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Bitcoin surges in Zimbabwe after military seize power

133 points by ca98am79 9y ago

Nbadal 9y ago
Are there any other examples of this kind of surge happening?
- gaius 9y ago
  It would be interesting to see what would happen to Uber prices
lend000 9y ago
Is this a legitimate news source? I have a difficult time believing this part: > The events unfolded as Zimbabwe is in deep crisis. The economy has halved in size since 2000, an estimated 95% of the workforce is jobless and as many as 3 million Zimbabweans have gone into exile. 95% unemployment?
- nostrademons 9y ago
  Fact check on it: https://africacheck.org/reports/is-zimbabwes-unemployment-rate-4-60-or-95-why-the-data-is-unreliable/ https://africacheck.org/reports/is-zimbabwes-unemployment-ra... Basically, it's complicated, and nobody knows what to believe. The 95% figure is taken from the CIA World Factbook, and has been repeated frequently in mainstream media and on Wikipedia. However, depending on who you ask and how you count, it could be as low as 4%. Keep in mind that not everyone in the world takes Western institutions (like a national government, rule of law, and functioning economy) for granted. More than half the world's population still lives on subsistence agriculture: they tend a small plot of land, which generates enough food to feed their family and trade with surrounding villagers. These people are still "employed" in the sense that they work to support themselves, but they don't participate in any traceable economic activity.
  - egeozcan 9y ago
    I thought "economic unemployment" is defined by the people who seek a job while not having a current one. People who do not seek a job aren't counted. It's been a very long while since the economy classes though.
    - lend000 9y ago
      That's just how the US Bureau of Labor defines it, allowing elected officials to make the economy seem better than it is.
    - jldugger 9y ago
      Which is a simple thing to look at when you're in a first world country with a functioning Unemployment Insurance office you can query to count such things. When you try to map that into different cultures and economic development statuses, it gets far fuzzier.
    - nostrademons 9y ago
      ...how do you define "seek a job" in a place where the concept of full-time employment is alien? Therein lies the rub. If you dig into the stats, the 10% unemployment rate quoted in official government statistics - and measured accordingly to the methodology economists usually use, excluding people who have "given up on searching for a job - is based on a definition of "job" where they have worked (in cash or in kind) for at least one hour in the past week. By those stats, 50% of the country was not in the labor force, 45% was "employed" (for at least one hour a week), 5% was actively unemployed. But then when you dig further, 75% of those classified as "employed" didn't receive any payment for their work. They bartered. So now we're looking at 12.5% employment. And 84% of those employed worked in the informal sector, i.e. maybe they did a couple hours of labor for another villager. Considering the large overlap between the bartering & informal sectors, we're at around 5% full-time employment in the country. That shows the difficulty in applying models built for an industrial economy to regions that still primarily function on an agrarian economy. The definitions they use are nonsensical - they don't apply to how people qualitatively work. (There're similar difficulties applying models made for industrial economies to post-industrial economies - how do you classify someone who drives for Uber & Lyft at the same time while AirBnBing out their house, doing Instacart runs, running an Amazon import-export business over the Internet, trading in Bitcoin, and selling stuff on Etsy? Is that 0, 1, or 7 jobs? Are they a financier or taxicab driver?)
- cwt137 9y ago
  The Bitcoin story has been confirmed by the BBC http://www.bbc.com/news/live/world-africa-41994362#post_5a0c6d4ae4b075b72b3c317a http://www.bbc.com/news/live/world-africa-41994362#post_5a0c...
- thephyber 9y ago
  I can't independently confirm, but Zimbabwe has long been in a downward spiral of hyperinflation[1] and the Wiki article describes the origins and some of the effects on the economy. [1] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
- walshemj 9y ago
  One of my coworkers in London is from Zimbabwe and she was telling us some of the problems her family had trying to run a farm.
dpflan 9y ago
I'm intrigued by the idea that cryptocurrencies can exist and may help alleviate economics crises, but in a dark plot twist can't governments essentially own the majority of computing power, start their own cryptocurrency, and outlaw all others? What does the world look like when a decentralized concept like this is appropriated and brute forced into a more-or-less centralized concept? (Or perhaps I'm way off track...)
