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Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatil

Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. Thankfully I have an option to use USD to hoard money, but that option is not something that's given, in many countries you just can't exchange for fair price. I agree that for someone living in US or EU there's no much point using BTC.

deleted 6y ago
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tenaciousDaniel 6y ago
It's sad that this aspect of the conversation so often gets replaced by everything else. This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. We're still not there, but that should be the north star for crypto (again, in my opinion).
- sorbits 6y ago
  Normally the government leverages its power to keep its currency stable. If a country fails at that, the residents tend to switch to another country’s currency, for example USD is widely accepted in countries with unstable currencies, and this makes sense, since a lot of commodity prices are set in USD. What we have seen with crypto currencies are extreme volatility, not useful to base a country’s economy on, and because it is decentralized, no-one can really intervene to control this volatility, by e.g. changing the interest rate, and nothing is priced in crypto currencies, to sort of keep it tied to something. The only metric for what a coin should cost seems to be the electricity/leasing of computers required to mine one. But even this metric is not good, as it is proportional to the size of the network, which is not a constant, and is likely to grow, as the price goes up.
  - lazide 6y ago
    Devils advocate - it is possible the large swings are also because it does not have the counterbalancing effect of a large economy on it, and as it gets used more often that will change. Being able to buy something I want today, because the price went up from yesterday, or saving today when I would have spent, because the price has dropped today causes a regulating effect. Right now the usage of it is low, small changes in this equation have an outsized effect.
  - deleted 6y ago
    [deleted]
  - leppr 6y ago
    I agree assets with fixed inflation, be them cryptocurrencies or precious metals, make poor currencies, but some cryptocurrency projects are actually working on algorithmically price-stable currencies (ie. a cryptocurrency with a dynamic supply, not pegged to another fiat currency). When/if the supply problem is solved, and a more environnementally friendly consensus mechanism than PoW developed, there won't be many arguments against adopting cryptocurrencies as the default payment method. [1]: https://debaseonomics.io/ https://debaseonomics.io/, https://reflexer.finance/ https://reflexer.finance/
    - MrMan 6y ago
      But that is still the future.
  - vbezhenar 6y ago
    For some countries official rate is terrible and buying USD unofficially is dangerous (it's prohibited and you can end up with fake dollars). BTC might be somewhat safer, as can keep anonymity and there's no fake BTC. About volatility: you're right but the thing is: even if BTC is volatile, over longer period its value rises up. Nobody lost any USD yet if he kept his BTC long enough.
- ccheney 6y ago
  You're right, we're still not there yet. I love the idea of cryptocurrency but it's being treated more like a speculative investment vehicle than a currency for goods & services. Sure, you can buy some stuff with it but its volatility is generated through all of the speculators. It needs to be stabilized if we're ever going to replace fiat currency.
  - l_pan_ 6y ago
    It has already been https://www.investopedia.com/terms/s/stablecoin.asp https://www.investopedia.com/terms/s/stablecoin.asp Andreessen Horowitz invested $15 million in https://en.wikipedia.org/wiki/Dai_(cryptocurrency) https://en.wikipedia.org/wiki/Dai_(cryptocurrency)
    - toomuchtodo 6y ago
      What happens to stablecoins when central banks hand out digital wallets [1] to everyone alongside instant payments [2]? [1] https://www.atlanticcouncil.org/blogs/econographics/the-rise-of-central-bank-digital-currencies/ https://www.atlanticcouncil.org/blogs/econographics/the-rise... [2] https://en.wikipedia.org/wiki/Instant_payment#Examples_of_instant_payment_services https://en.wikipedia.org/wiki/Instant_payment#Examples_of_in...
      - GoblinSlayer 6y ago
        Fiat systems impose the risk of opacity, regulatory heuristics and reversible transactions.
        deleted 6y ago
        [deleted]
- halukakin 6y ago
  Say everyone in an unstable economy were paid in usd. If that country has foreign deficit, if that country has high government debt. What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc... Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa.
  - l_pan_ 6y ago
    Well said. I believe this is why the US and many others abandoned the gold standard.
  - ardy42 6y ago
    > Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. That's a good point. Too many people propose individualist solutions to social problems, and all their "solution" would do is make the social problem worse. I think that stems often stems from an overzealous faith in free markets, which leads to a distorted idea that individual self interest factored over all of society always results in social benefits, so you only need to consider things from the perspective of an individual (which is also far more familiar to most people). Sometimes individual self interest does lead to social benefits, but often it doesn't.
    - imtringued 6y ago
      Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance. It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.
- forty 6y ago
  Why would someone give btc against a more risky local money? What I wonder is, why is it more convenient for someone who has some unstable money available to trade it for btc rather than euro directly for example? - i assume the end goal is to convert it back to a real money you can use to purchase thing?
  - GoblinSlayer 6y ago
    Why would someone give euro against a more risky local money?
    - forty 6y ago
      hence my question, what does btc change?
