[spottybanana]

What the normal people will use in the beginning is going to be non-custodial LN based solution like strike. Minimal fees, easy to use. If you get a bit more, move to custodial LN wallet/onchain transactions. More fees, more security and less trust. And once you have too much BTC start storing them in an offline cold storage.

[enlyth]

I can see someone explaining to their grandmother about having to move her BTC to offline cold storage and storing her private keys securely or she could lose her life's savings in an instant with no recourse

[thinkmassive]

Multisig solutions are available for increased security and reliability. Services like Casa and Unchained Capital will even hold a single key from your set, allowing you to recover your funds if one of your keys is lost, however they can never move your funds on their own because they never possess a quorum.

[lftl]

How does it work that they have the ability to help you recover your funds, but they can't do that "recovery" unilaterally?

[thinkmassive]

Bitcoin has a scripting language that allows more complex requirements to unlock funds, rather than simply sending an amount from one key to another:

https://en.bitcoin.it/wiki/Script

Multisignature requires a quorum k-of-n signatures to unlock funds, for example 3 of 5 keys (or 2-of-3, 2-of-2, etc):

https://en.bitcoin.it/wiki/Multi-signature

So you can have a wallet that requires 2 signatures to move funds, where you control 2 signing devices (mobile app + hardware wallet) and the third-party holds the 3rd key. Normally you manage all transfers without involvement of the third party, but if one of your keys becomes inaccessible they can help you sweep your funds to a new set of keys.

Additional resiliency and security is gained by increasing the quorum to 3-of-5. You control a mobile app plus 3 hardware signing devices, which are ideally distributed geographically. This increases reliability in case something happens at your primary site (like your house) and increases security by requiring an attacker to physically visit multiple locations. The 5th key is held by the recovery service.

tl;dr: https://keys.casa/how-it-works

[tylerhou]

https://en.wikipedia.org/wiki/Shamir%27s_Secret_Sharing

[thinkmassive]

Shamir’s Secret Sharing is a general solution for splitting secrets. Bitcoin multisig is superior for for its specific applications though. The biggest reasons are:

1. There is never one single key with full control. This is a huge vulnerability with SSS.

2. More flexibility, by allowing differing k-of-n subsets in combination with timelocks and other Bitcoin script features.

[627467]

That someone probably will have learned how to help grandma on complex digital processes last time goverment services, communications and commerce moved online.

I agree it won't be pain-free, but hardly the first time such conversion would happen

[aNoob7000]

LOL! Very true..

Who the hell has time to figure out all this stuff?

I personally think the day the digital US dollar is developed and can be stored in your IPhone. If I can take my locally stored digital dollar and then send it via imessage or whatsapp, then the game is truly over for Bitcoin.

[singularity2001]

   I personally think the day the digital US dollar is developed  …

The digital US dollar is pretty much in use already, or do you think your bank has anything physical resembling the number on your account?

[freeone3000]

It's closer to each individual bank having their own digital currency, all of which are worth 1 USD each. The digital US dollars at my bank are not directly exchangable with the digital US dollars at your bank. You need to settle up with an ACH transaction, which takes at least a day to transact as it has to run in a central batch job. In addition, only US domestic institutions can use this mechanism to transfer US dollars between themselves -- international institutions need to use the SWIFT system, which is multiple days for a transaction. Contrast with credit card payment and settlement, which acts closer to a digital system but can't be used as a store of value (and has punitive fees for attempting to do so). The US dollar acts like a cash system with some digital features rather than a digital system.

[warkdarrior]

> The digital US dollars at my bank are not directly exchangable with the digital US dollars at your bank. You need to settle up with an ACH transaction, which takes at least a day to transact as it has to run in a central batch job.

FedNow will reduce that latency from days to minutes. US is slow in that game, but RTP is widely deployed in UK, France, etc.

For international transactions, one can use SWIFT (days) or TransferWise (minutes) or Western Union (under one hour).

