Bitcoin Is Disrupting the Argentine Economy 253
HughPickens.com writes: Nathaniel Popper writes in the NYT that with its volatile currency and dysfunctional banks, Argentina is the perfect place to experiment with a new digital currency. The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage. But Argentina has been quietly gaining renown in technology circles as the first, and almost only, place where Bitcoins are being regularly used by ordinary people for real commercial transactions. For example, BitPagos is selling bitcoins in over 8,000 Argentine convenience stores and is helping more than 200 hotels, both cheap and boutique, take credit-card payments from foreign tourists. The money brought to Argentina using Bitcoin circumvents the onerous government restrictions on receiving money from abroad
The Rock Hostel is one of hundreds of hotels in the country using BitPagos to collect credit-card payments from foreign customers. If owner Rodriguez Pons accepted credit-card payments from American customers through the usual financial channels, customers would be billed in dollars, and when those dollars came to Pons's Argentine bank account, they would be converted at the official rate, about 30 percent lower than the black-market rate. It would also take 20 days for Pons to get her pesos. BitPagos helped counter these drawbacks by taking the credit-card payment in the United States and then using the dollars to buy Bitcoins, generally from Coinbase, before sending them to Pons immediately.
Bitcoin proponents like to say that the currency first became popular in the places that needed it least, like Europe and the United States, given how smoothly the currencies and financial services work there. It makes sense that a place like Argentina would be fertile ground for a virtual currency. Inflation is constant: At the end of 2014, for example, the peso was worth 25 percent less than it was at the beginning of the year. And that adversity pales in comparison with past bouts of hyperinflation, defaults on national debts and currency revaluations. "In the long run, Bitcoin will be very disruptive to the developed world," says Dan Morehead, a former Goldman Sachs executive who now runs a hedge fund focused on Bitcoin. Things are happening sooner in Argentina, he says, because its financial system creates hassles for the people there. But, he added, "Argentina is just a more extreme example of the situation in every country."
The Rock Hostel is one of hundreds of hotels in the country using BitPagos to collect credit-card payments from foreign customers. If owner Rodriguez Pons accepted credit-card payments from American customers through the usual financial channels, customers would be billed in dollars, and when those dollars came to Pons's Argentine bank account, they would be converted at the official rate, about 30 percent lower than the black-market rate. It would also take 20 days for Pons to get her pesos. BitPagos helped counter these drawbacks by taking the credit-card payment in the United States and then using the dollars to buy Bitcoins, generally from Coinbase, before sending them to Pons immediately.
Bitcoin proponents like to say that the currency first became popular in the places that needed it least, like Europe and the United States, given how smoothly the currencies and financial services work there. It makes sense that a place like Argentina would be fertile ground for a virtual currency. Inflation is constant: At the end of 2014, for example, the peso was worth 25 percent less than it was at the beginning of the year. And that adversity pales in comparison with past bouts of hyperinflation, defaults on national debts and currency revaluations. "In the long run, Bitcoin will be very disruptive to the developed world," says Dan Morehead, a former Goldman Sachs executive who now runs a hedge fund focused on Bitcoin. Things are happening sooner in Argentina, he says, because its financial system creates hassles for the people there. But, he added, "Argentina is just a more extreme example of the situation in every country."
Banks (Score:5, Insightful)
As usual, if you can't understand that you can't screw your users without losing them, you merit losing ground to new technologies.
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Why should they be free to screw their users? Seriously, fuck them right in the ear.
Kind of sad, really. (Score:5, Interesting)
Technological marvel and portent of things to come or not, it's really quite sad that Argentina's is so messed up that it makes Bitcoin look good.
Don't cry for me, Argentina, cry for yourselves.
Re:Kind of sad, really. (Score:5, Insightful)
Bitcoin stability only needs to be measured in days. All that's needed is enough time to bill someone in currency x and redeem it in currency z. It's primary function is to keep banks and governments out of the transaction.
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But as the article points out... it's really just a way to streamline an existing black market in money changing. And the reason the black market has to exist at all is because legal money changing it a bad deal.
So as soon as bitcoin actually becomes popular enough to disrupt the existing black-market it'll also be popular enough to attract government intervention as has been done to the banks.
