6 ms·

Panama unveils bill to make Bitcoin legal tender

46 points by danaos 5y ago

dotcoma 5y ago
But Switzerland to stick to the Swiss Franc, strangely ;-)
mkl 5y ago
Are there any successful cryptocurrencies that aren't based on proof-of-waste? El Salvador's and Panama's moves seem like the start of a bad trend.
- almavi 5y ago
  I read a interesting take on this, in case you're interested: https://gist.github.com/joepie91/daa93b9686f554ac7097158383b97838#so-theres-this-proof-of-stake-thing-right https://gist.github.com/joepie91/daa93b9686f554ac7097158383b...
  - stavros 5y ago
    That article performs some sleight of hand, where nodes "control" the currency. Nodes sign transactions publicly, they don't control anything. They can't covertly pick the wrong transaction to sign, if they do it will be very visible.
    - almavi 5y ago
      I mean, I may be wrong, but don't consensus between miners determine whether a block is valid or not? Specifically, 51% of mining power determines this, AFAIK.
      - stavros 5y ago
        Yes, but you can verify blocks independently and see that someone verified a block that was actually invalid. It's not something that can remain secret.
        almavi 5y ago
        But you won't verify the blockchain and call every node to say "hey! big corp X is cheating". The consensus protocol is what it is and if 51% agree on anything it will go on. We are at the mercy of 4 giants messing with the chain. Also probably simple double spending could be noticed and proven wrong but, for instance, rolling back a transaction would still be possible breaking the immutability of the blockchain.
- ackbar03 5y ago
  Well I guess bitcoin remains the most established. I guess they could switch to ether at some point if it goes well, but I remember something about ether not being fully decentralized? I'm not even a crypto nut but these are pretty interesting developments
  - almavi 5y ago
    Indeed: https://bitcoinera.app/arewedecentralizedyet/ https://bitcoinera.app/arewedecentralizedyet/
  - qecez 5y ago
    Why would anyone look beyond Bitcoin defeats me
    - mypastself 5y ago
      Monero is far superior with regards to anonimity, if that’s what you’re looking for.
      - qecez 5y ago
        *anonymity Bitcoin's Lightning Network is private enough, thank you very much.
        mypastself 5y ago
        It's great if it's private enough for you, but not everyone is satisfied with LN's level of privacy. Your original question was why anyone would use a different cryptocurrency. Thank you for correcting me, but since you yourself wrote a comment saying "Why would anyone look beyond Bitcoin defeats me", I’m wondering if you really corrected me because you believe spelling and grammar are important.
        qecez 5y ago
        Are you personally not satisfied with LN's level of privacy? If you're not, mind explaining why?
- em3rgent0rdr 5y ago
  Ethereum is right now in the process of migrating to proof-of-stake. https://ethereum.org/en/eth2/ https://ethereum.org/en/eth2/ Miners are already staking using the more energy-efficient validation.
  - qecez 5y ago
    Running a T-account in Excel is even more energy-efficient.
    - em3rgent0rdr 5y ago
      A recent report "Energy Footprint of Blockchain Consensus Mechanisms Beyond Proof-of-Work" (http://blockchain.cs.ucl.ac.uk/wp-content/uploads/2021/09/UCL_CBT_DPS_Q32021_updated.pdf http://blockchain.cs.ucl.ac.uk/wp-content/uploads/2021/09/UC...) has estimated (Table VI) the energy consumed per transaction of leading proof-of-stake and found that some exceed the efficiency of VisaNet (including Eth 2.0 on a high-throughput projection): Platform | Per transaction (kW h/tx) Eth. 2.0 | 0.00009 – 0.00286 (High throughput projection) Eth. 2.0 | 0.01823 – 0.55713 (Low throughput projection) Algorand | 0.00017 – 0.00534 Cardano | 0.01239 – 0.37854 Polkadot | 0.00378 – 0.11556 Tezos | 0.00036 – 0.01096 Bitcoin | 360.39300 – 3691.40700 VisaNet | 0.00358
- jazzyjackson 5y ago
  nano is interesting to watch. it is one of those DAGs/lattices, like stellar. they were vulnerable to spam and got written off after a couple exchange scams soured the early adopters and ddoses brought the network to a halt, but years later they’ve patched the place up and maybe it’ll work there’s even a cute/terrifying faucet app, “wenano”, where people can setup a geofence and disburse funds to anyone who shows up, pokemon go style mostly a dollar or two for being in a certain city, but I can imagine the chaos that allowing more specific geofences and higher bounties can cause. on the other hand, humanitarian crisis on the turkish border? some benevolents can set up a free-money faucet right in the middle of the refugee camp, people around the world can “top off” the faucet and keep the the funds flowing freaky future coming up quick
