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Lebanese turn to cryptocurrency as economy tanks

SantalBlush 5y ago
>“The idea of a decentralized network and people being the owners of it is what influenced many people in Lebanon to invest in bitcoin mining,” said Iskandar. I'm pretty sure it had more to do with Lebanon's economy tanking and the people trying to find ways to make money. They didn't lose trust in Lebanon's bank due to ideological reasons, they lost trust in its bank because the economy is in chaos. For them, crypto is one of their last resorts.
- trixie_ 5y ago
  They're not trying to 'make money' more like maintain what they have. In the past 5 years this same situation has played out in many countries. Bitcoin really is the new gold.
b112 5y ago
[flagged]
- stavros 5y ago
  > Good grief. I'm sure this is not isolated to lesbians. That's an oddly special group to single out, but yes, I assume cryptocurrency is also used by people of other sexual orientations.
  - b112 5y ago
    It's early. I misread Lebanese as Lesbian. It seemed weird indeed.
    - stavros 5y ago
      Haha I suspected it was a typo, I just figured I'd pile on :P
DantesKite 5y ago
I hope they can find something that works for them. I've been intensely critical of cryptocurrency, but if it can perform better than regular currency, especially in a war-torn/economically devastated area even for a few months/years, it's serving a useful function.
- InCityDreams 5y ago
  "War-torn"? The civil one that ended in 1990, or you referring to something else?
  - pcthrowaway 5y ago
    Well there are some who believe the Beirut explosion a few years ago was actually orchestrated by a foreign nation as an act of war.
  - jbay808 5y ago
    Perhaps this one? https://en.m.wikipedia.org/wiki/2006_Lebanon_War https://en.m.wikipedia.org/wiki/2006_Lebanon_War Or maybe these: https://en.m.wikipedia.org/wiki/2008_Lebanon_conflict https://en.m.wikipedia.org/wiki/2008_Lebanon_conflict https://en.m.wikipedia.org/wiki/Syrian_civil_war_spillover_in_Lebanon https://en.m.wikipedia.org/wiki/Syrian_civil_war_spillover_i...
beebmam 5y ago
Hasn't there been a massive energy crisis in Lebanon? How much of that energy consumption is cryptocurrency fueled?
- ricochet11 5y ago
  bitcoin energy use is around ~0.5% of total worldwide, so we can probably guess the Lebanon energy crisis isn't because of crypto.
  - cinntaile 5y ago
    There is no logical link between your first and your second statement since it doesn't give us any info on how much it contributes to energy use in Lebanon. The second statement is true though.
  - hiq 5y ago
    The article does mention that it's creating tensions in some villages relying on hydropower where miners installed their operation.
paulpauper 5y ago
Crypto only works as a inflation hedge for a collapsing currency, does not make it easier to transact.
- mirntyfirty 5y ago
  Yes, I think the “unregistered security” description of crypto is most accurate.
- trixie_ 5y ago
  It is definitely a hedge against fiat currencies. People are losing faith in central banks self control to not run the money printers full speed. Crypto is also way easier to transact compared to ACH and wire transfers. No need to interact with a bank whatsoever to move as much money you want to whoever you want.
  - tomatowurst 5y ago
    what evidence do you have to back this claim? how does crypto a wildly fluctuating asset offer a protection against the USD? Bitcoin can go swing anywhere from 40% range on any given week. How is this a stable hedge against currency or stocks for that matter? Gold has statistical evidence of holding its value and its frustrating to me to see half baked claims that crypto is hedge. Clearly we have different definition of what hedge is.
    - trixie_ 5y ago
      The evidence is in the news everyday. Financial institutions, companies and individuals are all diversifying into crypto. It is a new asset class, and yes a volatile one.
      - tomatowurst 5y ago
        but that isn't a hedge against currency like the parent comment says. buying a risky asset as part of your small portfolio isn't what I classify as hedging.
pcj-github 5y ago
This seems backwards. In a country where there is a shortage of energy, they are using it to run bitcoin mining operations? Lord help us.
- djbebs 5y ago
  Shortages are the result of mispriced electricity. Taking advantage of such mispricing is a good thing.
  - abduhl 5y ago
    For whom?
    - bitxbitxbitcoin 5y ago
      The people taking advantage of the price difference, but also “the market” as a whole.
      - recuter 5y ago
        A lot of people in Lebanon get 2 hours of a electricity a day, if that. Regional slumlords are renting out generators and smuggle oil. The electricity is not so much "mispriced" as it is controlled by various mafias and terrorist organizations. Sometimes cool cyberpunk theories crash upon the harsh shores of reality.
