Understand the implications of Bitcoin's downfall in El Salvador. Learn about the failed economic bet and its impact on the country's financial stability.
the lightning network still uses the blockchain, just less. it’s acts like an immutable public bar tab you can’t default on. once you have spent enough with another person that it is worth them conducting the transaction on chain then it does it. usually when fees are low too.
That is an extremely simplified explanation of how it works though, it is more complex than that.
Stil though, how well does that work with a rapidly fluctuating value of the bitcoin? Prices would have to be superfluid for external good to have known value of some sort.
Stability of the value of savings and currency seems crucial to using it for trade.
Won’t the economy have to go flat (stop growing) since the supply of bitcoin is fixed? Otherwise the value of bitcoin will always be going up. Which leads to hoarding and speculating, which was part of the reason for dropping the gold standard.
Unrelated note: part of why humanity stopped making our money out of precious metals was because the metal was worth more and more while the dollar held steady. So people started shaving the edges off silver coins, and then recievers had to start weighing money at the time of transaction (which slowed it all down). Making money fungible was a huge advantage for commerce.
Bitcoin transactions feel a lot like having to double check that the coins you’re receiving are actually “real” and that you’ll be able to trade them later. The lighting network feels like a tab at the hardware store where anyone can skip town anytime they want.
the lightning network still uses the blockchain, just less. it’s acts like an immutable public bar tab you can’t default on. once you have spent enough with another person that it is worth them conducting the transaction on chain then it does it. usually when fees are low too.
That is an extremely simplified explanation of how it works though, it is more complex than that.
Stil though, how well does that work with a rapidly fluctuating value of the bitcoin? Prices would have to be superfluid for external good to have known value of some sort.
Stability of the value of savings and currency seems crucial to using it for trade.
It’ll settle eventually
Won’t the economy have to go flat (stop growing) since the supply of bitcoin is fixed? Otherwise the value of bitcoin will always be going up. Which leads to hoarding and speculating, which was part of the reason for dropping the gold standard.
Unrelated note: part of why humanity stopped making our money out of precious metals was because the metal was worth more and more while the dollar held steady. So people started shaving the edges off silver coins, and then recievers had to start weighing money at the time of transaction (which slowed it all down). Making money fungible was a huge advantage for commerce.
Bitcoin transactions feel a lot like having to double check that the coins you’re receiving are actually “real” and that you’ll be able to trade them later. The lighting network feels like a tab at the hardware store where anyone can skip town anytime they want.