Essentially all this article is saying is "Look at this awesome black market full of illicit goods! Look at how
And why is bitcoin different? (Score:3)
Other than proponents saying "because it's distributed, digital, and magic" I fail to see how failing to tell your government about one source of money is going to be any different that failing to disclose another.
Other than the pixie dust and unicorn poop, what exactly keeps the government from charging you with nor reporting the money?
Bitcoin doesn't exist outside of the real world just because people who use it claim that to be the case. But it definitely carries its own reality distortion field with it.
No shit (Score:2)
If the problem is that the Argentine currency is unstable... well then Bitcoin is the WRONG answer. It is exceedingly unstable, it would be unstable even for a stock, never mind a currency, it moves like a thinly traded penny stock. So trying to use it for some kind of stability is just about the dumbest thing you can do.
To me, this seems like more Bitvertisement by which ever of Slashdot's editors is heavily invested in them and trying to drum up interest.
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It pretty much is a thinly-traded penny stock.
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This is an oppressive government with immoral laws that are being circumvented. It doesn't let them avoid reporting income altogether unless bitcoin usage reaches critical mass bu
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>> This is an oppressive government with immoral laws that are being circumvented.
Thats also true of literally every government in the world.
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Other than proponents saying "because it's distributed, digital, and magic" I fail to see how failing to tell your government about one source of money is going to be any different that failing to disclose another.
Other than the pixie dust and unicorn poop, what exactly keeps the government from charging you with nor reporting the money?
Bitcoin doesn't exist outside of the real world just because people who use it claim that to be the case. But it definitely carries its own reality distortion field with it.
I am a Greek, living in Greece, which is currently (in)famous for its state's financial problem (in reality, Greece is a poor state with rich citizens). Few weeks ago there was a stupid story from non-Greek media about how Greece should adopt Bitcoin and be saved "magicaly"! The reason we Greeks are not in the same situation as Argentina is because we have this strong (and "real") currency called Euro (backed by Nothern European economies, e.g., Germany) - imagine if we "adopted" Bitcoin as our currency...
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It's _not_ going to be your choice to leave, of course you like it (thieves always do). When you are bouncing down the road, having been ejected from the euro, your government will no doubt bring back the Drachma. But your citizens will have a choice. They can make payments in bitcoin and leave savings in the strong currency of their choice. Effectively giving the finger to the Greek government. I'd bet 99% of Greek government employees will.
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but remember that we originaly got the loans paying huge interests, so the private entities giving us the loans had huge profits for DECADES (no one had any complaint!).
And, the "bail out" loans did not really go to running the Greek government or Greek people, it went to bailing out the banks that used to hold greek sovereign debt. Currently, Greek debt is essentially held by the IMF and ECB. Much like in every other country banks do not suffer the consequences of the bad loans they make, but instead privatize the profits and socialize the losses.
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Other than the pixie dust and unicorn poop, what exactly keeps the government from charging you with nor reporting the money?
It's a valid question but I can speculate on reasons why they may not do that.
1) Incompetence.
2) Corruption. Specifically I mean that the people who investigate this can often be bribed in nations with major economic problems to look the other way.
3) The current president can always fall back on the old tried and try cry of "Britain stole the Islas Malvinas from us! We must get them back!" to distract citizens from paying attention to the economy.
4) Blaming the USA for everything is another always
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If you can do all transactions in bit coin it could be fairly difficult for governments to track.
Yes, it isn't like all bitcoin transaction are public, open for anyone to see.
but you could use a new address for every incoming transaction making much harder to trace.
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In fact, nobody you don't tell your wallet id to knows it. So you are unintentionally right.
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Which puts you WAY ahead of the stinking law abiders.
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There are several things I might put under a mattress, but Genghis Khan's army isn't one of them.
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>> At least it can't be devalued like government's magic paper.
Sure it can. The government already got their hands on 30,000 ( worth about $18 million then) of Silk Road's bitcoins and more from other busts, and the NSA already has masive computers that could mine bitcoins like there's no tomorrow.
Complete conspiracy theorizing herre, but it really wouldn't be hard or even unlikely for the US government to use any bitcoins they recover from criminal activity, along with power-mining to keep anonymousl
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anonymously bulk-selling bitcoins at a big loss just to crash the whole bitcoin market.