        bitxbitxbitcoin 5y ago
        Then the market isn’t a benefactor because it isn’t properly functioning/free (from corruption) as they so often aren’t. Harsh shores of reality also crash on capitalism.
        recuter 5y ago
        There is almost an insight here.
jayd16 5y ago
So what is the actual increase in usage? Most of the quotes are from crypto CEOs and the like.
woodruffw 5y ago
This demonstrates one of the particular ironies of Bitcoin: it's not an alternative to the US dollar insomuch as it's an extralegal way to acquire US dollars. It sounds as if nobody in Lebanon is using Bitcoin to pay for milk and bread. Instead, they're exchanging it for a stable non-local fiat, which in turn pays for the milk and bread.
- bitxbitxbitcoin 5y ago
  Bitcoin being used as an extralegal way to acquire anything isn’t an irony necessarily, just a part of functioning money.
  - woodruffw 5y ago
    The "irony" mentioned is that it isn't serving any of its myriad purported goals: it isn't a functional store of value and it isn't itself a mechanism of exchange or liquidity. Extralegality is merely a circumstantial property.
    - everfree 5y ago
      Bitcoin is a tool that can be used to enable something. If I want to get value out of a hammer, I don't care whether that value comes from me using it directly or indirectly, and I don't care whether the useful properties of my hammer are intentionally designed or are circumstantial.
    - hdfjjbvcf 5y ago
  - hiq 5y ago
    The article mentions USDT (the stable non-local fiat) though, not Bitcoin. The article doesn't say whether people are interested in BTC for anything but mining.
    - bitxbitxbitcoin 5y ago
mhitza 5y ago
What I expected to read about in this article, was about people using cryptocurrencies for something. But it's only briefly touched upon at the end of the article in a paragraph > The increasing demand for cryptocurrency mining in Lebanon has prompted many shops across the country to accept payments in USDT, which is a cryptocurrency with a value that is meant to mirror the value of the US dollar. How many? What can you buy? How often are they used? Demographics, any insight? Otherwise this "turn to cryptocurrency" article seems to be just about an increase of local miners. The only two interesting aspects on that topic are that: - hotels might connect to data mining operations to provide surplus electricity "bandwidth", as their occupancy is lower due to the pandemic - Lebanon has an iffy electricity grid, and households are starting (have been for a while now?) to feel as consumers the extra strain on the grid caused by miners.
- jfk13 5y ago
  So as usual, the cryptocurrency story here is that a few people may be finding an opportunity to make money, while it's acting as an overall negative for the society in general.
  - birracerveza 5y ago
    - onaworkcomputer 5y ago
      The comment you were responding to was summarizing/editorializing its parent, not presenting new information.
    - Inityx 5y ago
      Source https://www.youtube.com/watch?v=YQ_xWvX1n9g https://www.youtube.com/watch?v=YQ_xWvX1n9g
      - vmception 5y ago
nimbius 5y ago
unsurprising as this trend is seeing popularity in south america as well as other countries the US deems of ill repute. Frankly im convinced this is the quiet death of Kissinger era soft power, the American monetary policy cudgel. The US currently sanctions monetarily ten percent of the financial world. If you take into account various chinese sanctions, its easily more than this. https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information https://home.treasury.gov/policy-issues/financial-sanctions/... when your country racks up yearly multi-trillion dollar debts and expects other countries to continue financing them amidst such sanctions it tends to betray a certain disconnect and highlight the delineation between the political class and the capital class. Politicians have taken a very serious tool and run wild with it like a child with a pocket knife to such an extent over forty years that i think most players have simply had their fill of fair-weather ethical discourse from the land of the free.
- woodruffw 5y ago
  This claim isn't substantiated by the particulars: Bitcoin miners in these countries seem more than happy to cash their efforts out in USD, or in USD equivalents. Bitcoin itself remains speculative in nature, meaning that the amount of actual organic settlement via it remains relatively small.
- pkaye 5y ago
  The EU also has sanction against Lebanon. These sanctions are typically against specific individuals and not the entire population.
- iskander 5y ago
  > the American monetary policy cudgel. We're trading it for having the safe subset of crypto denominated in USD pegged stables. Less direct power over other countries but still keeps the world transacting in dollars.
- yunohn 5y ago