      - hnick 6y ago
        I can think of a few things. It's less regulated so it's more likely people will make poor trades - maybe it's not in their interest as you are implying, but they do it anyway. Countries can make owning foreign currency illegal. BTC is easier to hide than Euros (cash or electronic). You can trade BTC back to cash without a paper trail by writing down a private key. In terms of why someone would sell BTC for a failing currency? Maybe they are also a local and have expenses to pay. Otherwise, it's likely the seller is selling for USD or something and there's an intermediate conversion so someone else who needs it ends up with the local currency. It's pretty common to get out of the currency as much as possible (assets, other currencies, BTC) then only dip back in for as little as possible to pay local expenses.
  - sjy 6y ago
    Governments with unstable currencies sometimes impose restrictions on the ability to buy and sell them, and bitcoin makes it easier to evade these.
  - heavyset_go 6y ago
    They wouldn't. A lot of cryptocurrency justifications hinge on made up scenarios. They also ignore the fact that it costs money to even send or spend most cryptocurrency, or the fact that it must be liquidated in 99.9% of spending scenarios, and ignore the challenges in buying or selling cryptocurrency in the first place. Most exchanges require several forms of ID and verification to buy or sell cryptocurrency. I had to use a smartphone to take a picture of myself with my photo ID before I could even use most exchanges. Someone who doesn't have photo ID, computer or a working smartphone are out of luck in that scenario. Bitcoin might make sense for remittance, with the intention that it is then liquidated after being received.
- grey-area 6y ago
  But none of that requires cryptocurrencies in their current form. You’re talking about a supranational currency, and I have sincere doubts that grifters of all sorts would not try to take over and manipulate such a currency, as they have for bitcoin. The governance is more important than the tech IMO.
  - MrMan 6y ago
    The globe has a few supranational currencies already we have some experience in this
- Thorentis 6y ago
  Why is encouraging people in such countries to use <some cryptocurrency> better than making the US Dollar more accessible to these people? If stability is the goal, I find it hard to accept that DogeCoin is the answer to the developing/third world's economic problems.
  - tenaciousDaniel 6y ago
    I don't think DogeCoin is the answer to anything at all, tbh.
    - netflixandkill 6y ago
      It was the answer to "how many people can I get in on this joke?" while playing around with litecoin.
    - irwwwan 6y ago
      Let’s see what can Elon do with his bitcoin.
  - herbst 6y ago
    How is usd tho? Sure its more stable than bitcoin, but in the last months and years it relatively lost value to eur/chf when bitcoin only increased. Both solutions have issues however only one made holding money lucrative
- jariel 6y ago
  " This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. " This was never the promise of blockchains or decentralized currencies because those things cannot fulfill the promise. There's a much more pragmatic answer and that's to use Euros, USDs, Pounds or RMBs for a decade or so until the government has legitimacy. 'Cash' is useful in these economies. Also, it's possible to provide digitized banking for the purposes of transferring money without the notion of introducing new, funny currencies.
- dragonwriter 6y ago
  > This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. Well, except that the conversion into/out of fiat and the access to the network to transact the crypto are all things the government will usually be quite able to interfere with.
cma 6y ago
How did it lose more than 100% of its value?
- sz4kerto 6y ago
  I'm living in an EU-member country. Our currency has lost half of its value compared to the USD since 2008. How? 'Slowly and steadily.'
  - scandox 6y ago
    I think they mean mathematically how could it lose more than 100%.
    - lazide 6y ago
      My guess is they meant their equivalent of the $4 cappuccino is now $10 (or more) in their local currency, which while not mathematically correct is probably the most intuitive way to understand it (as compared to losing 60% which would more than double prices). Not the poster though.
      - vbezhenar 6y ago
        You're right. 1 USD = 155 KZT in 2014, 1 USD = 425 KZT right now.
        buran77 6y ago
        In all honesty though if you started using BTC as your main currency*, replacing your national currency, one day you'd have your money in BTC, the next day their value would be wiped out. We're not talking about a slow and steady decline, halving of the value in a decade. We're talking "no money to buy food for the next few months". Many people in countries with unstable currencies are particularly vulnerable to this kind of fluctuations because in general they have nothing to absorb the shock, no assets, no savings, etc. Unlike traders these people can't just wait for the rebound, by that time they're bankrupt. BTC is useful for exactly the scenarios it's almost exclusively used in now: speculative transactions (buy low, sell high), or transactions for less than legal stuff and the overwhelming majority of proponents are in these 2 camps. There's a much smaller group of proponents made up of people who don't understand currencies in general (besides the basics, like spending them), or cryptocurrencies in particular. I'm sure some form of electronic tender would fill this role you're describing but it's not BTC and probably none of the major cryptocurrencies on the market now. * (putting aside the network capacity, number of transactions/sec, the cost of producing a BTC and of a transaction, etc. which make it completely unsuitable for the purpose of using the currency instead of just storing and trading it, which is probably the only significant purpose of BTC today)
halukakin 6y ago
Even if BTC were available to all countries, it wouldn't have stopped local currency value losses. And ironically hoarding stronger currencies makes local currencies lose value even faster.
