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> 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
by 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 agoIt 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 agoComplex and terribly executed; certain classes of businesses cannot pay their tax burden while remaining profitable.
- yazantapuz 4y agoIt is a nightmare.
- AlbertCory 4y agoThanks, I don't pretend to know how all that works in Argentina. So cuevas are buddies with those in power? Wouldn't that mean they get extorted to stay in business? And if they don't come up with the requested bribes, or otherwise run afoul of their "sponsors" then they get shut down and the customers are SOL?
- justbored123 4y ago
- Daishiman 4y agoWell if they shut down who else is gonna exchange your worthless pesos for hard currency?
- AlbertCory 4y agoI didn't mean all of them. Just the one you're unlucky enough to be with.
- Daishiman 4y agoHundreds of millions move through those, including importers and exporters from foreign markets with mafia connections. A figurative hornet's nest to disturb.
- daniel-cussen 4y agoYeah so there, and Brazil, there are for sure businesses that can handle the level of racket--but they're locals, and connected. Speaking the language is fairly critical. Being chill. Immigrants starting a business never get a toehold, the price doubles every time they pay it pretty much. Unless...unless you're magical or some shit, like unbelievable, next level. Oh you know who? Truecrypt author, Paul Le Roux, him.
- fragmede 4y agoThe cuevas existed before crypto though, so all that's changed is some backend implementation details of how they operate, rather than anything else. Users put their trust in cuevas to handle their money as much as regular people in other countries put their trust in their local bank. The lack of uptake in crypto by regular people in Argentina underlies how much the decentralized promised cryptocurrency future simply isn't that interesting (for whatever reason) by regular people, even in a country where you'd expect people to be aware of the issues of fiat currency. The underlying fact seems to be that cuevas have managed to put enough trust in Binance to use it as their centralized platform, and that the underlying technology is so esoteric that "17-year old with a smartphone and the binance app" is all the implementation detail that's necessary for them. Smart contracts (to them) are just some esoteric money trinket, like folding animals out of dollar bills.