6 ms·

How Bitcoin Is Disrupting Argentina’s Economy

114 points by herendin 11y ago

kleer001 11y ago
"The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage." That's the very definition of not disrupting.
- fips140 11y ago
  Oh, go back to bed sourpuss
- DickingAround 11y ago
  Requiring any disruption to take broad effect before saying it's a 'disruption' makes that word useless. That would be like saying a crack in a wall doesn't matter till the wall falls over. The real question is whether this is hairline crack that the rebar of their society will keep in place or if it's a crack that's unchecked and will continue to grow?
  - davidgerard 11y ago
    Requiring a disruption to at least barely register is pretty fair though. Bitcoin itself barely registers as an economic disruption (though it's got a lot of coverage for its reputational relation to criminals and scams), and this "disruption" barely registers in relation to something that barely registers. This article is a press release for a book.
    - juanignacio 11y ago
      It may disrupt the traditional way money is moved around in the River Plate: in bags and attached to body in the ferry to Montevideo.
  - bencollier49 11y ago
    "Threatens to disrupt".
    - kleer001 11y ago
      Good call. That would have been wholly correct, enthusiastic, optimistic, and I would have still clicked the link.
  - kleer001 11y ago
    > That would be like saying a crack in a wall doesn't matter till the wall falls over. If you point at a crack in the wall and say "The wall is falling over!" I'm going to laugh in your face. Then I'll get some spackle.
  - mikeash 11y ago
    How does it make the word useless? For your wall analogy, let's look at the word "destroy." A crack starts in the wall, and grows until the wall falls over. At this point, the wall is destroyed. But when the crack that eventually destroys the wall is still small, is the wall "destroyed" at that point? Of course not. Does that make the word "destroyed" useless? Not at all.
davidgerard 11y ago
SPOILER: it's not. > The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage. This article is hype: "This article was adapted from 'Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money'". It reads like a press release because it is one. > This is the street-smart economics. Not the complex Ph.D. economics. The phrase "I'm not book-smart, I'm street-smart" can be rephrased "I'm not real-credible, I'm fake-credible." It's the sort of thing expert beginners say, particularly when they've reached the stage of recognising and disparaging actual expertise in their subject. And hoo boy, Bitcoiners are at the far end of expert beginner. There is no reason to expect anything good or useful from this article.
random28345 11y ago
"See, Bitcoin isn't just for illegal drug purposes. It's also for illegally circuventing currency controls!" Psychic prediction. In ten years, there will be some jurisdictions where possesion of a copy of the bitcoin ledger will be a criminal offense.
- exelius 11y ago
  Well, Argentina's currency controls are legendary for how awful they are. If you want a lesson in how NOT to manage monetary policy, look at Argentina since about 1900. The country was the richest in the world at the time, but since then has alternated between boom and bust thanks to its disastrous monetary policy. Evading the government's currency controls is a way of life for Argentinians.
  - Sherlock 11y ago
    The Economist published an interesting report about that some months ago. The main takeaways were that (1) Argentine was rich, but lagged behind its money-peers in human development indexes such as literacy rates and (2) The elite from Argentina benefited from high food prices, so the rest of the country resented them, a brewing pot for populism. But your point stands, monetary (or fiscal) policy was awful.
- smtddr 11y ago
  I suspect the only reason this hasn't happened already is because some very wealthy & connected people are profiting and avoiding taxes with bitcoin. Thus it's important that the masses use it too otherwise it'll just be them standing out like a sore thumb. IIRC, they kept trying to make bitcoin illegal in China but for some reason they couldn't. I think it's because of the aforementioned reason.
- grubles 11y ago
  There are already links to child porn in the blockchain.
- hobarrera 11y ago
  Two parties privately trading currencies in Argentina is already illegal. You need a special permit to make a purchase (which isn't easy to get). So, we consider bitcoin a legally-accepted currency, then it's already illegal to trade for them. One of the main problems is that legally trading ARS to USD has a huge overhead: * You have to use the "official" price, which is ~60-70% the street price. * You have to pay 30-40% taxes on the exchange.
pakled_engineer 11y ago
The ferry from Argentina to Uruguay everyday full of people taking money out of the country to deposit it in banks that won't be skimmed by the government is much more disruptive than a handful of bitcoin traders. Bitcoin however is great for avoiding the official fake exchange rate and getting the real rate, which is often 2x the amount of the official rate. If you're travelling to BA you want to avoid those sketchy blackmarket moneychangers floating around. If you're a tourist there's good odds you'll be receiving counterfeit Argentinian Pesos or end up getting jacked by a guy on a motorbike after he watches you exchanging money in the streets whereas with Bitcoin you can safely meet somebody in a coffee shop, do the trade and they usually have some kind of localbitcoins.com or other online reputation they want to keep so won't be handing over counterfeits. Bitcoin hasn't replaced the mass exodus of Argentinians who deposit money outside the country in Uruguay yet. http://en.mercopress.com/2013/03/05/an-estimated-one-million-dollars-trickled-per-day-from-argentina-to-uruguayan-banks http://en.mercopress.com/2013/03/05/an-estimated-one-million...
- juanignacio 11y ago