The problem is that they'll run out of bitcoins to sell, and mining produces smaller and smaller amounts over time.
25% deflation? Amateurs, I tell you! (Score:5, Informative)
Losing 25% year on year in the Peso looks like kid's stuff in the devaluation game. They need a *real* currency to lock in year on year decreases of more than 50%. And that's why they've turned to Bitcoin!
4/15/2014 = $496
4/15/2015 = $223
It's not as fun as lighting cigars with $100 bills, but it's just as productive!
Re:25% deflation? Amateurs, I tell you! (Score:4, Informative)
1. Divisible to an infinite number of units so there are always enough pieces to grow to any transaction volume. (Gold has this flaw, there aren't small enough bits to use to transact in actual gold.)
2. No known method of counterfeiting.
3. Innately digital and transmittable in all major ways.
4. De-centralized system of initial creation and distribution.
5. Innate value in the sense of a useful commodity.
6. Is universal and requires no secondary currencies exchange once critical mass is achieved.
In other words, Bitcoin is the only currency that has innate value in the form of utility where that utility is to function as a quick assured universal means of value transmission where the assurance is not subject to the interests of a third party. Fiat currencies must be valued against other fiat currencies at critical mass. If bitcoin ever reaches critical mass it eliminates the utility of all other currencies except goods with valuations based on supply and demand so the speculative currency market becomes a non-entity.
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Yes it provides utility as a currency, but outside of its use as a currency it has no value because it cannot be used for anything else. Things that have innate value have other uses than just for currency.
There's no such thing as innate value. Food doesn't have value, if there's no one to eat it. People don't have value, if they're just another mouth to feed, breeding more mouths to feed.
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Seriously are we back in the 90's? Some of the most valuable things on earth only exist in the digital realm, see microsoft office and windows, google, and everything produced by the television and movie industries.
"which solves a cryptographic puzzle nobody actually asked or cares about"
The puzzle of money that can't be counterfeited, doesn't require inflation, and doesn't depend on a central bank? I'm not sure how that falls under
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I'd say it's neither inflation nor deflation since it's only tied to the exchange rate.
It would usually be called devaluation of a currency. But any valuation of bitcoin against a currency backed by a government is pure speculation anyway, so what you're seeing is the bursting of a speculation bubble
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What's the betting he graduated magna cum laude?
From A&M.
BitPagos? Rock Hostel? (Score:5, Informative)
Re:BitPagos? Rock Hostel? (Score:5, Interesting)
As a fellow argentinian I can confirm I've never heard of this bullshit before. There was an a(dve)rticle on Infobae the other day with the same phrasing.
When MercadoPago accepts BTC we can talk.
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The one in Plaza Independencia?
They have a neon sign for bicoin safe deposit boxes, but they don't look that secure, I think you can even see them from the street.
Also, their windows are lined with weird posters, like 9/11 conspiracy stuff.
I'm betting that''s just some guy, slightly nuts, with a bit of money to rent a place, not a real business.
Odd definition of "disruptive" (Score:5, Insightful)
The Argentine economy has hyperinflation and unreasonably burdensome government controls. Bitcoin hasn't "disrupted" the Argentine economy, it has made daily life possible for the average Argentinian.
Yes, from the perspective of the government, Bitcoin has made their self-destructive policies moot. It has given the populace an alternative to their collapsing fiat currency. Fortunately, however, the government doesn't get to define "the economy" - The participants in the economy do, and Argentinians have said "no thanks!" to the local Peso.
Argentina doesn't highlight the problems with Bitcoin, it exemplifies the entire raison d'etre for it!
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I'm an "average Argentinian" and I never heard of BitPagos, I know no one which needs something like bitcoin, at least you consider "average Argentinian" all those person who cryies because they can't buy notebooks on ebay freely (or if you are one of those stupid people whom thinks "Argentinian" are just the people who lives in Capital Federal. So, summarizing: shut up, stop saying stupid things.
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In this case, disruptive means that the people who need to prop up the peso/dollar exchange rate to pay back loans denominated in dollars will get screwed. Because the supply of pesos flowing through the system available for the banks to skim will dry up. And US investment banks who took risks wil have to renegotiate loans. Or accept default.
And if there's one thing we know about wealthy investors: They never take a loss on a gamble. Someone else must be found to make them whole.
