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The problem here is that nobody wants Bolívars (the Venezuelan currency), since it's almost imposible to convert them back to USD or any other currency. A sale

by josu 12y ago

The problem here is that nobody wants Bolívars (the Venezuelan currency), since it's almost imposible to convert them back to USD or any other currency. A sales manager for Marriot was telling me that in Caracas they charge 40$ a night if you pay with USD or 300$ if you pay with bolívars. So the only people that would be willing to exchange bitcoins for bolívars would be people who live in Venezuela. So I assume that supply of bitcoins in Venezuela is really scarce, and their price should be on pair with black market dollars, so probably 6-7x the international price. The only way around this would be if Venezuelans were to mine their own bitcoins, but given that most of the mining equipment is sold either in USD or BTC, it's just a catch 22. So no, there is no bitcoin economy in Venezuela and as long as they keep their strict capital controls in place, there won't be any kind of economy in Venezuela.

harry8 12y ago
The point is you get a fair, unregulated, market exchange rate of Bolivars to USD (or Euro or Yuan or whatever) via bitcoin currency. At whatever that rate is based on supply and demand and you can transact at that rate. Currency controls mean "we the govt. say our currency is worth x USD and you must transact at that rate" which kills the market and means zero USD sellers. I'd expect the USD to Bolivar rate via bitcoin to be significantly more Bolivar to USD than the "official" rate. In a sense this is nothing especially new in markets. You could always get a wildly more favourable rate for your USD behind the iron curtain on the black market. Local currency is worth something, people will take it at some value. Even zimbabwe, just add a bunch of zeroes...
- jfroma 12y ago
  Exactly, in Argentina the situation is similar. The problem is that no body wants bolivar (or pesos) at the official rate because is unfair. Bitcoin can help to make that more fair and here is an example. An example is a person that works for a company abroad from Venezuela . If he does what is supposed to do, he will get paid in dollars but with a wire transfer but the local bank gives bolivar at the official rate only and won't be able to buy dollars back. On the other hand there is always another person that needs to get dollars, to travel or to pay something. One way to solve this issue is with Bank accounts abroad, the first person get paid on an account in a bank outside Venezuela, then he wire to the second person acc abroad. In exchange the second person pay in bolivar at a good rate to the first one. In the black market it sometimes call "wire dollar" or cable dollar. Bitcoin can makes this easier because is more tangible, you can meet someone at any place and move the bitcoins from phone. It requires less trust between the parties. The money always go where it wants to go, there is no way to regulate.
imaginenore 12y ago
It's true. Try and find an online exchange willing to exchange Bolivars (VEF) to USD. If you are a bitcoin seller, what can you do with Bolivars other than spend them in Venezuela? Xe.com exchange rate is currently 1 USD = 6.29 VEF So you would expect 1 BTC to be worth around 350*6.29 = 2,201 VEF. Yet on localbitcoins Caracas they sell for more than 20 times that much: https://localbitcoins.com/places/570916/caracas-ve/ https://localbitcoins.com/places/570916/caracas-ve/ It seems like a tremendous arbitrage opportunity, if only there was a way to sell Bolivars. Anyways, if I am ever to travel to Venezuela, I will come with Bitcoins.
- rafaelm 12y ago
  Actually, the 6.29 exchange rate is only for importers of medicines and food, which are mostly government friends and cronies who are becoming multi-millionaires by buying dollars from the govt at Bs.6.9. Then they claim they bought food from a foreign company (which they also own in Panama or somewhere else) and they sell it back to the govt at Bs.80-100 per dollar and they pocket the difference. Or they buy dollars at the 6.9 rate, claim they are importing farming machinery for $2-3million. Then they buy one tractor for $50k, pay off the corresponding govt official, and keep the difference. And I'm not making this up. They recently tried to arrest 2 or 3 guys on this (they probably didn't pay enough) and they just fled to Miami and Panama. If you come to venezuela, bring dollars. You will always find someone that will buy them at the black market rate of almost Bs.100 per dollar. You could live like a king here with $1000 for quite a while.
awongh 12y ago
Or, what are the chances that things get bad enough that people begin to request payments for goods or services in bitcoin? This would solve the problem of shortage of physical us dollars.... Or in the case that you have the ability to request bitcoin can you simply request virtual us dollars just as easily? ( are there restrictions against this? )
FloresHernandez 12y ago
Actually, is the other way around. It is cheaper to pay in Bolivars than Dollars. Right now is 9000 Bolivars (Around 90 Dollars) vs. 130 Dollars a night at the Marriott in Caracas. It used to be crazy before, if you paid in Bolivars it was only 100 dollars vs 600 dollars if you paid in USD. Fun fact, even if you were paying in Bolivars way less, you still used to get Marriott points as if you were spending 600 dollars a night, so the quickest way to get a lot of points was staying at the Caracas Marriott. Having said that, I have yet to hear about anyone bypassing the regulations by using bitcoins. Is still not that hard finding someone selling dollars.
- josu 12y ago
  According to the Marriott page, the exchange rate that they apply is 1USD=50VEF [1]. This is 7 times the official exchange rate, on par with what I was saying. But I haven't been to Venezuela, so I might be missing something. [1] http://i.imgur.com/D1wLoQM.png http://i.imgur.com/D1wLoQM.png
- hopeee 12y ago
  this also used to apply for airlines miles, it used to be awesome :D
presty 12y ago
> The problem here is that nobody wants Bolívars how do you pay your taxes?

