For every $269 in bitcoin, $4,672 of tax payer money is spent

[MNbag]

https://www.elsalvador.com/noticias/nacional/nayib-bukele-bitcoin-mineria-alto-costo-energia-electrica/885523/2021/?utm_source=twitter&utm_medium=noticias+&utm_campaign=organico

Oh boy, this is a biggie.

Apparently, trusting a guy who managed to run 17 companies into the ground is apparently not great at coming up with navigating the adoption of Bitcoin in a country.

This is further worsened by the fact that the nation's electricity grid doesn't have the capacity to even accommodate a mining center without raising the price of energy for ordinary El Salvadoreans.

I wonder if it is worth the number getting bigger.

[jackg]

Apparently, trusting a guy who managed to run 17 companies into the ground is apparently not great at coming up with navigating the adoption of Bitcoin in a country.

Sounds a bit like the last president of the US trying to run it... Somehow that didn't seem to detract from his election campaign.

This is further worsened by the fact that the nation's electricity grid doesn't have the capacity to even accommodate a mining center without raising the price of energy for ordinary El Salvadoreans.

I wonder if it is worth the number getting bigger.

Well it isn't worth it. But it's not just one guy voting on whether they do it or not, it's multiple.

On the El Salvador not being able to support a miner, most countries that accept the US dollar as their currency also can't print it. They just exchange it for resources or aid...

[MNbag]

On the El Salvador not being able to support a miner, most countries that accept the US dollar as their currency also can't print it. They just exchange it for resources or aid...

The only difference between the US dollar and Bitcoin is that you don't require an entire energy grid to get a dollar.

I swear that if North Korea comes up tomorrow and says that they would use Bitcoin at the UN, I can guarantee that this entire forum would be calling Kimmy "Our Dear Leader".

[dkbit98]

I checked the history of news on this elsalvador.com website nd it is clear they are writing only anti-bitcoin articles for some time, and this study was made by only ONE University professor Carlos Martínez.
I am not claiming anything but how much would bankers and IMF had to pay to one professor from El Salvador to write something against Bitcoin?  
He is not taking in account future value of Bitcoin and the fact that government is not selling those Bitcoin now.

[MNbag]

Not everything has to be a conspiracy by the banks to deface Bitcoin.

Maybe the newspaper is reporting on the incompetence of the government in allocating resources away from where it is useful.

At least it is better than some of the crypto news sites in terms of journalistic integrity.

[hatshepsut93]

At least it is better than some of the crypto news sites in terms of journalistic integrity.

Doubt it. This should be verified by another and more unbiased source. I'm not a fan of Bukele and how he uses Bitcoin to make publicity stunts, but if that site belongs to his opposition, obviously they would write anything that makes him look bad, and journalists screw up technical data almost all the time, unless it's a highly specialized news source.

[Hydrogen]

Initial start up costs, are dwarfing initial returns.

Its the long term outlook, which is in question. Losses could be made back from inflation protection and deflationary gains. New job creation related to crypto could boost the economy and tax revenues. If plans to construct geothermal power plants to power crypto mining are completed. The price of electricity could decline. Digital nomads and crypto whales who enjoy living near the equator could immigrate into el salvador bringing their wealth with them. Which could fund the development of more businesses and jobs.

Its hard to factor in the intangibles with new start up ventures. Potential is difficult to measure.

I can name economic stimulus bills funded by governments which created 1 low paying job at a cost of between $100,000 to $300,000 to taxpayers. On paper that looks terrible. In some cases, there might be intangible gains that can offset what appears to be a bad start.

[paxmao]

The guy is probably right. The price of Energy has to be super-competitive to allow a profitable mining of bitcoin. It is pretty much all you really need for a mining operation (the hardware costs the same more or less for everyone) so this looks more like an investment "for the future". To be honest, the quantities we are talking about are ridiculous for even an small country.

