6 ms·

Argentina is now the primary candidate for Bitcoin adoption. High GDP. Crazy inflation. Corrupt stupid government. Totalitarian-style financial laws. Easy

by ye 13y ago

Argentina is now the primary candidate for Bitcoin adoption. High GDP. Crazy inflation. Corrupt stupid government. Totalitarian-style financial laws. Easy widespread internet and mobile access. Not enough dollars.

wslh 13y ago
No, [We] Argentinians follow the dollar religiously. Don't try to give rational arguments in favor or against bitcoins it doesn't work here.
- fennecfoxen 13y ago
  Eh. Bitcoin won't solve Argentina's foreign-exchange woes anyway. Their fundamental problem is the nation is poor, but the government wants to declare that they're not poor by fiat (printing money, and pretending that the currency hasn't devalued by making it illegal to trade it at a decent price.) Bitcoin won't make the country prosperous any more than black-market dollars will.
  - ye 13y ago
    Bitcoin, assuming I'd does as well as before, can help against the inflation, which hits the poor disproportionately hard. And it allows to bypass the stupid laws and let's you do the online shopping almost anonymously.
    - wslh 13y ago
      No, no, no. You can't buy non virtual stuff anonymously because "everything" is stopped by customs and you need to pick it up personally with your id. You can buy virtual stuff like books, software, etc. Also with bitcoins one day you will pay X and the other X/2 or 2*X.
maxerickson 13y ago
Can you explain how a large amount of bitcoin end up getting sold into Argentina? I don't see why anybody (in country) with dollars would bother selling them for bitcoin, and I don't see why anybody with bitcoin is going to be excited about pesos. So you get a little trickle.
- gojomo 13y ago
  Whatever people are doing to get the pesos, they can do directly for bitcoin instead.
  - zfran 13y ago
    who's gonna pay in bitcoin when they can do it in shitty soon-to-devaluate pesos?
    - gojomo 13y ago
      Who's going to take pesos when someone else is offering bitcoin?
      - wslh 13y ago
        You have dollars and Argentinians love dollars. You can buy and sell dolars in the [not so] black market.
      - fancyketchup 13y ago
        Who's going to offer bitcoin? Nobody living in Argentina has any to offer. American and European tourists? Why wouldn't they keep their (appreciating) bitcoins at home and just offer to pay in Dollars or Euros?
        politician 13y ago
        They can bootstrap a Bitcoin-variant on a new block chain, and have plenty and plenty which are calibrated to the local economy rather than the Western economy. Remember, money doesn't have intrinsic value. There's no reason a bunch of pissed off middle class educated people can't en masse adopt a new way of trading resources.
exit 13y ago
so the problem isn't an imbalance of imports (sending foreign currency out) vs exports (bringing foreign currency in)?
- fennecfoxen 13y ago
  It is, and the underlying problem is that people don't want to bring dollars to Argentina. Why not? Well, because it's illegal to buy pesos with dollars at a fair price; you must accept a really crappy exchange rate or go to the black market. You can see why few would bring dollars to the country under those conditions. Currency controls like this are the hallmark of a corrupt regime trying their best to pretend there isn't any problem with printing a whole lot of money.
  - erichocean 13y ago
    Currency controls like this are the hallmark of a corrupt regime trying their best to pretend there isn't any problem with printing a whole lot of money. Maybe they've been listening to former Enron advisor and Nobel laureate Paul Krugman over at the NY Times. He's adamant that nothing bad can come from "printing a whole lot of money", and that it's just the ticket to get a problem economy going again—the more the better.
    - wslh 13y ago
      Paul Krugman is a great friend of Argentina[1] but he lives in US. [1] Paul Krugman's Very Strange Ideas About Argentina's Economy: http://www.forbes.com/sites/timworstall/2012/05/04/paul-krugmans-very-strange-ideas-about-argentinas-economy/ http://www.forbes.com/sites/timworstall/2012/05/04/paul-krug...
      - trevelyan 13y ago
        What are you talking about? This is what Krugman actually had to say about Argentina in 2001: "Argentina entered the new century in straits similar to those of a disquieting number of European counties today. With the peso shackled to the dollar, it had (as Greece, Spain, and the other so-called PIIGS on the periphery of the Eurozone do today) what appeared to be an irremediably overvalued currency sapping the competitiveness of its exports, along with mounting difficulties servicing its debt as tax receipts dwindled in the face of recession. The counsel of the IMF was naturally for austerity. The Argentines should maintain dollar convertibility—that is, a pricey currency—and trim public expenditure in order to cover interest payments. . . . [Yet] austerity in the face of gigantic indebtedness . . . yielded precisely the devaluation and default it was supposed to prevent. If the Argentine experience is truly as exemplary as the IMF once maintained, the story can’t be a heartening one in light of the turn toward austerity today being undertaken in Europe and threatened in the US." In contrast, the Forbes article is entirely unclear. It fails to explain the key point that the IMF was not just advocating depreciation, but was pushing for the sort of restrictive government austerity that has been forced on Greece. "it’s also difficult to see quite what is unorthodox or heterodox about following the standard IMF prescription for a country in such problems. Default, renegotiate the debt burden and devalue the currency to try and spark an export boom." Krugman's point is simple and stands. A simple comparison of Argentina's GDP growth post-2001 with Greek growth post-2008 shows this plainly enough: one economy recovered quickly and the other is still sinking.
michaelbuckbee 13y ago
I have an actual real-life case study that supports this. I know someone who is currently outsourcing development to Argentina (close time zone, technical population and he gets to practice his spanish). His current method of paying them is to pay a US residing relative of theirs who is basically holding the money as a stateside retirement account for the Argentinians. He offered over a year ago to start paying them in BTC so that they could actually spend they money he was paying them (for which I'm sure they are kicking themselves for turning down now). So while there are all sorts of issues with BTC in terms of liquidity, exchange and security its probably a mark of how bad it is in Argentina that BTC looks sane and stable in comparison.
- wslh 13y ago
  One of the simple ways to solve the payment issue is to open an LLC in USA, receive the payments in a US bank account and transfer the money via a "cueva" (cave). There are legal ways also, you can find the details in the Globant's SEC filling: https://www.sec.gov/Archives/edgar/data/1557860/000114420413048053/v350224_f1.htm https://www.sec.gov/Archives/edgar/data/1557860/000114420413... In that way you can buy and sell dollars using the black market currency in a legal way.
  - rahimnathwani 13y ago
    tl;dr Buy USD-denominated Argentine government bonds in the USA (or have your customer do that). Sell the bonds in Argentina, getting more pesos than you would have through the normal mechanism.
rtpg 13y ago
despite all that inflation bitcoin's volatility is a lot higher.
- ekianjo 13y ago
  Not so much in the past few weeks. After the China news stories the price has been pretty stable.
- martinvol 13y ago
  Actually no, today the peso was devalued by 3% compared to the US dollar. In just one day. And bitcoins can easily be exchanged by US dollars, so is not a bad a idea for Argentinians after all.
Argorak 13y ago
Unsurprisingly, there is high interest in Argentina for Bitcoin. The latin american bitcoin conference was in Buenos Aires and there is a foundation. http://labitconf.com/ http://labitconf.com/ http://www.bitcoinargentina.org/ http://www.bitcoinargentina.org/ A lot of argentinian hackers I spoke to are very well-informed about bitcoin.

