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In 1982, I went to Czechoslovakia (this was before the divorce and before the fall of the Wall), and walking around the streets of Prague, people constantly whi

In 1982, I went to Czechoslovakia (this was before the divorce and before the fall of the Wall), and walking around the streets of Prague, people constantly whispered to me, a visibly foreign person, "Change money? Change money?" Dollars or German marks were what they wanted, and I could have gotten a much better exchange rate than the official one, if that was what I wanted. Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. > The way I explain this to myself, it seems that the key characteristic that draws Argentinians to these relatively centralized cryptocurrencies is that the government doesn't control them, rather than being completely decentralized in a way that no one controls them. The government doesn't control them now. What do you bet there are armies of programmers working for the government, figuring out how they can? So if I lived there, I'd probably be using crypto, too, but I'd always be afraid it's going to vanish someday. Not by the government devaluing the peso, which Argentines are used to, but by some unforeseen technical snafu. So I'd probably spread my bets around, having some US $100's, some bricks, and some of other coins, making sure not to have all my eggs in one basket.

malkia 4y ago
Ha! This brings memories. Growing up in Bulgaria, I was 6 years old in 1982, and I was begging my grandma's coworkers (he was their manager) to give me a dollar. Some of their husbands would drive trucks (T.I.R.) and would get ahold of foreign currency, but it was impossible to do so. In fact, the government has set up special shops called CORECOM - https://en.wikipedia.org/wiki/Corecom https://en.wikipedia.org/wiki/Corecom where you can "exchange" your "dirty" foreign currency for stuff not possible to buy anywhere else. I wanted my $1 dollar to get a Kinder Surprise Egg (that, and empty cans out of coca cola, or pez were great for a kid to have). Then regime fell, and in early 1990's all "corecom" eggs were now for sale everywhere... They were no longer that valueable :) (From the wikipedia article, it looks like The Czechoslovakian's version was called Tuzex - https://en.wikipedia.org/wiki/Tuzex https://en.wikipedia.org/wiki/Tuzex - lol - what names, someone should make a game with these names)
- v-erne 4y ago
  Poland also used to have this kind of shops - they were called Pewex https://en.m.wikipedia.org/wiki/Pewex https://en.m.wikipedia.org/wiki/Pewex And they allowed purchases mostly in dollars. This shops were the only place where You could get high tech equipment that was produced by "rotten" west.
  - gumby 4y ago
    China had a more complex system into the mid 90s: They had special currency exchangeable for foreign currencies but de facto it was only for foreigners (who else had foreign exchange?). There were places that only took these Foreign Exchange Certificates: hotels for foreigners, tourist traps, some speciality shops etc. They were denominated in Yuan but these places that took them of course charged foreigner prices too -- like a pack of cigarettes cost about much more than you would pay in the street. Some local people were quite eager to get FECs and would exchange them at better than 1:1 so they could buy something normally unavailable What people really liked was if you bought something with them (like cigarettes) -- you'd get change in regular renminbi. There were other good techniques for soaking the foreigners. Two I particularly liked: Egypt used to require that visitors spend at least $75 (maybe $225 today) worth of Egyptian Lire per day. You had to buy that much local currency at the airport to enter the country (based on how many days you planned to visit). But the best part was when you left you had to show receipts for the things you'd paid for and if they didn't add up to enough they'd tax you the difference before you could leave! The sneakiest system was in Sri Lanka: the currency was not convertible so you could only buy rupees when you were physically there. Then when you left of course you had some cash left, but when departing flights left the banks were closed. There was a huge transparent globe collecting money for a children's charity. Naturally it was full of rupees (and a tiny amount of foreign money). I refused to do this and later sold my walletload of Sri Lankan Rupees to a coin collector shop in Singapore for some terrible exchange rate. Just out of principle.
Daishiman 4y ago
> Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. Cuevas are operated or are buddies with those in power. Here's the thing: there is not a single rational actor in Argentinian politics who likes currency controls. It is a gigantic pain in the ass and a huge inconvenience for personal finances and so anyone who likes real money will use cuevas. At the same time those people know that the alternative at the present moment is unlikely to be for the best; liberating the exchange rate just leads to people stashing money overseas, hyperinflationary spirals, even more difficulty servicing debt. More importantly, the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries. At this point the risk of walking all this back is too great for any single politican, side hustles would be lost, and the future would be even more uncertain. No one wants to pay the price.Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. It's basically a really crappy local Nash Equilibrium.
- JumpCrisscross 4y ago
  > the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries How complex is the Argentinian tax code? (Every democracy needs complex economic arrangements to reflect the balance of power. In America, we tend to stuff that complexity into the tax code.)
  - ankaAr 4y ago
    It is easier to feed a lion wearing a bunny suit, bathed in blood. Argentinian here, we have maybe 100 taxes, a little more..
  - Daishiman 4y ago
lezojeda 4y ago
>The government doesn't control them now. What do you bet there are armies of programmers working for the government, figuring out how they can? Argentinean here. That probably won't happen... for many years, at last. Programmers from my country start working for foreigners for dollares/any other non-meme coin that is no the peso. Anyone with 3+ years experience stops working for locals if they have a good english level and stop considering job offers in pesos (100% anual inflation as of now). What I'm trying to say is, the government can try to do that but it'll have to manage with only mediocre devs or spend a lot of money which... they don't really have.
Tade0 4y ago
> It means that cuevas are vulnerable to surveillance and control. Oh but the "change money" people were no less vulnerable to surveillance and control - the communist solution to this very communist problem that they posed was to use them as a source of intelligence.

