Should El Salvador Fork Bitcoin?

[Hydrogen]

Here is an idea. What would happen if:

• El Salvador forked pre taproot bitcoin and adopted it as its native digital currency
• Limited mining of their forked alt to IP addresses in El Salvador, to guarantee 51% attacks could not be made from outside territories
• Offered incentives on mining equipment and electricity to allow citizens in the country to experience the early golden years of low difficulty bitcoin mining
• Offered incentives on crypto wallet supporting smartphones and the infrastructure necessary for businesses and consumers to use the forked crypto exclusively
• Implemented caps on outside speculators such as large hedge funds from accumulating a significant portion of the forked alt, while allowing foreign small parties to buy and sell freely

Would it be possible for a small nation to fork bitcoin, in an effort to recreate the early glory days of mining (low difficulty era) for its residents.

Which could in turn produce prosperity and wealth, somewhat out of thin air, in a deflationary capacity.

While capping markets and limiting mining to IP addresses in El Salvador* to prevent interference from large speculators with overwhelming liquidity from buying out the market cap.

I never thought bitcoin cash and other forks of BTC would amount to much. The staying power of bitcoin cash however has proven otherwise.

Perhaps it is possible for small nations like El Salvador to recreate and even build upon this success.

[witcher_sense]

Would it be possible for a small nation to fork bitcoin, in an effort to recreate the early glory days of mining (low difficulty era) for its residents.

Which could in turn produce prosperity and wealth, somewhat out of thin air, in a deflationary capacity.

Bitcoin is open-source software using an MIT License, which means you can freely copy, distribute, modify and even sell copies of this software. As far as I am concerned, the only condition for copying such software is that you must include the MIT copyright notice. In other words, El Salvador absolutely can modify Bitcoin software and create its own version of Bitcoin (fork). As for recreating "the glory days of low mining difficulty," I think it is only possible if the fork is highly unsuccessful because otherwise, existing bitcoin miners will use part of their equipment for mining this state-sponsored fork, thereby automatically increasing the difficulty of mining. But creating or issuing your own money doesn't magically make you prosperous or wealthy because first, you need to convince your own people that this money is good for them (which, of course, a dictator can achieve via violence, aggression, torture, and propaganda), and second, you need to convince your neighbors, your enemies and all other countries that El Salvador's bitcoin is good enough to replace the dollar and other currencies when conducting trades between countries.

Perhaps it is possible for small nations like El Salvador to recreate and even build upon this success.

Bitcoin Cash is a scam coin created to siphon off money from naive investors; and since its creation, it has only been dropping in price against bitcoin without the hope of ever catching up.

[Hydrogen]

As for recreating "the glory days of low mining difficulty," I think it is only possible if the fork is highly unsuccessful because otherwise, existing bitcoin miners will use part of their equipment for mining this state-sponsored fork, thereby automatically increasing the difficulty of mining.

I forgot to write it in the bottom part (edits it in), it was only in the bullet part on top.

What if mining of their forked bitcoin alt were limited exclusively to IP addresses in El Salvador.

To prevent foreign nations from hijacking the chain via 51% attacks and consolidate mining inside their own borders. Could that be a good idea and positive design change. Or would it be negative and limiting in some way?

[BayAreaCoins]

limiting in some way?

It sounds pretty limiting.

[franky1]

ASICS do not communicate directly with the peer to peer network.. they only communicate to a pool manager.

a pool manager broadcasts a block to the peers(fullnodes). just like peers that relay blocks when syncing and such/ when they see a new block they download. if they are not getting blocks they are not getting blocks.

to stop blocks outside of el salv is to ban peers of full nodes outside of elsalvador

this means it becomes a whole network closed system of full nodes only running inside elsalvador

this means no own can own el-btc on a full node outside of el salv because they cannot communicate to the el-btc network

..
also
bitcoins bottom line value is ~$15k due to the most efficient underlying cost mining of network hashrate
the price is then a premium above the $15k

if el salv only does say 5exa network mining. the underlying value is $300 meaning the el-btc will be on the market speculating from $300 to a ~ speculated5x so probably a ATH of $1.5k at current rates of this scenario

[pooya87]

Whether it is a government of a country or it is Roger Ver or Craig Wright or the bitcoin gold idiots whom I don't even know their names, it doesn't make any difference. They are all creating a poor copy of bitcoin that is useless and won't have any real success.