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They aren't replacing the local Peso with Bitcoin. They're just using Bitcoin as a transactional currency to run an unregulated currency exchange. Bitcoins in this instance are essentially a proxy for US dollars.
If I have $100 USD and I want to convert it to Pesos I can either go to a regulated currency exchange which apparently is attempting to combat inflation by keeping the peso value low or you can exchange your $100USD for say 0.5 bitcoins on the open bitcoin market. Then you find someone who want
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That also doesn't really fit the definition of "disruptive".
Would you use that word to describe US drug dealers using Tide (the detergent) as a medium of exchange?
Headline vs. Article... FIGHT! (Score:5, Funny)
Bitcoin Is Disrupting the Argentine Economy
The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage.
So it's disrupting the Argentine Economy... but only in a way that's so small as to be imperceptible. Gotcha.
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Disrupt is an overloaded word. In this case it's in the "disruptive technology" sense: the USD > bitcoin > ARS automation allows for a 30% increase in revenue for any business that accepts foreign bank cards. Thats enough for people to stampede to it, the only thing holding it back will be how fast the payment terminals can be set up.
God proven to exist! (Score:2, Offtopic)
Inflation is constant
The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage.
Both from TFS.
I too can make extravagant claims in the subject line of my post, only to actually disprove the claim in my message. God has not been proven to exist.
Chill, bitcoin-istas (Score:2)
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How would a nation/national bank even implement a bitcoin peg? You _don't_ know what you are talking about.
LOL one failed currency to replace another (Score:2)
As if... (Score:2)
So you kill the currency monopoly, (Score:2)
and the power goes back to the people disrupting the old-guard but stabilizing and empowering the individual who no longer deals with run-away inflation.
Gosh, who could have ever guessed that would happen?
*cough*Ron Paul*cough*
Apples to apples (Score:5, Informative)
>> At the end of 2014, for example, the peso was worth 25 percent less than it was at the beginning of the year.
Even as someone who believed in Bitcoin enough to spend significant $ on mining hardware, I know bitcoin has been far more volatile and has devalued far more than that in the same period.
So.... (Score:2)
They're replacing their volatile and dysfunctional currency with.... another volatile and dysfunctional currency.
This must be an ad for something! (Score:5, Informative)
I live in Argentina and I haven't heard of any of this. Neiher BitPagos, nor any of the other things mentioned above. Here in Argentina bitcoins are, like most enywhere else, a marginal things only some nerds know.
Re:This must be an ad for something! (Score:5, Informative)
I've read the linked news. The 8000 convenience stores is a fake number. They say that somebody intended to partner with an existing paying network (for paying cell phone prepaid schemes). I assure you there are no 8000 stores here selling bitcoin. I bet there aren't 8000 people here knowing about bitcoin either. =)
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If governments keep pushing laws that have nothing to do with justice, in the end they can only get civil wars.
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So you're saying a country doesn't want its currency to be stable? That anyone and anyone should be able to create a currency out of thin air and use it?
Don't know your American history that well, do you?
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Sir, your opinions are not worth a continental.
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The 'lower class' never pulls off successful revolutions. Revolutions are hard, too much work, almost like a real job.
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Looting stores isn't a very tough job and has a nice reward.
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Ancient sages said, "Do not despise the snake for having no horns. For who is to say it will not turn into a dragon? Thus may one just man become an army."
I say, "Ancient sages full of shit".
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break the law
Whose law? Argentina's?
And why should we care?
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I live across the river from them, you insensitive clod!
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This is cutting into your black market currency exchange?
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Luckily, Uruguay's financial markets no longer rely heavily on dirty Argentinian money. There is still a lot of that money around here, but not as much as it used to be, so less financial risk for us.
Anyway, a major financial meltdown in Argentina would most definitely affect us, and that's why I care.
Re:/.er bitcoin comments are the best! (Score:5, Insightful)
Re:/.er bitcoin comments are the best! (Score:5, Insightful)
That would imply they hold a number of Bitcoins worth some vaguely similar amount to what their current cash holdings are worth.
No it would not. Bitcoin would need to be a reliable store of value for the above to be true. And "store of value" is the currency characteristic where bitcoin fails the hardest.
