[kragen]

> Can you explain how this is better than e.g. Wise (formerly Transferwise), PayPal, or some other international money transmitter?

The short answer is that Bitcoin works and TransferWise and PayPal don't. I looked into TransferWise a couple of months ago when someone else asked about it: https://news.ycombinator.com/item?id=26657391

I can't get an Argentine bank account, and you need a bank account to use either TransferWise or PayPal. It's probably also the case—though I don't know for sure—that such transactions would happen at the "official rate", which is to say, you get 62% of your money, and the other 38% gets taken by the Central Bank to subsidize imports into Argentina and vacations abroad by Argentine tourists. I know that sounds too crazy to be true, but that's really what happens with bank transfers. Western Union doesn't do this, and if they did people wouldn't use them.

> Bitcoin does not solve the “cash to people without a bank account”.

This is not correct. It does. I can't access a bank account and I get paid in Bitcoin. It's true that I pay Bitcoin transaction fees in order to do so, but they are generally tolerable.

> If the idea is, that people should instead transfer money to each other via the Strike app, when they pay for things, I fail to see how this is different from e.g. sending money to each other with PayPal.

PayPal is exposed to a lot of risk of fraud because of being connected to the banking system, and it passes that risk along to its users.

A friend of mine had his laptop stolen via PayPal (in the US). He received the payment on PayPal, a woman came to pick up the laptop, and after she left the payment was reversed. He disputed the reversal, but because he couldn't produce a shipping tracking number, PayPal automatically rejected his dispute.

There are several cases of conferences that have done conference registrations through PayPal and then had all their revenues confiscated because PayPal decided that their pattern of transactions looked like a high risk for fraud (new account, lots of incoming money, no shipping tracking numbers). Linking your bank account to your PayPal account means that PayPal can, at any time and at their discretion, take all the money in your bank account, and this is also a thing that happens.

And of course it's widely known that PayPal discriminates against prostitutes and porn models and people associated with them, closing their accounts without notice when it discovers them, and sometimes confiscating their money.

These risks don't get smaller when your customers are the unbanked; they get larger. And passing those risks along to people who are living hand to mouth is unacceptable: temporarily losing access to your money is a much bigger deal when you can't afford to fill the gas tank more than halfway full because you don't have savings to cover gas for your car. Or food for your kids.

I don't know anything about Strike as such, but using Bitcoin itself eliminates those risks, although while you're holding Bitcoin, it does create cash-like risks of its own—exchange-rate volatility, seed phrase loss, and theft by trojans. Good people tell me the Lightning Network design has a similar risk profile to Bitcoin itself, but I don't understand it well enough to make such assertions on my own.

[sorbits]

> The short answer is that Bitcoin works and TransferWise and PayPal don't.

The comment you link to say that you cannot get money out of Argentina (due to capital controls).

Fair enough, but in the comment I replied to, you said that you were living in Argentina, and got paid in bitcoin.

Am I to infer that you want to get your salary out of Argentina? And those who pay you are within Argentina?

Otherwise, I do not see the problem.

If you are paid by someone outside Argentina, they can deposit the money (as USD or whatever) into your PayPal or Wise account, and you can send them to whoever you want, get a debit card associated with the account, and spend/withdraw within Argentina (without needing a local bank account).

I do understand that bitcoin is a means to get money out of a country with capital controls, but normally money flows into these countries, as has been mentioned earlier, 20% of El Salvador’s BNP is remittance, i.e. people are sending money into the country.

>> Bitcoin does not solve the “cash to people without a bank account”. > This is not correct. It does

Bitcoin itself does not solve it. But I assume that you have found people in Argentina, who are willing to pay you cash for bitcoins?

I wonder if people are willing to buy your bitcoins (with cash) because they see it as an investment, or because they need to transfer their cash out of Argentina and cannot go through the regular system (due to capital controls).

[kragen]

> Fair enough, but in the comment I replied to, you said that you were living in Argentina, and got paid in bitcoin.

Right, two separate problems. The reason I think I can't use TransferWise to get paid is that I don't have access to a bank account. Maybe it's possible to open a TransferWise account without a bank account or credit card? Maybe someone in Argentina with a bank account could get paid that way, although they'd never know if their next paycheck was going to arrive or get cut off by a regulatory change.

Actually it looks like this has already happened. https://pirlutravel.com/transferwise/ says TransferWise doesn't work with Argentine bank accounts since January 02020. "Lo único que sigue funcionando por ahora para enviar y recibir dinero afuera es Western Union, AirTM y algunas plataformas de criptomoneda." Maybe this AirTM thing is something I should try.

> Bitcoin itself does not solve it. But I assume that you have found people in Argentina, who are willing to pay you cash for bitcoins?

Oh, sorry! I didn't realize you intended to exclude Bitcoin when you said "cash". Yes, there are people here in Argentina who will buy Bitcoin for dollars or pesos. Many of them are Venezuelan, so presumably a lot of those Bitcoins go to Venezuela next.