[Sithara007]

Several inaccuracies with the calculation. First the author didn't took in to account the pending payments. Including that, the total value of Bitcoin mined is more than $500. And secondly, he calculated the energy cost using the pricing formula for the national grid. That is wrong, because geothermal energy is being used for mining and the cost of generation is much lower. Then he calculated the amount of electricity consumed while assuming that the mining equipment ran non-stop for 4 days (which was not the case, as they are still testing the power supply and mining rigs).

[kryptqnick]

My first thought was 'how legit is this info', and then I see others are doubting it too. It sounds terrible, and it's very bad if it's true, but one website and one expert isn't convincing for me. As for electricity, they're working on using volcanic energy, and it's just a start, so it might turn out okay in the end. Honestly, I didn't understand from the article (I google translated it from Spanish, and that might be a part of the problem) where the taxation data comes from and how it's calculated. I thought El Salvador was creating a very welcoming environment for crypto businesses, so I assumed there'd be very small taxes for that.

[mocacinno]

I cannot read this article, it is not in a language i master.... I'm just going on the discussion in this thread...

Why is there an issue with the electricity grid? They do not need to mine bitcoin... Countries use gold without having any gold in their surface, people use FIAT that hasn't been stamped/printed in their own country... It's not because a country wants to use bitcoin they have to mine it. They only require a couple of running nodes, and you can run those on an rPi if you really wanted to. The citizens themselfs can use an SPV client connecting to those nodes (or other nodes)...

Makes me wonder about the quality of the rest of the article, but like i said, i cannot read it due to the language barreer.

[Kong Hey Pakboy]

I'm not from El Salvador so I don't know the real condition there but aren't they planning to build a new power plant that's on a volcano so that they can mine bitcoin there? I can see the plight that people has but the problem is that there's decisions to be made where there's going to be rough patches at the start but will eventually smooth out in the end.

[bryant.coleman]

I'm not from El Salvador so I don't know the real condition there but aren't they planning to build a new power plant that's on a volcano so that they can mine bitcoin there? I can see the plight that people has but the problem is that there's decisions to be made where there's going to be rough patches at the start but will eventually smooth out in the end.

There are a lot of inaccuracies in the report. The author just wanted to put forward his points and he resorted to outright lying. The powerplant established near the volcano would provide electricity at much cheaper rates, but he used the national grid rates for his calculation. The justification being given is that El Salvador imports electricity. But he conveniently forgets that even if the electricity was added to the national grid, there would be a lot of additional expenses related to transmission loss and new equipment. Also it makes no sense to make the calculation based on just 4-days output. They were still setting up the mining farm, and the equipment was not used continuously. 

[beerlover]

I do not get why people here trying to make bitcoin look like a bad idea when in fact it is a lot better than what you might imagine. We are in bitcointalk, if NK dictator comes up and says that Bitcoin should be world currency, I would agree with him on that, not meaning that I would find him a dear leader or find him any good, just because he is a piece of shit doesn't mean that I need to bash bitcoin if he says it is good, that just doesn't make sense, a bad person could agree with me, that doesn't make me bad as well (well not in this situation at least).

Bitcoin could be acquired in all sorts of ways, if mining is not great for now, maybe it will be a lot more profitable later on, wait for those machines to be profitable and in the long run it will provide a lot more profit. Or just don't mine and buy, even that is enough to make a great profit, price of bitcoin rises, so we have no idea if every 269 dollars in bitcoin worths how much since it will go up in price.

[DrBeer]

So Bitcoin is a kind of celery among cryptocurrencies? Why celery? Because celery is a vegetable with a negative calorie content, which barks several tens of kilocalories to the body, and takes several times more for its processing, which leads to weight loss So the existence of bitcoin leads to "weight loss" in the fiat market?

[uneng]

There is no way to say if bitcoin mining is going to be bad business for El Salvador yet. What we have so far are speculations which endorse and others which go against bitcoin, what is natural since the adoption there is in a very early stage yet. It's clear El Salvador has a serious issue with energy supply and that it's not the cheapest energy in the world, but at same time there is an unprecedented attempt from the government to minimize costs in order to make bitcoin mining a viable business and who knows, futurely, decrease the costs of energy consumed by citizens at their homes as well.

