
    - simiones 5y ago
      But the total amount of data stored in the Lightning network is even more absurd. Not only do we store "A has paid B 1 SAT" for all time, we actually store "A is paying C 1SAT for B; C is paying D 1SAT for B; E is paying F 1SAT for B; F is paying B 1SAT".
      - SamPatt 5y ago
        Not everyone is forced to store it though. You don't need consensus about the state of the entire network on layer 2 like you do on layer 1. So it's not really a problem.
        xur17 5y ago
        More specifically, only the channel participants have to store it, and only as long as the channel is open.
      - datadata 5y ago
        The transactions within an open channel are only stored by the two owners of the channel. The entire network does not need to store, nor does it even get to see these transactions. They can even be private. When the channel is closed none of the channel transactions need to be committed to the blockchain, only the final balances of the channel between the two participants. A lightning channel does require an onchain bitcoin transaction both to be opened and closed, but while open it supports unlimited transactions within the channel while it is open without increasing the onchain storage burden on the network validation nodes further beyond the two transactions to open and close the channel.
- geofft 5y ago
  That's not how either Bitcoin or electricity pricing works. Bitcoin is secure only under the assumption that a 51% attack is computationally difficult, i.e., that it is not cheaper to acquire more mining capacity than the non-malicious miners collectively have (whether by creating a conspiracy of existing miners, or by becoming new miners) than to actually pay whatever transaction you're trying to get away with not paying. This means two things (which are, in a sense, the same thing in two different directions). First, Bitcoin needs to have a nontrivial fraction of the world's computational power in order to be secure. If mining happens on a laptop, well, I personally own at least two laptops, so I can easily double-spend coins, making the currency worthless. It doesn't have to be 51% of the world's total computational power, but it has to be enough that nobody can easily and cheaply put together enough additional power to mine false chains at a rate that keeps up with the non-malicious miners. Second, if it were ever the case that secure mining was happening on a single laptop, that would mean that this one laptop represents a huge portion of humanity's computing power, meaning that, first of all, the fair market value of being able to use this laptop would be incredibly high (both because it needs to be high enough that a double-spend attack isn't profitable, and because of simple supply and demand), and second, there would be a separate moral question of why we're using this laptop to mine Bitcoin instead of, say, powering any of the scientific research (like vaccine development) that now has to happen on TI-83s. It is technically true that Bitcoin could "work" with mining only happening on a laptop (and probably did "work" in this sense when Satoshi was developing it on his personal laptop), but that's like saying that, say, MD5 is a "secure" hash provided the attacker only has pen and paper. True, but that's not what anyone means by "secure."
- only_as_i_fall 5y ago
  Isn't the security of the blockchain fundamentally tied to the mining difficultly? I don't see how you could significantly reduce the energy usage without sacrificing security (unless you make structural changes such as moving to POS)
  - topranks 5y ago
    You could reduce the energy use per-transaction if the block size limit was increased. That's not gonna happen at this stage however.
option_greek 5y ago
They are using lightning wallets. So no on chain settling. No (extra) trees were harmed for hamburgers (though obviously opening and closing of channels and initial mining it self is energy intensive).
- simiones 5y ago
  Actually, they are not even using lighning wallets. They are using a centralized payment processor that has personal accounts for users, like any other payment app. This centralized processor happens to use lightning wallets in its backend, but there is no 1:1 mapping of payment_account:lightning_wallet. And since Lightning itself doesn't interact with the blockchain except when you open/close payment channels, there is no actual use of bitcoin in the whole scheme. Which is of course to be expected, as the bitcoin network is entirely unable to process the transactions of a small rural town. Basically, people in El Salvador will use a centralized payment app that happens to denominate prices in Bitcoin. It will be interesting to see how much this actually works with the extreme volatility of Bitcoin, but for a country that is apparently desperate to get foreign value into the country it may be the worse option, except for all the others.
  - doomroot 5y ago
    You have the first part right, but to insinuate that lightning is not using the bitcoin blockchain is entirely wrong. In the case of lightning, the bitcoin blockchain is only used in a dispute over funds. This is how you properly scale a decentralized blockchain.
    - simiones 5y ago
      So the way to scale the blockchain is to avoid putting transactions on it. If I promise you that if you give me your burger you'll have 5SAT from me, and later you ask for my water and offer to reduce my debt to 4SAT in exchange, did we use the bitcoin blockchain in our transaction? With ligthning, you're not using the bitcoin network to process transactions. If we opened a lightning channel for our 2 personal bitcoin wallets, and I paid you 1000SAT over the channel, and then someone checked my bitcoin wallet, they would see that I still have all those SATs (of course, I can't double spend them).
drdeca 5y ago
How do you reach that number? (CO2/block) / (transactions/block)? I imagine these transactions are being done over the lightning network or something like that(I could be wrong on this though), in which case that calculation wouldn’t give the right answer. In addition, I think I would evaluate the CO2 costs per transaction based on the contributions to the mining reward (because this is the part of transaction which has an influence on how much power people use to mine), which I think for bitcoin is still relatively small compared to the block reward part? Well, there’s also the influence on the price that making transactions has.
- okl 5y ago
  Check the numbers. Bitcoin is just not worth it's ecological footprint: https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption
  - zsmi 5y ago
    That's new to me. It seems the argument hinges on this fact, "Bitcoin could therefore theoretically handle around 220 million transactions annually." I think the assumption that there will be no innovation in this space, optimizations will never decrease the amount of computing resources required for a bitcoin transaction, and nothing can be done, is probably incorrect. Some prospects: https://en.wikipedia.org/wiki/Bitcoin_scalability_problem#Efficiency_improvements https://en.wikipedia.org/wiki/Bitcoin_scalability_problem#Ef...
    - okl 5y ago
      The pollution is happening right now. You must realize that appealing to a hypothetical future solution doesn't excuse us from our obligation to do things right in the present.
      - lostmsu 5y ago
        Can you outline how that could have worked for cars, trains, and all other automation, which were all extremely polluting and inefficient, and were slowly refined over a course of XX century?
spraveenitpro 5y ago
Dumbest comment I have seen today.
buildbuildbuild 5y ago
Not necessarily with the Lightning Network. Strike is actively advising El Salvador in this, they develop a lightning app.
la_fayette 5y ago
I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The developed world is responsible for climate change, so I guess the poorest have their right to use their money how they want and not in the way some banks or you consider it. The impact of the lightning network on energy consumption is even neglible...
- fennecfoxen 5y ago
  > I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The fees are high because the costs are high. Existing remittance channels are shackled by anti-money-laundering, anti-organized-crime, anti-terrorism, know-your-customer compliance costs (typically enforced by the governments of multiple jurisdictions leaning on the money transfer operator's banking partners, who tend to be skittish about these things as a result). The world average of a ~$14 fee on a $200 remittance is easily in line with these costs; any crypto-remittance system which offers lower fees is only able to do so because it bypasses these controls. If you wanted to reform this in the existing world banking system, you'd need the US and El Salvador government to work with each other to some treaty which streamlines these channels; this would lower costs either directly or when competition arose.
  - exdsq 5y ago
    And all the other fees taken along the way too https://www.moneyandbanking.com/commentary/2018/2/18/the-stubbornly-high-cost-of-remittances https://www.moneyandbanking.com/commentary/2018/2/18/the-stu...
  - tehjoker 5y ago
    El Salvador was the site of Ronald Regan's financing of death squads in the 1980s. The cost of preventing these crimes and terrorism pales in comparison to the official terrorism that was perpetrated on that country. I'm not sure if there's a direct tie to Iran-Contra, but in Nicaragua Regan directly contravened a congressional funding ban and used Iranian and CIA drug money to fund the death squads there. Similar funding sources were probably at play in El Salvador.
neilsense 5y ago
Just spreading falsehoods without understanding anything...nice.