[aNoob7000]

I want my digital cash to work like regular cash. I need to pay the lawn guy, send an iMessage. I wanna buy lunch, swipe my phone and pay with the money in my phone. I don't need the charge going through my bank or some intermediary.

I want freedom to use my digital money the way I want without someone holding my account hostage, if I do something wrong. Additionally, I have no problem losing my money, if I send the money to the wrong person or lose my phone.

[freeone3000]

FedNow is a digital cash system. It's not there yet, and it's still not international. As for Western Union et al, it's a bit like claiming the US has a digital cash system because Venmo exists -- it's someone else taking on the risk the funds won't settle in order to provide a better user experience. So the US is approaching a digital cash system, but it's not there.

[bun_at_work]

The bank does hold a fraction of your deposits, as our banking in the US is fractional reserve banking. This has been the case for quite some time, and isn't really the same thing as digital currency, even if we transact digitally.

[jwolfe]

From my understanding, they hold most of that in reserve accounts with the Federal Reserve. But yeah, someone at some point holds some cash. But of the total US money supply (in 2018), physical currency makes up about 11% of the total value[0].

[0] https://www.businessinsider.com/heres-how-much-us-currency-t...

[reedjosh]

And whenever this comes up, I just like to remind people that we went to a reserve requirement of 0% nearly a year ago with the start of COVID.

https://medium.com/navigating-life/we-just-went-from-fractio...

Edit: Downvoted, and I'm guessing it's the source? This is legitimate fact though. Here's the fed's own announcement.

> In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.

https://www.federalreserve.gov/newsevents/pressreleases/mone...

[bun_at_work]

Right, because fractional reserves are set around 10% or so.

edit: fraction reserve _requirements_ are set around 10% or so.

[kqr]

Well, you make it sound like there's a limited number of dollar notes and the bank will refuse your deposit/loan if they don't have enough notes lying around to make the fractional requirements.

In reality, they will accept your deposit/loan (as long as it makes business sense) with no regard for how many notes they have lying around. If that puts them over the edge of the fractional requirements, they'll just go to the Fed/Treasury, who will swing their wand and write in additional (digital) reserves for the bank.

It is mainly all digital at this point.

[reedjosh]

> they'll just go to the Fed/Treasury, who will swing their wand and write in additional (digital) reserves for the bank.

Pretty sure that's true for larger institutions and lending between themselves, but not for your everyday accounts. They must go to fed member banks themselves to ask for the loans.

[bun_at_work]

This simply isn't how the financial system works. The bank will only loan out amounts based on what they hold in reserve. Asking the Fed/Treasury to "swing their wand around" isn't really close to what happens. Also, the Federal Reserve and the Treasury are different entities.

They don't just "print money" for banks arbitrarily.

[scatters]

The US does not have reserve requirements; it has capital requirements. The fractional-reserve model is not a realistic description of banking in modern developed economies.

[X6S1x6Okd1st]

That definition seems to differ from the definition I've commonly seen.

How do you define a digital currency?

[bun_at_work]

I don't have a strict definition handy, however it seems as though digital currencies would be those that are digitally based, whereas the dollar is a tangible currency first, even if it is fiat.

A digital currency would be like crypto currency, or in-game currencies or something designed to be digital. The dollar is the federal reserve currency, and not intended to be digital. It doesn't make sense to call it digital currency, when in fact it's physical currency first, and we've developed digital tools to help us use it and move it around.

[HWR_14]

> I personally think the day the digital US dollar is developed and can be stored in your IPhone. If I can take my locally stored digital dollar and then send it via imessage or whatsapp, then the game is truly over for Bitcoin

Hasn't this already happened. It's called Zelle or Venmo or CashApp or ApplePay or a million others. Heck, if you prefer Elon Musk pushed technology there's even this thing called PayPal.

And it comes with a whole series of laws that protect you in the case of hacking, fraud, etc.

I don't follow the advantage of using a government-issued (and custodially held) bitcoin wallet. Well, I understand that El Salvador wants to encourage people to use their BTC there. But other than that I don't see the value.

