5 ms·

people keep saying this in every thread. I don't understand how that works. Is it that people in the "weak" states are using BTC for commerce or are they exchan

by ngc248 5y ago

people keep saying this in every thread. I don't understand how that works. Is it that people in the "weak" states are using BTC for commerce or are they exchanging BTC to USD and then using it. How does it work? I doubt there are exchanges which will do the BTC -> USD conversion. So what are these people using to do this? Coinbase?

meheleventyone 5y ago
Yes and it always curiously ignores that mobile banking is the actual technology that has actually massively helped the unbanked. I suspect if Bitcoin is helping people in these countries evade currency controls it’s helping the rich not the poor and rather enabling capital flight than adding stability.
- eru 5y ago
  You are mostly right, but do keep in mind that enabling capital flight is a _good_ thing! Just like helping people to leave bad places is a good thing. The risk of capital flight puts a limit on how bad the local regime can screw up the economy and still squeeze money out of it. (And calling it capital flight is just a mean way of saying 'people want to invest elsewhere'.)
  - meheleventyone 5y ago
    Capital flight actively hurts the economy it is removed from and only benefits the rich (who are often the local regime and often literally robbing the country) at the expense of the poor people trapped there. Which is totally counter to the narrative most crypto people put forward that somehow it's helpful to the average person living in those countries. Basically the money and the wealthy can get out leaving the rest of the country floundering in an even worse situation. Which doesn't sound all that "good" to me.
    - eru 5y ago
      And that's why we should ban people living in eg the US from investing in any other country? And why we are at it, we should also ban people from drawing down their capital and consuming it. The effect is the same as capital flight, after all. No more drawing down your retirement savings! In any case, if you are powerful enough to rob a poor country, do you think you would be subject to any laws preventing capital flight?
      - meheleventyone 5y ago
        Shifting the goal posts isn't the win you think it is. We're talking about a specific context.
        eru 5y ago
        See my update. Basically, anyone powerful enough to rob a country wouldn't really be subject to captial controls anyway. Unless of course you want to blame the kulaks, and not the people with connections to government of robbing the country.
        meheleventyone 5y ago
        The method doesn't really matter, the capital flight is still bad and if this is the case Bitcoin has no advantages then Bitcoin is even more useless for this context.
        eru 5y ago
        I'd say in the best case Bitcoin allows people who are not connected to the robbing elite that runs the country to take some capital out of the country. That would be a good thing. (I don't think Bitcoin is actually all that impactful in the real world one way or another.)
        bratwurst3000 5y ago
- TheColorYellow 5y ago
  Cryptocurrency as a means of payment is used in Africa. And the usage of Bitcoin as an inflation hedge has certainly been proven by the fact that Bitcoin returned superior returns over the inflation rise recently than any other asset an average African could have held. Maybe we shouldn't ignore that mobile banking in Africa still doesn't allow easy access to US dollars? Maybe we shouldn't ignore that a transfer from the currency in Ethipoia to the currency in Nigeria requires routing through the European banking system? Don't act as if the traditional financial system has greatly supported the emerging market world. Let's not lie to ourselves.
  - sdenton4 5y ago
    What proportion of bitcoin's five economically meaningful transactions per minute are African? This activity is a rounding error.
akhodakivskiy 5y ago
For example in Russia the chinese vendors would sell their stuff for cash rubles, convert them into crypto, send crypto to china, order a container of new stuff, ship it to Russia, repeat. basically they save on taxes, conversion fees, cross border transfer fees, etc. on the cash portion of their revenues. it’s probably harder to do the same with card payments as the tax agencies are in control of electronic payments. in the end there has to be a reason to use crypto in some economic activity. in the example above it’s cost management.
- jfk13 5y ago
  > cost management You mean tax evasion? I suppose that's a good thing if you're basically in favour of anarchy and societal collapse. Personally, I'm not.

by ngc248 5y ago

meheleventyone 5y ago

Yes and it always curiously ignores that mobile banking is the actual technology that has actually massively helped the unbanked. I suspect if Bitcoin is helping people in these countries evade currency controls it’s helping the rich not the poor and rather enabling capital flight than adding stability.

eru 5y ago
You are mostly right, but do keep in mind that enabling capital flight is a _good_ thing! Just like helping people to leave bad places is a good thing. The risk of capital flight puts a limit on how bad the local regime can screw up the economy and still squeeze money out of it. (And calling it capital flight is just a mean way of saying 'people want to invest elsewhere'.)
- meheleventyone 5y ago
  Capital flight actively hurts the economy it is removed from and only benefits the rich (who are often the local regime and often literally robbing the country) at the expense of the poor people trapped there. Which is totally counter to the narrative most crypto people put forward that somehow it's helpful to the average person living in those countries. Basically the money and the wealthy can get out leaving the rest of the country floundering in an even worse situation. Which doesn't sound all that "good" to me.
  - eru 5y ago
    And that's why we should ban people living in eg the US from investing in any other country? And why we are at it, we should also ban people from drawing down their capital and consuming it. The effect is the same as capital flight, after all. No more drawing down your retirement savings! In any case, if you are powerful enough to rob a poor country, do you think you would be subject to any laws preventing capital flight?
    - meheleventyone 5y ago
      Shifting the goal posts isn't the win you think it is. We're talking about a specific context.
      - eru 5y ago
        See my update. Basically, anyone powerful enough to rob a country wouldn't really be subject to captial controls anyway. Unless of course you want to blame the kulaks, and not the people with connections to government of robbing the country.
        meheleventyone 5y ago
        The method doesn't really matter, the capital flight is still bad and if this is the case Bitcoin has no advantages then Bitcoin is even more useless for this context.
        eru 5y ago
        I'd say in the best case Bitcoin allows people who are not connected to the robbing elite that runs the country to take some capital out of the country. That would be a good thing. (I don't think Bitcoin is actually all that impactful in the real world one way or another.)
        bratwurst3000 5y ago
TheColorYellow 5y ago
Cryptocurrency as a means of payment is used in Africa. And the usage of Bitcoin as an inflation hedge has certainly been proven by the fact that Bitcoin returned superior returns over the inflation rise recently than any other asset an average African could have held. Maybe we shouldn't ignore that mobile banking in Africa still doesn't allow easy access to US dollars? Maybe we shouldn't ignore that a transfer from the currency in Ethipoia to the currency in Nigeria requires routing through the European banking system? Don't act as if the traditional financial system has greatly supported the emerging market world. Let's not lie to ourselves.
- sdenton4 5y ago
  What proportion of bitcoin's five economically meaningful transactions per minute are African? This activity is a rounding error.

akhodakivskiy 5y ago

For example in Russia the chinese vendors would sell their stuff for cash rubles, convert them into crypto, send crypto to china, order a container of new stuff, ship it to Russia, repeat. basically they save on taxes, conversion fees, cross border transfer fees, etc. on the cash portion of their revenues. it’s probably harder to do the same with card payments as the tax agencies are in control of electronic payments. in the end there has to be a reason to use crypto in some economic activity. in the example above it’s cost management.

jfk13 5y ago
> cost management You mean tax evasion? I suppose that's a good thing if you're basically in favour of anarchy and societal collapse. Personally, I'm not.