mytailorisrich 5y ago

I don't know the exact law in El Salvador, but in general "legal tender" does not imply an obligation to accept as payment in stores, it just means that most debts are discharged if the debtor offers (tenders) to settle the debt using a 'legal tender'. So, for instance, if your plumber did some work for you and sends you an invoice afterwards then that debt is discharged if you offer to settle it using a 'legal tender'. However, shopping in a store is usually not the same because payments do not settle an existing debt. Again, I'm not sure exactly what El Salvador's new law entails.

space_rock 5y ago
In El Salvador it means an obligation to accept it. Which is good for bitcoin adoption but does reduce people's freedom to refuse it
- throwdecro 5y ago
  I'm envisioning a lot of dirty looks from paper cash-preferring shopkeepers to crypto tourists when the tourists buy up all shop's inventory and leave the shopkeeper with just a few numbers in some app. EDIT: To be clear, I mean tourists each individually buying a normal amount of things using BTC, which adds up to the store exchanging it's inventory for a number in the app.
  - carnitine 5y ago
    Didn’t the grandparent comment explain that in such a case, legal tender doesn’t apply? There’s no debt in a normal shopping transaction, the shopkeeper is free to accept whatever they wish or reject the transaction entirely.
    - deleted 5y ago
      [deleted]
    - arcticbull 5y ago
      That's how it works in the US but it's mandatory in El Salvador. I believe the dictator there has been threatening folks who don't accept Bitcoin with punishment. Needless to say this is good for Bitcoin. [1] [1] https://u.today/el-salvador-government-to-punish-businesses-that-dont-accept-bitcoin https://u.today/el-salvador-government-to-punish-businesses-...