- dash2 6y ago
  Sure, but it protects the individual saver, and governments are capable of debauching their currency with or without the existence of BTC.
xirbeosbwo1234 6y ago
Bitcoin, at least, absolutely does not solve this problem. Let's leave aside its volatility for now and assume it magically stays at exactly the same price. You are then left using a currency where each transaction costs several dollars and takes a half an hour, and that's the present state of affairs when no one is using it. So you would keep your cryptocurrency in a bank and transfer it through the normal channels, which opens it up to the same government controls you're concerned about. That's if you're allowed to hold cryptocurrency at all. Hyperinflation is a problem of massive corruption and incompetence in government. It doesn't happen by accident in an otherwise stable society. If you're concerned about hyperinflation, you should assume the bank (or "exchange") will be subverted and transactions will be censored. Bitcoin was built to solve those problems, but does not scale and so cannot. This is, by the way, the only situation where I'm at all sympathetic to cryptocurrencies. If someone can come up with a cryptocurrency that scales and that isn't controlled by cartels, I'll be glad that it can be used in unstable parts of the world.
- shawnz 6y ago
  > So you would keep your cryptocurrency in a bank and transfer it through the normal channels You do your daily spending through the normal channels, sure, but why would you need to keep your cryptocurrency savings in a bank in such a situation?
  - xirbeosbwo1234 6y ago
    Bitcoin is fantastically slow. It can handle about 120 million transactions per year. That is absolutely 100% unusable for anything at scale. If 30 million people used Bitcoin, they could each do about one transaction every three months and the fees would be sky-high. That is not good enough, not even for savings. Other cryptocurrencies are faster by smallish constant factors. None of them, at this time, are scalable. None of them are fast enough to be usable by millions of people.
- SailingSperm 6y ago
  30 mins for FINAL international settlement of arbitrary $ amounts between $0.001 - $100B IS fast - and the uptime for the BTC network is 100% since inception ~2011. If you're really wanting to compare apples to apples - For traditional banks doing cross border transactions, it takes up to five days at most global banks, not counting weekends or bank holidays to actually settle with a lot more intermediaries involved.
vishnugupta 6y ago
> Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. The way I understand volatility, it means wild swings in both directions over short periods. Your country’s currency however has been monotonically weakening. And the citizens have been able to react to that steady decline by storing their wealth in different forms, as you said yourself that you’ve been storing it in USD. For sure even USD denominated assets have periods of volatility as we saw March last year when the entire world sought to refuge in the safety of US treasury bills or currency. Oil too witnessed some crazy gyrations like negative future pride. But they are in reaction to the extraordinary phase the world was going through then, when the world and hence the business practically shut down. Something which hasn’t happened in at least a generation. Butcoin prices on the other hand regularly swing 10-15 in a day. Definitely not something you’d call stable compared to any of the world’s current currencies. Perhaps these swings will dampen over time?
undefined1 6y ago
> I agree that for someone living in US or EU there's no much point using BTC at the moment, but we are seeing institutional failure all around. as trust in the institutions fall, the importance and value of crypto/decentralization increases.
sfblah 6y ago
I don't actually understand. Things can't lose any more than 100% of their value. What do you mean by 250%? Do you mean inflation was at a 250% rate?
elyobo 6y ago
I'm not sure what you mean by "lost 250% of its value" - that seems impossible, so I guess something has been lost in translation! Can you clarify?
- Ashanmaril 6y ago
  Everyone who had money before now owes 250% of it. But people who were in debt are doing great!
- bbarnett 6y ago
  There are loads of cases of hyper-inflation, which means that the currency's real-world value decreases. Here's the worst I've ever heard of: https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe Yes, you read that right: "However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008." I recall interviews with government employees, who were quitting in droves. The Government wasn't keeping up with inflation, so at the end of 2 weeks, your check was basically worthless. The place was falling apart. People would run to the bank, cash pay checks, and buy STUFF. Anything. Anything physical. TVs, couches, bikes, blenders, ANYTHING. In one interview, a woman's living room was filled with random pieces of furniture, stacked to the ceiling, and a TV. To trade. For barter. Because even an hour later, that paycheck was worth so much less. Madness.
  - nexthash 6y ago
    Yeah, it's crazy sad. Apparently the same thing is starting to happen now in Zimbabwe again with a 737.9% annual increase. At this point they are screwing over their people and any reasonable citizen shouldn't rely on or trust the currency at all. https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-continues-its-march-back-to-hyperinflation https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-...
  - recursive 6y ago
    For mere hyper-inflation, it seems there's a cap of 100% value loss. It's something else together to lose more value than there was in the first place.
rustybelt 6y ago
Am I dumb? How does something lose over 100% of it's value?
- fredsir 6y ago
  Isn't it 250% loss in buying value? So because of inflation everything now cost 2,5x what it did. Usually your paycheck can afford 100 apples but after inflation your paycheck can only afford 40.
  - dalmo3 6y ago
