5 ms·

Honest question: Why don't they just adopt bitcoin and stop this madness?

• krapht 8y ago
  Who is "they"?
  • carlmr 8y ago
    From the headline I'd say Venezuela seems a good candidate. However this ignores the reality that they can already not buy any useful amount of bitcoins with their currency and mining is unrealistic. Maybe some altcoin might work, but then a lot of vendors would need to switch as well.
    • simias 8y ago
      The government of Venezuela has no reason to replace a currency they control with one they don't. Switching to cryptocurrencies will definitely not solve the many systemic issues in Venezuela so the government would still end up with a broken economy and on top of that they wouldn't control the currency anymore. That doesn't make sense. Switching to bitcoin won't make the Brent price go up. The people could individually decide to switch to cryptocurrencies (or dollars, euros, bottle caps etc...) and get others to accept it but then you have the problem of purchasing this currency in the first place and it still doesn't solve the underlying issue of the broken Venezuelan economy. You could be a bitcoin billionaire in Caracas right now, if the shop doesn't sell toilet paper then it doesn't sell toilet paper. On the other hand if you have bolivar bills... It's not the bolivar that's broken, it's the Venezuelan economy. This ridiculous inflation is a symptom.
      • gtt 8y ago
        If they cannot control currency, may be they should give up this control?
    • Shivetya 8y ago
      It would fail for the same reason the economy has already failed. The government does not respect the private property rights of individuals or businesses. As such any attempt to generate wealth ends when someone in power decides to take it. When governments fail to protect the private property rights of their citizens, be it physical property, financial investments and savings, to the income they earn, poverty will result for the majority.
      • simias 8y ago
        The economy failed because it was completely dependent on oil. When the oil price went down the economy went bust. It's only at this point that the socialist politics failed the people by not making the drastic and painful cuts that would've kept the country afloat. Lack of protection for the private property probably didn't help but making that the main cause for the Venezuelan collapse is a very ideological stance to have IMO. Insert here the obligatory "look at china" counter-example. As far as I can tell the only way to really avoid this catastrophe would've been to diversify the Venezuelan economy in decades past (something Chavez promised to do but didn't) but nobody did it, regardless of political affiliation. "Free money coming straight from the ground" is just so much easier for a politician than making a complex and potentially impopular long term economic reform.
        • deleted 8y ago
          [deleted]
        • phyller 8y ago
          China is not a great counter example. Chavez actually did things to redistribute wealth, and when certain goods got too expensive they fixed prices, and when the businesses failed or refused to operate at a loss they were nationalized. China has a state plan and they invest in businesses. That means they provide resources to businesses instead of taking them away. Maybe that sounds like just better implemented socialism. Or maybe it's just literal capitalism on a scale never before seen. Think about it. What does the government of China provide to its citizens? If you are poor in China, will the government take care of you? No. It might provide you with a job, though. The USA is more socialist than China, the government will provide food, housing and even medical care for you and your children. You cannot be refused from an emergency room because you cannot pay. A few extremely wealthy people run China, and make decisions that are in their best interests. They invest their capital to get returns. Sounds like capitalism to me.
    • jxub 8y ago
      Yes, other altcoins like Nano with 0 fees are increasingly being adopted, hope they help with the problem.
      • jmanderley 8y ago
        "Increasingly being adopted" where?
  • rawTruthHurts 8y ago
    From the post title: "Venezuela's Inflation to Reach 1M Percent" If I'm correct, I'd say "they" refers to "Venezuelans", that is, the inhabitants of Venezuela.
• sebleon 8y ago
  Venezuelan government wants to maintain control over money creation (and print as needed). They actually came out with their own cryptocurrency, the Petro, which is backed by national oil reserves.
• zaarn 8y ago
  Can Bitcoin handle the entirety of the Venezuelian Economy right at this moment down to every single cup of coffee and roll of toilet paper? If the answer to that question is anything but yes, I doubt adopting bitcoin at all will help.
  • vntok 8y ago
    To be clear, the answer to that question is obviously a resounding 'no'.
  • gtt 8y ago
    We decompose the problem and some smaller problems one by one. All large enough transactions could be settled with bitcoin. Which means industry could start to operations again. People who don't what to follow this tried and true approach of solving smaller problems usually don't want problem to be solved at all.
    • deleted 8y ago
      [deleted]
    • Tomte 8y ago
      Industry cannot work in huge transactions alone. They also need pencils, toilet paper or the odd USB cable.
    • zaarn 8y ago
      The industry cannot work without paying the workers and the workers won't accept pay they can't use to get a coffee.
      • gtt 8y ago
        Yes, but they can buy food and housing in bulk with bitcoin easily, so this is way better than they have it now. Worrying about coffee seems unrealistic, "let them have a cake"-like thinking.
