Hope your popcorn isn't stale by the time you get to enjoy it.

A lot of people have been predicting the downfall of Bitcoin for over a decade. Its death has been proclaimed thousands of times. All these years later, 1 BTC buys you a lot more popcorn than it could a decade ago, and 1 USD buys a lot less. The trajectories aren't going in your favor, but I like that you've taken such a firm position. :)

The Bitcoin rollout in El Salvador was rushed. It's actually pretty incredible that it worked as well as it did with only months of development. I'm not sure what the hurry was, but it ended up not mattering too much since consumers could just keep using USD as usual.

This isn't correct. Bitcoin scales amazingly, both as a store of value and as a currency for daily transactions. I've found people who claim it doesn't scale are simply unaware of how Bitcoin is architected. So I'm happy to provide that knowledge.

When someone says "Bitcoin" they might mean a number of different things, including the currency, the network, the software that runs the network or the entire ecosystem. I'm going to talk about Bitcoin the ecosystem.

Bitcoin includes a number of components. It is the blockchain, sometimes called "layer one" or the base layer. It is also the additional layers on top that allow you to transact BTC in different ways.

Separation of concerns is a cherished software design principle that Bitcoin follows. The base layer's concern is final settlement, security and privacy.

Speed of transaction isn't one of the base layer's goals, although it is much faster than other settlement networks. On the base layer you can have final settlement in under an hour. People might not realize that it takes banks and payment processors days or weeks to settle transactions. They hide this by sometimes giving you access to your money before settlement under the assumption that it will settle. These settlement transactions are grouped together into large transactions between banks. Sometimes banks have to move physical reserves in order to finalize which takes a lot of time. With Bitcoin, it's always under an hour.

Maximizing transaction throughput also isn't a base layer goal. Only ~7 transactions per second is the maximum on the base layer (it might be more with recent upgrades incl. taproot). This is a limit imposed by the way the blockchain is secured. By contrast, centralized payment networks like VISA can handle many thousands of transactions per second. And because base layer transactions are themselves a limited resource, transactions can be expensive for moving small amounts (although still cheap for large amounts; the fees are fixed per transaction not a percentage).

If this were the end of the story, Bitcoin would still be useful for infrequent aggregated transactions between financial institutions and as a store of value, but it would be a nonstarter as a payment network. Transactions are too expensive and throughput is too small to accommodate all of the daily transactions humans like to do. But it's not the end of the story.

As I said, Bitcoin is built in layers. Like the internet itself. With the internet, the base layer is the physical layer. It has certain requirements, responsibilities, and properties. On top of that are layers of protocols that add functionality, including IP, TCP, and specific applications. Bitcoin is like this.

The base layer, the blockchain, has the requirements and properties previously described. But there are layers and applications built on top of the base layer. Just because you're using an application or layer built on top of the base layer doesn't mean you're "no longer using Bitcoin". Just because you're using a web browser doesn't mean you're not using the physical and routing layers of the internet.

One of these Bitcoin layers is called the Lightning Network. This is the one that allows BTC to be transacted at scale, and it does so while also remaining distributed not centralized. In terms of speed and throughput, it will support millions of transactions per second. This is what El Salvador is using. And again, if you're using the Lightning Network (or any layer 2 or layer 3), you are using Bitcoin. You're transacting in BTC, not any other currency or token.

There have been disagreements about how to scale Bitcoin and cryptocurrencies generally. Programmers and software architects sometimes squabble. Some have argued that the base layer needs to have all the things, including scalability. Some set out to build what they think are better base layers. But this cuts against separation of concerns. The base layer doesn't need to be the be all end all. Just like we didn't cram HTTP into the physical layer or routing layer of the internet. Those fretting about the capabilities of the base layer are missing the point.

Are these second and third layers on Bitcoin just "tacked-on intermediary systems"? Maybe, maybe not. Some of the internet layers were also probably tacked-on to solve specific problems rather than being conceived all at once. Who cares? It works. It scales well. Could we build a better internet today if we rearchitected it with all of the collective experience we've gained? Could we build a better Bitcoin? Yes to both. Again, who cares? Bitcoin works well today. And there are many more layers and applications than just the Lightning Network, expanding the capability of Bitcoin. Because they are "Bitcoin", every bit as much as the base layer.

So there you go, free knowledge for you. El Salvador's rocky rollout was due to their own infrastructure being rushed, not any problem with Bitcoin itself.

Bitcoin miners are incentivized to search out the least expensive energy sources they can find, which are usually clean and/or renewable. They can do this because mines can be set up pretty much anywhere, so the location of the energy is typically not a problem. For example, a lot of mining is on hydroelectric which is both clean and renewable. They just start mining right next to dams. Commonly certain types of renewals like hydroelectric frequently produce too much energy for the grid to accept, and miners love to take that energy that would otherwise be wasted. A few years ago some surveys found that perhaps 70% of Bitcoin mining was already on clean energy; even if such estimates were wildly optimistic at the time, they're probably conservative today. As an application, Bitcoin has actually pushed forward investment in renewables. And it's only getting better.