Bitcoin is very useful as a payment technology. But holding bitcoins is an absolute risk. Which is why most merchants who accept bitcoins for payment never actually see or touch a bitcoin. Their merchant exchange immediately converts to fiat upon receipt and the merchant receives only this fiat currency.
Now could the Argentine Peso also be a poor store of value, thats plausible. The US Dollar or Euro, these are likely to be reasonable stores of value. Going from one risky to another risky, peso to bitcoin, does not make sense compared to going peso to dollar or euro, unless people are prevented from doing so. If prevented from going to dollar or euro then a move to bitcoin would seem more an act of desperation.
Re:/.er bitcoin comments are the best! (Score:5, Informative)
..which, from TFA it is - an act of economic desperation. Their currency loses 25% per year and trying to convert it to dollars takes time and huge fees - losing roughly 30%. If bitcoin provides a better, faster arbitrage, then it is, in this case, a more "reliable store of value."
I think it's more of a damning comment on Argentinian currency rather than a spotlight on the quality and fungibility of bitcoins.
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Yes sir, this is by far the best of the bad solutions we have sir.
Re:/.er bitcoin comments are the best! (Score:4, Interesting)
..which, from TFA it is - an act of economic desperation. Their currency loses 25% per year and trying to convert it to dollars takes time and huge fees - losing roughly 30%. If bitcoin provides a better, faster arbitrage, then it is, in this case, a more "reliable store of value."
I think it's more of a damning comment on Argentinian currency rather than a spotlight on the quality and fungibility of bitcoins.
Or it could be seen also as a spotlight of bitcoins as a tool to preserve wealth in a free-falling economy.
Re:/.er bitcoin comments are the best! (Score:5, Interesting)
Or it could be seen also as a spotlight of bitcoins as a tool to preserve wealth in a free-falling economy.
In the last year or so bitcoin prices have been in freefall too. Its somewhat stabilized at the moment but bitcoin prices are still speculation driven. One negative policy decision from the Chinese government regarding bitcoin and it could easily be in freefall again.
As a payment method bitcoin is great. But as a store of value its "tulips", at least for now while its dominated by speculators.
Re:/.er bitcoin comments are the best! (Score:5, Informative)
Their currency loses 25% per year ...
Bitcoin recently lost 75% in a year.
Re:/.er bitcoin comments are the best! (Score:5, Informative)
If you just want to avoid the poor bank exchange rate, the stability of bitcoin isn't a problem. Instead of accepting dollars, and trading them for pesos, you now accept bitcoin and trade them for pesos.
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Somebody with pesos still has to want your bitcoin. Apparently, somebody does.
Re:/.er bitcoin comments are the best! (Score:5, Insightful)
"..which, from TFA it is - an act of economic desperation."
And blatantly illegal. From TFA (note is mine): "The money brought to Argentina using Bitcoin circumvents the onerous government restrictions on receiving money from abroad"
So what they found is that it's easier for Argentinians -at least some of them, to support a black market on bitcoins than dollars (which has been the standard in the past).
"I think it's more of a damning comment on Argentinian currency"
Not so much about Argentinian currency as Argentinian economy (which the former is tied to).
Re:/.er bitcoin comments are the best! (Score:4, Interesting)
Actually, they got in trouble by *not* printing money, but instead by borrowing. They were working hard to keep inflation down for awhile in the 1990's and that meant that they borrowed to cover their work on building infrastructure. This actually worked fairly well... for awhile.
When the global financial crisis hit in the early 2000's it left Argentina unable to service debts. Argentina had to deal with huge unemployment and political instability. That resulted in the largest default on sovereign debt ever. No bueno.
Argentina is still a "pariah" but was doing a little better until recently. Some people are blaming new populist policies for having put Argentina back in trouble with a shrinking economy again.
Argentina is just chock full of corruption, as well. That means that unless things are peachy keen and there's enough money for everyone, like in the 1990s, people don't want to touch Argentina with a 10 foot pole. That hurts their ability to recover where less corrupt countries might bounce back faster.
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I think it's more of a damning comment on Argentinian currency rather than a spotlight on the quality and fungibility of bitcoins.