  > The increasing demand for cryptocurrency mining in Lebanon has prompted many shops across the country to accept payments in USDT I don’t blame you for missing the part of the post that actually addresses which cryptocurrency they’re resorting to, since it’s literally at the end. But, you do realise that USDT is a stable pegged (with super shaky/shady backing) to the USD, right?
leifg 5y ago
I have to concede that actually is one of the use cases for cryptocurrencies or more concretely: stable coins. I guess using cryptocurrencies make sense if you are completely left to your own devices and can't rely on the government for help. I'm just worried how this will turn out long term: - Is using a cryptocurrency run by a company registered in Hong Kong, backed by a bank on the Bahamas really that great of an idea? - Are large parts of the population able to store their assets correctly. Are they storing their coins on their own wallets or are they using exchanges. If they use exchanges, does the government have an interest in letting them do whatever or are they imposing sanctions? If they store their coins in their own wallets, is the majority of the population able to properly secure their assets? - Will mining operations have an impact on the existing infrastructure if it becomes to profitable. I can totally see mining operations by powerful individuals prioritizing their profit over a nearby town's electricity needs. But most importantly: what will happen if the value of cryptocurrencies decreases or even crashes? I don't see regular people highly invested in crypto just walking away from a crash.
- trixie_ 5y ago
  In these unstable countries you can see people walking away from cash. How much inflation in the US and around the world will people tolerate before diversifying into crypto. Looks like the ball is already rolling. The market cap for bitcoin is only a trillion, once it's up to around 100 trillion the price will be a lot more stable just like the dollar itself.
  - notyourwork 5y ago
    I'd replace "once" with "if" because that isn't a given at this point.
    - trixie_ 5y ago
      That is true. No one knows the future. I do think bitcoin is still the most likely to get there first for various reasons.
  - hiq 5y ago
40four 5y ago
Like others have said, I didn’t expect this article to be largely about mining crypto coins, I think they missed a larger more important point. I think it is an important point a lot of cryptocurrency deniers should consider. It’s one thing if you live in a country with a strong, stable currency. Quite another if your local economy/ currency tend to be more volatile. Cryptocurrency can play an important and valuable role in protecting your wealth for those people. Imagine your local currency’s value is tanking, or experiencing a period of hyper inflation. By shifting some of your wealth into a stable coin, or anything more stable than what you have, this can provide a huge benefit to the user.
- Inityx 5y ago
  >cryptocurrency deniers lmao, nobody's claiming that cryptocurrency doesn't exist...
  - 40four 5y ago
    Haha, that’s fair. I could have picked a better choice of words, but you know what I meant
- ironSkillet 5y ago
  How is this use-case different from someone in the struggling country buying USD, which is way less volatile? Is it because converting local currency to crypto is easier than converting local to USD?
  - hiq 5y ago
    In practice the article mentions that this is what they do: buying USDT.
    - ironSkillet 5y ago
      So the entire apparatus is coming into existence in order to essentially buy/sell goods in USD. And the reason this cannot be done directly is because of financial/legal restrictions on the Lebanese populace? Just trying to understand the value-add for the people on the ground using it in everyday life.
dalbasal 5y ago
I think Lebanon demonstrates, perhaps, more of a counternarrative. Even though the Lebanese currency collapsed while bitcoin exploded, crypto still is not being used for everyday uses. I suppose "something tradeable" is not an empty niche. Local currency still works if you don't hold it long. Foreign currency works for everything else. There's not a replacement for fiat. The Lebanese lost trust in almost every aspects of their government. Sure, that's a problem for their national currency. But, you don't get that much mileage from crypto in this case.
- trixie_ 5y ago
  Plenty of people use crypto to buy things in local currency with a debit card from their crypto storage provider.
munk-a 5y ago
Doesn't USDT remain famously overleveraged and just one bank-rush away from an economic crisis?
sonicggg 5y ago