- wereHamster 9y ago
  Sure they can try to "outlaw" cryptocurrencies. Or the internet as a whole. Good luck with enforcing it though…
  - akhatri_aus 9y ago
    If you can control the traffic in and out a country, you can control both the internet and block off extra-sovereign chains.
    - gruez 9y ago
      ...because censorship (in general) work so well in the past? the bitcoin blockchain generates 6 one MB blocks per hour, that's 1.6 KB/s. i can think of multiple ways to smuggle data in at that bandwidth. blockstream apparently also has satelites broadcasting the blockchain. good luck shutting that down. transactions are even easier. they're less than 0.5KB, something you can easily fit in a few SMS, or in a envelope.
      - akhatri_aus 9y ago
        Everyone would need to smuggle data out, 50%+ of the chain within the country is all that's needed to win. You're not going to get everyone to use satellites to get data in and out. If you've ever been in an African country you'd know SMSs aren't on the cheap side either. You'd also know they have tools that can track and catch your VSAT dishes and fine you heavily.
  - 9y ago
pwaai 9y ago
I feel like there are whales that simply manipulate the price based on news. There's little evidence to suggest bitcoin has any usage in zimbabwe in practical day to day usage. Therelies the problem with bitcoin, why would someone in zimbabwe pay 1 week of their salary to move 3 weeks of pay and still not be sure if the money will still be there tomorrow?
- kown223 9y ago
  if you didn't dealt with this you can't understand, but simply put, 1 week of pay could be toilet paper next week(s), as it happened in Venezuela. In my country some years ago, in a time of crisis for example the government locked all foreign currency in banks, and auto exchanged it for the national currency, at a rate set by them, it was robbery basically, prices would jump up like 25% day to day, so the national current was worthless, oh, they did the same with all the private owned gold in banks or so they could grab, sold for national currency, same scenario I think it happened in Basil too, government locking money in banks.
  - solaarphunk 9y ago
    .... but bitcoin frequently jumps 25% a day on NON-domestic news.... how is it a better store of value?
    - lloeki 9y ago
      > .... but bitcoin frequently jumps 25% a day on NON-domestic news.... how is it a better store of value? Z$ record inflation was 79,600,000,000% a month[0] before it disappeared. Bitcoin's short term volatility looks quite manageable in comparison. [0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#Inflation_rate https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#Inf...
    - dragonwriter 9y ago
      Historically, Bitcoin has had high short-run volatility but also strong longer-term appreciation trend. That means it's been a good store of value, but not one you want, ideally, to rely on in situations where you might want money on short notice with little control of timing. (Whether it's reasonable to project that past behavior into the future is another discussion, of course.)
tryingagainbro 9y ago
Zimbabwe looks poor but I'm 100% certain that thousands of people have billions and trillions of dollars stored at home https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zimbabwe_Hyperinflation_2008_notes.jpg/1280px-Zimbabwe_Hyperinflation_2008_notes.jpg https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zi...
- Grangar 9y ago
  That was Nigeria...
DonHopkins 9y ago
We can only hope the military seizes power in the US.
- deleted 9y ago
  [deleted]
nikcub 9y ago
A million a month in Bitcoin trade might not sound like much, but Zimbabwe's total GDP is only $1.3 billion per month
rnhmjoj 9y ago
I don't want to start the usual bitcoin scaling debate, but aren't the fees extremely high now? Using [1] an average transaction costs about 10$, this is particularly bad in a poor country. I wonder if using a cryptocurrency is really the best option in this case. [1]: https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/
- nikcub 9y ago
  The 137,000 satoshi price quoted isn't an average - it's the price to have your transaction almost guaranteed to be accepted in the next block It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction
  - bduerst 9y ago
    For POS transactions though don't you want it to be instant? 3-12 blocks is half a hour to two hours wait. The chart shows 30 satoshis/byte to take 40 minutes to a 19 hours total wait.
    - gruez 9y ago
      i think that's strawman at this point. even if bitcoin had 1GB block sizes, bringing the wait time to 1 block (10 minutes), it's still not going to be acceptable for POS. it's either going to be on-chain with no confirmations, or through layer2 protocols.