Proof of stake is also not an equivalent alternative to proof of work. It has downsides that might be acceptable for an application platform like Ethereum but are a no-go for the requirements of Bitcoin which is aiming to be hard money.

There are reasons to hate on Bitcoin. Energy use is not one of them anymore.

Correct.

And the number one favorite currency for money laundering, fraud, and all sorts of illegal transactions is... drum roll... the US Dollar!

This persistent FUD that cryptos are uniquely suited for or tolerant of illegitimate uses is pretty worn-out at this point.

Failure is actually an important feature of growth and progress. Failure is how human beings learn and grow. It's how societies (which are groups of people) learn and grow, too.

Stunted growth happens when something prevents us from quickly moving past failures.

Freudian slip

Most private ventures fail. It's not surprising that one private city could fail. One data point isn't enough to prove or disprove the concept.

Most government ventures fail, too. It's just that when government ventures fail what normally happens is bureaucrats poor more money into the failure, and the public is on the hook to continue to pay for the disaster.

Imagine the level of self delusion necessary to believe California's population exodus can be blamed on Covid-19.

You generally can't solve a problem with a wrong diagnosis, which I guess is why California quality of life will continue to decline. Oh well, glad I'm not there.

That's a deprecated way of thinking.

Bitcoin is for everybody, and that's a feature not a bug. You can use it, your friends can use it, and yes your enemies can use it. You can't stop your enemies from using it. "Crypto-fanatics" don't have to like or keep company with corrupt regimes. It's an open network, like the Internet itself. I don't have to like or agree with everybody on the internet. I don't have to like or agree with how other people use money.

Often the same people who are for limiting communication and speech on the internet are also fearful of a money that can't be censored. To such I say: You're on the authoritarian side. You're not fooling anyone so you might as well come out as authoritarian.

The Party members didn't mind censorship.

Censorship makes us feel safe and comfortable. "Please Big Brother, tell me what I should think. Don't let me see opposing viewpoints that might confuse me. I love you Big Brother."

I did at one point believe that Americans would always reject censorship on the scale we're talking about. That was before I actually read "1984" (it wasn't required reading in my cohort) et al. and came to better understand the effects that a concerted propaganda campaign can have on the minds of people. So I'm not surprised to see many -- probably the majority -- of people here clamoring for more censorship.

Despite that, I was very surprised how apparently easy it was for the powers that be to manipulate people to the point we see now. How quickly they were able to get people to beg corporations to only allow state-sanctioned speech. Lest they possibly hear ideas or an argument that makes them feel uncomfortable.

Even people that rightly opposed the Patriot Act which was enacted under the guise of protecting the public from scary terrorists, those same people today use the same rationale to justify censorship. "We have to protect ourselves from the scary virus after all." Well as dumb or corrupt as the people were who argued for the Patriot Act, at least they didn't make it their mission to shut down opposing ideas. This is a level of fascism that AFAIK we haven't seen in America.

Eventually everyone in America will be in only one of two camps that don't necessarily align with political parties: people and sheeple. Those who think for themselves, and those who are conditioned to bleat for a corporate state to make them feel safe.

PS- I don't mind sharing that I'm vaccinated.

So many holding their breath waiting for the "implosion" have long since died of asphyxiation.

I'm sure it's coming. Any day now...

I don't know whether or not El Salvador's experiment will succeed or fail. But the president of El Salvador is extremely popular. I'm not sure why he's so popular if he's a gangster. There's a lot of FUD being repeated; much of that can be traced to the International Monetary Fund and the U.S. administration who obviously have an interest in keeping El Salvador only on the dollar. So I'm waiting to see how this experiment plays out.

From what I can tell, most people in El Salvador don't really understand Bitcoin (unsurprising since most people here don't understand it either). So this change won't really affect most people. At least not right away. Some people will start using it immediately for remittance payments. If it proves to be cheaper than alternatives like Western Union, then more people will use it. Some people today are already accepting Bitcoin as payment in their local economies. Over time perhaps more and more people will accept Bitcoin.

Or if the people determine Bitcoin isn't better (enough) than traditional currency to bother with, well then it probably won't gain much traction. Either way, it's a bold experiment. The world will be watching very closely. I'll ignore the FUD until it starts to sound credible and comes from sources without a special interest in the outcome.

Sorry dude, the market has spoken. Your fork lost. Time to move on.

Not really. It's a public ledger. It's arguably more transparent than banks moving "dollars" around. It's definitely more transparent than cash.

I know, right? Reminds me of those silly people who bought BTC at a then-ATH of $30 before it "freefalled" to $17. I bet those suckers who held until today feel pretty bad about their unwise investment!