  - luckylion 5y ago
    > there’s even a cute/terrifying faucet app, “wenano”, where people can setup a geofence and disburse funds to anyone who shows up, pokemon go style How does that work, can't you just fake the location service on your phone and "be" there? Or do they require 24/7 tracking and checking whether you've been a the airport etc?
    - jazzyjackson 5y ago
      I’ll try it tomorrow and let you know, I was looking up ways to spoof gps through devtools but I can imagine some countermeasures, namely, comparing your location when you try to claim a faucet and deciding you arrived awfully fast from newfoundland to the maltese islands. If I can only teleport my location as fast as I can drive, it would hardly be worth it.
      - chii 5y ago
        Create a million accounts, each spread out in a grid around the world. Then, as soon as a claimable geolocation appears, you use the closest to claim it!
        tomtomistaken 5y ago
- mypastself 5y ago
  If you count market cap as success, the PoS protocol Cardano (ADA) is currently at #3, right behind the two big ones (BTC and ETH). If you mean successful adoption as a currency, there is no such thing yet, PoW or PoS.
  - qecez 5y ago
    Market cap is a useless metric. All altcoins without exception are a leveraged way to play Bitcoin.
    - mypastself 5y ago
      You’re free to offer your definition of success, then.
      - qecez 5y ago
        Don't know, perhaps decentralization?
        mypastself 5y ago
        What about it?
- johanneskanybal 5y ago
  My money is on Ethereum getting there first while pointing out it's unfair to call something creating value pure waste. Siding with gold miners and bloated corrupt banking systems as the future on a tech site seems weird.
- skinnyasianboi 5y ago
  There are many alternatives to the proof of work concept. Cardano uses proof of stake with a fraction of energy cost and is academic proven with 100+ peer reviewed papers. Beautiful project
  - ikerdanzel 5y ago
    People use crypto purely because of speculative nature. Despite Bitcoin is one of the worst off crypto implementation, it is the most highly valued because network effect and speculation. In future don't be surprise private enterprise built nuclear plant purely to power up their crypto mining.
- basch 5y ago
  Solana has had quite a month. https://www.notboring.co/p/solana-summer https://www.notboring.co/p/solana-summer >Solana uses a Proof of Stake consensus mechanism plus Proof of History, a decentralized source of time that Solana Labs CEO and founder Anatoly Yakovenko told me is “the implementation of the arrow of time in math.” Sounds mind-bending, and it is, but what it means is that transactions on Solana are verifiably ordered without all nodes needing to agree simultaneously. That’s what makes it so fast. At the rate it's been growing, relative to other major coins, it could be a top 4-5 coin very soon. It currently sits right behind Binance Coin and Tether at #6. https://www.coingecko.com/en https://www.coingecko.com/en
- nl 5y ago
  Yes. There are a number of "Level 1" blockchains[1] that are proof-of-stake. Ethereum is moving to PoS. Algorand was just announced as the level 1 chain for the El Salvador[2], while Cardano and Solana are both pretty big chains. Other contenders include NEAR. [1] https://medium.com/the-capital/layer-1-vs-layer-2-what-you-need-to-know-about-different-blockchain-layer-solutions-69f91904ce40 https://medium.com/the-capital/layer-1-vs-layer-2-what-you-n... [2] https://finance.yahoo.com/news/el-salvador-develop-blockchain-infrastructure-084104876.html https://finance.yahoo.com/news/el-salvador-develop-blockchai...
- satronaut 5y ago
  Can you define proof of waste? I haven't heard of that protocol?
LatteLazy 5y ago
What does "legal tender" mean in this context? Normally, as i understand it, it means you must accept it for payments of debts. So will El Salvadorans be required to accept bitcoin? Can your employer suddenly announce your salary is now paid only in it?
- larrysalibra 5y ago
  In the El Salvador law, Article 7 goes beyond the typical definition of legal tender - the recognition by courts as payment for debts - and requires everyone to accept Bitcoin.