      - xorcist 9y ago
        Orphan blocks are common, one block has never been considered secure. Early in Bitcoin, a best practice emerged to consider six blocks secure. So that takes an hour, best case. (Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.) So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.
ataturk 9y ago
As long as Robert Mugabe gets tortured and then thrown in a shallow grave, or maybe to wild dogs, I'm fine with it.
ca98am79 9y ago
Actually the quoted price is from an exchange with low liquidity and the real price is around $7k: https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-actually-13000/ https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-act...
valuearb 9y ago
This is a counter-example to the tired meme that crypto-currencies are only a benefit for criminals.
- tmalsburg2 9y ago
  How do you know that the people buying BTC in Zimbabwe are not criminals?
  - gatmne 9y ago
    I'd downvote you if I could. How would you know that the people buying groceries in your store are not criminals? It's how a currency is used not by whom. I'd say guarding your life savings against the reckless actions of your government is a legitimate use case.
robk 9y ago
I find it hard to believe ANYONE wants to take the other side of this and sell bitcoin for local currency. In cases like this or Venezuela, even at exorbitant prices I can't see why anyone would want to hold the local currency.
- tmalsburg2 9y ago
  The article says that there is no local currency. Zimbabwe adopted USD and SA rand some years back and the bitcoin exchange sells BTC for USD.
  - robk 9y ago
    Then where is the inflation? 1 usd = 1 usd
- cwkoss 9y ago
  People who bought previously (and profited) and need Zim fiat would sell to people who now want to buy to preserve Zim fiat.
Apocryphon 9y ago
Could there be a future type of financial vehicle based on news? Since political instability has market effects. From what I understand, prediction markets are simply like sports betting. But what I'm thinking is something that's pegged to currency / commodity price fluctuations. Did the Saudi purge similarly boost crypto value as well?
- sp527 9y ago
  You’re basically describing derivatives, which represent a multi-trillion dollar market...
zman0225 9y ago
very small correlation between situ in Zimbabwe and price of bitcoins. https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets Either a pump from Korea or China.
- nrp 9y ago
  Agreed that this seems fishy. Given that Zimbabwe no longer has a local currency, this seems to be USD->BTC on an exchange that happens to be in Zimbabwe. If you have the financial freedom to move your USD, it seems highly unlikely that you'd want to do so into BTC at a price much worse than at other exchanges. Can anyone familiar with Zimbabwe shed some light on what's happening?
  - zman0225 9y ago
    Not just fishy -- fake news all the way. There's just not enough capital out of Zimbabwe to dictate a global market cap surge of 10-20 Billion (in the past 3 days)
sangnoir 9y ago
For additional context: when you see the $13,000 price - don't think that is USD, even if it nominally is. A year ago Zimbabwe introduced a surrogate currency known as the "bond note"[1] that is officially pegged 1:1 with the USD. Because of Gresham's law[2] (and higher utility of USD compared to the Bond note), the USD disappeared from the market and now commands a premium. Just to confuse things further, there are cash shortages even for bond notes as the central bank is attempting to rein-in inflation - electronic money (bank balances) is the 3rd tier of currency that is commonly available, and the bond notes command a premium over electronic money that you can wire in and out of your account. The Zimbabwean exchange in this story (Gollix) strictly uses bank wires to trade (only Zimbabwean banks), so the denomination of the bitcoin price isn't real USD, but something less valuable. If you were to sell your bitcoin on this exchange, you'd pay a premium to convert you electronic balance into USD - and incidentally, you'll end up with roughly the same price as other exchanges (in USD). 1. http://www.dw.com/en/zimbabwe-introduces-bond-notes/a-36496437 http://www.dw.com/en/zimbabwe-introduces-bond-notes/a-364964... 2. https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
paxpelus 9y ago
Yeah it is probably Zimbabwe that helped bitcoin increase in value. A country that has 16 billion GDP and $600 GDP per capita [1] Even if all the people in Zimbabwe tried to buy bitcoin that day, the value of bitcoin would remain the same. [1] - https://en.wikipedia.org/wiki/Economy_of_Zimbabwe https://en.wikipedia.org/wiki/Economy_of_Zimbabwe