    If you had money for 100 apples, and now you only have money for 40 apples, you're down 60%, not 250%.
    - fredsir 6y ago
      Sure, but that was not the claim by the parent. It's a bit unintuitive the way the parent wrote the claim, but the parent said the currency lost its value by 250% which is not really possible. What I think the parent means is that it became 2,5 times less worth. That is, what before could buy 100 apples can now buy 40 apples since 100/1=100 and 100/2,5=40, and as you say it, that means the value is down by 60% - same thing. At least that is how I understand what the parent claimed.
nexthash 6y ago
It doesn't make a difference whether a currency is paper or digital - if digital currency takes over in your country, the exact same thing will happen. The government will regulate its use, punish those using crypto 'unlawfully', and print more when it needs to, making it lose value. See, it doesn't matter what the technology behind a currency is, it ain't going anywhere on your government's turf without permission. They have the ability, if they choose, to go door to door looking for 'unlawful money launderers' or any other designation they slap on the use of crypto and there's nothing you can do about it.
- hertzrat 6y ago
  In practice, how would “print more” work for blockchain?
arcticbull 6y ago
> Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. Thankfully I have an option to use USD to hoard money, but that option is not something that's given, in many countries you just can't exchange for fair price. > I agree that for someone living in US or EU there's no much point using BTC. This is quite a tenuous argument however. First, currency is only intended to be stored for as long as necessary to purchase the necessities of life or value preserving investments. Losing 250% of value over 7 years is an inflation rate of 14% annually, a hair over 1% per month. At the end of each month you're left with 99% of the value you started the month with. That's sub-optimal but certainly not a dealbreaker if everything else were stable and functional. The early 1980s in the US had similar inflation rates [1]. Assuming your country isn't sanctioned you could have dropped that money into all sorts of safe havens. Further, the issue is of course transaction fees. They're about $20 each right now, and the only place those fees are palatable are rich countries with stable financial systems. In countries without stable financial systems they're prohibitively expensive. You can avoid that with Layer 2, but of course, Layer 2 offers none of the benefits you seek with Bitcoin in the first place. Exchanges are centralized, trustful and censorable. It genuinely, truly meets the needs of nobody who isn't speculating. It's basically the "ruined fresco" of payment methods. From a distance it looks right but as you zoom in you realize mistakes were most definitely made. [2] [1] https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i... [2] https://www.npr.org/sections/thetwo-way/2012/09/20/161466361/woman-who-ruined-fresco-of-jesus-now-wants-to-be-paid https://www.npr.org/sections/thetwo-way/2012/09/20/161466361...
jariel 6y ago
" Currency of my country lost 250% of its value over last 7 years. " The problem is not your Central Bank, it's almost assuredly a total dysfunction of government and the civil services - which will have effects more far reaching that Central Bank problems. The solution is not BTC. It's to use something common and trusted, temporarily, like USD or Euros until there is enough credibility in the system for external parties to accept your own currency. Or - to overthrow your government, install leaders with integrity and hope that international bodies accept the change, because if they do, you'll be in a much easier position issuing your own currency than having to issue debt in a foreign denomination. Put another way: it's not a currency problem, it's a governance/management problem that exhibits itself in currency problems and other things. BTC will not really help you have a better managed government.
- hertzrat 6y ago
  The average person in your neighbour hood is sitting reading the paper, contemplating: “I’m worried about inflation. should I buy some Bitcoin, or should I overthrow the government? I think I’ll try the overthrow option today”
  - jariel 6y ago
    In those situations, the average person is definitely thinking 'overthrow the government' because everything is crumbling around it. This is what causes they hyper sensitivity, authoritarianism, and 'blame America for Everything'. But yes, BTC is completely unpragmatic. USD, at least in Latin America, has the benefit that it will creep into the system irrespective of what anyone in charge says. Nobody needs to be told that USD's are 'good' the hairdresser, cabbie, landlord, grocer will just take it. I wonder if Euros have the same effect in E. Europe and North Africa. Maybe these days.
Wowfunhappy 6y ago
Are there places where you can buy Bitcoin with lower fees than buying US dollars?
quickthrower2 6y ago
Do you think stablecoins are a good choice? Use USD but without government inteference.
srg0 6y ago
> Currency of my country lost 250% of its value over last 7 years. I doubt population of your country at large can afford bitcoin transaction fees for their daily shopping. BTW, are you saying that your currency has negative value now? I assume you mean a 2.5x inflation multiplier over 7 years, or +14% per year. That's mild compared to an order of magnitude walk of the BTC-USD rate over just one year. The only real use case for BTC I see is moving capital between jurisdictions.
dragonwriter 6y ago
> Currency of my country lost 250% of its value Unless it acquired significant negative value, no, it didn't. I'm not sure if you mean it declined to 1/2.5 times it's value (-60%) following the popular-but-annoying usage of “n times less” but converted to percentage (it's an idiom that isn't used with percentages and is mathematically wacky to start with) or if you mean to say it declined by 2.5 times it's post-decline value (-71%), using the ending rather than the starting value to calculate the percentage change.