I've met many Lebanese immigrants, both in North and South America. Crazy to see how well they integrated and succeeded in such little time. Entrepreneurship seems to run strong in their community. Lots of really large companies are run by Lebanese and their descendants. Very similar to Indian immigrants. Unfortunately this success has not been mirrored in their own country. There is nothing valuable being produced there, both in natural and human resources. I can only conclude that all the smart ones left the country. I also do not see how turning to cryptocurrencies is going to make a difference this late in the game. There are not that many places in the World that can run a profitable mining operation. That's why most mining pools are Chinese. You also need capital to set up a rig.
hash872 5y ago
Here's my dumb question that I always want to ask- why can't the people of Lebanon, or other residents of poor & unstable countries, just use digital dollars? (Or euros?) People in developing countries have access to payment technology like Payoneer and other methods of money transfer, and the dollar is vastly more stable than any cryptocurrency. Why don't they just.... ignore their local currency and do everything in dollars? What am I missing?
- imachine1980_ 5y ago
  Becouse you need dollars in the central bank too buy dollars And You need dollars I the central banks too sustenance of the currency Mean that I you don't have dollars too sustenance of the currency you also don't have dollars to buy, but people can produce crypto, meaning that the country can sell it.
- dudeinjapan 5y ago
  Yes but do dollars come with unlockable content such as EXCLUSIVE access to the Bored Alpaca Polo Club Discord server?
- actually_a_dog 5y ago
  Why do you specify "digital" dollars or euros? Both the dollar and the euro are mostly digital currencies already. Dollars that only exist in a computer system somewhere out-value coins and notes by a factor of (IIRC) 10 or more.
- c0ffeebabe 5y ago
  I created an account just to answer this question, seems it seems like a lot of people in the first world can't even phantom the need for people to use an unregulated currency. Source: I'm from Argentina. I can't speak for the situation in Lebanon or any other place, but I imagine there are similarities. I know there are similarities with Venezuela and (I believe) Iran. Long story short: when your government deems illegal or at least suspicious for you to save in USD/EUR, Payoneer/Paypal/etc are risky to use. You have several problems: 1. You can't easily use the money on (say) Payoneer. You need a credit card. Credit cards are easy to tract. You'll quickly have someone asking where the money came from. I understand this seems like a good idea in a sane country, but it is not desirable when the only way for you to save is to bend the rules somewhat. 2. You can't put your money into Payoneer/Paypal/etc because, remember, you don't have any USD. You can't buy them. So the only way these are a fix is for people who work for USA/Europe and can maybe get paid directly there. 3. Cryptocurrency is not yet as regulated nor it is easily regulated. Payoneer has to comply with Argentinian law because they are a financial entity. Cryptos are still young and are (at least in Argentina) still somehow being able to sell USD-like assets without selling USD. Example: in Argentina you can buy up to 200 USD per month (well, the lucky ones get 200 USD... won't get into details), but you can buy as many USDC as you want. 4. The _your keys, your money_ moto may be a meme for the YCombinator crowd, but it is not for many people. Payoneer/Paypal and banks *will* ask for documents baking up your funds. Again, this is a good idea if you live in a sane country, but many people do not. You can't just go to the bank and tell them: no, I don't have these dollars declared anywhere because they are illegal to own in my country. I've seen colleague's accounts getting closed due to "suspicious activity" and their assets are frozen. The Argentinian answer is generally: be grateful you are earning in USD, look for the next Payoneer (I think we are using a lot of Dukascopy lately) _or_ switch to crypto. Anyway. Make of crypto what you will, but people in high-inflation countries with an excess of love for regulation intuitively understand their appeal.
stretchwithme 5y ago
Don't they mean "as the currency is used to take their resources"?
trhway 5y ago
with the government severely limiting people's ability to buy dollars in Russia recently the USDT has become much more popular there. Speaking about the economy in the Mid East - the 2011 Arab Spring was triggered by the bread prices rise (due to lower Russian exports due to 2010 fires). With Ukraine and Russia being major exporters of wheat, in particular into the Arab Spring region, and both countries expected to export much less this year due to the war - one can see that an even larger Arab Spring II is in the making now, and probably in some other regions of the world too. The food prices drastically rising will in particular lead to inflation and local currencies devaluations if not a total crash.

