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Moving money from point A to point B quickly is the ideal use case for cryptocurrency. It’s interesting to see that even their example use case results in the

Moving money from point A to point B quickly is the ideal use case for cryptocurrency. It’s interesting to see that even their example use case results in the transferred Bitcoin being converted back to dollars right away: > “Wherever you are now, you can send bitcoin to anyone with a Chivo wallet in El Salvador, and in minutes, they have the value and then they can go to one of the ATMs and take it out in cash without a fee,” said Alex Gladstein, chief strategy officer for the Human Rights Foundation. I suspect this will be the default behavior for Bitcoin remittances: Buy Bitcoin, send it immediately, then other side sells it as quickly as possible to get back to cash. Bitcoin dropped 20% in the span of minutes on the big launch day in El Salvador. I doubt many people are going to want to hodl their remittances in a highly volatile currency. It’s also interesting that the costs haven’t actually gone to zero for the Bitcoin model, but they have been obscured and shifted to other parties. This says the receiver can withdraw BTC as cash “without a fee” but what does that mean? Is it like those currency exchange stations at the airport that have “zero fee” but they more than make up for it with unfavorable exchange rates? If not, who is paying to operate and maintain the foreign exchange infrastructure, which isn’t free? Also, they make use of L2 networks for transfers, but at the end of the day those are still rolled up on to the Bitcoin blockchain, which is unbelievably expensive to run due to the energy requirements that register as a significant fraction of humanities energy usage. That energy must be paid for somehow, which is currently a a mix of block rewards (technically, inflationary money printing) and transaction fees, which are at least amortized across L2 transactions. There may be uses for cryptocurrency yet, but I hope this isn’t the end game because it’s still an inefficient mess. Maybe if we can get away from PoW block chains and also wise up and jettison the arbitrary speculative tokens then maybe we can make some progress.