by ye 13y ago

wslh 13y ago

No, [We] Argentinians follow the dollar religiously. Don't try to give rational arguments in favor or against bitcoins it doesn't work here.

fennecfoxen 13y ago
Eh. Bitcoin won't solve Argentina's foreign-exchange woes anyway. Their fundamental problem is the nation is poor, but the government wants to declare that they're not poor by fiat (printing money, and pretending that the currency hasn't devalued by making it illegal to trade it at a decent price.) Bitcoin won't make the country prosperous any more than black-market dollars will.
- ye 13y ago
  Bitcoin, assuming I'd does as well as before, can help against the inflation, which hits the poor disproportionately hard. And it allows to bypass the stupid laws and let's you do the online shopping almost anonymously.
  - wslh 13y ago
    No, no, no. You can't buy non virtual stuff anonymously because "everything" is stopped by customs and you need to pick it up personally with your id. You can buy virtual stuff like books, software, etc. Also with bitcoins one day you will pay X and the other X/2 or 2*X.

maxerickson 13y ago

Can you explain how a large amount of bitcoin end up getting sold into Argentina? I don't see why anybody (in country) with dollars would bother selling them for bitcoin, and I don't see why anybody with bitcoin is going to be excited about pesos. So you get a little trickle.

gojomo 13y ago
Whatever people are doing to get the pesos, they can do directly for bitcoin instead.
- zfran 13y ago
  who's gonna pay in bitcoin when they can do it in shitty soon-to-devaluate pesos?
  - gojomo 13y ago
    Who's going to take pesos when someone else is offering bitcoin?
    - wslh 13y ago
      You have dollars and Argentinians love dollars. You can buy and sell dolars in the [not so] black market.
    - fancyketchup 13y ago
      Who's going to offer bitcoin? Nobody living in Argentina has any to offer. American and European tourists? Why wouldn't they keep their (appreciating) bitcoins at home and just offer to pay in Dollars or Euros?
      - politician 13y ago
        They can bootstrap a Bitcoin-variant on a new block chain, and have plenty and plenty which are calibrated to the local economy rather than the Western economy. Remember, money doesn't have intrinsic value. There's no reason a bunch of pissed off middle class educated people can't en masse adopt a new way of trading resources.