>“The idea of a decentralized network and people being the owners of it is what influenced many people in Lebanon to invest in bitcoin mining,” said Iskandar. I'm pretty sure it had more to do with Lebanon's economy tanking and the people trying to find ways to make money. They didn't lose trust in Lebanon's bank due to ideological reasons, they lost trust in its bank because the economy is in chaos. For them, crypto is one of their last resorts.

trixie_ 5y ago
They're not trying to 'make money' more like maintain what they have. In the past 5 years this same situation has played out in many countries. Bitcoin really is the new gold.

b112 5y ago

[flagged]

stavros 5y ago
> Good grief. I'm sure this is not isolated to lesbians. That's an oddly special group to single out, but yes, I assume cryptocurrency is also used by people of other sexual orientations.
- b112 5y ago
  It's early. I misread Lebanese as Lesbian. It seemed weird indeed.
  - stavros 5y ago
    Haha I suspected it was a typo, I just figured I'd pile on :P

DantesKite 5y ago

I hope they can find something that works for them. I've been intensely critical of cryptocurrency, but if it can perform better than regular currency, especially in a war-torn/economically devastated area even for a few months/years, it's serving a useful function.

InCityDreams 5y ago
"War-torn"? The civil one that ended in 1990, or you referring to something else?
- pcthrowaway 5y ago
  Well there are some who believe the Beirut explosion a few years ago was actually orchestrated by a foreign nation as an act of war.
- jbay808 5y ago
  Perhaps this one? https://en.m.wikipedia.org/wiki/2006_Lebanon_War https://en.m.wikipedia.org/wiki/2006_Lebanon_War Or maybe these: https://en.m.wikipedia.org/wiki/2008_Lebanon_conflict https://en.m.wikipedia.org/wiki/2008_Lebanon_conflict https://en.m.wikipedia.org/wiki/Syrian_civil_war_spillover_in_Lebanon https://en.m.wikipedia.org/wiki/Syrian_civil_war_spillover_i...

beebmam 5y ago

Hasn't there been a massive energy crisis in Lebanon? How much of that energy consumption is cryptocurrency fueled?

ricochet11 5y ago
bitcoin energy use is around ~0.5% of total worldwide, so we can probably guess the Lebanon energy crisis isn't because of crypto.
- cinntaile 5y ago
  There is no logical link between your first and your second statement since it doesn't give us any info on how much it contributes to energy use in Lebanon. The second statement is true though.
- hiq 5y ago
  The article does mention that it's creating tensions in some villages relying on hydropower where miners installed their operation.

paulpauper 5y ago

Crypto only works as a inflation hedge for a collapsing currency, does not make it easier to transact.

mirntyfirty 5y ago
Yes, I think the “unregistered security” description of crypto is most accurate.
trixie_ 5y ago
It is definitely a hedge against fiat currencies. People are losing faith in central banks self control to not run the money printers full speed. Crypto is also way easier to transact compared to ACH and wire transfers. No need to interact with a bank whatsoever to move as much money you want to whoever you want.
- tomatowurst 5y ago
  what evidence do you have to back this claim? how does crypto a wildly fluctuating asset offer a protection against the USD? Bitcoin can go swing anywhere from 40% range on any given week. How is this a stable hedge against currency or stocks for that matter? Gold has statistical evidence of holding its value and its frustrating to me to see half baked claims that crypto is hedge. Clearly we have different definition of what hedge is.
  - trixie_ 5y ago
    The evidence is in the news everyday. Financial institutions, companies and individuals are all diversifying into crypto. It is a new asset class, and yes a volatile one.
    - tomatowurst 5y ago
      but that isn't a hedge against currency like the parent comment says. buying a risky asset as part of your small portfolio isn't what I classify as hedging.

pcj-github 5y ago

This seems backwards. In a country where there is a shortage of energy, they are using it to run bitcoin mining operations? Lord help us.