dom96 5y ago
At that point why don't they just send Tether or USDT (or another stable coin), why even risk playing with such volatility, can't these stable coins be transferred with few fees as well?
- deleted 5y ago
  [deleted]
- robot_no_419 5y ago
  Because Tether and USDT are censorable by their parent companies (ie, these tokens can be blacklisted by the Ethereum Virtual Machine), and they are also tied to the monetary policy of the United States. It definitely makes sense for them to use Tether/USDT for sure, I agree there. But making Bitcoin a legal currency is also a political and economic statement that goes far beyond simply facilitating digital payments.
  - qeternity 5y ago
    They ARE using USDT. Strike, the platform being used, automatically converts everything to Tethers. There's hardly anything truly "bitcoin" about El Salvador's system.
    - mateuszf 5y ago
      Not sure what's the current status on this but they were planning on moving from Tether to cooperation with El Salvador banks. https://www.coindesk.com/business/2021/06/21/strike-is-phasing-out-usdt-from-bitcoin-based-el-salvador-remittances-ceo-says/ https://www.coindesk.com/business/2021/06/21/strike-is-phasi...
  - dustintrex 5y ago
    El Salvador doesn't have its own currency, it already uses the USD as legal tender, plus their crypto system is backed by USDT. This has been suggested as one of the many reasons Bukele is so keen on Bitcoin/Chivo: he can't print USD, but having control of the national wallet system gives him countless avenues to manipulate the system.
    - kevinak 5y ago
      I don't think that's accurate. Where have you read that they are using USDT?
lumost 5y ago
BTC volatility will presumably fall as the market cap grows. One would expect Institutional traders who make money on volatility will continue to move in as it becomes easier to bank on some long-term average price of BTC relative to other currencies. Something I suspect we often forget about in the world of stable reserve currencies is that the majority of the world can't run floating exchange rates without encountering major volatility. Standard Fiat/Gold backed currencies generally require some large institution to control the currency price either via money supply, foreign currency supply, gold, or government decreed exchange rates. When these institutions fail currencies tend to have rather extreme swings.
- PragmaticPulp 5y ago
  > BTC volatility will presumably fall as the market cap grows. One would expect Institutional traders who make money on volatility will continue to move in… I don’t buy it. Those institutional traders have plenty of access in 2021 and it’s still as volatile as ever. The extreme volatility is what makes them their money and also convinces the casual investor to put money into Bitcoin because they think it might 100X again. If the volatility stops, so does the crypto party. Big traders don’t want it to stop.
  - qeternity 5y ago
    Institutional trader here. Yes, this. Crypto is popular with traders because it's volatile and fragmented.
    - deleted 5y ago
      [deleted]
    - stiltzkin 5y ago
      On crypto you need an asterisk as this is not a problem with stable coins as USDC or Dai.
      - qeternity 5y ago
BLKNSLVR 5y ago
You, umm, answer your own accusation in the same paragraph: > Also, they make use of L2 networks for transfers, but at the end of the day those are still rolled up on to the Bitcoin blockchain > which are at least amortized across L2 transactions That's the point of Layer 2 solutions. Don't worry, there's a lot of progress being made if you keep up with the industry news.
- PragmaticPulp 5y ago
  As long as the L2 transactions still require the operation of the main BTC blockchain, someone is paying the costs of maintaining the L1 block chain. It’s misdirection, but the costs of maintaining the Bitcoin blockchain haven’t gone anywhere.
  - sunshinerag 5y ago
    No one said the cost is zero. But L2 solution multiplies the number of transactions done by a significant done. So the cost per transaction is staggeringly low.
- mbesto 5y ago
  > Don't worry, there's a lot of progress being made if you keep up with the industry news. Sorry to nitpick your comment specifically, but I always hear this in the crypto community "we're making progress!". But no one ever cares to provide specifics. Why is that?
  - BLKNSLVR 5y ago
    Honestly, it's fucking complex, which doesn't help it's adoption or popularity. I've been throwing away my previous life for nearly a year in reading, watching, and listening to all manner of news, deep dive explanations, technical analysis, price predictions, "fundamentals" definitions, pundit commentary, etc, as well as participating, in non-financially-ruinous-risking ways, in trading, swapping, DeFi, yield farming, lending, (not borrowing). It's difficult to define what I've learnt, and maybe that's indicative in the opposite way than I'd like. You have to dip your toe in to check the temperature. I've known of Bitcoin since it was $1, and was very skeptical of it until I dipped my toe in. Both my feet are wet now though, right up to my knees. I believe cryptocurrency has a bright future. Bitcoin is the first, Ethereum added something amazing to bitcoin to become a platform for other ecosystems, and now there are smaller competitors that are going to be "the new Ethereum" by being faster and cheaper and more decentralised so the ecosystems can spread wider to cater to more people. There are a couple of cryptocurrencies that are hoping to be able to soon compete with the transaction speeds and volumes of Visa but with lower fees. But, admittedly, that kind of performance level is vaporware after 5 years, but work continues and "revelations" always seem to be round the corner: Cardano smart contracts go live this weekend (I think, unless it's the last testnet release). Ethereum 2.0 is scheduled for release in December (this will probably make people 'in the know' smirk - so let's say Q1 2022). Solana is gaining popularity and has the potential for the Visa stats right now, but it's just waiting for the volume to prove it. Polkadot has its parachain auctions coming up later this month (or next...).
jdcaron 5y ago
It's already possible to move money between accounts without cryptocurrencies: banks, payments systems (example Paypal), fund transfer services (example Interac). The transactions are reversible in case of a fraud or issues. What you mean is cryptocurrencies offer a way to circumvent the legal ways of moving money around.
- bko 5y ago
  Using paypal to send internationally for $50-100 has a $3 fee + 3% + fee associated with exchange rates (PayPal’s exchange rate for personal payments includes a 2.5% to 4.5% margin subtracted from the interbank rate and depending on the receiving currency.) Also there is a few day lag between when you can retrieve the money So it's pretty expensive. On top of that, the person has to have a bank account that can be connected with PayPal. The benefit of WesternUnion (and why its a lot more expensive) is that you can just show up somewhere, show them an ID and get cash that was transferred to you. Crypto is closer to that, where you can download an app, go to an ATM and exchange for fiat in a short timeframe https://transumo.com/paypal-international-fees/#USA https://transumo.com/paypal-international-fees/#USA
  - deleted 5y ago
    [deleted]
  - pkd 5y ago
    Transferwise (and others like it) have no such issues. When I make a cross border transfer, the funds are immediately available (if I elect to debit my account immediately). This varies by jurisdiction but it proves that cryptocurrencies are not required to have instantaneous transfers.
bwf93 5y ago
I just looked at how much it would cost to claim a reward from a smart contract I have money invested in. I would claim $16 and transferring it to my wallet would cost $169. I don't see how this is affordable.
- koonsolo 5y ago
  PoS FTW
- deleted 5y ago
  [deleted]
- nybble41 5y ago
  I'm assuming your smart contract is not in Bitcoin, since current BTC transaction fees are under $0.70 per standard transaction for 90% chance of confirmation in 30 minutes or less.[0] A smart contract in BTC might involve larger transactions, or multiple transactions, but probably not the equivalent of 240 standard transactions. The article is about El Salvador's switch to Bitcoin, so the price of smart contracts in Etherium, or some other system, is beside the point. [0] According to <https://bitcoiner.live/?confidence=0.9 https://bitcoiner.live/?confidence=0.9> at 6:31 PM CDT.