[whiskyant]

>Who the hell has time to figure out all this stuff?

In the early days of the internet, many things were a complete pain in the ass to do. But then services and apps were built and things became easier, same is happening in this space.

Before, even purchasing Bitcoin was extremely difficult to do, and involved a lot of research + steps - now it's trivial. Before, securing your wallet was extremely difficult, now it's easier but not ideal to those that are less tech saavy.

[aerosmile]

This is such a brilliant answer. Imposing the grandma test on early-stage ecosystems is a total naysayer move. We all know that humans are capable of doing advanced math, even though a newborn baby doesn't come even close to being able to do it.

[miked85]

The digital dollar has been here for years. I couldn't even tell you the last time I carried paper currency.

[rahimnathwani]

The dollar is a central bank currency.

Numbers in a retail bank's ledger are not digital dollars. They represent an obligation of the bank, and not direct ownership of dollars.

Digital dollars exist, but only banks can hold them, as they're the only ones with accounts at the central bank. The rest of us use retail bank accounts, which are the equivalent of custodial wallets in the crypto world.

[JumpCrisscross]

> dollar is a central bank currency

The term "dollar" encompasses central bank money (including but not limited to banknotes) as well as private money.

> Numbers in a retail bank's ledger are not digital dollars

Yes, they very much are. Modern money creation is public-private and only semi-centralized.

[rahimnathwani]

This is correct in practice. But consider what I said in the context of the discussion: contrasting 'digital dollars' with cryptocurrencies.

With dollars, individuals have to choose between bank accounts, which are subject to counterparty risk, and cash, which cannot be transacted digitally.

If your holding of 'digital dollars' in a bank account is subject to counterparty risk, then there's something different about the dollars you hold and 'real' dollars issued by the central bank.

With cryptocurrency, anyone can transact the real thing. There's no counterparty risk. (Of course, there are issues with blockchain scaling, use of custodial wallets etc., which negate this to some extent.)

[JKCalhoun]

If I hand a cashier a physical dollar, no fee to me.

Not so with your so-called digital dollars.

An actual digital dollar would have no transaction fee whatsoever.

[skoopie]

So the person who transports those dollars to the bank doesn't get paid? The car that takes that person to the bank doesn't use gas? Just because you don't see the fee doesn't mean you don't pay it. It's included in the price of anything you buy.

[hayyyyydos]

> An actual digital dollar would have no transaction fee whatsoever.

So, something BTC is unable to provide?

[squeaky-clean]

That fee is only because we want that money settled instantly by a third party. There's no fee for a bank to bank transfer. Or heck, even writing a check. Once you get VISA involved they want a cut.

[miked85]

I don't pay any fee when I use a credit card.

[c-linkage]

It might appear that way, but that is only because the fee is hidden.

The credit card terminal agreements signed by retailers prevent the retailer from offering differential pricing when buying via credit card or cash. Essentially, the credit card fee is embedded into the price.

This might be "good" for people who have credit cards, but it is inflationary (by roughly 2%) to people whose credit is poor and only transact by cash.

But let's be honest -- who cares about the poor?

[reedjosh]

You pay a slightly elevated price to use your CC.

The CC network charge vendors a percentage of the transaction. So you aren't paying directly, but we're all paying.

[spullara]

You do, but it is hidden as the vendor is responsible for paying it. CC companies are basically a tax on transactions.

[amelius]

> Who the hell has time to figure out all this stuff?

This is a valid question for our current tax system, already.

[systemvoltage]

I like physical analog cash even though its a pain in the ass to carry. Cashless society is terrifying to me.

[dougSF70]

I think that using cash makes money expensive which adds some base load inflation - this will help reduces homelessness and other societal ills (such as wealth inequality).

Electronic money is never lost, not like those pounds, pennies, dollars, quarters. Losing money, takes out of circulation. While not much is taken out, it might be enough to create a base load of inflation - money becomes more scarce and therefore more expensive.

Low inflation leads to asset price bubbles - stock market and housing in particular. It also suppresses wage inflation. So housing becomes more expensive and wages do not keep up, making housing less affordable. A double punch.