        • 8y ago
• nutjob2 8y ago
  "Venezuela’s inflation will skyrocket to 1 million percent by the end of the year as the government continues to print money to cover a growing budget hole, the International Monetary Fund predicted on Monday." If you're not talking about the government, who obviously like printing money, then the issue is that people are paid in the local currency and have no choice and shops may be forced to accept it. The black market has long ago dealt in USD. Bitcoin doesn't help anyone since people don't have enough money to eat, let alone buy computers or mobile phones. Also Bitcoin is not a hard, ie stable, currency.
  • dantudor 8y ago
    USDT is stable and much easier to move across the border into the country than USD itself
    • jmanderley 8y ago
      Even if we assume Tether to remain stable, that doesn't solve the fundamental problem of even getting someone to buy local currency in exchange for fake Dollars.
    • deleted 8y ago
      [deleted]
  • gtt 8y ago
    Is not that they don't have money to eat, they don't have enough food to eat. As I see it, at the hear of the issue is broken economics. Sound money, like bitcoin, could be a great solution to several problems of economics of Venezuela.
    • JumpCrisscross 8y ago
      > bitcoin, could be a great solution to several problems of economics of Venezuela Bitcoin's volatility is the opposite of what Venezuela needs. About the only proven solution for hyperinflating countries with poor institutions is a currency board [1]. You peg the local currency 1:1 to an external currency. If that doesn't work, you switch to a hard currency. [1] https://en.wikipedia.org/wiki/Currency_board https://en.wikipedia.org/wiki/Currency_board
• blauditore 8y ago
  I guess lack of knowledge and infrastructure. Cryptocurrency requires computers and internet connection whenever you want to make a deal, participants should know how to operate those things. Otherwise, despite its shortcomings, it would be kind of a god-sent in this kind of situation. However, I'm sure the government would try to prevent wide adoption.
  • jmanderley 8y ago
    Crypto isn't the solution to every problem.
• rcxdude 8y ago
  AFAIK some Venezuelans are. But the country's infrastructure is not exactly in the greatest of shapes to support actually using it.
• shitgoose 8y ago
  they have adopted dollars already. seems good enough.
  • mrweasel 8y ago
    In many ways it's actually better. It's just different banknotes and potentially coins. You don't need to change the way you do business, like you would with Bitcoin and people don't necessarily understand Bitcoin. People may not like it, but the US dollar is a stable currency, it's reasonably well managed and importantly the Venezuelan government can do anything weird with it. Most crypto coins aren't as unstable as the Venezuelan currency, but still much less stable than the US dollar or Euros, so it's not actually that attractive as an alternative.
• brainwad 8y ago
  The government pays state employees in bolivar, not bitcoin. Probably because the government doesn't have any bitcoin to pay workers with.
• JumpCrisscross 8y ago
  > Why don't they just adopt bitcoin It's easier to barter or use hard currency. When you're at 1 million percent inflation, you don't want to have to rely on having electricity and network access to buy food. Moreover, pitching people on a new currency in the midst of a currency collapse is an uphill battle.
• pjc50 8y ago
  Realistically, they've already adopted the dollar. Are the regular international credit card systems still working in Venezuela?
• paulddraper 8y ago
  Ah Bitcoin, the stable currency. /s A far more realistic approach is to adopt another country's stable currency (e.g. US dollar).
  • oleganza 8y ago
    It's mostly unstable up. Virtually anyone who holds Bitcoin over 1 year sees their savings not lose value, often with a good upshot, unlike _every_ currency in the world.
    • paulddraper 8y ago
      (1) BTC does not always go up. It suffered 100% inflation during 2014. (2) Even if its value "unstable upwards", rapid deflation of currency is just as harmful as rapid inflation.
      • oleganza 8y ago
        (1) BTC _always_ goes up. It did not annihilate after 4 giant bubbles with dramatic corrections. Only people with strong irrational denial who finally buy during the maximum frenzy have to wait a couple of years to return to black. Everyone else has to wait much shorter and then hold with a peace of mind. (2) It is not harmful to people going long with their own money, but it is a huge risk to margin traders (both those going short and long, but on a loaned capital). But this is a positive thing because that's how you get the sound money bootstrapped: by incentivizing long-term holding and disincentivizing wild speculation.
        • paulddraper 8y ago
          > It is not harmful to people going long with their own money, but it is a huge risk to margin traders Yes, appreciation on assets is great for owners. But when talking about currencies (i.e. standard medium of exchange), it is the overwhelming consensus that deflation -- especially rapid deflation -- is harmful to an economy. The Great Depression being the most dramatic example of a deflationary spiral. https://en.wikipedia.org/wiki/Deflation#Effects https://en.wikipedia.org/wiki/Deflation#Effects