deleted 6y ago

[deleted]

tenaciousDaniel 6y ago

It's sad that this aspect of the conversation so often gets replaced by everything else. This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. We're still not there, but that should be the north star for crypto (again, in my opinion).

sorbits 6y ago
Normally the government leverages its power to keep its currency stable. If a country fails at that, the residents tend to switch to another country’s currency, for example USD is widely accepted in countries with unstable currencies, and this makes sense, since a lot of commodity prices are set in USD. What we have seen with crypto currencies are extreme volatility, not useful to base a country’s economy on, and because it is decentralized, no-one can really intervene to control this volatility, by e.g. changing the interest rate, and nothing is priced in crypto currencies, to sort of keep it tied to something. The only metric for what a coin should cost seems to be the electricity/leasing of computers required to mine one. But even this metric is not good, as it is proportional to the size of the network, which is not a constant, and is likely to grow, as the price goes up.
- lazide 6y ago
  Devils advocate - it is possible the large swings are also because it does not have the counterbalancing effect of a large economy on it, and as it gets used more often that will change. Being able to buy something I want today, because the price went up from yesterday, or saving today when I would have spent, because the price has dropped today causes a regulating effect. Right now the usage of it is low, small changes in this equation have an outsized effect.
- deleted 6y ago
  [deleted]
- leppr 6y ago
  I agree assets with fixed inflation, be them cryptocurrencies or precious metals, make poor currencies, but some cryptocurrency projects are actually working on algorithmically price-stable currencies (ie. a cryptocurrency with a dynamic supply, not pegged to another fiat currency). When/if the supply problem is solved, and a more environnementally friendly consensus mechanism than PoW developed, there won't be many arguments against adopting cryptocurrencies as the default payment method. [1]: https://debaseonomics.io/ https://debaseonomics.io/, https://reflexer.finance/ https://reflexer.finance/
  - MrMan 6y ago
    But that is still the future.
- vbezhenar 6y ago
  For some countries official rate is terrible and buying USD unofficially is dangerous (it's prohibited and you can end up with fake dollars). BTC might be somewhat safer, as can keep anonymity and there's no fake BTC. About volatility: you're right but the thing is: even if BTC is volatile, over longer period its value rises up. Nobody lost any USD yet if he kept his BTC long enough.
ccheney 6y ago
You're right, we're still not there yet. I love the idea of cryptocurrency but it's being treated more like a speculative investment vehicle than a currency for goods & services. Sure, you can buy some stuff with it but its volatility is generated through all of the speculators. It needs to be stabilized if we're ever going to replace fiat currency.
- l_pan_ 6y ago
  It has already been https://www.investopedia.com/terms/s/stablecoin.asp https://www.investopedia.com/terms/s/stablecoin.asp Andreessen Horowitz invested $15 million in https://en.wikipedia.org/wiki/Dai_(cryptocurrency) https://en.wikipedia.org/wiki/Dai_(cryptocurrency)
  - toomuchtodo 6y ago
    What happens to stablecoins when central banks hand out digital wallets [1] to everyone alongside instant payments [2]? [1] https://www.atlanticcouncil.org/blogs/econographics/the-rise-of-central-bank-digital-currencies/ https://www.atlanticcouncil.org/blogs/econographics/the-rise... [2] https://en.wikipedia.org/wiki/Instant_payment#Examples_of_instant_payment_services https://en.wikipedia.org/wiki/Instant_payment#Examples_of_in...
    - GoblinSlayer 6y ago
      Fiat systems impose the risk of opacity, regulatory heuristics and reversible transactions.
      - deleted 6y ago
        [deleted]
halukakin 6y ago
Say everyone in an unstable economy were paid in usd. If that country has foreign deficit, if that country has high government debt. What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc... Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa.
- l_pan_ 6y ago
  Well said. I believe this is why the US and many others abandoned the gold standard.
- ardy42 6y ago
  > Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. That's a good point. Too many people propose individualist solutions to social problems, and all their "solution" would do is make the social problem worse. I think that stems often stems from an overzealous faith in free markets, which leads to a distorted idea that individual self interest factored over all of society always results in social benefits, so you only need to consider things from the perspective of an individual (which is also far more familiar to most people). Sometimes individual self interest does lead to social benefits, but often it doesn't.
  - imtringued 6y ago
    Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance. It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.
forty 6y ago
Why would someone give btc against a more risky local money? What I wonder is, why is it more convenient for someone who has some unstable money available to trade it for btc rather than euro directly for example? - i assume the end goal is to convert it back to a real money you can use to purchase thing?
- GoblinSlayer 6y ago
  Why would someone give euro against a more risky local money?
  - forty 6y ago
    hence my question, what does btc change?
    - hnick 6y ago
      I can think of a few things. It's less regulated so it's more likely people will make poor trades - maybe it's not in their interest as you are implying, but they do it anyway. Countries can make owning foreign currency illegal. BTC is easier to hide than Euros (cash or electronic). You can trade BTC back to cash without a paper trail by writing down a private key. In terms of why someone would sell BTC for a failing currency? Maybe they are also a local and have expenses to pay. Otherwise, it's likely the seller is selling for USD or something and there's an intermediate conversion so someone else who needs it ends up with the local currency. It's pretty common to get out of the currency as much as possible (assets, other currencies, BTC) then only dip back in for as little as possible to pay local expenses.
- sjy 6y ago
  Governments with unstable currencies sometimes impose restrictions on the ability to buy and sell them, and bitcoin makes it easier to evade these.
- heavyset_go 6y ago
  They wouldn't. A lot of cryptocurrency justifications hinge on made up scenarios. They also ignore the fact that it costs money to even send or spend most cryptocurrency, or the fact that it must be liquidated in 99.9% of spending scenarios, and ignore the challenges in buying or selling cryptocurrency in the first place. Most exchanges require several forms of ID and verification to buy or sell cryptocurrency. I had to use a smartphone to take a picture of myself with my photo ID before I could even use most exchanges. Someone who doesn't have photo ID, computer or a working smartphone are out of luck in that scenario. Bitcoin might make sense for remittance, with the intention that it is then liquidated after being received.
grey-area 6y ago
But none of that requires cryptocurrencies in their current form. You’re talking about a supranational currency, and I have sincere doubts that grifters of all sorts would not try to take over and manipulate such a currency, as they have for bitcoin. The governance is more important than the tech IMO.
- MrMan 6y ago
  The globe has a few supranational currencies already we have some experience in this
Thorentis 6y ago
Why is encouraging people in such countries to use <some cryptocurrency> better than making the US Dollar more accessible to these people? If stability is the goal, I find it hard to accept that DogeCoin is the answer to the developing/third world's economic problems.
- tenaciousDaniel 6y ago
  I don't think DogeCoin is the answer to anything at all, tbh.
  - netflixandkill 6y ago
    It was the answer to "how many people can I get in on this joke?" while playing around with litecoin.
  - irwwwan 6y ago
    Let’s see what can Elon do with his bitcoin.
- herbst 6y ago
  How is usd tho? Sure its more stable than bitcoin, but in the last months and years it relatively lost value to eur/chf when bitcoin only increased. Both solutions have issues however only one made holding money lucrative
jariel 6y ago
" This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. " This was never the promise of blockchains or decentralized currencies because those things cannot fulfill the promise. There's a much more pragmatic answer and that's to use Euros, USDs, Pounds or RMBs for a decade or so until the government has legitimacy. 'Cash' is useful in these economies. Also, it's possible to provide digitized banking for the purposes of transferring money without the notion of introducing new, funny currencies.
dragonwriter 6y ago
> This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. Well, except that the conversion into/out of fiat and the access to the network to transact the crypto are all things the government will usually be quite able to interfere with.