Low inflation leads to more financial speculation as people with access to capital look to diversify away from a limited pool of assets (Bonds and cash become less desirable in low inflation regimes). Buying housing and leasing it out is a good use of capital. However, this leads real-estate investors to drive increases in rent as they chase yield and airbnb-empires also drive rental prices - as this is one way of driving yield.

High rents combined with low wage growth means that people's lives become priced for perfection and one small deviation can knock them out of equilibrium - losing their home / rental property when they lose their job.

All because governments and technology are conspiring to keep inflation low. Using cash is the person-on-the-street's only weapon to fight it.

[systemvoltage]

Homelessness is a California’s complex housing shortage and governance/policy problem. The world is much bigger than issues in SF/Portland/Seattle. I am not following the strawman from utilitarian aspects of cash -> inflation -> homelessness & inquality.

[dougSF70]

Cheap money forces it to find a home that generates a 7%+ return. Cheap money reduces the number of asset classes that can guarantee (within reason) those returns to Housing and Stocks (and Crypto of course). Buying a home becomes out of reach for more people. In addition, low inflation also suppresses wage growth. As house prices increase (just look at Blackrock's purchase of residential property at 30-50% premiums) rents will also increase because professional landlords are seeking a 7% return and if the property changes hands at a 10% lift then rent-asked for that property will also rise. This leads to a situation of unaffordable housing (exaggerated by lack of new supply coming in line in places like California) in the face of low wage growth - this leads to homeless-ness. IMO.

[JKCalhoun]

Counterpoint: those pounds, pennies, dollars, quarters never end up in a Nigerian Prince's bank account.

Oh, electronic money is "lost" all the time. Alarmingly so. :-)

[dougSF70]

Moved yes, lost no. That prince will spend it. Unlike Grandma's couch, known to have consumed $000's in its life time.

[tangent128]

(I think your definitions are reversed- a decrease in money supply is associated with deflation, not inflation.)

[dougSF70]

From the interwebs: In the U.S., the money supply is influenced by supply and demand—and the actions of the Federal Reserve and commercial banks. ... More money flowing through the economy corresponds with lower interest rates, while less money available generates higher rates."

Higher rates = higher cost of borrowing = higher prices = higher inflation.

[JKCalhoun]

I understand.

For perhaps the same reasons as you, I decline/turn-off auto-pay of any services I subscribe to. I actually cut checks every couple of weeks to pay bills.

I need a regular reminder of how I am being nickeled and dimed. My big fear is a constant drain on my account from a service that I had forgotten about or just the accumulative damage a lot of services add up to.

To be sure, our corporate overlords love the auto-pay, cashless society they have created for our convenience.

[jwolfe]

I have all of my credit cards and bank accounts set to notify (text) me whenever there is any transaction whatsoever. I find that helps with the subscription concerns, as well as confidence in catching fraud/incorrect charges quickly.

[criley2]

A cryptocurrency backed by the united states could certainly succeed as many people want to do business that way, but the point of bitcoin was decentralization and preventing government control of the currency.

The same people (lots and lots and lots of criminals, but you know, regular people too) who use bitcoin would probably not want a us dollar coin very much.

But the vast majority of people don't use bitcoin at all, for anything... I think a us dollar coin with FDIC protection or whatever protection it takes to make grandma feel safe that her $100k account is protected, would be wildly successful if they tried it.

[pinkybanana]

> Who the hell has time to figure out all this stuff?

Nobody will have to learn this stuff, if the BTC economy develops there will be professional custodials for all levels. Eg. banks.

But the importance is that there is always the option to self-custody if you want to. With fiat you don't have that option even in theory. I think the option for self-custody is what makes BTC powerful alternative, not necessarily how widespread self-custody is going to be.

[wins32767]

> But the importance is that there is always the option to self-custody if you want to. With fiat you don't have that option even in theory.

The stack of hundred dollar bills under my mattress disagrees with you.