Besides there is a lot of easier ways to create a centralized currency that the government controls than to create a copy of bitcoin. Specially since copying bitcoin would require mining it and that consumes electricity (it costs the government a lot of money) whereas they could simply create a copy of something like PayPal and call it CBDC without needing such big investment in mining.

[franky1]

Whether it is a government of a country or it is Roger Ver or Craig Wright or the bitcoin gold idiots whom I don't even know their names, it doesn't make any difference. They are all creating a poor copy of bitcoin that is useless and won't have any real success.

Besides there is a lot of easier ways to create a centralized currency that the government controls than to create a copy of bitcoin. Specially since copying bitcoin would require mining it and that consumes electricity (it costs the government a lot of money) whereas they could simply create a copy of something like PayPal and call it CBDC without needing such big investment in mining.

bitcoin code is ready. saving a gov alot of bug fixing and coding and R&D
blockchains offer decentralise data store for data security(many merchants across the land running full nodes so no single gov entity or merchant can manipulate the data)

a government can start el-btc from a fresh block0 genesis with a starting difficulty that is based on say 5exahash. thus starting value is base of $300 underlying cost knowing the market speculation price above value would swing in a 5x window between $300-$1.5k where they as exchange running services on the network could possibly put in some market price controls like preventing spikes and dips of more then 2% a day(circuit breakers) to prevent such volatility

thus being a cheap ready-in-the-box CBDC

by not having taproot or RBF. they can easily do things like accept zero confirm "fast payments" with a 10min settlement time. thus not need the silly subnetwork flawed crap like LN that pretend to solve things but causes more issues

[pooya87]

bitcoin code is ready. saving a gov alot of bug fixing and coding and R&D
blockchains offer decentralise data store for data security(many merchants across the land running full nodes so no single gov entity or merchant can manipulate the data)

If the coin is created by the government and is controlled by the government, it is not decentralized hence it doesn't require a decentralized blockchain. When you consider that using blockchain is the most inefficient form of database you realize how silly it is to create a centralized bitcoin copy.

a government can start el-btc from a fresh block0 genesis with a starting difficulty that is based on say 5exahash. thus starting value is base of $300 underlying cost knowing the market speculation price above value

Wrong. Bitcoin is not a product to have its price determined based on the cost of production. Specially since cost of production is decided based on the price. If that were the case, any idiot would have created a shitcoin with "5 exahash" and the price of that shitcoin would have automatically been "$300" making them rich.

thus being a cheap ready-in-the-box CBDC

Mining is not cheap specially when the electricity in the country is expensive ($0.2+) and the country is poor and doesn't have enough power plants to be able to ensure excess capacity.

by not having taproot or RBF. they can easily do things like accept zero confirm "fast payments" with a 10min settlement time. thus not need the silly subnetwork flawed crap like LN that pretend to solve things but causes more issues

LOL

[BitDane]

Would it be possible for a small nation to fork bitcoin, in an effort to recreate the early glory days of mining (low difficulty era) for its residents.

It is definitely possible to fork Bitcoin but then it will be called an altcoin once it is forked.  Many altcoins had been created by forking Bitcoin, they are created by an independent developer, what more with a country that has much bigger funding of course they can easily fork Bitcoin.

Which could in turn produce prosperity and wealth, somewhat out of thin air, in a deflationary capacity.

It depends on how the nation of El Salvador market their altcoin.  If they pre-mined it and produce gazillion of coins  and sell it to the people around the world, then it is possible to create wealth, I don't know about the prosperity though since prosperity isn't just a simple thing as having a much bigger fund since funds can be stolen by corrupt officials.

Perhaps it is possible for small nations like El Salvador to recreate and even build upon this success.

It is very possible but the only challenge is how they can make other country to invest in their forked Bitcoin.

[kryptqnick]

Thankfully, Bukele seems to be specifically  pro-Bitcoin, so I don't think his country will do something like this. Of course, they could make a fork, but from that point, they'd be simply altcoin adopters, a coin nobody cares about outside their country. They might as well just make their own token for such purposes, because the fact of it being a fork of Bitcoin won't help to keep the value and capitalization of BTC. So the safest and most secure way is just buying regular BTC as they do, and encouraging eco-friendly mining of regular BTC as I think they are planning to do.

[mk4]

El Salvador unnecessarily forking an already fully functional blockchain aside — if any country would want a cryptocurrency, they're a lot more incentivized to fork something like USDT/USDC — which are stablecoins with "freeze"[1] functionalities.


