4 ms·

Why Bitcoins are more expensive in Argentina than in the US

65 points by Sealy 13y ago

deleted 13y ago
[deleted]
- deleted 13y ago
  [deleted]
probably_wrong 13y ago
Short version: they are not - the real problem is that there are two values for the dollar in Argentina, the official one (highly manipulated to hide, among other things, the real value of inflation) and the unofficial one (the one everyone accepts as the real one, except of course for the government). The author is taking the "fake" dollar value and using it to prove that bitcoins are more expensive, but he could apply this approach to pretty much anything. This is shown by the author in the second graph, btw, so I can only guess than the title has been intentionally framed in such a way that allows the author to write about economy in Argentina in a website dedicate to digital currency.
jerguismi 13y ago
Title is misleading. No one really uses the official goverment exchange rate. Also trade goes both way in Argentina, the market is illiquid so the spread is high. Localbitcoins offers anonymized trade data from ARS, however it is somewhat crappy interface now: https://localbitcoins.com/bitcoincharts/ARS/trades.json?since=200426 https://localbitcoins.com/bitcoincharts/ARS/trades.json?sinc... (iterate the since argument with tid) https://localbitcoins.com/country/AR https://localbitcoins.com/country/AR
ErsatzVerkehr 13y ago
Clearly this is just another symptom of the Great Argentine Coin Shortage. i.e., http://www.newyorker.com/talk/financial/2009/06/08/090608ta_talk_surowiecki http://www.newyorker.com/talk/financial/2009/06/08/090608ta_...
- missing_cipher 13y ago
  This has actually gotten better recently. They introduced a magnetic card for transportation(bus, subway, trains), SUBE: http://en.wikipedia.org/wiki/SUBE_card http://en.wikipedia.org/wiki/SUBE_card
rubyrescue 13y ago
see my comments here - http://news.ycombinator.com/item?id=5968355 http://news.ycombinator.com/item?id=5968355 - basically the market is very illiquid and the volumes are small.
aortega 13y ago
Government highly regulates and practically prohibits the dollar here in Argentina. As a consequence, black market dollar is the only available and it's obviously more expensive. Huge inflation of 25% or more makes the black-market dollar even more attractive. Today the dollar exchange here is 5.50 ar$, and black-market dollar is 8.7 ar$. There are several ways to circumvent the prohibition, for example using credit cards. But the clever government implements all kind of crazy pseudo-taxes on dollar purchases to close the loophole. Bitcoin is another example of such loopholes, but very expensive and illiquid at the moment. By the way, the same situation happens in Venezuela but the grip is harder and has been happening for far longer, official dollar is 6.3 Bs. while black-market "lechuga" dollar is a whopping 34 Bs., so bitcoin exchange should be even more attractive there.
- rafaelm 13y ago
  I'm in Venezuela and unfortunately I've never heard anyone talking about Bitcoin here.I haven't really looked hard,to be honest. Dollar purchases are totally prohibited here , we only get $400/year for online purchases and ~$2500 for travellers. The black market here is just out of control, like you said, just today a friend sold $1000 at Bs.32. The Government only gives dollars at the official rate (Bs.6.3) to their close friends (corruption). Venezuela does not produce anything other than oil. So , everything we consume here is imported (food,clothing,etc). If you are in commerce and need to import something, you go to the black market. And that explains why the projected inflation for this year is ~45 - 50%. Argentina already suffered hyper-inflation not too long ago. I cannot understand why they did not learn from their mistakes.
  - aortega 13y ago
    Well, because of course it was not a mistake. Inflation is a way to transfer wealth from the general population to the guys with the printing press (The gov friends). The only way to escape this trap is to save money in a hard currency, for example the dol...wait a minute...
    - rafaelm 13y ago
lucasrp 13y ago
The article is wrong. The official exchange rate is a phony rate. The real price is the street price, and it's relatively the same as in other countries. If we take the official exchange rate in consideration, then EVERYTHING is more expensive in Argentina than in the US, because the black market is the only market accessible to regular people.