cma 6y ago

How did it lose more than 100% of its value?

sz4kerto 6y ago
I'm living in an EU-member country. Our currency has lost half of its value compared to the USD since 2008. How? 'Slowly and steadily.'
- scandox 6y ago
  I think they mean mathematically how could it lose more than 100%.
  - lazide 6y ago
    My guess is they meant their equivalent of the $4 cappuccino is now $10 (or more) in their local currency, which while not mathematically correct is probably the most intuitive way to understand it (as compared to losing 60% which would more than double prices). Not the poster though.
    - vbezhenar 6y ago
      You're right. 1 USD = 155 KZT in 2014, 1 USD = 425 KZT right now.
      - buran77 6y ago
        In all honesty though if you started using BTC as your main currency*, replacing your national currency, one day you'd have your money in BTC, the next day their value would be wiped out. We're not talking about a slow and steady decline, halving of the value in a decade. We're talking "no money to buy food for the next few months". Many people in countries with unstable currencies are particularly vulnerable to this kind of fluctuations because in general they have nothing to absorb the shock, no assets, no savings, etc. Unlike traders these people can't just wait for the rebound, by that time they're bankrupt. BTC is useful for exactly the scenarios it's almost exclusively used in now: speculative transactions (buy low, sell high), or transactions for less than legal stuff and the overwhelming majority of proponents are in these 2 camps. There's a much smaller group of proponents made up of people who don't understand currencies in general (besides the basics, like spending them), or cryptocurrencies in particular. I'm sure some form of electronic tender would fill this role you're describing but it's not BTC and probably none of the major cryptocurrencies on the market now. * (putting aside the network capacity, number of transactions/sec, the cost of producing a BTC and of a transaction, etc. which make it completely unsuitable for the purpose of using the currency instead of just storing and trading it, which is probably the only significant purpose of BTC today)

halukakin 6y ago

Even if BTC were available to all countries, it wouldn't have stopped local currency value losses. And ironically hoarding stronger currencies makes local currencies lose value even faster.