[pinkybanana]

Good luck storing and handling that pile of cash, I'll stay with my crypto hardware wallet.

[wins32767]

If folks are unbanked, their pile of cash is unlikely to be so large that it's hard to store and handle.

[acdha]

> But the importance is that there is always the option to self-custody if you want to. With fiat you don't have that option even in theory.

You mean that if you store cash it will magically disappear once you hit a certain quantity or age?

[pinkybanana]

Physical cash is ridiculously cumbersome and difficult to handle in larger quantities. I wouldn't probably be able to get $10k worth of cash from my local bank, and getting something like $100k would probably require days and lots of work. However if I have millions worth of BTC at some big exchange, I can move that amount to a secure self custody in 10 minutes without a hassle.

[acdha]

So you agree that you were wrong to say that you don’t have the option even in theory? Convenience is a discussion point but it’s predicated on being possible – and since this happens not-infrequently (people buy cars, farm equipment, even houses with cash) it’s far from theoretical.

One other area to learn about: security – while it’s true that you can move millions on yourself own, the risks of theft or accidental loss are why most people do not avail themselves of these theoretical options since they consider the cost of banking fees to be an acceptable trade off for the security and convenience of letting a professional handle those problems.

[hn_throwaway_99]

The idea that "normal people" will be able to use bitcoin at all without getting their private keys stolen is laughable.

Think of how often online bank accounts get hacked in the US, except the difference now is that your money is gone, permanently.

[acdha]

… and the people who made that possible for the hacker will laugh at you and say it's your fault rather than admitting that the system they sold you is fragile.

[tiku]

I don't think they have to use it like we use it..

[wraptile]

How do you think bank accounts get hacked? It's much easier to yank a password/credit card number people use daily.

The benefit of private key is you only need to use it once. Then store it away in a safe or _bank_.

More UX will develop over time as adoption grows. We already have hardware wallets that even babies could use.

Finally you somehow imply that FIAT theft doesn't happen. Even in recent modern history people have lost all their savings in a snap be it their house burning down, colleague stealing everything or even your bank going under.

[KingOfCoders]

"More UX will develop over time as adoption grows. We already have hardware wallets that even babies could use."

The difference is this: If people have a hardware wallet they use digitally they think it's like a bank account on their phone. They do not realize that with that wallet if the wallet is gone so is the money. Wheras if the phone is gone, nothing happens to their money.

[reedjosh]

Have a wallet and a seed phrase for said wallet in a safety deposit box or even two. Boom, all set.

[andyana]

You mean a safety deposit box at a bank? At a bank most Ecuadorians don't use?

[reedjosh]

In that case, bury a seed phrase somewhere like hidden treasure. The whole point is that a seed phrase is all that's needed to backup a wallet.

It's akin to hiding money in your mattress, but less bulky. You could even memorize it because seed phrases are between 12 and 24 words.

[bun_at_work]

> or even your bank going under.

FDIC insurance prevents your money from being lost in this case, no?

Also, it's a bit ridiculous to think that private keys won't be stolen because you can just store it away in a safe or bank or whatever. People are susceptible to all sorts of scams and this private key won't be a panacea for human stupidity or ignorance.

[hn_throwaway_99]

Basically everything in your post highlights why crypto is a horrible idea for your average person:

> How do you think bank accounts get hacked? It's much easier to yank a password/credit card number people use daily.

Exactly, and when a credit card number is stolen the consumer is almost never liable, as opposed to crypto where your life savings are gone forever.

> The benefit of private key is you only need to use it once. Then store it away in a safe or _bank_.

As another responder said, you need your private key to sign every transaction. Giving you the benefit of the doubt and assuming you're talking about wallet keywords, even then if you have an account you still need the ability to sign transactions, and according to crypto enthusiasts the no-middleman, non-reversability of crypto transactions is a feature, not a bug.

> More UX will develop over time as adoption grows. We already have hardware wallets that even babies could use.

This man used a Trezor wallet but was still tricked into entering his wallet keywords into a fake Trezor app and lost his life savings: https://www.washingtonpost.com/technology/2021/03/30/trezor-...

