9 ms·

>between two entities usually consists of a heavily guarded, insured, physical shipment of cash or gold. Err, life isn't a james bond movie. For money transfer

>between two entities usually consists of a heavily guarded, insured, physical shipment of cash or gold. Err, life isn't a james bond movie. For money transfer like this we use bank wires. We dont buy gold and ship it on gunships anymore.

endlessvoid94 13y ago
Any transfer over 10,000 requires a signature.
derefr 13y ago
That's only if the two entities can both interact with the global banking infrastructure (i.e. they hold money in reserve currencies, their accounts aren't frozen, etc.) If someone in Argentina wanted to buy something from anywhere else in the world in 2000, for example, they'd basically have to trade natural resources or gold for access to foreign currency, and then spend that.
- muzzamike 13y ago
  In 2000...
  - derefr 13y ago
    Yes, in 2000, because that was during the period Argentina's currency was collapsed. Any other country's currency could collapse at any time, putting some other group in the same situation.
  - aortega 13y ago
    2013 Argentinian here. To buy a house right now you usually have to pay dollars cash because nobody accepts a currency that devaluates 25% per year. The political class here is crazy corrupt and rich like in every third world country, and they are known for using piles of 500 euros bills to stay out of the bank system because euros have more wealth density than dollars.
    - jpmc 13y ago
      The other big issue is how hard it is to exchange pesos for dollars. The government is doing all they can to make it nearly impossible for the average Argentinian to avoid the massive devaluation.
    - nico 13y ago
      I'm a little offended by the "like in every third world country" statement. Chile is not like that at all, and we are a third world country. In fact, here we are ranked right under (20th) the US (19th) in terms of transparency: http://www.transparency.org/country#CHL http://www.transparency.org/country#CHL http://www.transparency.org/country#USA_DataResearch http://www.transparency.org/country#USA_DataResearch Argentina is ranked 102: http://www.transparency.org/country#ARG_DataResearch http://www.transparency.org/country#ARG_DataResearch In all of Latin America, the closest countries to Chile in that transparency ranking are Costa Rica, with the 48th place, then Cuba 58th and then Brazil 69th. Edit: added justification data with links / I'm proud of Chile
      - derefr 13y ago
        Chile will probably stop being third-world soon enough, though (I heard something about startup accelerators popping up there?) There should be a term for "third-world country that's probably going to stay third-world for the forseeable future, excepting a revolutionary change of government." Maybe... dystopia? Argentina is a dystopia.
        nico 13y ago
        Checkout http://startupchile.org http://startupchile.org they've made a lot of noise. There are quite a few cool (and successful) companies that have come out of there. My two favorites: Padlet (padlet.com) and Admetricks (admetricks.com). Padlet was also in YC and Imagine K-12 (after StartupChile)
        aortega 13y ago
        >Chile will probably stop being third-world soon enough Sorry, I don't think so. Chile is doing good nowadays but basically their only export is copper. Copper is a semi-precious metal right now and thats why that country suddenly has so much wealth, but the difference between rich and poor is abysmal and their economy is tied to the price a single non-renewable resource. Compared to Chile, Argentina still has a huge tech industry capable of exporting value-added products like cars.
  - muzzamike 13y ago
    Rushed and misread your comment, apologizes.
- jypepin 13y ago
  Still today in fact. Not sure exactly of all the details, but Argentinians are simply not allowed to change their currency. They need to fill documents to officially ask the government, which will likely refuse you the right if it is for a huge amount (remember, this 'non-change' policy is exactly for that, avoid flights of capitals).
  - brazzy 13y ago
    AFAIK, the government does allow the exchange of currency, it just mandates an unrealistic exchange rate at which there is practically no supply. However, there is a lively black market that is tolerated (probably because it's cash based and thus does not scale but serves average people well enough) - newspapers publish the rates, traders operate quite openly. In an interesting validation of basic economy, the black market rates are much closer to the official ones in rurual tourist hotspots, presumably due to the much bigger supply of foreign currencies.
- Tarang 13y ago
  I think they use reserve accounts with each other backed against gold held in larger central banks. At the end of the day it's still a plain bank wire (I owe you x) hoping for an opposing (we owe you x) to cancel it off. Or for the reserves to build up of what is owed..
qnr 13y ago
The parent comment said direct transfer. Bank wire involves intermediate parties, is subject to various capital limits, account closures, funds freeze etc.
- mkramlich 13y ago
  and fees with Bitcoin, fees are optional
  - Marazan 13y ago
    And if you don't pay the Bitcoin bribes, sorry fees, your transaction can take hours or even days to be accepted by the benevolent miners.
JackFr 13y ago
Not true: http://www.bloomberg.com/news/2012-01-31/venezuela-receives-last-shipment-of-repatriated-gold-bars-1-.html http://www.bloomberg.com/news/2012-01-31/venezuela-receives-... http://www.forbes.com/sites/afontevecchia/2013/01/16/germany-repatriating-gold-from-ny-paris-in-case-of-a-currency-crisis/ http://www.forbes.com/sites/afontevecchia/2013/01/16/germany...
- smackfu 13y ago
  True but these are both transferring gold so that the gold is in a different physical location, not transferring gold to pay someone. I'm sure both cases would much rather sell the gold in place A and buy it in place B, but that's just not possible at this quantity of gold.
  - fragsworth 13y ago
    The same can be done with bitcoins - because they do exist in physical locations (as many physical locations as you want, actually, but you probably don't want too many...)
- fragsworth 13y ago
  Not only is gold shipped frequently, it's also stolen frequently: http://rt.com/news/gold-shipment-stolen-france-304/ http://rt.com/news/gold-shipment-stolen-france-304/ http://www.reuters.com/article/2013/05/16/us-usa-miami-gold-idUSBRE94F0RM20130516 http://www.reuters.com/article/2013/05/16/us-usa-miami-gold-...
  - socillion 13y ago
    Not only is Bitcoin sent frequently, it's also stolen frequently: http://rt.com/news/bitcoin-hacking-stolen-million-417/ http://rt.com/news/bitcoin-hacking-stolen-million-417/ http://www.nbcnews.com/technology/250-000-worth-bitcoins-stolen-net-heist-980871 http://www.nbcnews.com/technology/250-000-worth-bitcoins-sto... http://www.esecurityplanet.com/network-security/czech-bitcoin-exchange-bitcash.cz-hacked.html http://www.esecurityplanet.com/network-security/czech-bitcoi... edit: unrelated, someone should make an index of how many Bitcoin threads hit the front page of HN per day.
27182818284 13y ago
>For money transfer like this we use bank wires Yeah and there is a fee involved too, right?
saalweachter 13y ago
Isn't this what happens at the Reserve in downtown Manhattan? Everyone just keeps (a huge portion of) their gold in a single vault. A gold transfer involves carrying gold bars from one compartment of the vault to a second compartment in the same vault.
bsandbox 13y ago
Reminds me one of Michael Lewis' anecdotes from The Big Short. Something along the lines of one of the big Wall Street banks transferring tens of billions of dollars to the Fed by literally gathering up a set of bonds from their safe, putting them in a briefcase and giving them to a secretary and an armed guard to carry to the building across the street where the Fed had set up an impromptu office.