dash2 6y ago
Sure, but it protects the individual saver, and governments are capable of debauching their currency with or without the existence of BTC.

xirbeosbwo1234 6y ago

Bitcoin, at least, absolutely does not solve this problem. Let's leave aside its volatility for now and assume it magically stays at exactly the same price. You are then left using a currency where each transaction costs several dollars and takes a half an hour, and that's the present state of affairs when no one is using it. So you would keep your cryptocurrency in a bank and transfer it through the normal channels, which opens it up to the same government controls you're concerned about. That's if you're allowed to hold cryptocurrency at all. Hyperinflation is a problem of massive corruption and incompetence in government. It doesn't happen by accident in an otherwise stable society. If you're concerned about hyperinflation, you should assume the bank (or "exchange") will be subverted and transactions will be censored. Bitcoin was built to solve those problems, but does not scale and so cannot. This is, by the way, the only situation where I'm at all sympathetic to cryptocurrencies. If someone can come up with a cryptocurrency that scales and that isn't controlled by cartels, I'll be glad that it can be used in unstable parts of the world.

shawnz 6y ago
> So you would keep your cryptocurrency in a bank and transfer it through the normal channels You do your daily spending through the normal channels, sure, but why would you need to keep your cryptocurrency savings in a bank in such a situation?
- xirbeosbwo1234 6y ago
  Bitcoin is fantastically slow. It can handle about 120 million transactions per year. That is absolutely 100% unusable for anything at scale. If 30 million people used Bitcoin, they could each do about one transaction every three months and the fees would be sky-high. That is not good enough, not even for savings. Other cryptocurrencies are faster by smallish constant factors. None of them, at this time, are scalable. None of them are fast enough to be usable by millions of people.
SailingSperm 6y ago
30 mins for FINAL international settlement of arbitrary $ amounts between $0.001 - $100B IS fast - and the uptime for the BTC network is 100% since inception ~2011. If you're really wanting to compare apples to apples - For traditional banks doing cross border transactions, it takes up to five days at most global banks, not counting weekends or bank holidays to actually settle with a lot more intermediaries involved.

vishnugupta 6y ago

> Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. The way I understand volatility, it means wild swings in both directions over short periods. Your country’s currency however has been monotonically weakening. And the citizens have been able to react to that steady decline by storing their wealth in different forms, as you said yourself that you’ve been storing it in USD. For sure even USD denominated assets have periods of volatility as we saw March last year when the entire world sought to refuge in the safety of US treasury bills or currency. Oil too witnessed some crazy gyrations like negative future pride. But they are in reaction to the extraordinary phase the world was going through then, when the world and hence the business practically shut down. Something which hasn’t happened in at least a generation. Butcoin prices on the other hand regularly swing 10-15 in a day. Definitely not something you’d call stable compared to any of the world’s current currencies. Perhaps these swings will dampen over time?

undefined1 6y ago

> I agree that for someone living in US or EU there's no much point using BTC at the moment, but we are seeing institutional failure all around. as trust in the institutions fall, the importance and value of crypto/decentralization increases.

sfblah 6y ago

I don't actually understand. Things can't lose any more than 100% of their value. What do you mean by 250%? Do you mean inflation was at a 250% rate?

elyobo 6y ago

I'm not sure what you mean by "lost 250% of its value" - that seems impossible, so I guess something has been lost in translation! Can you clarify?

Ashanmaril 6y ago
Everyone who had money before now owes 250% of it. But people who were in debt are doing great!
bbarnett 6y ago
There are loads of cases of hyper-inflation, which means that the currency's real-world value decreases. Here's the worst I've ever heard of: https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe Yes, you read that right: "However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008." I recall interviews with government employees, who were quitting in droves. The Government wasn't keeping up with inflation, so at the end of 2 weeks, your check was basically worthless. The place was falling apart. People would run to the bank, cash pay checks, and buy STUFF. Anything. Anything physical. TVs, couches, bikes, blenders, ANYTHING. In one interview, a woman's living room was filled with random pieces of furniture, stacked to the ceiling, and a TV. To trade. For barter. Because even an hour later, that paycheck was worth so much less. Madness.
- nexthash 6y ago
  Yeah, it's crazy sad. Apparently the same thing is starting to happen now in Zimbabwe again with a 737.9% annual increase. At this point they are screwing over their people and any reasonable citizen shouldn't rely on or trust the currency at all. https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-continues-its-march-back-to-hyperinflation https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-...
- recursive 6y ago
  For mere hyper-inflation, it seems there's a cap of 100% value loss. It's something else together to lose more value than there was in the first place.

rustybelt 6y ago

Am I dumb? How does something lose over 100% of it's value?