EXACTLY... Argentina's currency is in SERIOUS trouble and has been in decline for a decade or more. It's where Greece is headed, and the whole EU if they don't disconnect from Greece or just outright forgive the bulk of their debt. The biggest problem they face is there is literally NOTHING they can do about the devaluation of their currency except abruptly stop nearly ALL government spending, but that would leave the country in anarchy, the government out of power and the country rife for being taken over
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Actually it doesn't have to match anything. It has to match what the market in Argentina bears. And since Bitcoin is deflationary, while Pesos are Inflationary they counter each other very well. By having Bitcoins, the average Argentine can increase wealth by performing services and charging BitCoins for them.
In terms of monetary terms, withholding payment in Inflationary currency (Peso) is a net gain, and unless you are paid in cash (or equivalent) immediately, Pesos are a losing proposition for workers. O
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This will result in better economy for Argentina, at least for workers.
It could mean a better economy for all Argentinians, and for people everywhere else as well. Once a precedent has been set that common citizens can opt-out of their national currency and banking systems, it will put pressure on governments to govern more responsibly to keep them from defecting to Bitcoin.
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It could do all that wonderful stuff.
It could also cause them to make using bitcoin illegal and throw people out of aircraft over the sea if they transgress.
Re:/.er bitcoin comments are the best! (Score:5, Insightful)
People want to know why the rich keep getting richer? It is because they don't deal in currency, they deal in assets. Currency is only used when converting one asset for another. Most Currency is inflationary, meaning if you hold it, you lose. This is such a little known fact of life. BitCoin, should it survive will ultimately be deflationary currency, meaning it gains value the longer you hold it.
Think of it this way, you work hard, when you're young, you can retire if you save anything, because deflationary currency becomes an asset. But that doesn't bode well for the rich n powerful, or politicians who need a dependent class of people to take care of.
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you can retire if you save anything, because deflationary currency becomes an asset. But that doesn't bode well for the rich n powerful,
Why not ? They'll hoard more than everybody else, while the poor man is forced to trade his savings for food.
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"People want to know why the rich keep getting richer? It is because they don't deal in currency, they deal in assets."
That's basically the first thing my Economy professor told us: for companies, passives are good, since it means money to run the bussiness that the shareholder didn't take out of their pockets. On the other hand, for "normal" people, actives are the good one of the film, since they are the kind of assets you require to life in confort (a nice car, a big house, an expensive watch...)
"BitCoi
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Also deflation can be an economic disaster, as it discourages spending.
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I don't know anyone who holds a significant amount of currency, rich or poor. If you're poor you're probably not holding any more money in any form than you need to buy essentials for the next month. If you're better off you might have savings, but they'll be in a bank. If you're rich you have investments.
One of the reasons the rich keep getting richer is because the poor and middle class are willing to lend value (in work or money) to them for cheap or free.
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"In terms of monetary terms, withholding payment in Inflationary currency (Peso) is a net gain, and unless you are paid in cash (or equivalent) immediately, Pesos are a losing proposition for workers. On the other hand, withholding payment in a deflationary currency (BitCoin) is bad for the employer, and good for the worker."
It isn't, since the employee is paid by the employer. Infation means, as you properly stated, that you don't want to store money, you being either an employer or a worker, money burns
Re:/.er bitcoin comments are the best! (Score:5, Interesting)
Bitcoin, if it gets too big, destabilizes this again, as now people do not look to their own national currency, and their already weak national currency grows even weaker. If you want an example of the effects of a nation not being able to control monetary policy, look at Greece as a constituent of the EU; they can't control monetary policy through the usual means (ie, controlling access to new money) so they can't devalue the currency when necessary to keep the economy flowing.
I expect that the laws will be interpreted to mean that Bitcoin users are in violation, or else new laws will be written to force Bitcoin exchange to follow the same rules as any other currency exchange. Argentina has struggled with their money for too long to let something destabilize the government like this.
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This is an unqualified good thing. Any laws the Argentinians pass will be ineffective. Their government will have to stop printing money or see their currency (and fiscal policy) become irrelevant.
Hopefully it wakes up the rest of the worlds 'print and spenders'. The sooner they pull their heads out of their asses the better.
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"Their government will have to stop printing money or see their currency (and fiscal policy) become irrelevant."
You might have an argument were not for the little fact that devaluating currency is a true and tested way to deal with monetary crisis when used properly that allowed a lot of countries to regain a healthy economy.
"The sooner they pull their heads out of their asses the better."