endlessvoid94 13y ago

Any transfer over 10,000 requires a signature.

derefr 13y ago

That's only if the two entities can both interact with the global banking infrastructure (i.e. they hold money in reserve currencies, their accounts aren't frozen, etc.) If someone in Argentina wanted to buy something from anywhere else in the world in 2000, for example, they'd basically have to trade natural resources or gold for access to foreign currency, and then spend that.

muzzamike 13y ago
In 2000...
- derefr 13y ago
  Yes, in 2000, because that was during the period Argentina's currency was collapsed. Any other country's currency could collapse at any time, putting some other group in the same situation.
- aortega 13y ago
  2013 Argentinian here. To buy a house right now you usually have to pay dollars cash because nobody accepts a currency that devaluates 25% per year. The political class here is crazy corrupt and rich like in every third world country, and they are known for using piles of 500 euros bills to stay out of the bank system because euros have more wealth density than dollars.
  - jpmc 13y ago
    The other big issue is how hard it is to exchange pesos for dollars. The government is doing all they can to make it nearly impossible for the average Argentinian to avoid the massive devaluation.
  - nico 13y ago
    I'm a little offended by the "like in every third world country" statement. Chile is not like that at all, and we are a third world country. In fact, here we are ranked right under (20th) the US (19th) in terms of transparency: http://www.transparency.org/country#CHL http://www.transparency.org/country#CHL http://www.transparency.org/country#USA_DataResearch http://www.transparency.org/country#USA_DataResearch Argentina is ranked 102: http://www.transparency.org/country#ARG_DataResearch http://www.transparency.org/country#ARG_DataResearch In all of Latin America, the closest countries to Chile in that transparency ranking are Costa Rica, with the 48th place, then Cuba 58th and then Brazil 69th. Edit: added justification data with links / I'm proud of Chile
    - derefr 13y ago
      Chile will probably stop being third-world soon enough, though (I heard something about startup accelerators popping up there?) There should be a term for "third-world country that's probably going to stay third-world for the forseeable future, excepting a revolutionary change of government." Maybe... dystopia? Argentina is a dystopia.
      - nico 13y ago
        Checkout http://startupchile.org http://startupchile.org they've made a lot of noise. There are quite a few cool (and successful) companies that have come out of there. My two favorites: Padlet (padlet.com) and Admetricks (admetricks.com). Padlet was also in YC and Imagine K-12 (after StartupChile)
      - aortega 13y ago
        >Chile will probably stop being third-world soon enough Sorry, I don't think so. Chile is doing good nowadays but basically their only export is copper. Copper is a semi-precious metal right now and thats why that country suddenly has so much wealth, but the difference between rich and poor is abysmal and their economy is tied to the price a single non-renewable resource. Compared to Chile, Argentina still has a huge tech industry capable of exporting value-added products like cars.
- muzzamike 13y ago
  Rushed and misread your comment, apologizes.
jypepin 13y ago
Still today in fact. Not sure exactly of all the details, but Argentinians are simply not allowed to change their currency. They need to fill documents to officially ask the government, which will likely refuse you the right if it is for a huge amount (remember, this 'non-change' policy is exactly for that, avoid flights of capitals).
- brazzy 13y ago
  AFAIK, the government does allow the exchange of currency, it just mandates an unrealistic exchange rate at which there is practically no supply. However, there is a lively black market that is tolerated (probably because it's cash based and thus does not scale but serves average people well enough) - newspapers publish the rates, traders operate quite openly. In an interesting validation of basic economy, the black market rates are much closer to the official ones in rurual tourist hotspots, presumably due to the much bigger supply of foreign currencies.
Tarang 13y ago
I think they use reserve accounts with each other backed against gold held in larger central banks. At the end of the day it's still a plain bank wire (I owe you x) hoping for an opposing (we owe you x) to cancel it off. Or for the reserves to build up of what is owed..