dom96 5y ago

At that point why don't they just send Tether or USDT (or another stable coin), why even risk playing with such volatility, can't these stable coins be transferred with few fees as well?

deleted 5y ago
[deleted]
robot_no_419 5y ago
Because Tether and USDT are censorable by their parent companies (ie, these tokens can be blacklisted by the Ethereum Virtual Machine), and they are also tied to the monetary policy of the United States. It definitely makes sense for them to use Tether/USDT for sure, I agree there. But making Bitcoin a legal currency is also a political and economic statement that goes far beyond simply facilitating digital payments.
- qeternity 5y ago
  They ARE using USDT. Strike, the platform being used, automatically converts everything to Tethers. There's hardly anything truly "bitcoin" about El Salvador's system.
  - mateuszf 5y ago
    Not sure what's the current status on this but they were planning on moving from Tether to cooperation with El Salvador banks. https://www.coindesk.com/business/2021/06/21/strike-is-phasing-out-usdt-from-bitcoin-based-el-salvador-remittances-ceo-says/ https://www.coindesk.com/business/2021/06/21/strike-is-phasi...
- dustintrex 5y ago
  El Salvador doesn't have its own currency, it already uses the USD as legal tender, plus their crypto system is backed by USDT. This has been suggested as one of the many reasons Bukele is so keen on Bitcoin/Chivo: he can't print USD, but having control of the national wallet system gives him countless avenues to manipulate the system.
  - kevinak 5y ago
    I don't think that's accurate. Where have you read that they are using USDT?

lumost 5y ago

BTC volatility will presumably fall as the market cap grows. One would expect Institutional traders who make money on volatility will continue to move in as it becomes easier to bank on some long-term average price of BTC relative to other currencies. Something I suspect we often forget about in the world of stable reserve currencies is that the majority of the world can't run floating exchange rates without encountering major volatility. Standard Fiat/Gold backed currencies generally require some large institution to control the currency price either via money supply, foreign currency supply, gold, or government decreed exchange rates. When these institutions fail currencies tend to have rather extreme swings.

PragmaticPulp 5y ago
> BTC volatility will presumably fall as the market cap grows. One would expect Institutional traders who make money on volatility will continue to move in… I don’t buy it. Those institutional traders have plenty of access in 2021 and it’s still as volatile as ever. The extreme volatility is what makes them their money and also convinces the casual investor to put money into Bitcoin because they think it might 100X again. If the volatility stops, so does the crypto party. Big traders don’t want it to stop.
- qeternity 5y ago
  Institutional trader here. Yes, this. Crypto is popular with traders because it's volatile and fragmented.
  - deleted 5y ago
    [deleted]
  - stiltzkin 5y ago
    On crypto you need an asterisk as this is not a problem with stable coins as USDC or Dai.
    - qeternity 5y ago

BLKNSLVR 5y ago

You, umm, answer your own accusation in the same paragraph: > Also, they make use of L2 networks for transfers, but at the end of the day those are still rolled up on to the Bitcoin blockchain > which are at least amortized across L2 transactions That's the point of Layer 2 solutions. Don't worry, there's a lot of progress being made if you keep up with the industry news.