[1] https://bitcointalk.org/index.php?topic=5204055

[NeuroticFish]

El Salvador forked pre taproot bitcoin and adopted it as its native digital currency

Or would it be negative and limiting in some way?

Keep in mind that any fork of Bitcoin is not bitcoin, it's just a pathetic altcoin.

So the fork coin will not be Bitcoin, they'll have an altcoin for which the value would become very low.
Just look at BCH, BSV and all other forks of bitcoin.

Of course, luckily, they'll still have their pre-fork bitcoins too and if they don't waste that, they can have the choice to get back to their senses and use the proper bitcoin they still have.

[stompix]

This will happen, their forked bitcoin will be useless as it will drop in value worse than Bitcoin SV, it would be stupid to have a Bitcoin that is being issued by the government and controlled by one.

Second, about the mining stuff
- they would need a centralized pool, you can't block mining gear from the source code of the coin based on IP
- Salvador is a NET importer of electricity, that's why their whole volcano mining was just a big PR lie and nobody is talking about it anymore
- Salvador is so poor it can't afford anymore to offer "incentives"

Third, putting caps on how much you can own, then putting caps on how much you can trade, then putting caps on how much you're allowed to keep, right? It is truly a marvelous idea, the only question that remains is why use bitcoin at all?

You seem very keen on the idea that somehow a country can print cheap money easily, give that money away and nothing will happen, everyone will get rich and you won't experience inflation and devaluation of the mass-produced currency. It doesn't work like that!

[Smartprofit]

In my opinion, the main value of Bitcoin is that it is the original network, not a copy. 

Currently, there are many blockchains that are superior to the Bitcoin blockchain in terms of manufacturability and innovation (for example, the Monero blockchain). 

However, bitcoin is money.  And money (finance) is a very conservative entity.  In the field of finance, the time of uninterrupted and trouble-free functioning of a financial instrument is very important.  Bitcoin has performed very well over the past 14 years. 

Therefore, the original in the field of finance is always more valuable than a copy.

[Lucius]

The OP really has incomprehensible ideas for me personally, and I think he should think carefully before presenting them in public, because sometimes it really seems like he doesn't know what he's talking about. Hasn't history taught us at least one thing - that all those who have created their own version of Bitcoin have failed or are completely worthless in every sense? Maybe El Salvador should have accepted the offer from Cardano and declared that token a legal tender in the country?


Hey @Hydrogen what about your idea that "fire wood and wood burning stoves" will be the next Bitcoin?

It appears fire wood and wood burning stoves could be the next bitcoin. These trends emphasize high price volatility which can occur in response to market trends and shifting demand. If it were possible to purchase crypto tokens pegged to the value of firewood and wood stoves, it would be profitable. Although not the most ethical financial move given the profits would come at some expense of negative consumer sentiment.

[Hydrogen]

All anyone has to do is create a bridge network from a foreign IP to a El Salvador IP, to bypass any restrictions.

"Bridge network."

You mean a network of spoofed IP addresses? That would only work in only one direction as the IP routing would direct responses to the correct IP addresses rather than the forged ones. For that to have a chance of working they would need to spoof IP addresses then compromise internet routing to do something like a man in the middle attack to fulfill all of their crypto mining needs.

If you're referring to proxy or VPN approach, they would need a server inside el salvador to make that work. Given that el salvador is the government of the country, they should be able to prevent or restrict unwanted 3rd parties from having that access.

Long story short, its not that easy to fake IP addresses in a way which would allow them to be used for TCP handshakes and sessions, especially over the long term as would be needed for mining purposes.

ASICS do not communicate directly with the peer to peer network.. they only communicate to a pool manager.

a pool manager broadcasts a block to the peers(fullnodes). just like peers that relay blocks when syncing and such/ when they see a new block they download. if they are not getting blocks they are not getting blocks.

to stop blocks outside of el salv is to ban peers of full nodes outside of elsalvador

this means it becomes a whole network closed system of full nodes only running inside elsalvador

this means no own can own el-btc on a full node outside of el salv because they cannot communicate to the el-btc network

..
also
bitcoins bottom line value is ~$15k due to the most efficient underlying cost mining of network hashrate
the price is then a premium above the $15k

if el salv only does say 5exa network mining. the underlying value is $300 meaning the el-btc will be on the market speculating from $300 to a ~ speculated5x so probably a ATH of $1.5k at current rates of this scenario

I was thinking they would naturally limit IP mining to el salvador, while allowing nodes to be run by anyone globally. (Separation of nodes and mining) Or deploy a minimalist core setup, which would be easier to run on smartphones than the current bitcoin (if that were technically possible). The blockchain being formatted in a compressed format would reduce its size by roughly 1/3rd and make it easier to download.