> Even in recent modern history people have lost all their savings in a snap be it their house burning down, colleague stealing everything or even your bank going under.

Which is exactly why everyone with a mortgage is required to have home owners insurance, and FDIC insurance exists.

The only way to introduce these kinds of benefits (e.g. to have someone adjudicate allegations of fraud; insurance; etc.) is to introduce middle men, which then defeats the entire purpose of crypto in the first place.

[UncleMeat]

You need your private key to sign transactions.

On an unrelated note, why do cryptocurrency advocates so frequently write "FIAT" in all caps? It isn't an acronym or initialism.

[janeroe]

> The idea that "normal people" will be able to use bitcoin at all ... is laughable.

The idea that "normal people" will be able to use cash at all is laughable.

The idea that "normal people" will be able to use gold coins at all is laughable.

And yet, many use (or used to) and don't need a mommy state to tell them what to do.

[jokethrowaway]

I'm all for getting the government out - but cash or gold is way easier to use.

If you have a political problem, you need to solve it politically. You can't hack it with a technical solution or politicians and their rich friends will just find a way to use it against you (like it's happening with btc, enjoy limitless tracking and the rich elite profiting from btc as much (if not more) than you) or ban it (like it happened to e-gold).

[reedjosh]

> you need to solve it politically.

And what do you do when politics are fully captured by corporate and oligarchical interests?

The majority of bitcoiners see no way out of our current political system. The dollar underpins the US hegemony.

Bitcoin wouldn't be necessary if the government would allow alternative currencies, but until bitcoin, it had squashed numerous attempts at alternatives.

So to say that we need to solve it politically misses the point. Bitcoin is a solution to solve what is seen as a political mess. Further, politics is just non-violent war. This _is_ a political method.

> their rich friends will just find a way to use it against you

I don't entirely disagree. I see bitcoin as a start. The lightning network already brings some anonymity to transactions, but it could be made to do better.

Monero (XMR) is a privacy based crypto that already does so and can currently do 1500tps on chain (BTC does ~7). Crypto is war against oligarchs motivated by failed traditional politics. Monero and other techs like decentralized exchanges are a step up in weaponry of this war.

[jokethrowaway]

I have a feeling Monero et similia will be banned together with encrypted messaging (encryption = terrorist). We lose more freedom every year at the hands of governments, I don't see why this trend is bound to improve.

I think what you do is you flee the country and move somewhere smaller where you have greater freedom and a greater chance at influencing politics.

My granddad was putting bombs in nazi buildings, but I don't think it really helped. We needed the USA to come over and kill the bad guys.

I don't know who will come to save us this time.

[reedjosh]

Decentralized exchanges will prevent their ability to ban it.

[G3rn0ti]

Well, the concept of holding cash and gold at home is easier than managing a private key. But as soon as you want your money to work i.e. earn interests or invest it, crypto currencies are easier to work with. I mean, you can literally deposit and earn interest by touching a button inside your Coinbase wallet, right now.

Regarding your second argument: Change in the financial system does not happen by itself. You need severe pressure. DeFi has a huge potential to put pressure on the traditional financial markets to make them more accessible to the poor and limit their excesses (monetary inflation).

The government could of course “ban” Bitcoin and DeFi. But since they are decentralized it can’t make them really disappear — only more cumbersome to get into (and out of), for example, by closing down centralized exchanges. But the government can’t really prevent you to meet a “dealer” cashing in/out on your cryptos.

[acdha]

> But the government can’t really prevent you to meet a “dealer” cashing in/out on your cryptos.

If that “dealer” doesn’t report your transactions under KYC or either of you don’t pay taxes, you’ll get a hard reminder that governments can and routinely do prevent things like this. It’s especially risky to break those laws with cryptocurrencies because you’re leaving a full irrepudiable history of every transaction so when they bust your dealer they get _every_ transaction, not just the one that was caught, and that’s for everyone they’ve dealt with — and since those transactions are all by definition illegal, they have both grounds to investigate and an easy lever to pressure each person to turn in bigger players in exchange for leniency.