qnr 13y ago

The parent comment said direct transfer. Bank wire involves intermediate parties, is subject to various capital limits, account closures, funds freeze etc.

mkramlich 13y ago
and fees with Bitcoin, fees are optional
- Marazan 13y ago
  And if you don't pay the Bitcoin bribes, sorry fees, your transaction can take hours or even days to be accepted by the benevolent miners.

JackFr 13y ago

Not true: http://www.bloomberg.com/news/2012-01-31/venezuela-receives-last-shipment-of-repatriated-gold-bars-1-.html http://www.bloomberg.com/news/2012-01-31/venezuela-receives-... http://www.forbes.com/sites/afontevecchia/2013/01/16/germany-repatriating-gold-from-ny-paris-in-case-of-a-currency-crisis/ http://www.forbes.com/sites/afontevecchia/2013/01/16/germany...

smackfu 13y ago
True but these are both transferring gold so that the gold is in a different physical location, not transferring gold to pay someone. I'm sure both cases would much rather sell the gold in place A and buy it in place B, but that's just not possible at this quantity of gold.
- fragsworth 13y ago
  The same can be done with bitcoins - because they do exist in physical locations (as many physical locations as you want, actually, but you probably don't want too many...)
fragsworth 13y ago
Not only is gold shipped frequently, it's also stolen frequently: http://rt.com/news/gold-shipment-stolen-france-304/ http://rt.com/news/gold-shipment-stolen-france-304/ http://www.reuters.com/article/2013/05/16/us-usa-miami-gold-idUSBRE94F0RM20130516 http://www.reuters.com/article/2013/05/16/us-usa-miami-gold-...
- socillion 13y ago
  Not only is Bitcoin sent frequently, it's also stolen frequently: http://rt.com/news/bitcoin-hacking-stolen-million-417/ http://rt.com/news/bitcoin-hacking-stolen-million-417/ http://www.nbcnews.com/technology/250-000-worth-bitcoins-stolen-net-heist-980871 http://www.nbcnews.com/technology/250-000-worth-bitcoins-sto... http://www.esecurityplanet.com/network-security/czech-bitcoin-exchange-bitcash.cz-hacked.html http://www.esecurityplanet.com/network-security/czech-bitcoi... edit: unrelated, someone should make an index of how many Bitcoin threads hit the front page of HN per day.

27182818284 13y ago

>For money transfer like this we use bank wires Yeah and there is a fee involved too, right?

saalweachter 13y ago

Isn't this what happens at the Reserve in downtown Manhattan? Everyone just keeps (a huge portion of) their gold in a single vault. A gold transfer involves carrying gold bars from one compartment of the vault to a second compartment in the same vault.

bsandbox 13y ago

Reminds me one of Michael Lewis' anecdotes from The Big Short. Something along the lines of one of the big Wall Street banks transferring tens of billions of dollars to the Fed by literally gathering up a set of bonds from their safe, putting them in a briefcase and giving them to a secretary and an armed guard to carry to the building across the street where the Fed had set up an impromptu office.