4 ms·

This comes up over and over, where people clearly don't understand how foreign currency exchange works. The name, of course, tells you, but people seem to thin

by XorNot 4y ago

This comes up over and over, where people clearly don't understand how foreign currency exchange works. The name, of course, tells you, but people seem to think that "currency conversion" is some transformative process where rubles just become bitcoin. Which is of course: false. To turn rubles into bitcoin, someone who wants to buy rubles has to be willing to buy them for bitcoin. This means someone local, who can transact in rubles, needs to have a supply of bitcoin. Where are they getting it from? They can't buy it overseas because if you could exchange rubles with foreigners then you could also just buy USD. They could mine it, but that still means they need to be willing to accept rubles for their bitcoin, and yet the scenario presented suggests there's a path to exchange rubles for USD which is more favorable. In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally.

lolc 4y ago
No actually you can sell services (software, as the original comment alluded) and get Bitcoin in return. These Bitcoin can be sold for Rubles, or bread, or whatever. There's no forex involved unless people want the convenience of exchanges. Which is one of the limitations of Bitcoin: it's hard to deal on-net.
- XorNot 4y ago
  You would have to sell Bitcoin constantly to pay your taxes in your local jurisdiction. And while there's no unrest locally, you're at a negative: no one has any reason to give you a favorable rate, since you need rubles much more then they need Bitcoin. It's just Forex concerns, and you're going to be paying out the nose constantly on a "what if". Of course, while there's no sanctions, you could also just buy USD directly.
  - lolc 4y ago
    Before, you said that nobody in the local market has Bitcoin. Now you're arguing the opposite, that nobody in the local market wants Bitcoin. Sure, both can be true, when there's just no market. But that's a different argument.
    - XorNot 4y ago
      This isn't a contradiction: until you need Bitcoin (to leave) your demand for local currency is, effectively, infinite - because you're taxed in local currency. That's non-negotiable. After you want to leave, the situation flips on you - as the only sort of person who would have local Bitcoin, you (the royal you) are the only potential source of it to people who want to leave, but now you want to retain it. And there's the other side of the equation as well: once you leave, your situation flips again: you, and if there were actually a lot of people doing this you'd be in trouble - now have a desperate need to exchange Bitcoin into whichever local currency you actually land in, and you have to do so urgently in order to purchase food/shelter etc. This is the fundamental problem with an unpegged exchange currency: the optimum rate of exchange is either 0, or infinite. Market factors, imperfect information etc. are why this isn't the case, but it is why Bitcoin swings wildly compared to any properly managed currency. P.S. This is excluding other practical issues, like Bitcoin needing computers and internet access to work but in a time of instability access to banking is going to be extremely limited. Even if satellite internet is a thing, you're no longer going to have escrow services to conduct currency exchange - transacting in Bitcoin in a warzone involves taking a bunch of your actual resources in hand and somehow ensuring you don't get screwed in the exchange - and vice versa.
      - lolc 4y ago
        You've added a pile of arguments that there might not be a local market for Bitcoin at all. Sure, that may be the case. Who are you arguing with? This is what I saw as incomplete: > This means someone local, who can transact in rubles, needs to have a supply of bitcoin. [...] In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally. There are global markets (original example being software services) where you can get paid in Bitcoin. This possibility was omitted. Address that.
        XorNot 4y ago
        Point to literally any one of these which can pay at a rate providing an actual salary level compensation, and which will do so without knowing who you are or your current country of residence.

by XorNot 4y ago

lolc 4y ago

No actually you can sell services (software, as the original comment alluded) and get Bitcoin in return. These Bitcoin can be sold for Rubles, or bread, or whatever. There's no forex involved unless people want the convenience of exchanges. Which is one of the limitations of Bitcoin: it's hard to deal on-net.

XorNot 4y ago
You would have to sell Bitcoin constantly to pay your taxes in your local jurisdiction. And while there's no unrest locally, you're at a negative: no one has any reason to give you a favorable rate, since you need rubles much more then they need Bitcoin. It's just Forex concerns, and you're going to be paying out the nose constantly on a "what if". Of course, while there's no sanctions, you could also just buy USD directly.
- lolc 4y ago
  Before, you said that nobody in the local market has Bitcoin. Now you're arguing the opposite, that nobody in the local market wants Bitcoin. Sure, both can be true, when there's just no market. But that's a different argument.
  - XorNot 4y ago
    This isn't a contradiction: until you need Bitcoin (to leave) your demand for local currency is, effectively, infinite - because you're taxed in local currency. That's non-negotiable. After you want to leave, the situation flips on you - as the only sort of person who would have local Bitcoin, you (the royal you) are the only potential source of it to people who want to leave, but now you want to retain it. And there's the other side of the equation as well: once you leave, your situation flips again: you, and if there were actually a lot of people doing this you'd be in trouble - now have a desperate need to exchange Bitcoin into whichever local currency you actually land in, and you have to do so urgently in order to purchase food/shelter etc. This is the fundamental problem with an unpegged exchange currency: the optimum rate of exchange is either 0, or infinite. Market factors, imperfect information etc. are why this isn't the case, but it is why Bitcoin swings wildly compared to any properly managed currency. P.S. This is excluding other practical issues, like Bitcoin needing computers and internet access to work but in a time of instability access to banking is going to be extremely limited. Even if satellite internet is a thing, you're no longer going to have escrow services to conduct currency exchange - transacting in Bitcoin in a warzone involves taking a bunch of your actual resources in hand and somehow ensuring you don't get screwed in the exchange - and vice versa.
    - lolc 4y ago
      You've added a pile of arguments that there might not be a local market for Bitcoin at all. Sure, that may be the case. Who are you arguing with? This is what I saw as incomplete: > This means someone local, who can transact in rubles, needs to have a supply of bitcoin. [...] In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally. There are global markets (original example being software services) where you can get paid in Bitcoin. This possibility was omitted. Address that.
      - XorNot 4y ago
        Point to literally any one of these which can pay at a rate providing an actual salary level compensation, and which will do so without knowing who you are or your current country of residence.