[chronicsunshine]

You're telling us people that don't have bank accounts are gonna be using bitcoin in some abstruse way?

Or are you saying some other entity (a bank) will help them with it?

And if the latter, why would bitcoin be of help at all? A normal bank account would be simpler and less worrisome.

[pinkybanana]

Both. Some people (probably minority) will use self-hosted wallets. Majority will use custodials (banks).

> And if the latter, why would bitcoin be of help at all? A normal bank account would be simpler and less worrisome.

USD will still stay as the official currency of El Salvador. However now merchants have to accept also BTC. The hypotheses is that for example foreign businessmen will bring BTC in form of investments to the country, and people will send BTC via remittances. There is possibility that there isn't actual demand, but there is also possibility that El Salvador might get some serious economical boost because of this.

[notafraudster]

The original conversation was about how Bitcoin could help the 70% who are unbanked have access to something like a bank account. The proposed mechanism for this is "well, they can go to a bank and register something like a bank account, or else they can be a high-SES self-educated tech person who builds their own bank using computer hardware". I do not think this could help the 70% who are unbanked have access to something like a bank account.

Whether or not it has spinoff economic benefits in terms of tourism or parking capital flight from other countries, you might be right, but that's not what was being discussed, right?

[KingOfCoders]

I'd also say it's easier to give everyone the right to an account as in Germany (if the reason is that they can't get one b/c of a missing/bad credit history and not because they don't live to a bank and have no phone), to solve the 70% unbanked problem instead of introducing BTC.

[reedjosh]

> The original conversation was about how Bitcoin could help the 70% who are unbanked

And this isn't the best argument for bitcoin. The best argument for it is the limited supply.

Considering the BBC has a dog in the fight, I believe that's probably why it doesn't mention the anti-inflationary argument that is the true reason a country would want to transact in BTC.

The USD is available to the US to make more of at any time. Imagine trying to run your government on someone else's currency. You'd always be at a disadvantage.

In the past the US hegemony has regime changed several countries that tried to use their own currency. (See Lybia)

[WinstonSmith84]

let's not put the cart before the horse? you can't solve the trickiest problem in a day. This news, is a major development and is going to open many, many doors, eventually solving this problem, too

[shp0ngle]

I don't know how do you expect people to understand two disparate, absolutely differently working payment systems (LN and BTC) with different threat models, and moving between them always costs a lot of money.

But hey whatever works.

I think this will work as well as Petro worked for Venezuela.

[mastax]

My understanding is that Strike is already reasonably popular in El Salvador, because it's much better than taking a bus 2 hours to the Western Union, paying 10% to them, then paying 10% to the gang that hangs outside.

Could a more "conventional" system do the same job? Probably, but I won't begrudge people a working solution.

[HWR_14]

Yes, it's far more efficient now. Now the gang will just take 10% of your entire savings (because it's all on your phone) every time they see you. Or 30% if they don't like you that one day. Because if it's one thing I try to do in a situation with lots of street crime, it's carry the maximum amount of my net worth on my person in the least recoverable form in case I get robbed.

[eloff]

In Latin America people kidnap you and take you around to ATMs at gunpoint until you've reached the withdrawal limit. This seems so much more dangerous with bitcoin wallets.

[reedjosh]

There are wallets that will show a fake lower balance in distress mode.

Further, why walk around with all of your BTC available to you? If you really have enough to worry about gangs stealing it, put it in cold storage or on an exchange, but don't carry access to it around in your pocket the same way you wouldn't carry cash around in your pocket.

[HWR_14]

A fake UI screen? Wow, that's useful. Good thing there isn't an easily verifiable public ledger with the true value of the account that the criminals can check while holding you at gunpoint.

Meanwhile, you expect people to have cold storage where? IIRC, they cannot just memorize a private key, but they need an actual file on a device.