[aixi]

>The short answer is that Bitcoin works and TransferWise and PayPal don't. I looked into TransferWise a couple of months ago when someone else asked about it: https://news.ycombinator.com/item?id=26657391

Dude, just call a spade a spade and say what you really mean: You are using bitcoin to perform tax evasion in your country because you think taxes and the economy there are unfair.

[kragen]

Nope, although the fake currency transfer rates that are the big obstacle here are structurally similar in their economic impact to prohibitively-high export tariffs, they aren't actually taxes; they don't go to the Treasury but to the Central Bank, and so they don't pay for social services but rather to subsidize imports, further hollowing out the Argentine economy and destroying our competitiveness. But the evidence suggests that, even if I'm willing to take the 38% haircut, TransferWise and PayPal simply don't work. They just don't have service here.

Argentina does have a little bit of income tax, which I'm not allowed to pay (I tried, but the tax office turned me away because they don't accept income taxes from illegal immigrants), but most of the tax revenue here comes from the VAT, which I pay just like everyone else, because it's included in the price of everything. Exports of information technology services, which is what I do, are exempt from VAT. In fact, when I had a company here, before I was an illegal immigrant, I had to pay a lot of extra VAT that was supposed to get refunded, but it never was, because following that aspect of the law is too inconvenient to the government. (Because all my revenue came from exports, you see.) One accountant suggested that I bill a friend's domestic company for fake services in order to get the refund. I refused.

(This may throw some light on why TransferWise and PayPal have opted out of doing business here.)

I understand that if you've lived in a country all your life with a more or less reasonable government, all of this sounds ridiculously implausible. Government economic policy optimized to destroy domestic industry at the expense of imports? Tax offices refusing to accept taxes? Tax offices breaking the law by refusing to refund VAT? Accountants recommending fraudulent invoices as standard business practice in order to work around the tax office breaking the law? And before I moved to Argentina, it would have sounded ridiculously implausible to me too. Maybe I would have assumed that people were only interested in Bitcoin for tax evasion, if it had existed then! Hopefully I wouldn't have been such a fool as to accuse random people on the internet of crimes as a result of my misconceptions, but I probably would have done that, too.

Anyway, that's the way things really are.

Dude.

[sorbits]

If I understand your situation correctly, you are working in Argentina, but not paying income tax because you are a non-resident, and the source of your income is outside Argentina.

In that situation, I would look into setting up an offshore corporation with a bank account to hold the income, and then get a debit card that could be used in Argentina.

This would be a hedge against the volatility of bitcoin (but maybe you see that as an advantage) and it would not require you to get cash from strangers, which I personally would be a little hesitant about, since there is a non-zero chance you are accepting dirty money and/or helping people circumvent currency controls, but I do not know the laws of Argentina, and whether or not you are violating any laws here.

[kragen]

> If I understand your situation correctly, you are working in Argentina, but not paying income tax because you are a non-resident, and the source of your income is outside Argentina.

Very nearly—I'm working in Argentina, and the source of my income is outside Argentina, but I am not paying income tax because AFIP refused to issue me a CUIT without a work visa, but I'm not a non-resident; I'm an illegal immigrant.

> In that situation, I would look into setting up an offshore corporation with a bank account to hold the income, and then get a debit card that could be used in Argentina.

I have no idea how to do this, particularly without being able to leave Argentina. Also I don't think it's really a practical solution for the vast majority of people in either Argentina or El Salvador. (Also, most people bridle at taking the 38% haircut from the fake exchange rate, which at times has gone as high as 50%. In Venezuela it's sometimes been over 90%.)

> get cash from strangers, which I personally would be a little hesitant about, since there is a non-zero chance you are accepting dirty money and/or helping people circumvent currency controls

Any time you handle money, whether from a bank or anywhere else, you are accepting dirty money and/or helping people circumvent currency controls. The nature of money is that it is dirty and circumvents currency controls. That's the advantage money has over a gift economy: I don't have to worry whether the person I'm selling my car to, writing software for, or selling Bitcoin to is a good person or a bad person, whether when they return the favor it will be in spades or stintingly, or whether they will die or leave town before returning the favor. Of course I would like my money to fund good activities like education, family remittances to Venezuela, and abortion rights†, rather than bad activities like factory farming of livestock, constructing nuclear weapons, or exploitative garment sweatshop labor; but the nature of money is that it grants each individual the autonomy to make their own moral choices about how to direct their resources, rather than submitting each innovation for community assent. Sometimes they make the wrong choices, but that is better than not having the choice at all.

Similarly, the ice cream shop down the street has no duty to inquire whether the young woman buying ice cream earned that money from masturbating in front of a webcam for strangers on the internet, which I think is an occupation in which bitcoin is now very popular. Indeed, it would be unacceptable for them to make such inquiries.

I'm hesitant about getting cash from strangers for a different reason, which is what I thought you were going to say: they might shoot me or rob my house and take the cash back. With banks and Western Union this is a much larger risk.

______

† Abortion was illegal in Argentina until December. One of the things I did with my money in the past was to buy abortion manuals and give them away in the park. (It turns out there were legal drugs in Argentina which could produce safe first-trimester abortions.) Probably many people considered that money "dirty", but because we live in a money economy, the people who printed the books didn't have to worry about being turned out of their homes or going hungry as a result. Free abortion took a really long time to gain community assent.