soco 5y ago
Maybe I'm just a cranky skeptic but I can't stop wondering, what's in it for the panaman (and salvadorian) government? What kind of money this switch will bring in their vaults/pockets? What kind of control does it enable? What kind of business will the move bring?
- jazzyjackson 5y ago
  If a population really did adopt a single payment network, the goverment could issue a blacklist of accounts that you can be punished for transacting with. think of the power the US government has to freeze the funds of russian oligarchs - blockchain allows at least a version of this: not to freeze the funds, but to prohibit sending or receiving funds from a certain address vendors could happily subscribe to this blacklist to ensure legal compliance (an RSS feed will do but thats just me)
  - qecez 5y ago
    Bitcoin is perfectly fungible, if you know what you're doing. Even beyond this, there are no "accounts" or "addresses" on the Lightning Network - its privacy is superb.
    - jazzyjackson 5y ago
      I haven’t looked at lightning since it was vaporware so I’ll have to check that out… I don’t know much about channels, is there really no public ledger in that case?
      - qecez 5y ago
        Same thing, tried dipping my toes a couple of years ago, payments would often fail, gui inexistent, etc. But we've come a long way since then. For starters, download bluewallet and get some free sats to play around with: https://lnfaucet.com https://lnfaucet.com https://fixedfloat.com/lightning-faucet https://fixedfloat.com/lightning-faucet Quite a rabbit hole you're falling into. And no, there's no public ledger.
  - 5y ago
nathias 5y ago
why, they should just run their own PoS so they can have all the benefits of crypto and all the benefits of having sovreign monetary policies
Pinegulf 5y ago
This may be silly question, but what does official status actually mean? Bitcoin wasn't illegal in Pananama. It's not like they can print more nor guarantee value of the coin with other goods, is it?
- alephnan 5y ago
  Government payments and certain civilian contracts have to be settled on legal tender. Utilities, hospitals, have to accept it as payment. Taxation purposes.
- drexlspivey 5y ago
  If a currency is legal tender in a country it means that everyone in the country are required to accept it as means of settling a debt.
  - itsoktocry 5y ago
    You can accept it as a means of debt repayment in the eyes of the law . No one is "required" to accept anything.
    - valenterry 5y ago
      I think what it means is that if I break your car and you sue me to get the money back from me, I can pay you in bitcoin and you'll have to accept it, i.e. cannot claim that I haven't repayed you for the damage. In all countries were Bitcoin is not an official currency (so pretty much everywhere) you could claim that even though I payed you in Bitcoin, it doesn't settle the debt and you reject the payment and ask me to pay you in an official currency.
      - tromp 5y ago
        You cannot pay someone in bitcoin who hasn't setup a wallet or shared a bitcoin address with you...
        5y ago
qwerty456127 5y ago
Why do they all choose BitCoin? Its arguably the worst cryptocurrency by all means but the price. It has ridiculously high transaction costs in money, time and energy, easily becoming nearly unusable this way. Doesn't it?
- Quarrelsome 5y ago
  mindshare.
- TekMol 5y ago
  - Highest Market Cap (Large buys do not impact price much) - Highest chance to still be around in 50 years - Hardest to manipulate (50% attack is extremely expensive) - Proven technology (Ethereum gets overhowl with ETH 2) - Great track record of trustworthyness (No DAO fork) - Defined inflation (Ethereum changes inflation often) - Popular second layer tech (Lightning Network)
- johanneskanybal 5y ago
  Without trust and network effect value doesn't exist and most of what you see as problems is a direct result of its success and popularity. With these new more relevant metrics of success in mind it becomes simple to see why it's undisputed for now. There's 1-2 competitors maybe but none with a track record of standing a chance over the long haul.
skinnyasianboi 5y ago
I always find it fascinating how HN dis-acknowledges the crypto movement. I admire both and wish they would go hand in hand
- georgeecollins 5y ago
  There are lots of places to go to hear cheerleading and doom saying. I would like HN to be a place where people ask questions and get thoughtful answers.