exit 13y ago

so the problem isn't an imbalance of imports (sending foreign currency out) vs exports (bringing foreign currency in)?

fennecfoxen 13y ago
It is, and the underlying problem is that people don't want to bring dollars to Argentina. Why not? Well, because it's illegal to buy pesos with dollars at a fair price; you must accept a really crappy exchange rate or go to the black market. You can see why few would bring dollars to the country under those conditions. Currency controls like this are the hallmark of a corrupt regime trying their best to pretend there isn't any problem with printing a whole lot of money.
- erichocean 13y ago
  Currency controls like this are the hallmark of a corrupt regime trying their best to pretend there isn't any problem with printing a whole lot of money. Maybe they've been listening to former Enron advisor and Nobel laureate Paul Krugman over at the NY Times. He's adamant that nothing bad can come from "printing a whole lot of money", and that it's just the ticket to get a problem economy going again—the more the better.
  - wslh 13y ago
    Paul Krugman is a great friend of Argentina[1] but he lives in US. [1] Paul Krugman's Very Strange Ideas About Argentina's Economy: http://www.forbes.com/sites/timworstall/2012/05/04/paul-krugmans-very-strange-ideas-about-argentinas-economy/ http://www.forbes.com/sites/timworstall/2012/05/04/paul-krug...
    - trevelyan 13y ago
      What are you talking about? This is what Krugman actually had to say about Argentina in 2001: "Argentina entered the new century in straits similar to those of a disquieting number of European counties today. With the peso shackled to the dollar, it had (as Greece, Spain, and the other so-called PIIGS on the periphery of the Eurozone do today) what appeared to be an irremediably overvalued currency sapping the competitiveness of its exports, along with mounting difficulties servicing its debt as tax receipts dwindled in the face of recession. The counsel of the IMF was naturally for austerity. The Argentines should maintain dollar convertibility—that is, a pricey currency—and trim public expenditure in order to cover interest payments. . . . [Yet] austerity in the face of gigantic indebtedness . . . yielded precisely the devaluation and default it was supposed to prevent. If the Argentine experience is truly as exemplary as the IMF once maintained, the story can’t be a heartening one in light of the turn toward austerity today being undertaken in Europe and threatened in the US." In contrast, the Forbes article is entirely unclear. It fails to explain the key point that the IMF was not just advocating depreciation, but was pushing for the sort of restrictive government austerity that has been forced on Greece. "it’s also difficult to see quite what is unorthodox or heterodox about following the standard IMF prescription for a country in such problems. Default, renegotiate the debt burden and devalue the currency to try and spark an export boom." Krugman's point is simple and stands. A simple comparison of Argentina's GDP growth post-2001 with Greek growth post-2008 shows this plainly enough: one economy recovered quickly and the other is still sinking.

michaelbuckbee 13y ago

I have an actual real-life case study that supports this. I know someone who is currently outsourcing development to Argentina (close time zone, technical population and he gets to practice his spanish). His current method of paying them is to pay a US residing relative of theirs who is basically holding the money as a stateside retirement account for the Argentinians. He offered over a year ago to start paying them in BTC so that they could actually spend they money he was paying them (for which I'm sure they are kicking themselves for turning down now). So while there are all sorts of issues with BTC in terms of liquidity, exchange and security its probably a mark of how bad it is in Argentina that BTC looks sane and stable in comparison.

wslh 13y ago
One of the simple ways to solve the payment issue is to open an LLC in USA, receive the payments in a US bank account and transfer the money via a "cueva" (cave). There are legal ways also, you can find the details in the Globant's SEC filling: https://www.sec.gov/Archives/edgar/data/1557860/000114420413048053/v350224_f1.htm https://www.sec.gov/Archives/edgar/data/1557860/000114420413... In that way you can buy and sell dollars using the black market currency in a legal way.
- rahimnathwani 13y ago
  tl;dr Buy USD-denominated Argentine government bonds in the USA (or have your customer do that). Sell the bonds in Argentina, getting more pesos than you would have through the normal mechanism.

rtpg 13y ago

despite all that inflation bitcoin's volatility is a lot higher.

ekianjo 13y ago
Not so much in the past few weeks. After the China news stories the price has been pretty stable.
martinvol 13y ago
Actually no, today the peso was devalued by 3% compared to the US dollar. In just one day. And bitcoins can easily be exchanged by US dollars, so is not a bad a idea for Argentinians after all.

Argorak 13y ago

Unsurprisingly, there is high interest in Argentina for Bitcoin. The latin american bitcoin conference was in Buenos Aires and there is a foundation. http://labitconf.com/ http://labitconf.com/ http://www.bitcoinargentina.org/ http://www.bitcoinargentina.org/ A lot of argentinian hackers I spoke to are very well-informed about bitcoin.