Maybe it's you the one that would benefit from pulling your head out of your ideology ass and see the tools of the trade
Re:/.er bitcoin comments are the best! (Score:5, Informative)
Argentina already went through this headache when the US Dollar became the defacto standard
Tying the peso to the dollar was a good policy, and gave Argentina a huge opportunity to borrow at much lower costs to invest for the future. Instead they went deep into debt while squandering the money on unaffordable social programs and cheap imports. Much like what Greece did when they switched to the euro. But, unlike Greece, nobody is willing to give Argentina a bail out.
Re:/.er bitcoin comments are the best! (Score:5, Interesting)
"Much like what Greece did when they switched to the euro."
Oh, so the problem with Greece was that they "squandered the money on unaffordable social programs and cheap imports", not that a corrupted elite gamed the system in their favour and then got the helpful aid from Goldman Sachs to hide the tracks.
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Re:/.er bitcoin comments are the best! (Score:5, Interesting)
Oh, so the problem with Greece was that they "squandered the money on unaffordable social programs and cheap imports"
Basically, yes. Greeks retire at 60, or even earlier, with generous pensions, and then expect the Germans, who work till 67, to bail them out.
... not that a corrupted elite gamed the system in their favour and then got the helpful aid from Goldman Sachs to hide the tracks.
Nope. The loans from Goldman Sachs were mostly squandered on the same unaffordable social programs, and generous pensions. What happened in Greece should have been obvious to anyone decades before it finally imploded. Do you also believe that "corrupted elite" elected Syriza?
Re:/.er bitcoin comments are the best! (Score:4, Informative)
"Basically, yes. Greeks retire at 60, or even earlier, with generous pensions, and then expect the Germans, who work till 67, to bail them out."
Except that, as per OCDE data, Germans and Greeks retire at the same effective age of about 62 year old. Given that the official retirement age is, yes, higher at Germany than Greece, this also should tell you something about retirement conditions in both countries.
And then, poverty rates among older-than-65 y.o. in Germany is about 11% while in Greece it's about 16%, median financial wealth in the 65-74 y.o. group is about 16.000â in Greece and 58.000â in Germany and the enhancing rent effect of public services in Greece vs Germany is 15.000â vs 20.000â, again, all taken from OCDE data.
So, all in all, Germany provides higher rents and services for their elders than Greece by a significant margin. But, hey, don't let data interfere with your political visions.
"The loans from Goldman Sachs were mostly squandered"
It's not Goldman Sachs' loans what this is about but how Goldan Sachs lied when auditing Greek economy before the crisis in order to preserve the statu quo, if even for a while, both for them and a selected elite.
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not that a corrupted elite gamed the system in their favour
My understanding is that essentially no one pays taxes in Greece-- not because they arent owed, but because no one wants to.
Its not just the elite who are the problem, as fun as it is to try to make them universal scapegoats.
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Then either the price goes up a bunch or Bitcoin isn't actually being all that disruptive.
You missed a third alternative.... The price of Argentinian Pesos crashes utterly. So that amount of pesos officially worth "$50B USD" crashes down and becomes worth "$1B USD"
Argentenians buying Bitcoins doesn't necessarily elevate the value of Bitcoins ----- it can equally devaluate Pesos, resulting in more and more Pesos sold for fewer and fewer BTC per Peso.
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30% government grift isn't significant where you are from?
You do understand just how bad currency pegs are? A tool of economic warfare. e.g. China pegs it's currency to the US$, setting 100% industrial utilization as a target and using the exchange rate to get there. The US sees that China/US now share a common fiscal policy and prints money, knowing they are causing inflation in China as much as the USA. In CS terms a 'deadly embrace'. Wait till that breaks down, I just hope it doesn't involve nukes.
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It's part of the black market. But the old black market has high economic friction. They would take less than 30%, but bitcoin takes close to 0%.
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Not if you can't spend the bitcoin to buy stuff. If you have to convert it into pesos first, the black-market peso-bitcoin dealer is going to take is cut the same as he would for dollars.
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But the black market dealer is taking a much smaller cut than the official banks.
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You don't understand bitcoin. It was designed to route around government interference.
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Well, that and the block chains... About the only thing holding up values is the cost of mining hardware.... Wait, is that possible?