23 ms·

What's next? Letters in support by money launderers, drug cartels, online scammers, ransomware authors and pedophiles? El Salvador made it a government policy

What's next? Letters in support by money launderers, drug cartels, online scammers, ransomware authors and pedophiles? El Salvador made it a government policy to adopt Bitcoin as an official currency and it is not going too well - it remains a novelty used by just a few privileged individuals. As these technologies are not viable for everyday use, a country with unstable local currency will in reality start using USD or EUR based shadow banking instead of BTC/stablecoins. This is most recently evident in Turkey where people moved to EUR & USD after lira's collapse in late 2021.

once_inc 4y ago
Check Alex Gladstein(one of the writers)'s weblog and check some of his articles. Bitcoin is inherently a-political and inclusive; it doesn't know who is doing what with bitcoin at the protocol level. Yes, this allows scammers et al to do bad things, but it also makes financial inclusion possible for most of the people currently gatekept away from financial inclusion. El Salvador is frontrunning, and acceptance isn't at the levels the government had hoped, but it is still early and most people will need time to learn to adjust and find out how everything works.
- vesinisa 4y ago
  Right. It's always "early" for Bitcoin. It's been "early" for 13 years now. A high time someone blew the whistle on this destructive madness.
  - once_inc 4y ago
    My Early reference is in relation the the El Salvador bitcoin legal tender law, which is less than a year old. What is destructive exactly?
    - vesinisa 4y ago
      Bitcoin's resource use, comparable to a mid-size country: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/ Lacking viable uses outside of the criminal underworld and speculation, this is wasted energy. And it will only keep growing unless regulators step in.
      - once_inc 4y ago
        There is a vast amount of legitimate use on the Bitcoin blockchain. Even companies that have a clear incentive to find criminal use of Bitcoin can only find anywhere between 1 and 4% possibly criminial transaction use. That is considerably lower than estimates for the USD or EUR. Comparing the energy usage of a single global industry to a mid-size country is dumb. All of this fud originates from digiconomist, which also has an incentive to keep spewing this garbage. You can find a vast amount of refutations on this, but the one by Nic Carter is good: https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...
        vesinisa 4y ago
        Your source does not show how the numbers on Bitcoin's energy use published by Digiconomist are "garbage" and "FUD". In fact, the energy use of these blockchain networks is subject of multiple academic studies, like [1], [2] and [3] (just the top of a quick google). They all come to the same conclusion: these networks require mind-boggling amounts of electricity to operate by design. It is not garbage - it's an inherent fact of cryptocurrency. The article you linked instead makes the argument that the Bitcoin network will use less energy in the future, because there will be less coins issued for miners. This argument is easily refuted by that the risk of a 50% attack will always require defending the network with stupid large electricity use. The verifier incentives will just shift from mining proceeds to even more ridiculous transaction costs. [1]: https://ccaf.io/cbeci/index https://ccaf.io/cbeci/index [2]: https://www.sciencedirect.com/science/article/abs/pii/S2214629618301750 https://www.sciencedirect.com/science/article/abs/pii/S22146... [3]: https://www.sciencedirect.com/science/article/abs/pii/S1877343517300015 https://www.sciencedirect.com/science/article/abs/pii/S18773...
        jfk13 4y ago