As the article says, the announcement made by president Bukele about geothermal energy production doesn't bring further details regards costs it will represent for the country, what makes me believe all the calculations presented by the specialist are purely speculative for this reason. Once the government presents details in numbers ($) about the project we can reach to a better conclusion.

[cryptoperkele]

On the El Salvador not being able to support a miner, most countries that accept the US dollar as their currency also can't print it. They just exchange it for resources or aid...

The only difference between the US dollar and Bitcoin is that you don't require an entire energy grid to get a dollar.

What? They are both designed for totally different reasons. They are both good for their own purposes, usd just isn't designed for value growth but to keep their current capitalist system working alive and well as a fast and and highly liquid value transfer.

BTC as a currency is rather pointless even though people are using it. It makes as much sense as using apple stocks as a currency when that company was just starting. And i say this fully knowing that i have been spending btc since 2014.

[stompix]

Oh, what  surprise, I've told poeple a hundred times

• Salvador is NET importer of energy!
• There is no magical 100MW that was drilled, there is no such well in the entire world, Usa, Iceland Japan or Italy
• That powerplant who he keeps publishing in tweets is old as ***, the former director quoted near 100$ for MW for it.

But would somebody listen to reason?
No, of course, not everyone was volcano node this and that, meme and price, who cares about number and reality.
And now when facts are presented, of course, they are not true, it's the banks, the reptilians, the overlords, who pay for the articles.

First the author didn't took in to account the pending payments. Including that, the total value of Bitcoin mined is more than $500. And secondly, he calculated the energy cost using the pricing formula for the national grid. That is wrong, because geothermal energy is being used for mining and the cost of generation is much lower.

And of course, it makes total sense for the government to burn cheap energy for bitcoin and then import extra more expensive energy to meet citizens' needs.
I'm pretty sure each one of you would be thrilled to pay three-timer more on electricity in order for the government to subsidize miners.

I swear that if North Korea comes up tomorrow and says that they would use Bitcoin at the UN, I can guarantee that this entire forum would be calling Kimmy "Our Dear Leader".

Poeple have been cheering on Paypal and Wall Street investors for a while so no surprise they will cheer for everyone, but that's not really the problem here.
It doesn't matter who adopt or who starts using Bitcoin, if I see somebody I totally hate wearing my favorite rand of clothes I won't stop wearing mine, nor would I stop using bitcoin because some terrorist groups or something else is doing the same, everyone is free to make its own choices.

The problem here is that poeple are cheering for totally false info, at this moment is not a matter of president Bukele adopting bitcoin for economical reasons, it's a matter of Bukake using it and bitcoiners as a propaganda tool for its own gains, and this is disgusting.

[Sithara007]

And of course, it makes total sense for the government to burn cheap energy for bitcoin and then import extra more expensive energy to meet citizens' needs.
I'm pretty sure each one of you would be thrilled to pay three-timer more on electricity in order for the government to subsidize miners.

It is not as simple as that. The geothermal powerplant was newly built for the mining farm. It was not an existing facility. And the national grid prices include the cost for transmission, as additional equipment is needed and transmission losses need to be taken in to account. IMO, the government might have thought that it makes sense to purchase electricity (which is readily available), rather than spending the amount to purchase Bitcoin from the open market. BTW, a lot of people in El Salvador were going ballistic when the exchange rates dipped to $41K. Where are they now?

[stompix]

It is not as simple as that. The geothermal powerplant was newly built for the mining farm. It was not an existing facility.

Really?
And where is this magical new geothermal powerplant that was built overnight situated?
Because nobody knows of it, the powerplant in the pictures was already identified as the old Berlin powerplant.

Oh, wait!! You really believed in the magical well that produces 100MW that was drilled overnight just for bitcoin mining!
This is one of the most modern and largest geothermal plants in the world, it has $300MW capacity, but from 50! wells, it took nine years to built and cost 800 million, but I'm sure everyone here believes Bukele did this for free in 3 months because of laser eyes.