El Salvador adopts Bitcoin as official currency

John

There are a few costs on here about Bitcoin and how absolutely huge it's environmental footprint is, and several countries seen to be on the verge of legislative against it.

El Salvador though is going completely the other way, from yesterday they have become the first country in the world to make it an official currency together with the US dollar.

The government has created their own bitcoin wallet app and is giving citizens $30 worth of Bitcoin when they create an account to encourage use.

Ash

Seems like they had some trouble with the launch. From what I read, the wallet app they released didn't work on Apple devices and one other smartphone brand. The app also went down at certain points because too many people were trying to use it.

I am Ashlynn

I read the same things, that it was all a complete mess, and also the value of bitcoin dropped a lot, to the lowest for a while.

Ash

It just keeps dropping and dropping which just makes it a crazy thing to use as a currency really. Imagine getting paid in Bitcoin and losing half of it in just a day.

John

I do think the value will stabilise and they will iron out the bugs in El Salvador.

The big problem is that the one thing that makes Bitcoin attractive in many ways -it's lack of tires to a government or central bank, also makes it inherently unstable. It can go up massively but it can also crash the same way.

I guess that for countries that already use a current tired to a foreign central bank (like the dollar) that isn't as big a change as it would be for countries that have more control, but still the dollar is much more stable.

The big problem is still the environmental and energy issues with Bitcoin, and it seems hugely irresponsible for any government to ignite that and make it a national currency.

Ash

I guess for certain countries, the environmental factor will take a back seat whilst they try to enjoy the economical benefits. Realistically, is there a lot people can do to improve the environmental/energy impact of BTC?

John

Ash Realistically, is there a lot people can do to improve the environmental/energy impact of BTC?

No, not really, apart from not using it.

The first problem is that it is always going to be 'mined' in the places that are cheapest to do that, and they are at least at the moment mostly getting all of their power from coal fuelled power stations.

Apart from where it is being mined, the problem is that Bitcoin is just hugely energy intensive compared to all of the more modern cryptocurrencies, but at this point it's not possible to change that.

This is a list of some cryptocurrencies and the amount of energy they use per transaction in Kilowatt hours (KWh)

IOTA 0.00011
XRP 0.0079
Chia 0.023
Dogecoin 0.12
Cardano 0.5479
Litecoin 18.522
Ethereum 62.56
Bitcoin 707

So, Bitcoin is using 11 times more energy than Ethereum which is already using a lot more than most of the others!

If a nation really feels the need to make a cryptocurrency a national currency then some of the others available, i.e. Ethereum are as mature and stable as Bitcoin, with a fraction of the energy footprint.

Ash

Wow, I was not aware that Bitcoin was using that much.

Walmart is going to start using Litecoin I believe which is a good move to make some of the other cryptocurrencies a more common option.

John

Ash Walmart is going to start using Litecoin I believe which is a good move to make some of the other cryptocurrencies a more common option.

Or not, according to both Walmart and Litecoin a few hours later it was a false press release somehow released through official sources.

The price of Litecoin jumped massively for a few hours, and someone somewhere definitely made a lot of money!

https://www.bbc.com/news/technology-58545944

Ash

Oh wow, whoever came up with that definitely made a lot of money. I know there were a few people wondering why they chose Litecoin but would never have guessed it was a lie.

John

and in an interesting development, the IMF is urging El Salvador to reverse the decision to make Bitcoin an official currency and basically saying that the country will not be able to get loans from the IMF because of it.

Story on BBC: https://www.bbc.com/news/world-latin-america-60135552

Ash

Completely forgot about El Salvador when I saw the BTC price dropping massively. Those businesses that are forced to accept BTC must feel awful.

Treebeard

Never really felt like this was a good idea if they are the only country doing it. To make a currency official and legal when no central bank has any control over it is a leap of faith but with not knowing who or what you actually have put your faith into.

Ash

Looks like they don't want to back down on it. If what I read was correct, they have been buying more as the price continues to dive down.

John

Ash Looks like they don't want to back down on it. If what I read was correct, they have been buying more as the price continues to dive down.

That's a bold move for sure. Curious to see how it does for them.

Girl-from-Mars

Ash Looks like they don't want to back down on it.

Wow, a poorer country challenging the IMF, that could be interesting to watch.

Ash

I'm sure the Bitcoin investments will work out in the long term but the money that they could potentially lose out by annoying the IMF might be a lot more.

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