        > There is a vast amount of legitimate use on the Bitcoin blockchain What kind of legitimate use? If the answer primarily boils down to "cryptocurrency speculation, wash trading, and attempts at get-rich-quick schemes", I won't be all that impressed.
        4y ago
    - danuker 4y ago
      I would say the wasteful proof-of-work securing upwards of $1M per hour is destructive - https://www.crypto51.app/ https://www.crypto51.app/. It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.
      - once_inc 4y ago
        Please note that Bitcoin is considerably more carbon emission friendly than most other industries. Also note that PoW is deliberately wasteful as feature.
        danuker 4y ago
        I agree that PoW is wasteful by design. But it should be tuneable - it should somehow target securing, say, $X/hour, and not more, because it's even more wasteful. This could be implemented through an oracle that gives the current price to the protocol. https://en.wikipedia.org/wiki/Blockchain_oracle https://en.wikipedia.org/wiki/Blockchain_oracle
        once_inc 4y ago
        Adding an oracle is adding an attack vector on the base layer for the future monetary network. Oracles are by definition trusted sources of information and wonky, untrustworthy, unreliable ones at that.
        danuker 4y ago
        Ugh. Then it would take revising the protocol, or a hard fork, to reduce the miner reward.
        soco 4y ago
        Most other industries produce something also without being wasteful-as-feature.
- solar-ice 4y ago
  Bitcoin is not "inherently apolitical"; it encodes several political ideas, including that unregulated capitalism is a good thinng and the environment is not worth worrying about. There's also some more specific ones, even if you generally agree with those; that a deflationary currency is a good thing, for example. "Apolitical" in this context seems to mean "I agree with its politics".
  - once_inc 4y ago
    No, bitcoin doesn't care what you do with it. It is regulated by the economic majority. If everyone agrees that we want regulations on transactions, it can be added to the protocol; I suggest you create a BIP for it, and see what the response is. Also; the environment not being worth worrying about is not a political idea that Bitcoin encodes; it simply uses Proof of Work because there is no alternative to it that has the same characteristics. Bitcoin isn't a deflationary currency. It's emission is deflating to 0, after which it is neither inflationary nor deflationary. Apolitical means it doesn't enforce you to do things because politics demands it of you; only because the protocol enforces it. Want to change the protocol? Feel free to build an alternative and spend your time convincing people to use it.
    - solar-ice 4y ago
      > Also; the environment not being worth worrying about is not a political idea that Bitcoin encodes; it simply uses Proof of Work because there is no alternative to it that has the same characteristics. That the system of Bitcoin users could not exist without that impact is literally what I mean by encoding that political idea. > It is regulated by the economic majority. That definitely sounds political. Why not a democratic majority?
    - solar-ice 4y ago
      > Apolitical means it doesn't enforce you to do things because politics demands it of you; only because the protocol enforces it. Why is the protocol defined like it is? Could it be... politics, perhaps? What kind of things does the protocol encourage, and what kind of things does the protocol discourage? Could there be a political ideology described in those things?
- giaour 4y ago
  > Bitcoin is inherently a-political I would disagree pretty strongly with this. Bitcoin has been aggressively libertarian from the start, and its popularity is due in part to the political arguments made in support of its use ("monetary policy bad," "code is law," etc). This isn't necessarily of all cryptocurrency, but Bitcoin in particular has always been part of a particular political agenda.