fredsir 6y ago
Isn't it 250% loss in buying value? So because of inflation everything now cost 2,5x what it did. Usually your paycheck can afford 100 apples but after inflation your paycheck can only afford 40.
- dalmo3 6y ago
  If you had money for 100 apples, and now you only have money for 40 apples, you're down 60%, not 250%.
  - fredsir 6y ago
    Sure, but that was not the claim by the parent. It's a bit unintuitive the way the parent wrote the claim, but the parent said the currency lost its value by 250% which is not really possible. What I think the parent means is that it became 2,5 times less worth. That is, what before could buy 100 apples can now buy 40 apples since 100/1=100 and 100/2,5=40, and as you say it, that means the value is down by 60% - same thing. At least that is how I understand what the parent claimed.

nexthash 6y ago

It doesn't make a difference whether a currency is paper or digital - if digital currency takes over in your country, the exact same thing will happen. The government will regulate its use, punish those using crypto 'unlawfully', and print more when it needs to, making it lose value. See, it doesn't matter what the technology behind a currency is, it ain't going anywhere on your government's turf without permission. They have the ability, if they choose, to go door to door looking for 'unlawful money launderers' or any other designation they slap on the use of crypto and there's nothing you can do about it.

hertzrat 6y ago
In practice, how would “print more” work for blockchain?

arcticbull 6y ago

> Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. Thankfully I have an option to use USD to hoard money, but that option is not something that's given, in many countries you just can't exchange for fair price. > I agree that for someone living in US or EU there's no much point using BTC. This is quite a tenuous argument however. First, currency is only intended to be stored for as long as necessary to purchase the necessities of life or value preserving investments. Losing 250% of value over 7 years is an inflation rate of 14% annually, a hair over 1% per month. At the end of each month you're left with 99% of the value you started the month with. That's sub-optimal but certainly not a dealbreaker if everything else were stable and functional. The early 1980s in the US had similar inflation rates [1]. Assuming your country isn't sanctioned you could have dropped that money into all sorts of safe havens. Further, the issue is of course transaction fees. They're about $20 each right now, and the only place those fees are palatable are rich countries with stable financial systems. In countries without stable financial systems they're prohibitively expensive. You can avoid that with Layer 2, but of course, Layer 2 offers none of the benefits you seek with Bitcoin in the first place. Exchanges are centralized, trustful and censorable. It genuinely, truly meets the needs of nobody who isn't speculating. It's basically the "ruined fresco" of payment methods. From a distance it looks right but as you zoom in you realize mistakes were most definitely made. [2] [1] https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i... [2] https://www.npr.org/sections/thetwo-way/2012/09/20/161466361/woman-who-ruined-fresco-of-jesus-now-wants-to-be-paid https://www.npr.org/sections/thetwo-way/2012/09/20/161466361...

jariel 6y ago

" Currency of my country lost 250% of its value over last 7 years. " The problem is not your Central Bank, it's almost assuredly a total dysfunction of government and the civil services - which will have effects more far reaching that Central Bank problems. The solution is not BTC. It's to use something common and trusted, temporarily, like USD or Euros until there is enough credibility in the system for external parties to accept your own currency. Or - to overthrow your government, install leaders with integrity and hope that international bodies accept the change, because if they do, you'll be in a much easier position issuing your own currency than having to issue debt in a foreign denomination. Put another way: it's not a currency problem, it's a governance/management problem that exhibits itself in currency problems and other things. BTC will not really help you have a better managed government.

hertzrat 6y ago
The average person in your neighbour hood is sitting reading the paper, contemplating: “I’m worried about inflation. should I buy some Bitcoin, or should I overthrow the government? I think I’ll try the overthrow option today”
- jariel 6y ago
  In those situations, the average person is definitely thinking 'overthrow the government' because everything is crumbling around it. This is what causes they hyper sensitivity, authoritarianism, and 'blame America for Everything'. But yes, BTC is completely unpragmatic. USD, at least in Latin America, has the benefit that it will creep into the system irrespective of what anyone in charge says. Nobody needs to be told that USD's are 'good' the hairdresser, cabbie, landlord, grocer will just take it. I wonder if Euros have the same effect in E. Europe and North Africa. Maybe these days.

Wowfunhappy 6y ago

Are there places where you can buy Bitcoin with lower fees than buying US dollars?

quickthrower2 6y ago

Do you think stablecoins are a good choice? Use USD but without government inteference.

srg0 6y ago

> Currency of my country lost 250% of its value over last 7 years. I doubt population of your country at large can afford bitcoin transaction fees for their daily shopping. BTW, are you saying that your currency has negative value now? I assume you mean a 2.5x inflation multiplier over 7 years, or +14% per year. That's mild compared to an order of magnitude walk of the BTC-USD rate over just one year. The only real use case for BTC I see is moving capital between jurisdictions.

dragonwriter 6y ago

> Currency of my country lost 250% of its value Unless it acquired significant negative value, no, it didn't. I'm not sure if you mean it declined to 1/2.5 times it's value (-60%) following the popular-but-annoying usage of “n times less” but converted to percentage (it's an idiom that isn't used with percentages and is mathematically wacky to start with) or if you mean to say it declined by 2.5 times it's post-decline value (-71%), using the ending rather than the starting value to calculate the percentage change.