PragmaticPulp 5y ago
As long as the L2 transactions still require the operation of the main BTC blockchain, someone is paying the costs of maintaining the L1 block chain. It’s misdirection, but the costs of maintaining the Bitcoin blockchain haven’t gone anywhere.
- sunshinerag 5y ago
  No one said the cost is zero. But L2 solution multiplies the number of transactions done by a significant done. So the cost per transaction is staggeringly low.
mbesto 5y ago
> Don't worry, there's a lot of progress being made if you keep up with the industry news. Sorry to nitpick your comment specifically, but I always hear this in the crypto community "we're making progress!". But no one ever cares to provide specifics. Why is that?
- BLKNSLVR 5y ago
  Honestly, it's fucking complex, which doesn't help it's adoption or popularity. I've been throwing away my previous life for nearly a year in reading, watching, and listening to all manner of news, deep dive explanations, technical analysis, price predictions, "fundamentals" definitions, pundit commentary, etc, as well as participating, in non-financially-ruinous-risking ways, in trading, swapping, DeFi, yield farming, lending, (not borrowing). It's difficult to define what I've learnt, and maybe that's indicative in the opposite way than I'd like. You have to dip your toe in to check the temperature. I've known of Bitcoin since it was $1, and was very skeptical of it until I dipped my toe in. Both my feet are wet now though, right up to my knees. I believe cryptocurrency has a bright future. Bitcoin is the first, Ethereum added something amazing to bitcoin to become a platform for other ecosystems, and now there are smaller competitors that are going to be "the new Ethereum" by being faster and cheaper and more decentralised so the ecosystems can spread wider to cater to more people. There are a couple of cryptocurrencies that are hoping to be able to soon compete with the transaction speeds and volumes of Visa but with lower fees. But, admittedly, that kind of performance level is vaporware after 5 years, but work continues and "revelations" always seem to be round the corner: Cardano smart contracts go live this weekend (I think, unless it's the last testnet release). Ethereum 2.0 is scheduled for release in December (this will probably make people 'in the know' smirk - so let's say Q1 2022). Solana is gaining popularity and has the potential for the Visa stats right now, but it's just waiting for the volume to prove it. Polkadot has its parachain auctions coming up later this month (or next...).

jdcaron 5y ago

It's already possible to move money between accounts without cryptocurrencies: banks, payments systems (example Paypal), fund transfer services (example Interac). The transactions are reversible in case of a fraud or issues. What you mean is cryptocurrencies offer a way to circumvent the legal ways of moving money around.

bko 5y ago
Using paypal to send internationally for $50-100 has a $3 fee + 3% + fee associated with exchange rates (PayPal’s exchange rate for personal payments includes a 2.5% to 4.5% margin subtracted from the interbank rate and depending on the receiving currency.) Also there is a few day lag between when you can retrieve the money So it's pretty expensive. On top of that, the person has to have a bank account that can be connected with PayPal. The benefit of WesternUnion (and why its a lot more expensive) is that you can just show up somewhere, show them an ID and get cash that was transferred to you. Crypto is closer to that, where you can download an app, go to an ATM and exchange for fiat in a short timeframe https://transumo.com/paypal-international-fees/#USA https://transumo.com/paypal-international-fees/#USA
- deleted 5y ago
  [deleted]
- pkd 5y ago
  Transferwise (and others like it) have no such issues. When I make a cross border transfer, the funds are immediately available (if I elect to debit my account immediately). This varies by jurisdiction but it proves that cryptocurrencies are not required to have instantaneous transfers.

bwf93 5y ago

I just looked at how much it would cost to claim a reward from a smart contract I have money invested in. I would claim $16 and transferring it to my wallet would cost $169. I don't see how this is affordable.

koonsolo 5y ago
PoS FTW
deleted 5y ago
[deleted]
nybble41 5y ago
I'm assuming your smart contract is not in Bitcoin, since current BTC transaction fees are under $0.70 per standard transaction for 90% chance of confirmation in 30 minutes or less.[0] A smart contract in BTC might involve larger transactions, or multiple transactions, but probably not the equivalent of 240 standard transactions. The article is about El Salvador's switch to Bitcoin, so the price of smart contracts in Etherium, or some other system, is beside the point. [0] According to <https://bitcoiner.live/?confidence=0.9 https://bitcoiner.live/?confidence=0.9> at 6:31 PM CDT.