46 points by danaos 5y ago

But Switzerland to stick to the Swiss Franc, strangely ;-)

mkl 5y ago

Are there any successful cryptocurrencies that aren't based on proof-of-waste? El Salvador's and Panama's moves seem like the start of a bad trend.

almavi 5y ago
I read a interesting take on this, in case you're interested: https://gist.github.com/joepie91/daa93b9686f554ac7097158383b97838#so-theres-this-proof-of-stake-thing-right https://gist.github.com/joepie91/daa93b9686f554ac7097158383b...
- stavros 5y ago
  That article performs some sleight of hand, where nodes "control" the currency. Nodes sign transactions publicly, they don't control anything. They can't covertly pick the wrong transaction to sign, if they do it will be very visible.
  - almavi 5y ago
    I mean, I may be wrong, but don't consensus between miners determine whether a block is valid or not? Specifically, 51% of mining power determines this, AFAIK.
    - stavros 5y ago
      Yes, but you can verify blocks independently and see that someone verified a block that was actually invalid. It's not something that can remain secret.
      - almavi 5y ago
        But you won't verify the blockchain and call every node to say "hey! big corp X is cheating". The consensus protocol is what it is and if 51% agree on anything it will go on. We are at the mercy of 4 giants messing with the chain. Also probably simple double spending could be noticed and proven wrong but, for instance, rolling back a transaction would still be possible breaking the immutability of the blockchain.
ackbar03 5y ago
Well I guess bitcoin remains the most established. I guess they could switch to ether at some point if it goes well, but I remember something about ether not being fully decentralized? I'm not even a crypto nut but these are pretty interesting developments
- almavi 5y ago
  Indeed: https://bitcoinera.app/arewedecentralizedyet/ https://bitcoinera.app/arewedecentralizedyet/
- qecez 5y ago
  Why would anyone look beyond Bitcoin defeats me
  - mypastself 5y ago
    Monero is far superior with regards to anonimity, if that’s what you’re looking for.
    - qecez 5y ago
      *anonymity Bitcoin's Lightning Network is private enough, thank you very much.
      - mypastself 5y ago
        It's great if it's private enough for you, but not everyone is satisfied with LN's level of privacy. Your original question was why anyone would use a different cryptocurrency. Thank you for correcting me, but since you yourself wrote a comment saying "Why would anyone look beyond Bitcoin defeats me", I’m wondering if you really corrected me because you believe spelling and grammar are important.
        qecez 5y ago
        Are you personally not satisfied with LN's level of privacy? If you're not, mind explaining why?
em3rgent0rdr 5y ago
Ethereum is right now in the process of migrating to proof-of-stake. https://ethereum.org/en/eth2/ https://ethereum.org/en/eth2/ Miners are already staking using the more energy-efficient validation.
- qecez 5y ago
  Running a T-account in Excel is even more energy-efficient.
  - em3rgent0rdr 5y ago
    A recent report "Energy Footprint of Blockchain Consensus Mechanisms Beyond Proof-of-Work" (http://blockchain.cs.ucl.ac.uk/wp-content/uploads/2021/09/UCL_CBT_DPS_Q32021_updated.pdf http://blockchain.cs.ucl.ac.uk/wp-content/uploads/2021/09/UC...) has estimated (Table VI) the energy consumed per transaction of leading proof-of-stake and found that some exceed the efficiency of VisaNet (including Eth 2.0 on a high-throughput projection): Platform | Per transaction (kW h/tx) Eth. 2.0 | 0.00009 – 0.00286 (High throughput projection) Eth. 2.0 | 0.01823 – 0.55713 (Low throughput projection) Algorand | 0.00017 – 0.00534 Cardano | 0.01239 – 0.37854 Polkadot | 0.00378 – 0.11556 Tezos | 0.00036 – 0.01096 Bitcoin | 360.39300 – 3691.40700 VisaNet | 0.00358
jazzyjackson 5y ago