djbebs 5y ago
Shortages are the result of mispriced electricity. Taking advantage of such mispricing is a good thing.
- abduhl 5y ago
  For whom?
  - bitxbitxbitcoin 5y ago
    The people taking advantage of the price difference, but also “the market” as a whole.
    - recuter 5y ago
      A lot of people in Lebanon get 2 hours of a electricity a day, if that. Regional slumlords are renting out generators and smuggle oil. The electricity is not so much "mispriced" as it is controlled by various mafias and terrorist organizations. Sometimes cool cyberpunk theories crash upon the harsh shores of reality.
      - bitxbitxbitcoin 5y ago
        Then the market isn’t a benefactor because it isn’t properly functioning/free (from corruption) as they so often aren’t. Harsh shores of reality also crash on capitalism.
        recuter 5y ago
        There is almost an insight here.

jayd16 5y ago

So what is the actual increase in usage? Most of the quotes are from crypto CEOs and the like.

woodruffw 5y ago

This demonstrates one of the particular ironies of Bitcoin: it's not an alternative to the US dollar insomuch as it's an extralegal way to acquire US dollars. It sounds as if nobody in Lebanon is using Bitcoin to pay for milk and bread. Instead, they're exchanging it for a stable non-local fiat, which in turn pays for the milk and bread.

bitxbitxbitcoin 5y ago
Bitcoin being used as an extralegal way to acquire anything isn’t an irony necessarily, just a part of functioning money.
- woodruffw 5y ago
  The "irony" mentioned is that it isn't serving any of its myriad purported goals: it isn't a functional store of value and it isn't itself a mechanism of exchange or liquidity. Extralegality is merely a circumstantial property.
  - everfree 5y ago
    Bitcoin is a tool that can be used to enable something. If I want to get value out of a hammer, I don't care whether that value comes from me using it directly or indirectly, and I don't care whether the useful properties of my hammer are intentionally designed or are circumstantial.
  - hdfjjbvcf 5y ago
- hiq 5y ago
  The article mentions USDT (the stable non-local fiat) though, not Bitcoin. The article doesn't say whether people are interested in BTC for anything but mining.
  - bitxbitxbitcoin 5y ago

mhitza 5y ago

What I expected to read about in this article, was about people using cryptocurrencies for something. But it's only briefly touched upon at the end of the article in a paragraph > The increasing demand for cryptocurrency mining in Lebanon has prompted many shops across the country to accept payments in USDT, which is a cryptocurrency with a value that is meant to mirror the value of the US dollar. How many? What can you buy? How often are they used? Demographics, any insight? Otherwise this "turn to cryptocurrency" article seems to be just about an increase of local miners. The only two interesting aspects on that topic are that: - hotels might connect to data mining operations to provide surplus electricity "bandwidth", as their occupancy is lower due to the pandemic - Lebanon has an iffy electricity grid, and households are starting (have been for a while now?) to feel as consumers the extra strain on the grid caused by miners.

jfk13 5y ago
So as usual, the cryptocurrency story here is that a few people may be finding an opportunity to make money, while it's acting as an overall negative for the society in general.
- birracerveza 5y ago
  - onaworkcomputer 5y ago
    The comment you were responding to was summarizing/editorializing its parent, not presenting new information.
  - Inityx 5y ago
    Source https://www.youtube.com/watch?v=YQ_xWvX1n9g https://www.youtube.com/watch?v=YQ_xWvX1n9g
    - vmception 5y ago

nimbius 5y ago

unsurprising as this trend is seeing popularity in south america as well as other countries the US deems of ill repute. Frankly im convinced this is the quiet death of Kissinger era soft power, the American monetary policy cudgel. The US currently sanctions monetarily ten percent of the financial world. If you take into account various chinese sanctions, its easily more than this. https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information https://home.treasury.gov/policy-issues/financial-sanctions/... when your country racks up yearly multi-trillion dollar debts and expects other countries to continue financing them amidst such sanctions it tends to betray a certain disconnect and highlight the delineation between the political class and the capital class. Politicians have taken a very serious tool and run wild with it like a child with a pocket knife to such an extent over forty years that i think most players have simply had their fill of fair-weather ethical discourse from the land of the free.