133 points by ca98am79 9y ago

Nbadal 9y ago

Are there any other examples of this kind of surge happening?

gaius 9y ago
It would be interesting to see what would happen to Uber prices

lend000 9y ago

Is this a legitimate news source? I have a difficult time believing this part: > The events unfolded as Zimbabwe is in deep crisis. The economy has halved in size since 2000, an estimated 95% of the workforce is jobless and as many as 3 million Zimbabweans have gone into exile. 95% unemployment?

nostrademons 9y ago
Fact check on it: https://africacheck.org/reports/is-zimbabwes-unemployment-rate-4-60-or-95-why-the-data-is-unreliable/ https://africacheck.org/reports/is-zimbabwes-unemployment-ra... Basically, it's complicated, and nobody knows what to believe. The 95% figure is taken from the CIA World Factbook, and has been repeated frequently in mainstream media and on Wikipedia. However, depending on who you ask and how you count, it could be as low as 4%. Keep in mind that not everyone in the world takes Western institutions (like a national government, rule of law, and functioning economy) for granted. More than half the world's population still lives on subsistence agriculture: they tend a small plot of land, which generates enough food to feed their family and trade with surrounding villagers. These people are still "employed" in the sense that they work to support themselves, but they don't participate in any traceable economic activity.
- egeozcan 9y ago
  I thought "economic unemployment" is defined by the people who seek a job while not having a current one. People who do not seek a job aren't counted. It's been a very long while since the economy classes though.
  - lend000 9y ago
    That's just how the US Bureau of Labor defines it, allowing elected officials to make the economy seem better than it is.
  - jldugger 9y ago
    Which is a simple thing to look at when you're in a first world country with a functioning Unemployment Insurance office you can query to count such things. When you try to map that into different cultures and economic development statuses, it gets far fuzzier.
  - nostrademons 9y ago
    ...how do you define "seek a job" in a place where the concept of full-time employment is alien? Therein lies the rub. If you dig into the stats, the 10% unemployment rate quoted in official government statistics - and measured accordingly to the methodology economists usually use, excluding people who have "given up on searching for a job - is based on a definition of "job" where they have worked (in cash or in kind) for at least one hour in the past week. By those stats, 50% of the country was not in the labor force, 45% was "employed" (for at least one hour a week), 5% was actively unemployed. But then when you dig further, 75% of those classified as "employed" didn't receive any payment for their work. They bartered. So now we're looking at 12.5% employment. And 84% of those employed worked in the informal sector, i.e. maybe they did a couple hours of labor for another villager. Considering the large overlap between the bartering & informal sectors, we're at around 5% full-time employment in the country. That shows the difficulty in applying models built for an industrial economy to regions that still primarily function on an agrarian economy. The definitions they use are nonsensical - they don't apply to how people qualitatively work. (There're similar difficulties applying models made for industrial economies to post-industrial economies - how do you classify someone who drives for Uber & Lyft at the same time while AirBnBing out their house, doing Instacart runs, running an Amazon import-export business over the Internet, trading in Bitcoin, and selling stuff on Etsy? Is that 0, 1, or 7 jobs? Are they a financier or taxicab driver?)
cwt137 9y ago
The Bitcoin story has been confirmed by the BBC http://www.bbc.com/news/live/world-africa-41994362#post_5a0c6d4ae4b075b72b3c317a http://www.bbc.com/news/live/world-africa-41994362#post_5a0c...
thephyber 9y ago
I can't independently confirm, but Zimbabwe has long been in a downward spiral of hyperinflation[1] and the Wiki article describes the origins and some of the effects on the economy. [1] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
walshemj 9y ago
One of my coworkers in London is from Zimbabwe and she was telling us some of the problems her family had trying to run a farm.

dpflan 9y ago

I'm intrigued by the idea that cryptocurrencies can exist and may help alleviate economics crises, but in a dark plot twist can't governments essentially own the majority of computing power, start their own cryptocurrency, and outlaw all others? What does the world look like when a decentralized concept like this is appropriated and brute forced into a more-or-less centralized concept? (Or perhaps I'm way off track...)