once_inc 4y ago

Check Alex Gladstein(one of the writers)'s weblog and check some of his articles. Bitcoin is inherently a-political and inclusive; it doesn't know who is doing what with bitcoin at the protocol level. Yes, this allows scammers et al to do bad things, but it also makes financial inclusion possible for most of the people currently gatekept away from financial inclusion. El Salvador is frontrunning, and acceptance isn't at the levels the government had hoped, but it is still early and most people will need time to learn to adjust and find out how everything works.

vesinisa 4y ago
Right. It's always "early" for Bitcoin. It's been "early" for 13 years now. A high time someone blew the whistle on this destructive madness.
- once_inc 4y ago
  My Early reference is in relation the the El Salvador bitcoin legal tender law, which is less than a year old. What is destructive exactly?
  - vesinisa 4y ago
    Bitcoin's resource use, comparable to a mid-size country: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/ Lacking viable uses outside of the criminal underworld and speculation, this is wasted energy. And it will only keep growing unless regulators step in.
    - once_inc 4y ago
      There is a vast amount of legitimate use on the Bitcoin blockchain. Even companies that have a clear incentive to find criminal use of Bitcoin can only find anywhere between 1 and 4% possibly criminial transaction use. That is considerably lower than estimates for the USD or EUR. Comparing the energy usage of a single global industry to a mid-size country is dumb. All of this fud originates from digiconomist, which also has an incentive to keep spewing this garbage. You can find a vast amount of refutations on this, but the one by Nic Carter is good: https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...
      - vesinisa 4y ago
        Your source does not show how the numbers on Bitcoin's energy use published by Digiconomist are "garbage" and "FUD". In fact, the energy use of these blockchain networks is subject of multiple academic studies, like [1], [2] and [3] (just the top of a quick google). They all come to the same conclusion: these networks require mind-boggling amounts of electricity to operate by design. It is not garbage - it's an inherent fact of cryptocurrency. The article you linked instead makes the argument that the Bitcoin network will use less energy in the future, because there will be less coins issued for miners. This argument is easily refuted by that the risk of a 50% attack will always require defending the network with stupid large electricity use. The verifier incentives will just shift from mining proceeds to even more ridiculous transaction costs. [1]: https://ccaf.io/cbeci/index https://ccaf.io/cbeci/index [2]: https://www.sciencedirect.com/science/article/abs/pii/S2214629618301750 https://www.sciencedirect.com/science/article/abs/pii/S22146... [3]: https://www.sciencedirect.com/science/article/abs/pii/S1877343517300015 https://www.sciencedirect.com/science/article/abs/pii/S18773...
      - jfk13 4y ago
        > There is a vast amount of legitimate use on the Bitcoin blockchain What kind of legitimate use? If the answer primarily boils down to "cryptocurrency speculation, wash trading, and attempts at get-rich-quick schemes", I won't be all that impressed.
      - 4y ago
  - danuker 4y ago
    I would say the wasteful proof-of-work securing upwards of $1M per hour is destructive - https://www.crypto51.app/ https://www.crypto51.app/. It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.
    - once_inc 4y ago
      Please note that Bitcoin is considerably more carbon emission friendly than most other industries. Also note that PoW is deliberately wasteful as feature.
      - danuker 4y ago
        I agree that PoW is wasteful by design. But it should be tuneable - it should somehow target securing, say, $X/hour, and not more, because it's even more wasteful. This could be implemented through an oracle that gives the current price to the protocol. https://en.wikipedia.org/wiki/Blockchain_oracle https://en.wikipedia.org/wiki/Blockchain_oracle
        once_inc 4y ago
        Adding an oracle is adding an attack vector on the base layer for the future monetary network. Oracles are by definition trusted sources of information and wonky, untrustworthy, unreliable ones at that.
        danuker 4y ago
        Ugh. Then it would take revising the protocol, or a hard fork, to reduce the miner reward.
      - soco 4y ago
        Most other industries produce something also without being wasteful-as-feature.
solar-ice 4y ago
Bitcoin is not "inherently apolitical"; it encodes several political ideas, including that unregulated capitalism is a good thinng and the environment is not worth worrying about. There's also some more specific ones, even if you generally agree with those; that a deflationary currency is a good thing, for example. "Apolitical" in this context seems to mean "I agree with its politics".
- once_inc 4y ago
  No, bitcoin doesn't care what you do with it. It is regulated by the economic majority. If everyone agrees that we want regulations on transactions, it can be added to the protocol; I suggest you create a BIP for it, and see what the response is. Also; the environment not being worth worrying about is not a political idea that Bitcoin encodes; it simply uses Proof of Work because there is no alternative to it that has the same characteristics. Bitcoin isn't a deflationary currency. It's emission is deflating to 0, after which it is neither inflationary nor deflationary. Apolitical means it doesn't enforce you to do things because politics demands it of you; only because the protocol enforces it. Want to change the protocol? Feel free to build an alternative and spend your time convincing people to use it.
  - solar-ice 4y ago
    > Also; the environment not being worth worrying about is not a political idea that Bitcoin encodes; it simply uses Proof of Work because there is no alternative to it that has the same characteristics. That the system of Bitcoin users could not exist without that impact is literally what I mean by encoding that political idea. > It is regulated by the economic majority. That definitely sounds political. Why not a democratic majority?
  - solar-ice 4y ago
    > Apolitical means it doesn't enforce you to do things because politics demands it of you; only because the protocol enforces it. Why is the protocol defined like it is? Could it be... politics, perhaps? What kind of things does the protocol encourage, and what kind of things does the protocol discourage? Could there be a political ideology described in those things?
giaour 4y ago
> Bitcoin is inherently a-political I would disagree pretty strongly with this. Bitcoin has been aggressively libertarian from the start, and its popularity is due in part to the political arguments made in support of its use ("monetary policy bad," "code is law," etc). This isn't necessarily of all cryptocurrency, but Bitcoin in particular has always been part of a particular political agenda.