woodruffw 5y ago
This claim isn't substantiated by the particulars: Bitcoin miners in these countries seem more than happy to cash their efforts out in USD, or in USD equivalents. Bitcoin itself remains speculative in nature, meaning that the amount of actual organic settlement via it remains relatively small.
pkaye 5y ago
The EU also has sanction against Lebanon. These sanctions are typically against specific individuals and not the entire population.
iskander 5y ago
> the American monetary policy cudgel. We're trading it for having the safe subset of crypto denominated in USD pegged stables. Less direct power over other countries but still keeps the world transacting in dollars.
yunohn 5y ago
> The increasing demand for cryptocurrency mining in Lebanon has prompted many shops across the country to accept payments in USDT I don’t blame you for missing the part of the post that actually addresses which cryptocurrency they’re resorting to, since it’s literally at the end. But, you do realise that USDT is a stable pegged (with super shaky/shady backing) to the USD, right?

leifg 5y ago

I have to concede that actually is one of the use cases for cryptocurrencies or more concretely: stable coins. I guess using cryptocurrencies make sense if you are completely left to your own devices and can't rely on the government for help. I'm just worried how this will turn out long term: - Is using a cryptocurrency run by a company registered in Hong Kong, backed by a bank on the Bahamas really that great of an idea? - Are large parts of the population able to store their assets correctly. Are they storing their coins on their own wallets or are they using exchanges. If they use exchanges, does the government have an interest in letting them do whatever or are they imposing sanctions? If they store their coins in their own wallets, is the majority of the population able to properly secure their assets? - Will mining operations have an impact on the existing infrastructure if it becomes to profitable. I can totally see mining operations by powerful individuals prioritizing their profit over a nearby town's electricity needs. But most importantly: what will happen if the value of cryptocurrencies decreases or even crashes? I don't see regular people highly invested in crypto just walking away from a crash.

trixie_ 5y ago
In these unstable countries you can see people walking away from cash. How much inflation in the US and around the world will people tolerate before diversifying into crypto. Looks like the ball is already rolling. The market cap for bitcoin is only a trillion, once it's up to around 100 trillion the price will be a lot more stable just like the dollar itself.
- notyourwork 5y ago
  I'd replace "once" with "if" because that isn't a given at this point.
  - trixie_ 5y ago
    That is true. No one knows the future. I do think bitcoin is still the most likely to get there first for various reasons.
- hiq 5y ago

40four 5y ago

Like others have said, I didn’t expect this article to be largely about mining crypto coins, I think they missed a larger more important point. I think it is an important point a lot of cryptocurrency deniers should consider. It’s one thing if you live in a country with a strong, stable currency. Quite another if your local economy/ currency tend to be more volatile. Cryptocurrency can play an important and valuable role in protecting your wealth for those people. Imagine your local currency’s value is tanking, or experiencing a period of hyper inflation. By shifting some of your wealth into a stable coin, or anything more stable than what you have, this can provide a huge benefit to the user.

Inityx 5y ago
>cryptocurrency deniers lmao, nobody's claiming that cryptocurrency doesn't exist...
- 40four 5y ago
  Haha, that’s fair. I could have picked a better choice of words, but you know what I meant
ironSkillet 5y ago
How is this use-case different from someone in the struggling country buying USD, which is way less volatile? Is it because converting local currency to crypto is easier than converting local to USD?
- hiq 5y ago
  In practice the article mentions that this is what they do: buying USDT.
  - ironSkillet 5y ago
    So the entire apparatus is coming into existence in order to essentially buy/sell goods in USD. And the reason this cannot be done directly is because of financial/legal restrictions on the Lebanese populace? Just trying to understand the value-add for the people on the ground using it in everyday life.

dalbasal 5y ago

I think Lebanon demonstrates, perhaps, more of a counternarrative. Even though the Lebanese currency collapsed while bitcoin exploded, crypto still is not being used for everyday uses. I suppose "something tradeable" is not an empty niche. Local currency still works if you don't hold it long. Foreign currency works for everything else. There's not a replacement for fiat. The Lebanese lost trust in almost every aspects of their government. Sure, that's a problem for their national currency. But, you don't get that much mileage from crypto in this case.

trixie_ 5y ago
Plenty of people use crypto to buy things in local currency with a debit card from their crypto storage provider.

munk-a 5y ago

Doesn't USDT remain famously overleveraged and just one bank-rush away from an economic crisis?

