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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 helpi

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
        Those not robbing the country are those who are to poor to move money to another country. First of all because they dont have money and second they are too poor. Where should they go? A first world country where their 2 cents aint worth shit?
        eru 5y ago
        > Those not robbing the country are those who are to poor to move money to another country. Let's look at some real world countries. Places like Venezuela and Syria used to have reasonable approximations of middle classes before they turned into hell holes. Middle classes that lived off honest work. > Where should they go? A first world country where their 2 cents aint worth shit? First, the price level differences between poor and rich countries aren't that large. Second, even if they were, you could still go to another country with a low price level that was better run. Eg moving from Venezuela to Bangladesh would be an improvement. Third, if you come from a poor country and manage to first world country, the real price is that your labour will be much more productive there. To illustrate the first and third point, just look at all the people who come from poor countries and move to the US illegally. The jump in earnings is so large, that they even endure illegality and working menial jobs.
  - pibechorro 5y ago
    Tell that to the millions of people who had close to all their life savings stolen when their currency was purposely hyperinflated and the banks closed, and forcibly converted their money into the new worthless monopoly money of the day (Argentina is a recent example). Its impossible for the middle class to save wealth in most of the world outside of the privileged west. Crypto does fix this major issue. It puts the local economy on check, compete and do a good job or the people opt out for dog coins. If politicians, who really should be no where near the levers of the economy, perform well they have a massive advantage and should have no issue gaining the trust of the citizens, except they dont, because its mainly a way to keep the poors poor and grow wealthy by being a parasite and a whore to the wealthy who leverage policy to perpetually stay on top.
  - zozbot234 5y ago
    Capital flight is a consequence of poor economic prospects. They're not causing the hurt (the 'fleeing' capital investment we're talking about is a small fraction of overall income), they're trying to escape it before it whacks them.
    - eru 5y ago
      In general, yes. But you can plausibly construct a scenario where a some members of a rich elite rob the country and run off with the proceeds. See eg Jho Low. (If you look at the rest of the comments, I am basically arguing your point. But let's not trivialise the other side in this debate.)
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.

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
        Those not robbing the country are those who are to poor to move money to another country. First of all because they dont have money and second they are too poor. Where should they go? A first world country where their 2 cents aint worth shit?
        eru 5y ago
        > Those not robbing the country are those who are to poor to move money to another country. Let's look at some real world countries. Places like Venezuela and Syria used to have reasonable approximations of middle classes before they turned into hell holes. Middle classes that lived off honest work. > Where should they go? A first world country where their 2 cents aint worth shit? First, the price level differences between poor and rich countries aren't that large. Second, even if they were, you could still go to another country with a low price level that was better run. Eg moving from Venezuela to Bangladesh would be an improvement. Third, if you come from a poor country and manage to first world country, the real price is that your labour will be much more productive there. To illustrate the first and third point, just look at all the people who come from poor countries and move to the US illegally. The jump in earnings is so large, that they even endure illegality and working menial jobs.
- pibechorro 5y ago
  Tell that to the millions of people who had close to all their life savings stolen when their currency was purposely hyperinflated and the banks closed, and forcibly converted their money into the new worthless monopoly money of the day (Argentina is a recent example). Its impossible for the middle class to save wealth in most of the world outside of the privileged west. Crypto does fix this major issue. It puts the local economy on check, compete and do a good job or the people opt out for dog coins. If politicians, who really should be no where near the levers of the economy, perform well they have a massive advantage and should have no issue gaining the trust of the citizens, except they dont, because its mainly a way to keep the poors poor and grow wealthy by being a parasite and a whore to the wealthy who leverage policy to perpetually stay on top.
- zozbot234 5y ago
  Capital flight is a consequence of poor economic prospects. They're not causing the hurt (the 'fleeing' capital investment we're talking about is a small fraction of overall income), they're trying to escape it before it whacks them.
  - eru 5y ago
    In general, yes. But you can plausibly construct a scenario where a some members of a rich elite rob the country and run off with the proceeds. See eg Jho Low. (If you look at the rest of the comments, I am basically arguing your point. But let's not trivialise the other side in this debate.)

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.