65 points by Sealy 13y ago

deleted 13y ago

[deleted]

deleted 13y ago
[deleted]

probably_wrong 13y ago

Short version: they are not - the real problem is that there are two values for the dollar in Argentina, the official one (highly manipulated to hide, among other things, the real value of inflation) and the unofficial one (the one everyone accepts as the real one, except of course for the government). The author is taking the "fake" dollar value and using it to prove that bitcoins are more expensive, but he could apply this approach to pretty much anything. This is shown by the author in the second graph, btw, so I can only guess than the title has been intentionally framed in such a way that allows the author to write about economy in Argentina in a website dedicate to digital currency.

jerguismi 13y ago

Title is misleading. No one really uses the official goverment exchange rate. Also trade goes both way in Argentina, the market is illiquid so the spread is high. Localbitcoins offers anonymized trade data from ARS, however it is somewhat crappy interface now: https://localbitcoins.com/bitcoincharts/ARS/trades.json?since=200426 https://localbitcoins.com/bitcoincharts/ARS/trades.json?sinc... (iterate the since argument with tid) https://localbitcoins.com/country/AR https://localbitcoins.com/country/AR

ErsatzVerkehr 13y ago

Clearly this is just another symptom of the Great Argentine Coin Shortage. i.e., http://www.newyorker.com/talk/financial/2009/06/08/090608ta_talk_surowiecki http://www.newyorker.com/talk/financial/2009/06/08/090608ta_...

missing_cipher 13y ago
This has actually gotten better recently. They introduced a magnetic card for transportation(bus, subway, trains), SUBE: http://en.wikipedia.org/wiki/SUBE_card http://en.wikipedia.org/wiki/SUBE_card

rubyrescue 13y ago

see my comments here - http://news.ycombinator.com/item?id=5968355 http://news.ycombinator.com/item?id=5968355 - basically the market is very illiquid and the volumes are small.

aortega 13y ago

Government highly regulates and practically prohibits the dollar here in Argentina. As a consequence, black market dollar is the only available and it's obviously more expensive. Huge inflation of 25% or more makes the black-market dollar even more attractive. Today the dollar exchange here is 5.50 ar$, and black-market dollar is 8.7 ar$. There are several ways to circumvent the prohibition, for example using credit cards. But the clever government implements all kind of crazy pseudo-taxes on dollar purchases to close the loophole. Bitcoin is another example of such loopholes, but very expensive and illiquid at the moment. By the way, the same situation happens in Venezuela but the grip is harder and has been happening for far longer, official dollar is 6.3 Bs. while black-market "lechuga" dollar is a whopping 34 Bs., so bitcoin exchange should be even more attractive there.

rafaelm 13y ago
I'm in Venezuela and unfortunately I've never heard anyone talking about Bitcoin here.I haven't really looked hard,to be honest. Dollar purchases are totally prohibited here , we only get $400/year for online purchases and ~$2500 for travellers. The black market here is just out of control, like you said, just today a friend sold $1000 at Bs.32. The Government only gives dollars at the official rate (Bs.6.3) to their close friends (corruption). Venezuela does not produce anything other than oil. So , everything we consume here is imported (food,clothing,etc). If you are in commerce and need to import something, you go to the black market. And that explains why the projected inflation for this year is ~45 - 50%. Argentina already suffered hyper-inflation not too long ago. I cannot understand why they did not learn from their mistakes.
- aortega 13y ago
  Well, because of course it was not a mistake. Inflation is a way to transfer wealth from the general population to the guys with the printing press (The gov friends). The only way to escape this trap is to save money in a hard currency, for example the dol...wait a minute...
  - rafaelm 13y ago

lucasrp 13y ago

The article is wrong. The official exchange rate is a phony rate. The real price is the street price, and it's relatively the same as in other countries. If we take the official exchange rate in consideration, then EVERYTHING is more expensive in Argentina than in the US, because the black market is the only market accessible to regular people.