wereHamster 9y ago
Sure they can try to "outlaw" cryptocurrencies. Or the internet as a whole. Good luck with enforcing it though…
- akhatri_aus 9y ago
  If you can control the traffic in and out a country, you can control both the internet and block off extra-sovereign chains.
  - gruez 9y ago
    ...because censorship (in general) work so well in the past? the bitcoin blockchain generates 6 one MB blocks per hour, that's 1.6 KB/s. i can think of multiple ways to smuggle data in at that bandwidth. blockstream apparently also has satelites broadcasting the blockchain. good luck shutting that down. transactions are even easier. they're less than 0.5KB, something you can easily fit in a few SMS, or in a envelope.
    - akhatri_aus 9y ago
      Everyone would need to smuggle data out, 50%+ of the chain within the country is all that's needed to win. You're not going to get everyone to use satellites to get data in and out. If you've ever been in an African country you'd know SMSs aren't on the cheap side either. You'd also know they have tools that can track and catch your VSAT dishes and fine you heavily.
- 9y ago

pwaai 9y ago

I feel like there are whales that simply manipulate the price based on news. There's little evidence to suggest bitcoin has any usage in zimbabwe in practical day to day usage. Therelies the problem with bitcoin, why would someone in zimbabwe pay 1 week of their salary to move 3 weeks of pay and still not be sure if the money will still be there tomorrow?

kown223 9y ago
if you didn't dealt with this you can't understand, but simply put, 1 week of pay could be toilet paper next week(s), as it happened in Venezuela. In my country some years ago, in a time of crisis for example the government locked all foreign currency in banks, and auto exchanged it for the national currency, at a rate set by them, it was robbery basically, prices would jump up like 25% day to day, so the national current was worthless, oh, they did the same with all the private owned gold in banks or so they could grab, sold for national currency, same scenario I think it happened in Basil too, government locking money in banks.
- solaarphunk 9y ago
  .... but bitcoin frequently jumps 25% a day on NON-domestic news.... how is it a better store of value?
  - lloeki 9y ago
    > .... but bitcoin frequently jumps 25% a day on NON-domestic news.... how is it a better store of value? Z$ record inflation was 79,600,000,000% a month[0] before it disappeared. Bitcoin's short term volatility looks quite manageable in comparison. [0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#Inflation_rate https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#Inf...
  - dragonwriter 9y ago
    Historically, Bitcoin has had high short-run volatility but also strong longer-term appreciation trend. That means it's been a good store of value, but not one you want, ideally, to rely on in situations where you might want money on short notice with little control of timing. (Whether it's reasonable to project that past behavior into the future is another discussion, of course.)

tryingagainbro 9y ago

Zimbabwe looks poor but I'm 100% certain that thousands of people have billions and trillions of dollars stored at home https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zimbabwe_Hyperinflation_2008_notes.jpg/1280px-Zimbabwe_Hyperinflation_2008_notes.jpg https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zi...

Grangar 9y ago
That was Nigeria...

DonHopkins 9y ago

We can only hope the military seizes power in the US.

deleted 9y ago
[deleted]

nikcub 9y ago

A million a month in Bitcoin trade might not sound like much, but Zimbabwe's total GDP is only $1.3 billion per month

rnhmjoj 9y ago

I don't want to start the usual bitcoin scaling debate, but aren't the fees extremely high now? Using [1] an average transaction costs about 10$, this is particularly bad in a poor country. I wonder if using a cryptocurrency is really the best option in this case. [1]: https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/

nikcub 9y ago
The 137,000 satoshi price quoted isn't an average - it's the price to have your transaction almost guaranteed to be accepted in the next block It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction
- bduerst 9y ago
  For POS transactions though don't you want it to be instant? 3-12 blocks is half a hour to two hours wait. The chart shows 30 satoshis/byte to take 40 minutes to a 19 hours total wait.
  - gruez 9y ago
    i think that's strawman at this point. even if bitcoin had 1GB block sizes, bringing the wait time to 1 block (10 minutes), it's still not going to be acceptable for POS. it's either going to be on-chain with no confirmations, or through layer2 protocols.
    - xorcist 9y ago
      Orphan blocks are common, one block has never been considered secure. Early in Bitcoin, a best practice emerged to consider six blocks secure. So that takes an hour, best case. (Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.) So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.