  I know of money going the other way arround. When Argentinians need the US dollars they have in Uruguay people cross in the ferry with tipicaly 50~100k, charging 2,5~3,5% fee for this "service". Maybe there is room to provide this service with Bitcoin, selling bitcoin to this people in Montevideo and buying Argentinian pesos with that Bitcoin in Argentina. Is it possible to make this work with a 1~2% commission using Bitcoin?
  - pakled_engineer 11y ago
    Problem is unstable rate of bitcoin so you wouldn't want to hang on to them in storage, you'd need a way to buy them on demand by either leaving USD on Coinbase account or having #bitcoin-otc IRC trade open, Stellar might be more suited for this you could create UruUSD coin when it gains more adoption https://stripe.com/blog/stellar https://stripe.com/blog/stellar
    - pakled_engineer 11y ago
misiogames 11y ago
Argentinian here, nope, no disruption at all, I actually will argue that due our history and high volatility of pesos people only trust in-hand hard cash dollars, anything else is smoke & mirrors :D
- nationcrafting 11y ago
  Just wondering, since you're argentinian... Since there are so many complications for argentinians wanting to buy dollars, and since the purpose is to store wealth, why don't we hear much about argentinians buy silver or gold coins (say, Krugerrands or Sovereigns) instead? I'm living in Peru, where there were two hyperinflations in the late 80s and early 90s. The Sol has been very stable ever since, so a lot of people trust their savings in Soles accounts now, but a few people I've met from older generations have their savings in silver coins.
  - arebop 11y ago
    When I visited Argentina a few months ago, I saw remarkably many gold and silver shops in BA and elsewhere around the country.
yellowapple 11y ago
Anyone have a non-paywalled source? NYTimes won't let me read the article unless I'm a subscriber, apparently.
- wmil 11y ago
  Open an incognito window and google the article title. Usually cookies and referrers trip the paywall.
kragen 11y ago
I think this article is going to result in a crackdown on Bitcoin here in Argentina. It’s interesting that it mentions “The American company Coinbase” but doesn’t mention Coinbase’s Argentine origins. Maybe Brian wouldn’t give an interview to the author? This is a good example of why I haven’t been willing to get involved in Bitcoin so far, despite finding it fascinating: we’ve known since May presented the Crypto-Anarchist Manifesto at Hackers (1989?) that a likely endgame of anonymous digital currencies was that governments would lose their ability to impose capital controls and indeed taxes. While I’m skeptical about the ontological status or moral value of the State, I also don’t want public education, policing, and public healthcare to disappear overnight without a chance to construct alternatives; racism and other hateful ideologies promoted by States over the centuries to keep their subjects divided can simply explode into violence. (I’m not worried about “terrorists and organized crime” — those are of course terrible but nothing we haven’t dealt with before. I’m worried about the collapse of governments leading to a collapse of civilization, which is a thing that has happened before, with disastrous results — the Bronze Age collapse, the Maya collapse, the fall of Rome, and so on.) If it catches on, though, continuing to abstain might become as difficult as Stallman’s continued abstention from using the internet, or the abstention of the Amish from driving cars. And I will yield.
- deleted 11y ago
  [deleted]
- hobarrera 11y ago
  > I think this article is going to result in a crackdown on Bitcoin here in Argentina. What surprises me is that the article identified the person with full name and photo - while his activities are clearly illegal (trading black market dollars for BTC, tax evasion most likely too). It's rather imprudent, IMHO.
  - kragen 11y ago
    It's not clear that they're illegal, although the article certainly did assert that they are. Buying and selling commodities for pesos is legal. It’s just, as I understand it, dealing in foreign currencies without a license that's illegal (but they daren’t shut that down entirely!), but Bitcoin isn’t a foreign currency. In fact, maybe it isn’t a currency at all; certainly that’s the IRS’s position on the matter. Whether AFIP, or the courts trying the case, will agree, that’s another question — and this article is certainly not going to help the case of the people mentiond in it.
Nrsolis 11y ago
While I might have some doubts about the ultimate thrust of this article, my gut tells me that ignoring Bitcoin as a technology and an ecosystem is a mistake. I've been present for three big revolutions in technology (personal computing, the Internet, and mobile data/smartphones) and with each there were detractors that dismissed the ultimate effect and utility of these new arrivals. I'm not so sure we aren't repeating that mistake. I'm hedging my bets. It might be the case that Bitcoin the currency never makes it, but the technology that underpins it might live on in some useful construct when applied to a problem where the utility is more apparent, even if that connection isn't at all clear now.
JDiculous 11y ago
Man I wish these articles would just get to the point
kolev 11y ago
No. It's not disrupting anything. Yet. And maybe it never would.
davidgerard 11y ago
The headline has been changed to the less obviously ridiculous "Can Bitcoin Conquer Argentina?" To which the answer is, of course, "Betteridge."
- davidgerard 11y ago
  And here the Argentinian president's Twitter openly mocks this story: https://twitter.com/CasaRosadaAR/status/593584932485779457 https://twitter.com/CasaRosadaAR/status/593584932485779457
juanignacio 11y ago
The Casa Rosada (the equivalent to the White House, home to the executive branch of the government) tweets ironically about this article: https://twitter.com/casarosadaar/status/593584932485779457 https://twitter.com/casarosadaar/status/593584932485779457
juanignacio 11y ago
Did the NY Times edited the title?

