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Consider a Venezuela scenario. Inflating currency and limits on currency conversion and transfer to prevent money escaping the border. With crypto your money is

Consider a Venezuela scenario. Inflating currency and limits on currency conversion and transfer to prevent money escaping the border. With crypto your money is already across the border.

karthikvellanki 8y ago
I've never understood the Venezuala argument about Bitcoin. When someone is buying Bitcoin with a volatile currency (like the Bolivar), it means someone else now has that volatile currency. The volatile currency doesn't suddenly dissappear and take it's problems with it. How is this different from buying dollars or euros with the volatile currency. Am I missing something?
- rvp-x 8y ago
  countries in this situation often limit or outlaw buying foreign currency
- andirk 8y ago
  Buying bolivar means you think it's super low and is a good buy.
arcticbull 8y ago
Yeah, I've spent a long time considering the Venezuela scenario. You can't mine there because all the good mining setups get nationalized ([1], [2]) so let's leave that method of acquisition off the table. That means the only way to get some is by exchanging. You can either: (1) Exchange with someone else in the country someone who already has bitcoins (let's say they mined them). In Venezuela, there remains the exact same number of both Bolivars and Bitcoin, so it's zero-sum. Neither Venezuela nor Venezuelans are better off by this exchange because nothing's changed. (2) Exchange with someone outside the country. Problem 1: Who on Earth will take your worthless Bolivars? Problem 2: If you do manage to find someone who will take your worthless Bolivars, why wouldn't you take US dollars instead (since you can trade freely, you may as well just open a USD bank account somewhere). Or some other asset that hasn't lost 80% of its value in the last year? Gold? Equities? Gold equities? The list is truly endless. If you find someone to take your worthless Bolivar bags for real assets there are much, much better assets. The fiat-value behind Bitcoin doesn't just spark into existence, willed by the devout masses. It's not like Venezuelans can suddenly mine Bitcoin in a way nobody else can because of their bad government. They also definitely don't all have Bitcoin in a way they can just ignore the balance of their bank accounts. How do you solve the initial distribution problem in a way that makes sense? [1] https://www.newsbtc.com/2018/05/31/officials-in-venezuela-begin-confiscating-imported-bitcoin-mining-hardware/ https://www.newsbtc.com/2018/05/31/officials-in-venezuela-be... [2] https://bitcoinist.com/venezuela-now-requires-bitcoin-miners-register-government/ https://bitcoinist.com/venezuela-now-requires-bitcoin-miners...
- lowdest 8y ago
  Right. One solution is to do buy crypto many years in advance, during good economic times. Whenever disaster strikes, it's best to have bought the insurance policy when the threat seems unlikely and far away rather than imminent. Admittedly, I don't know what could be done with crypto to help the average Venezuelan at this point.
  - arcticbull 8y ago
    The solution "predict which upcoming cryptocurrency is going to be the currency of the future, then wait for the apocalypse and be wealthy" doesn't seem like the most reliable way forward - or even a solution to any given problem other than "I'd like to be wealthy, but I'm not."

Consider a Venezuela scenario. Inflating currency and limits on currency conversion and transfer to prevent money escaping the border. With crypto your money is already across the border.

karthikvellanki 8y ago

I've never understood the Venezuala argument about Bitcoin. When someone is buying Bitcoin with a volatile currency (like the Bolivar), it means someone else now has that volatile currency. The volatile currency doesn't suddenly dissappear and take it's problems with it. How is this different from buying dollars or euros with the volatile currency. Am I missing something?

rvp-x 8y ago
countries in this situation often limit or outlaw buying foreign currency
andirk 8y ago
Buying bolivar means you think it's super low and is a good buy.

arcticbull 8y ago

Yeah, I've spent a long time considering the Venezuela scenario. You can't mine there because all the good mining setups get nationalized ([1], [2]) so let's leave that method of acquisition off the table. That means the only way to get some is by exchanging. You can either: (1) Exchange with someone else in the country someone who already has bitcoins (let's say they mined them). In Venezuela, there remains the exact same number of both Bolivars and Bitcoin, so it's zero-sum. Neither Venezuela nor Venezuelans are better off by this exchange because nothing's changed. (2) Exchange with someone outside the country. Problem 1: Who on Earth will take your worthless Bolivars? Problem 2: If you do manage to find someone who will take your worthless Bolivars, why wouldn't you take US dollars instead (since you can trade freely, you may as well just open a USD bank account somewhere). Or some other asset that hasn't lost 80% of its value in the last year? Gold? Equities? Gold equities? The list is truly endless. If you find someone to take your worthless Bolivar bags for real assets there are much, much better assets. The fiat-value behind Bitcoin doesn't just spark into existence, willed by the devout masses. It's not like Venezuelans can suddenly mine Bitcoin in a way nobody else can because of their bad government. They also definitely don't all have Bitcoin in a way they can just ignore the balance of their bank accounts. How do you solve the initial distribution problem in a way that makes sense? [1] https://www.newsbtc.com/2018/05/31/officials-in-venezuela-begin-confiscating-imported-bitcoin-mining-hardware/ https://www.newsbtc.com/2018/05/31/officials-in-venezuela-be... [2] https://bitcoinist.com/venezuela-now-requires-bitcoin-miners-register-government/ https://bitcoinist.com/venezuela-now-requires-bitcoin-miners...

lowdest 8y ago
Right. One solution is to do buy crypto many years in advance, during good economic times. Whenever disaster strikes, it's best to have bought the insurance policy when the threat seems unlikely and far away rather than imminent. Admittedly, I don't know what could be done with crypto to help the average Venezuelan at this point.
- arcticbull 8y ago
  The solution "predict which upcoming cryptocurrency is going to be the currency of the future, then wait for the apocalypse and be wealthy" doesn't seem like the most reliable way forward - or even a solution to any given problem other than "I'd like to be wealthy, but I'm not."