ataturk 9y ago

As long as Robert Mugabe gets tortured and then thrown in a shallow grave, or maybe to wild dogs, I'm fine with it.

ca98am79 9y ago

Actually the quoted price is from an exchange with low liquidity and the real price is around $7k: https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-actually-13000/ https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-act...

valuearb 9y ago

This is a counter-example to the tired meme that crypto-currencies are only a benefit for criminals.

tmalsburg2 9y ago
How do you know that the people buying BTC in Zimbabwe are not criminals?
- gatmne 9y ago
  I'd downvote you if I could. How would you know that the people buying groceries in your store are not criminals? It's how a currency is used not by whom. I'd say guarding your life savings against the reckless actions of your government is a legitimate use case.

robk 9y ago

I find it hard to believe ANYONE wants to take the other side of this and sell bitcoin for local currency. In cases like this or Venezuela, even at exorbitant prices I can't see why anyone would want to hold the local currency.

tmalsburg2 9y ago
The article says that there is no local currency. Zimbabwe adopted USD and SA rand some years back and the bitcoin exchange sells BTC for USD.
- robk 9y ago
  Then where is the inflation? 1 usd = 1 usd
cwkoss 9y ago
People who bought previously (and profited) and need Zim fiat would sell to people who now want to buy to preserve Zim fiat.

Apocryphon 9y ago

Could there be a future type of financial vehicle based on news? Since political instability has market effects. From what I understand, prediction markets are simply like sports betting. But what I'm thinking is something that's pegged to currency / commodity price fluctuations. Did the Saudi purge similarly boost crypto value as well?

sp527 9y ago
You’re basically describing derivatives, which represent a multi-trillion dollar market...

zman0225 9y ago

very small correlation between situ in Zimbabwe and price of bitcoins. https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets Either a pump from Korea or China.

nrp 9y ago
Agreed that this seems fishy. Given that Zimbabwe no longer has a local currency, this seems to be USD->BTC on an exchange that happens to be in Zimbabwe. If you have the financial freedom to move your USD, it seems highly unlikely that you'd want to do so into BTC at a price much worse than at other exchanges. Can anyone familiar with Zimbabwe shed some light on what's happening?
- zman0225 9y ago
  Not just fishy -- fake news all the way. There's just not enough capital out of Zimbabwe to dictate a global market cap surge of 10-20 Billion (in the past 3 days)

sangnoir 9y ago

For additional context: when you see the $13,000 price - don't think that is USD, even if it nominally is. A year ago Zimbabwe introduced a surrogate currency known as the "bond note"[1] that is officially pegged 1:1 with the USD. Because of Gresham's law[2] (and higher utility of USD compared to the Bond note), the USD disappeared from the market and now commands a premium. Just to confuse things further, there are cash shortages even for bond notes as the central bank is attempting to rein-in inflation - electronic money (bank balances) is the 3rd tier of currency that is commonly available, and the bond notes command a premium over electronic money that you can wire in and out of your account. The Zimbabwean exchange in this story (Gollix) strictly uses bank wires to trade (only Zimbabwean banks), so the denomination of the bitcoin price isn't real USD, but something less valuable. If you were to sell your bitcoin on this exchange, you'd pay a premium to convert you electronic balance into USD - and incidentally, you'll end up with roughly the same price as other exchanges (in USD). 1. http://www.dw.com/en/zimbabwe-introduces-bond-notes/a-36496437 http://www.dw.com/en/zimbabwe-introduces-bond-notes/a-364964... 2. https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law

paxpelus 9y ago

Yeah it is probably Zimbabwe that helped bitcoin increase in value. A country that has 16 billion GDP and $600 GDP per capita [1] Even if all the people in Zimbabwe tried to buy bitcoin that day, the value of bitcoin would remain the same. [1] - https://en.wikipedia.org/wiki/Economy_of_Zimbabwe https://en.wikipedia.org/wiki/Economy_of_Zimbabwe