114 points by herendin 11y ago

"The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage." That's the very definition of not disrupting.

fips140 11y ago
Oh, go back to bed sourpuss
DickingAround 11y ago
Requiring any disruption to take broad effect before saying it's a 'disruption' makes that word useless. That would be like saying a crack in a wall doesn't matter till the wall falls over. The real question is whether this is hairline crack that the rebar of their society will keep in place or if it's a crack that's unchecked and will continue to grow?
- davidgerard 11y ago
  Requiring a disruption to at least barely register is pretty fair though. Bitcoin itself barely registers as an economic disruption (though it's got a lot of coverage for its reputational relation to criminals and scams), and this "disruption" barely registers in relation to something that barely registers. This article is a press release for a book.
  - juanignacio 11y ago
    It may disrupt the traditional way money is moved around in the River Plate: in bags and attached to body in the ferry to Montevideo.
- bencollier49 11y ago
  "Threatens to disrupt".
  - kleer001 11y ago
    Good call. That would have been wholly correct, enthusiastic, optimistic, and I would have still clicked the link.
- kleer001 11y ago
  > That would be like saying a crack in a wall doesn't matter till the wall falls over. If you point at a crack in the wall and say "The wall is falling over!" I'm going to laugh in your face. Then I'll get some spackle.
- mikeash 11y ago
  How does it make the word useless? For your wall analogy, let's look at the word "destroy." A crack starts in the wall, and grows until the wall falls over. At this point, the wall is destroyed. But when the crack that eventually destroys the wall is still small, is the wall "destroyed" at that point? Of course not. Does that make the word "destroyed" useless? Not at all.

davidgerard 11y ago

SPOILER: it's not. > The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage. This article is hype: "This article was adapted from 'Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money'". It reads like a press release because it is one. > This is the street-smart economics. Not the complex Ph.D. economics. The phrase "I'm not book-smart, I'm street-smart" can be rephrased "I'm not real-credible, I'm fake-credible." It's the sort of thing expert beginners say, particularly when they've reached the stage of recognising and disparaging actual expertise in their subject. And hoo boy, Bitcoiners are at the far end of expert beginner. There is no reason to expect anything good or useful from this article.