by josu 12y ago

harry8 12y ago

The point is you get a fair, unregulated, market exchange rate of Bolivars to USD (or Euro or Yuan or whatever) via bitcoin currency. At whatever that rate is based on supply and demand and you can transact at that rate. Currency controls mean "we the govt. say our currency is worth x USD and you must transact at that rate" which kills the market and means zero USD sellers. I'd expect the USD to Bolivar rate via bitcoin to be significantly more Bolivar to USD than the "official" rate. In a sense this is nothing especially new in markets. You could always get a wildly more favourable rate for your USD behind the iron curtain on the black market. Local currency is worth something, people will take it at some value. Even zimbabwe, just add a bunch of zeroes...

jfroma 12y ago
Exactly, in Argentina the situation is similar. The problem is that no body wants bolivar (or pesos) at the official rate because is unfair. Bitcoin can help to make that more fair and here is an example. An example is a person that works for a company abroad from Venezuela . If he does what is supposed to do, he will get paid in dollars but with a wire transfer but the local bank gives bolivar at the official rate only and won't be able to buy dollars back. On the other hand there is always another person that needs to get dollars, to travel or to pay something. One way to solve this issue is with Bank accounts abroad, the first person get paid on an account in a bank outside Venezuela, then he wire to the second person acc abroad. In exchange the second person pay in bolivar at a good rate to the first one. In the black market it sometimes call "wire dollar" or cable dollar. Bitcoin can makes this easier because is more tangible, you can meet someone at any place and move the bitcoins from phone. It requires less trust between the parties. The money always go where it wants to go, there is no way to regulate.

imaginenore 12y ago

It's true. Try and find an online exchange willing to exchange Bolivars (VEF) to USD. If you are a bitcoin seller, what can you do with Bolivars other than spend them in Venezuela? Xe.com exchange rate is currently 1 USD = 6.29 VEF So you would expect 1 BTC to be worth around 350*6.29 = 2,201 VEF. Yet on localbitcoins Caracas they sell for more than 20 times that much: https://localbitcoins.com/places/570916/caracas-ve/ https://localbitcoins.com/places/570916/caracas-ve/ It seems like a tremendous arbitrage opportunity, if only there was a way to sell Bolivars. Anyways, if I am ever to travel to Venezuela, I will come with Bitcoins.

rafaelm 12y ago
Actually, the 6.29 exchange rate is only for importers of medicines and food, which are mostly government friends and cronies who are becoming multi-millionaires by buying dollars from the govt at Bs.6.9. Then they claim they bought food from a foreign company (which they also own in Panama or somewhere else) and they sell it back to the govt at Bs.80-100 per dollar and they pocket the difference. Or they buy dollars at the 6.9 rate, claim they are importing farming machinery for $2-3million. Then they buy one tractor for $50k, pay off the corresponding govt official, and keep the difference. And I'm not making this up. They recently tried to arrest 2 or 3 guys on this (they probably didn't pay enough) and they just fled to Miami and Panama. If you come to venezuela, bring dollars. You will always find someone that will buy them at the black market rate of almost Bs.100 per dollar. You could live like a king here with $1000 for quite a while.

awongh 12y ago

Or, what are the chances that things get bad enough that people begin to request payments for goods or services in bitcoin? This would solve the problem of shortage of physical us dollars.... Or in the case that you have the ability to request bitcoin can you simply request virtual us dollars just as easily? ( are there restrictions against this? )

FloresHernandez 12y ago

Actually, is the other way around. It is cheaper to pay in Bolivars than Dollars. Right now is 9000 Bolivars (Around 90 Dollars) vs. 130 Dollars a night at the Marriott in Caracas. It used to be crazy before, if you paid in Bolivars it was only 100 dollars vs 600 dollars if you paid in USD. Fun fact, even if you were paying in Bolivars way less, you still used to get Marriott points as if you were spending 600 dollars a night, so the quickest way to get a lot of points was staying at the Caracas Marriott. Having said that, I have yet to hear about anyone bypassing the regulations by using bitcoins. Is still not that hard finding someone selling dollars.

josu 12y ago
According to the Marriott page, the exchange rate that they apply is 1USD=50VEF [1]. This is 7 times the official exchange rate, on par with what I was saying. But I haven't been to Venezuela, so I might be missing something. [1] http://i.imgur.com/D1wLoQM.png http://i.imgur.com/D1wLoQM.png
hopeee 12y ago
this also used to apply for airlines miles, it used to be awesome :D

presty 12y ago

> The problem here is that nobody wants Bolívars how do you pay your taxes?