malkia 4y ago

Ha! This brings memories. Growing up in Bulgaria, I was 6 years old in 1982, and I was begging my grandma's coworkers (he was their manager) to give me a dollar. Some of their husbands would drive trucks (T.I.R.) and would get ahold of foreign currency, but it was impossible to do so. In fact, the government has set up special shops called CORECOM - https://en.wikipedia.org/wiki/Corecom https://en.wikipedia.org/wiki/Corecom where you can "exchange" your "dirty" foreign currency for stuff not possible to buy anywhere else. I wanted my $1 dollar to get a Kinder Surprise Egg (that, and empty cans out of coca cola, or pez were great for a kid to have). Then regime fell, and in early 1990's all "corecom" eggs were now for sale everywhere... They were no longer that valueable :) (From the wikipedia article, it looks like The Czechoslovakian's version was called Tuzex - https://en.wikipedia.org/wiki/Tuzex https://en.wikipedia.org/wiki/Tuzex - lol - what names, someone should make a game with these names)

v-erne 4y ago
Poland also used to have this kind of shops - they were called Pewex https://en.m.wikipedia.org/wiki/Pewex https://en.m.wikipedia.org/wiki/Pewex And they allowed purchases mostly in dollars. This shops were the only place where You could get high tech equipment that was produced by "rotten" west.
- gumby 4y ago
  China had a more complex system into the mid 90s: They had special currency exchangeable for foreign currencies but de facto it was only for foreigners (who else had foreign exchange?). There were places that only took these Foreign Exchange Certificates: hotels for foreigners, tourist traps, some speciality shops etc. They were denominated in Yuan but these places that took them of course charged foreigner prices too -- like a pack of cigarettes cost about much more than you would pay in the street. Some local people were quite eager to get FECs and would exchange them at better than 1:1 so they could buy something normally unavailable What people really liked was if you bought something with them (like cigarettes) -- you'd get change in regular renminbi. There were other good techniques for soaking the foreigners. Two I particularly liked: Egypt used to require that visitors spend at least $75 (maybe $225 today) worth of Egyptian Lire per day. You had to buy that much local currency at the airport to enter the country (based on how many days you planned to visit). But the best part was when you left you had to show receipts for the things you'd paid for and if they didn't add up to enough they'd tax you the difference before you could leave! The sneakiest system was in Sri Lanka: the currency was not convertible so you could only buy rupees when you were physically there. Then when you left of course you had some cash left, but when departing flights left the banks were closed. There was a huge transparent globe collecting money for a children's charity. Naturally it was full of rupees (and a tiny amount of foreign money). I refused to do this and later sold my walletload of Sri Lankan Rupees to a coin collector shop in Singapore for some terrible exchange rate. Just out of principle.

Daishiman 4y ago

> Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. Cuevas are operated or are buddies with those in power. Here's the thing: there is not a single rational actor in Argentinian politics who likes currency controls. It is a gigantic pain in the ass and a huge inconvenience for personal finances and so anyone who likes real money will use cuevas. At the same time those people know that the alternative at the present moment is unlikely to be for the best; liberating the exchange rate just leads to people stashing money overseas, hyperinflationary spirals, even more difficulty servicing debt. More importantly, the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries. At this point the risk of walking all this back is too great for any single politican, side hustles would be lost, and the future would be even more uncertain. No one wants to pay the price.Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. It's basically a really crappy local Nash Equilibrium.

JumpCrisscross 4y ago
> the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries How complex is the Argentinian tax code? (Every democracy needs complex economic arrangements to reflect the balance of power. In America, we tend to stuff that complexity into the tax code.)
- ankaAr 4y ago
  It is easier to feed a lion wearing a bunny suit, bathed in blood. Argentinian here, we have maybe 100 taxes, a little more..
- Daishiman 4y ago

lezojeda 4y ago

>The government doesn't control them now. What do you bet there are armies of programmers working for the government, figuring out how they can? Argentinean here. That probably won't happen... for many years, at last. Programmers from my country start working for foreigners for dollares/any other non-meme coin that is no the peso. Anyone with 3+ years experience stops working for locals if they have a good english level and stop considering job offers in pesos (100% anual inflation as of now). What I'm trying to say is, the government can try to do that but it'll have to manage with only mediocre devs or spend a lot of money which... they don't really have.

Tade0 4y ago

> It means that cuevas are vulnerable to surveillance and control. Oh but the "change money" people were no less vulnerable to surveillance and control - the communist solution to this very communist problem that they posed was to use them as a source of intelligence.