sonicggg 5y ago

I've met many Lebanese immigrants, both in North and South America. Crazy to see how well they integrated and succeeded in such little time. Entrepreneurship seems to run strong in their community. Lots of really large companies are run by Lebanese and their descendants. Very similar to Indian immigrants. Unfortunately this success has not been mirrored in their own country. There is nothing valuable being produced there, both in natural and human resources. I can only conclude that all the smart ones left the country. I also do not see how turning to cryptocurrencies is going to make a difference this late in the game. There are not that many places in the World that can run a profitable mining operation. That's why most mining pools are Chinese. You also need capital to set up a rig.

hash872 5y ago

Here's my dumb question that I always want to ask- why can't the people of Lebanon, or other residents of poor & unstable countries, just use digital dollars? (Or euros?) People in developing countries have access to payment technology like Payoneer and other methods of money transfer, and the dollar is vastly more stable than any cryptocurrency. Why don't they just.... ignore their local currency and do everything in dollars? What am I missing?

imachine1980_ 5y ago
Becouse you need dollars in the central bank too buy dollars And You need dollars I the central banks too sustenance of the currency Mean that I you don't have dollars too sustenance of the currency you also don't have dollars to buy, but people can produce crypto, meaning that the country can sell it.
dudeinjapan 5y ago
Yes but do dollars come with unlockable content such as EXCLUSIVE access to the Bored Alpaca Polo Club Discord server?
actually_a_dog 5y ago
Why do you specify "digital" dollars or euros? Both the dollar and the euro are mostly digital currencies already. Dollars that only exist in a computer system somewhere out-value coins and notes by a factor of (IIRC) 10 or more.
c0ffeebabe 5y ago
I created an account just to answer this question, seems it seems like a lot of people in the first world can't even phantom the need for people to use an unregulated currency. Source: I'm from Argentina. I can't speak for the situation in Lebanon or any other place, but I imagine there are similarities. I know there are similarities with Venezuela and (I believe) Iran. Long story short: when your government deems illegal or at least suspicious for you to save in USD/EUR, Payoneer/Paypal/etc are risky to use. You have several problems: 1. You can't easily use the money on (say) Payoneer. You need a credit card. Credit cards are easy to tract. You'll quickly have someone asking where the money came from. I understand this seems like a good idea in a sane country, but it is not desirable when the only way for you to save is to bend the rules somewhat. 2. You can't put your money into Payoneer/Paypal/etc because, remember, you don't have any USD. You can't buy them. So the only way these are a fix is for people who work for USA/Europe and can maybe get paid directly there. 3. Cryptocurrency is not yet as regulated nor it is easily regulated. Payoneer has to comply with Argentinian law because they are a financial entity. Cryptos are still young and are (at least in Argentina) still somehow being able to sell USD-like assets without selling USD. Example: in Argentina you can buy up to 200 USD per month (well, the lucky ones get 200 USD... won't get into details), but you can buy as many USDC as you want. 4. The _your keys, your money_ moto may be a meme for the YCombinator crowd, but it is not for many people. Payoneer/Paypal and banks *will* ask for documents baking up your funds. Again, this is a good idea if you live in a sane country, but many people do not. You can't just go to the bank and tell them: no, I don't have these dollars declared anywhere because they are illegal to own in my country. I've seen colleague's accounts getting closed due to "suspicious activity" and their assets are frozen. The Argentinian answer is generally: be grateful you are earning in USD, look for the next Payoneer (I think we are using a lot of Dukascopy lately) _or_ switch to crypto. Anyway. Make of crypto what you will, but people in high-inflation countries with an excess of love for regulation intuitively understand their appeal.

stretchwithme 5y ago

Don't they mean "as the currency is used to take their resources"?

trhway 5y ago

with the government severely limiting people's ability to buy dollars in Russia recently the USDT has become much more popular there. Speaking about the economy in the Mid East - the 2011 Arab Spring was triggered by the bread prices rise (due to lower Russian exports due to 2010 fires). With Ukraine and Russia being major exporters of wheat, in particular into the Arab Spring region, and both countries expected to export much less this year due to the war - one can see that an even larger Arab Spring II is in the making now, and probably in some other regions of the world too. The food prices drastically rising will in particular lead to inflation and local currencies devaluations if not a total crash.