random28345 11y ago

"See, Bitcoin isn't just for illegal drug purposes. It's also for illegally circuventing currency controls!" Psychic prediction. In ten years, there will be some jurisdictions where possesion of a copy of the bitcoin ledger will be a criminal offense.

exelius 11y ago
Well, Argentina's currency controls are legendary for how awful they are. If you want a lesson in how NOT to manage monetary policy, look at Argentina since about 1900. The country was the richest in the world at the time, but since then has alternated between boom and bust thanks to its disastrous monetary policy. Evading the government's currency controls is a way of life for Argentinians.
- Sherlock 11y ago
  The Economist published an interesting report about that some months ago. The main takeaways were that (1) Argentine was rich, but lagged behind its money-peers in human development indexes such as literacy rates and (2) The elite from Argentina benefited from high food prices, so the rest of the country resented them, a brewing pot for populism. But your point stands, monetary (or fiscal) policy was awful.
smtddr 11y ago
I suspect the only reason this hasn't happened already is because some very wealthy & connected people are profiting and avoiding taxes with bitcoin. Thus it's important that the masses use it too otherwise it'll just be them standing out like a sore thumb. IIRC, they kept trying to make bitcoin illegal in China but for some reason they couldn't. I think it's because of the aforementioned reason.
grubles 11y ago
There are already links to child porn in the blockchain.
hobarrera 11y ago
Two parties privately trading currencies in Argentina is already illegal. You need a special permit to make a purchase (which isn't easy to get). So, we consider bitcoin a legally-accepted currency, then it's already illegal to trade for them. One of the main problems is that legally trading ARS to USD has a huge overhead: * You have to use the "official" price, which is ~60-70% the street price. * You have to pay 30-40% taxes on the exchange.

pakled_engineer 11y ago

The ferry from Argentina to Uruguay everyday full of people taking money out of the country to deposit it in banks that won't be skimmed by the government is much more disruptive than a handful of bitcoin traders. Bitcoin however is great for avoiding the official fake exchange rate and getting the real rate, which is often 2x the amount of the official rate. If you're travelling to BA you want to avoid those sketchy blackmarket moneychangers floating around. If you're a tourist there's good odds you'll be receiving counterfeit Argentinian Pesos or end up getting jacked by a guy on a motorbike after he watches you exchanging money in the streets whereas with Bitcoin you can safely meet somebody in a coffee shop, do the trade and they usually have some kind of localbitcoins.com or other online reputation they want to keep so won't be handing over counterfeits. Bitcoin hasn't replaced the mass exodus of Argentinians who deposit money outside the country in Uruguay yet. http://en.mercopress.com/2013/03/05/an-estimated-one-million-dollars-trickled-per-day-from-argentina-to-uruguayan-banks http://en.mercopress.com/2013/03/05/an-estimated-one-million...

juanignacio 11y ago
I know of money going the other way arround. When Argentinians need the US dollars they have in Uruguay people cross in the ferry with tipicaly 50~100k, charging 2,5~3,5% fee for this "service". Maybe there is room to provide this service with Bitcoin, selling bitcoin to this people in Montevideo and buying Argentinian pesos with that Bitcoin in Argentina. Is it possible to make this work with a 1~2% commission using Bitcoin?
- pakled_engineer 11y ago
  Problem is unstable rate of bitcoin so you wouldn't want to hang on to them in storage, you'd need a way to buy them on demand by either leaving USD on Coinbase account or having #bitcoin-otc IRC trade open, Stellar might be more suited for this you could create UruUSD coin when it gains more adoption https://stripe.com/blog/stellar https://stripe.com/blog/stellar
  - pakled_engineer 11y ago

misiogames 11y ago

Argentinian here, nope, no disruption at all, I actually will argue that due our history and high volatility of pesos people only trust in-hand hard cash dollars, anything else is smoke & mirrors :D

nationcrafting 11y ago
Just wondering, since you're argentinian... Since there are so many complications for argentinians wanting to buy dollars, and since the purpose is to store wealth, why don't we hear much about argentinians buy silver or gold coins (say, Krugerrands or Sovereigns) instead? I'm living in Peru, where there were two hyperinflations in the late 80s and early 90s. The Sol has been very stable ever since, so a lot of people trust their savings in Soles accounts now, but a few people I've met from older generations have their savings in silver coins.
- arebop 11y ago
  When I visited Argentina a few months ago, I saw remarkably many gold and silver shops in BA and elsewhere around the country.