But I didn't go that far into detail expecting most would not bother reading and simply bash it due to them not comprehending motives behind proposed changes.

Its pointless to discuss, most of the changes and improvements that could be made aren't challenging topics to tackle on a conceptual level. They're only difficult in terms of software engineering, money and time.

Hasn't history taught us at least one thing - that all those who have created their own version of Bitcoin have failed or are completely worthless in every sense? Maybe El Salvador should have accepted the offer from Cardano and declared that token a legal tender in the country?

Why did bitcoin forks fail? Specifically why and how.

If you thought about it, you might realize the changes I proposed address said failures.

Last I checked firewood is outperforming stocks, bonds and everything else btw. I guess you're not a fan of financial predictions being proven accurate?

[Lucius]

Last I checked firewood is outperforming stocks, bonds and everything else btw.

Is it in some parallel universe of yours or in countries where there are no trees at all? Is firewood really such a perfect investment that you call it the next Bitcoin - maybe ask people in Africa if they think firewood is a better investment than Bitcoin?

I guess you're not a fan of financial predictions being proven accurate?

Your predictions? Maybe the ones where you speculate that a new token should be created for every problem in the world? These aren't any financial predictions, but a bunch of nonsense that you stack on top of each other in the Economic board - and that's actually called thread spamming.

[pooya87]

Ethereum: Norway’s central bank will use ETH ecosystem to issue national currency

That would be so funny to see a country having its national currency in a centralized mutable blockchain in control of a company that the country has no jurisdiction over
Imagine if Vitalik wanted to overthrow Norwegian regime. All it takes is to roll back all his chain's blocks or freeze their national currency
I didn't even mention the Ethereum network congestion and the gigantic fees they have to pay while the network goes down because someone decided to pay some kitty game on it

[Solosanz]

The reason why El Salvador want to accept Bitcoin as legal tender is the utility that's the Bitcoin offer! if they're Bitcoin fork, it's not Bitcoin anymore and the utility is already different. Bitcoin fork is centralized and can be manipulated, it's really against with the real Bitcoin utility, if they're don't happy with the decentralization and the fees, they wouldn't accept Bitcoin as legal tender in the first place! that's why many governments that doesn't like it prefer to create their own coins.

[stompix]

The OP really has incomprehensible ideas for me personally, and I think he should think carefully before presenting them in public, because sometimes it really seems like he doesn't know what he's talking about.

Hydrogen is what you would call a crypto maximalist, he thinks that replacing any kind of trading with a token, combined with relentlessly printing said tokens would somehow ensure prosperity, of course, this is a flawed vision but I admit in some cases it's entertaining, some are outrageous but some quite funny.

Why did bitcoin forks fail? Specifically why and how.

Because there is no need for them, simple as that.
That's why all forks fail, not just bitcoin forks but ETH forks and others.

If you thought about it, you might realize the changes I proposed address said failures.
Last I checked firewood is outperforming stocks, bonds and everything else btw. I guess you're not a fan of financial predictions being proven accurate?

What you proposed is a country spending money on subsidizing miners in the same country and then having them sell these coins to investors who would buy it... because ...why? Why would outside investors buy Salvador Bitcoin and not Bitcoin or Ghana Bitcoin or 600 West Third Street Mansfield issued by the Mansfield council in Ohio?

And if wood was a good investment, it would have been so without any token, right? So, there was no need for named token in the first place.
Second, you might want to check those prices again, lumber is taking a tumble and firewood will soon follow once things settle down and all the fear about freezing finally becomes what it was supposed to be, a debunked myth.

https://markets.businessinsider.com/news/commodities/lumber-prices-hit-lowest-level-since-2020-housing-market-slows-2022-12
https://www.investing.com/commodities/lumber

If you would have bought lumber in 1993, you would now have a loss, a 30 years asset that is in red hardly sounds "outperforming", what you're looking for is more speculation or, since we're talking about crypto, pump and dump behavior.