[reedjosh]

No, they can actually just memorize a seed phrase. The distress mode shows an entirely different wallet ID. So, you're wrong on both counts.

https://en.bitcoin.it/wiki/Seed_phrase

> However, the bitcoin key generated is not the main key. It is effectively a completely separate wallet!

https://coldcardwallet.com/?ref=producthunt

[jasonlaramburu]

LN still requires periodic on-chain transactions to close and open payment channels. So either these costs are being passed along to the users in El Salvador or the wallet provider is subsidizing it.

[random_kris]

I run 1 node and in a year I haven't yet had to reopen an existing channel. And 3 channels are good enough for most

[jasonlaramburu]

Are you buying daily essentials using LN, or running a small business? Also how could someone in El Salvador run a node without reliable electricity and internet? Also remember that the hardware cost of a full node is likely more than a month’s wages.

[gruez]

>Also how could someone in El Salvador run a node without reliable electricity and internet?

A lightning node doesn't need to be on 24/7. To prevent your counterparty from stealing your funds you only need to be online every 2 weeks (or never if you use a watchtower service). Syncing is also fast, so 1 hour of internet access/electricity should allow you to catch up 2 weeks of blockchain history.

>Also remember that the hardware cost of a full node is likely more than a month’s wages.

Are there no thin wallets for lightning?

[jasonlaramburu]

Right but the node needs to be online anytime you transact, correct?

[gruez]

Yeah that's a fair point. You probably[1] need to be online to make a transaction, but you can potentially have a thin client setup where you communicate with a hosted node somewhere, but the signing and stuff is kept on-device. This allows you to make transactions in the case where power is out, but your phone still has internet access. I don't live in el salvador so I'm not sure what the frequency of power outages is relative to telecommunications outages, but at least in the US cell towers and landlines run on backup power so they're up even when there's a blackout.

[1] For maximum convenience it's mandatory, but it's conceivable to update the state of a channel entirely offline. This would allow you to make offline transactions with a node you have a direct channel to, but multi hop transactions (ie. transactions with nodes that you don't have a direct channel to) would still be a hassle.

[rawtxapp]

Channel factories will eventually be able to bundle all these channel open/closes in a single transaction.

[waynenilsen]

One vision is that checking accounts are custodial LN solutions with savings accounts as cold storage.

Discussion with the "Bitcoin Beach" people https://stephanlivera.com/episode/279/

[gruez]

While you do need to close/open payment channels if you want to move the funds off the lightning network, I don't really see why you'd need to "periodically" do it. Lightning channels can stay open indefinitely so you can theoretically park your money on there indefinitely.

[KingOfCoders]

I have no clue, so Lightning is Bitcoin without the Bitcoin and blockchain? Without the blockchain how is it different from a MySQL database table?

[gruez]

If someone sends me 1 BTC and the transaction is recorded in mysql, the database operator can revert the transaction and I have zero recourse. That's not possible with lightning. If someone sends me 1 BTC over lightning, then decides to reneg on it by trying to commit an older state of the channel (where they haven't sent me 1 BTC), then my recourse is to rebut that transaction with a newer one.

[KingOfCoders]

Thanks!

[rebuilder]

Is there some writeup with details on how El Salvador will implement things? One obvious option would seem to be a wholly custodial, national, off-chain payment system. So El Salvador would hold BTC reserves, while people would actually transact on a government-operated ledger, only interacting with the Blockhain when withdrawing or receiving actual BTC outside the system, if that will be allowed.

[el-salvador]

Not yet.

The most detailed explanation was given by the president and his brother on a twitter space in English this midnight.

[thinkmassive]

I think you have your custodial/non-custodial terminology mixed up.

If you aren’t holding the keys that control your funds the entire time, it’s a custodial service. If USD is involved in any form besides paper cash in your own hands, it’s a custodial service.

[briefcomment]

I don't think LN is easy to use. Common trope is that most Bitcoin maximalists have never used it.

[rawtxapp]

The adoption is increasing (1ml.com) and there are many easy to use wallets (Phoenix wallet is my favorite so far).