yellowapple 11y ago

Anyone have a non-paywalled source? NYTimes won't let me read the article unless I'm a subscriber, apparently.

wmil 11y ago
Open an incognito window and google the article title. Usually cookies and referrers trip the paywall.

kragen 11y ago

I think this article is going to result in a crackdown on Bitcoin here in Argentina. It’s interesting that it mentions “The American company Coinbase” but doesn’t mention Coinbase’s Argentine origins. Maybe Brian wouldn’t give an interview to the author? This is a good example of why I haven’t been willing to get involved in Bitcoin so far, despite finding it fascinating: we’ve known since May presented the Crypto-Anarchist Manifesto at Hackers (1989?) that a likely endgame of anonymous digital currencies was that governments would lose their ability to impose capital controls and indeed taxes. While I’m skeptical about the ontological status or moral value of the State, I also don’t want public education, policing, and public healthcare to disappear overnight without a chance to construct alternatives; racism and other hateful ideologies promoted by States over the centuries to keep their subjects divided can simply explode into violence. (I’m not worried about “terrorists and organized crime” — those are of course terrible but nothing we haven’t dealt with before. I’m worried about the collapse of governments leading to a collapse of civilization, which is a thing that has happened before, with disastrous results — the Bronze Age collapse, the Maya collapse, the fall of Rome, and so on.) If it catches on, though, continuing to abstain might become as difficult as Stallman’s continued abstention from using the internet, or the abstention of the Amish from driving cars. And I will yield.

deleted 11y ago
[deleted]
hobarrera 11y ago
> I think this article is going to result in a crackdown on Bitcoin here in Argentina. What surprises me is that the article identified the person with full name and photo - while his activities are clearly illegal (trading black market dollars for BTC, tax evasion most likely too). It's rather imprudent, IMHO.
- kragen 11y ago
  It's not clear that they're illegal, although the article certainly did assert that they are. Buying and selling commodities for pesos is legal. It’s just, as I understand it, dealing in foreign currencies without a license that's illegal (but they daren’t shut that down entirely!), but Bitcoin isn’t a foreign currency. In fact, maybe it isn’t a currency at all; certainly that’s the IRS’s position on the matter. Whether AFIP, or the courts trying the case, will agree, that’s another question — and this article is certainly not going to help the case of the people mentiond in it.

Nrsolis 11y ago

While I might have some doubts about the ultimate thrust of this article, my gut tells me that ignoring Bitcoin as a technology and an ecosystem is a mistake. I've been present for three big revolutions in technology (personal computing, the Internet, and mobile data/smartphones) and with each there were detractors that dismissed the ultimate effect and utility of these new arrivals. I'm not so sure we aren't repeating that mistake. I'm hedging my bets. It might be the case that Bitcoin the currency never makes it, but the technology that underpins it might live on in some useful construct when applied to a problem where the utility is more apparent, even if that connection isn't at all clear now.

JDiculous 11y ago

Man I wish these articles would just get to the point

kolev 11y ago

No. It's not disrupting anything. Yet. And maybe it never would.

davidgerard 11y ago

The headline has been changed to the less obviously ridiculous "Can Bitcoin Conquer Argentina?" To which the answer is, of course, "Betteridge."

davidgerard 11y ago
And here the Argentinian president's Twitter openly mocks this story: https://twitter.com/CasaRosadaAR/status/593584932485779457 https://twitter.com/CasaRosadaAR/status/593584932485779457

juanignacio 11y ago

The Casa Rosada (the equivalent to the White House, home to the executive branch of the government) tweets ironically about this article: https://twitter.com/casarosadaar/status/593584932485779457 https://twitter.com/casarosadaar/status/593584932485779457

juanignacio 11y ago

Did the NY Times edited the title?