nano is interesting to watch. it is one of those DAGs/lattices, like stellar. they were vulnerable to spam and got written off after a couple exchange scams soured the early adopters and ddoses brought the network to a halt, but years later they’ve patched the place up and maybe it’ll work there’s even a cute/terrifying faucet app, “wenano”, where people can setup a geofence and disburse funds to anyone who shows up, pokemon go style mostly a dollar or two for being in a certain city, but I can imagine the chaos that allowing more specific geofences and higher bounties can cause. on the other hand, humanitarian crisis on the turkish border? some benevolents can set up a free-money faucet right in the middle of the refugee camp, people around the world can “top off” the faucet and keep the the funds flowing freaky future coming up quick
- luckylion 5y ago
  > there’s even a cute/terrifying faucet app, “wenano”, where people can setup a geofence and disburse funds to anyone who shows up, pokemon go style How does that work, can't you just fake the location service on your phone and "be" there? Or do they require 24/7 tracking and checking whether you've been a the airport etc?
  - jazzyjackson 5y ago
    I’ll try it tomorrow and let you know, I was looking up ways to spoof gps through devtools but I can imagine some countermeasures, namely, comparing your location when you try to claim a faucet and deciding you arrived awfully fast from newfoundland to the maltese islands. If I can only teleport my location as fast as I can drive, it would hardly be worth it.
    - chii 5y ago
      Create a million accounts, each spread out in a grid around the world. Then, as soon as a claimable geolocation appears, you use the closest to claim it!
      - tomtomistaken 5y ago
mypastself 5y ago
If you count market cap as success, the PoS protocol Cardano (ADA) is currently at #3, right behind the two big ones (BTC and ETH). If you mean successful adoption as a currency, there is no such thing yet, PoW or PoS.
- qecez 5y ago
  Market cap is a useless metric. All altcoins without exception are a leveraged way to play Bitcoin.
  - mypastself 5y ago
    You’re free to offer your definition of success, then.
    - qecez 5y ago
      Don't know, perhaps decentralization?
      - mypastself 5y ago
        What about it?
johanneskanybal 5y ago
My money is on Ethereum getting there first while pointing out it's unfair to call something creating value pure waste. Siding with gold miners and bloated corrupt banking systems as the future on a tech site seems weird.
skinnyasianboi 5y ago
There are many alternatives to the proof of work concept. Cardano uses proof of stake with a fraction of energy cost and is academic proven with 100+ peer reviewed papers. Beautiful project
- ikerdanzel 5y ago
  People use crypto purely because of speculative nature. Despite Bitcoin is one of the worst off crypto implementation, it is the most highly valued because network effect and speculation. In future don't be surprise private enterprise built nuclear plant purely to power up their crypto mining.
basch 5y ago
Solana has had quite a month. https://www.notboring.co/p/solana-summer https://www.notboring.co/p/solana-summer >Solana uses a Proof of Stake consensus mechanism plus Proof of History, a decentralized source of time that Solana Labs CEO and founder Anatoly Yakovenko told me is “the implementation of the arrow of time in math.” Sounds mind-bending, and it is, but what it means is that transactions on Solana are verifiably ordered without all nodes needing to agree simultaneously. That’s what makes it so fast. At the rate it's been growing, relative to other major coins, it could be a top 4-5 coin very soon. It currently sits right behind Binance Coin and Tether at #6. https://www.coingecko.com/en https://www.coingecko.com/en
nl 5y ago
Yes. There are a number of "Level 1" blockchains[1] that are proof-of-stake. Ethereum is moving to PoS. Algorand was just announced as the level 1 chain for the El Salvador[2], while Cardano and Solana are both pretty big chains. Other contenders include NEAR. [1] https://medium.com/the-capital/layer-1-vs-layer-2-what-you-need-to-know-about-different-blockchain-layer-solutions-69f91904ce40 https://medium.com/the-capital/layer-1-vs-layer-2-what-you-n... [2] https://finance.yahoo.com/news/el-salvador-develop-blockchain-infrastructure-084104876.html https://finance.yahoo.com/news/el-salvador-develop-blockchai...
satronaut 5y ago
Can you define proof of waste? I haven't heard of that protocol?

LatteLazy 5y ago

What does "legal tender" mean in this context? Normally, as i understand it, it means you must accept it for payments of debts. So will El Salvadorans be required to accept bitcoin? Can your employer suddenly announce your salary is now paid only in it?

larrysalibra 5y ago
In the El Salvador law, Article 7 goes beyond the typical definition of legal tender - the recognition by courts as payment for debts - and requires everyone to accept Bitcoin.

soco 5y ago

Maybe I'm just a cranky skeptic but I can't stop wondering, what's in it for the panaman (and salvadorian) government? What kind of money this switch will bring in their vaults/pockets? What kind of control does it enable? What kind of business will the move bring?

jazzyjackson 5y ago
If a population really did adopt a single payment network, the goverment could issue a blacklist of accounts that you can be punished for transacting with. think of the power the US government has to freeze the funds of russian oligarchs - blockchain allows at least a version of this: not to freeze the funds, but to prohibit sending or receiving funds from a certain address vendors could happily subscribe to this blacklist to ensure legal compliance (an RSS feed will do but thats just me)
- qecez 5y ago
  Bitcoin is perfectly fungible, if you know what you're doing. Even beyond this, there are no "accounts" or "addresses" on the Lightning Network - its privacy is superb.
  - jazzyjackson 5y ago
    I haven’t looked at lightning since it was vaporware so I’ll have to check that out… I don’t know much about channels, is there really no public ledger in that case?
    - qecez 5y ago
      Same thing, tried dipping my toes a couple of years ago, payments would often fail, gui inexistent, etc. But we've come a long way since then. For starters, download bluewallet and get some free sats to play around with: https://lnfaucet.com https://lnfaucet.com https://fixedfloat.com/lightning-faucet https://fixedfloat.com/lightning-faucet Quite a rabbit hole you're falling into. And no, there's no public ledger.
- 5y ago

nathias 5y ago

why, they should just run their own PoS so they can have all the benefits of crypto and all the benefits of having sovreign monetary policies

Pinegulf 5y ago

This may be silly question, but what does official status actually mean? Bitcoin wasn't illegal in Pananama. It's not like they can print more nor guarantee value of the coin with other goods, is it?

alephnan 5y ago
Government payments and certain civilian contracts have to be settled on legal tender. Utilities, hospitals, have to accept it as payment. Taxation purposes.
drexlspivey 5y ago
If a currency is legal tender in a country it means that everyone in the country are required to accept it as means of settling a debt.
- itsoktocry 5y ago
  You can accept it as a means of debt repayment in the eyes of the law . No one is "required" to accept anything.
  - valenterry 5y ago
    I think what it means is that if I break your car and you sue me to get the money back from me, I can pay you in bitcoin and you'll have to accept it, i.e. cannot claim that I haven't repayed you for the damage. In all countries were Bitcoin is not an official currency (so pretty much everywhere) you could claim that even though I payed you in Bitcoin, it doesn't settle the debt and you reject the payment and ask me to pay you in an official currency.
    - tromp 5y ago
      You cannot pay someone in bitcoin who hasn't setup a wallet or shared a bitcoin address with you...
      - 5y ago

qwerty456127 5y ago

Why do they all choose BitCoin? Its arguably the worst cryptocurrency by all means but the price. It has ridiculously high transaction costs in money, time and energy, easily becoming nearly unusable this way. Doesn't it?

Quarrelsome 5y ago
mindshare.
TekMol 5y ago
- Highest Market Cap (Large buys do not impact price much) - Highest chance to still be around in 50 years - Hardest to manipulate (50% attack is extremely expensive) - Proven technology (Ethereum gets overhowl with ETH 2) - Great track record of trustworthyness (No DAO fork) - Defined inflation (Ethereum changes inflation often) - Popular second layer tech (Lightning Network)
johanneskanybal 5y ago
Without trust and network effect value doesn't exist and most of what you see as problems is a direct result of its success and popularity. With these new more relevant metrics of success in mind it becomes simple to see why it's undisputed for now. There's 1-2 competitors maybe but none with a track record of standing a chance over the long haul.

skinnyasianboi 5y ago

I always find it fascinating how HN dis-acknowledges the crypto movement. I admire both and wish they would go hand in hand

georgeecollins 5y ago
There are lots of places to go to hear cheerleading and doom saying. I would like HN to be a place where people ask questions and get thoughtful answers.