[sorbits]

> [offshore corporation] I have no idea how to do this, particularly without being able to leave Argentina. Also I don't think it's really a practical solution for the vast majority of people in either Argentina or El Salvador

It’s fairly easy, but agree, it is not a practical solution for most people.

But then, most people do not get their income from abroad, so bitcoin isn’t practical either, for example you yourself exchange the bitcoins for cash, to use them locally (rather than use bitcoins to pay for your ice cream).

There is a market for “cash for bitcoin” (I think) because Argentina has capital controls, i.e. people making money in Argentina, that they want to get out of the country, and can’t go through the regulated system, are willing to buy your bitcoins, possible below market rate.

So bitcoin primarily solves the problem of getting money out of a country with capital controls, but most people living in a country with capital controls do not regularly face this problem.

You can say that for you, it solves the problem of getting money into the country, but there are plenty of alternatives, sure, some may have downsides, but bitcoin is not without downsides.

For spending money day-to-day, bitcoin does not solve that problem, the bitcoins have to be exchanged to cash first, as no-one wants to pay a 4 dollar fee to buy an ice cream, or have to wait up to an hour for reasonable assurance that the transaction is final.

> Any time you handle money, whether from a bank or anywhere else, you are accepting dirty money

While this may be true, I was alluding to specific anti-money laundering laws. For example, in the U.S. you have to report cash payments of $10,000 or above. So your ice cream shop, accepting a few dollars in cash, do not have to report this, and would not be liable if it turns out that these money were from selling drugs or what have you.

But if a car dealership accepts $25,000 in cash for a car, and they do not report it, then they are complicit in laundering money (to the best of my knowledge).

I don’t know if such laws exist in Argentina, but they exist in the U.S. and Europa, and I believe they would also apply to accepting cash for bitcoin (although the U.S. reporting threshold is quite high, in Denmark the reporting threshold was around $500, last I checked).

> I'm hesitant about getting cash from strangers for a different reason, which is what I thought you were going to say: they might shoot me or rob my house and take the cash back

My concern was twofold, the regulatory issue, as mentioned, but certainly also, that the people showing up to give you money for bitcoin may indeed be “gagsters”, but I was afraid that this would come off as prejudiced, as I don’t know Argentina, so I shouldn’t make assumptions, but I do know another developing country fairly well, where there is drug trafficking with foreigners involved, and capital controls makes it hard for them to take their profit out of the country, so they have turned to bitcoin, and I really would not want to get involved with these people (i.e. show up and accept their dirty cash for bitcoins).

[aixi]

>Nope, although the fake currency transfer rates that are the big obstacle here are structurally similar in their economic impact to prohibitively-high export tariffs, they aren't actually taxes; they don't go to the Treasury but to the Central Bank, and so they don't pay for social services but rather to subsidize imports, further hollowing out the Argentine economy and destroying our competitiveness. But the evidence suggests that, even if I'm willing to take the 38% haircut, TransferWise and PayPal simply don't work. They just don't have service here.

As I said on my previous post, you are circumventing local laws and taxes while living in Argentina by using Bitcoin. TransferWise and Paypal may not work in Argentina (I'm pretty sure TW works but just doesn't offer you a favorable exchange rate), but you could still receive a normal bank transaction from abroad and sell your dollars cheaper as stipulated by the laws in the country you choose to live in.

>Argentina does have a little bit of income tax, which I'm not allowed to pay (I tried, but the tax office turned me away because they don't accept income taxes from illegal immigrants), but most of the tax revenue here comes from the VAT, which I pay just like everyone else, because it's included in the price of everything. Exports of information technology services, which is what I do, are exempt from VAT. In fact, when I had a company here, before I was an illegal immigrant, I had to pay a lot of extra VAT that was supposed to get refunded, but it never was, because following that aspect of the law is too inconvenient to the government. (Because all my revenue came from exports, you see.) One accountant suggested that I bill a friend's domestic company for fake services in order to get the refund. I refused.

Not true. Illegal immigrants can be registered as autonomous workers, and since you earn in dollars you probably would fall in the 'Responsable Inscripto' category and have to pay autonomous worker fees + 35% of what you earn. You are just choosing not to. Also, the VAT is not the lion's share of tax collection in Argentina, but income taxes.

>I understand that if you've lived in a country all your life with a more or less reasonable government, all of this sounds ridiculously implausible.

I'm Argentinian. I simply chose to migrate away to a country without stupid taxes or laws rather than having an unfair advantage over my countrymen by avoiding them abusing the low-attachment-to-where-I-work-from nature of my career. The local tech scene in Argentina is filled with guys like you who avoid as many taxes as they can (except VAT, of course) using crypto or offshore accounts and then goad on the internet about it. You are lucky tax evasion is not a jail-able offence in Argentina, probably because the corrupt politicians are cut from the same cloth.

Sorry if I come across as too harsh on my opinion on tax evasion. I think it's an understandable crime in Argentina, but it somehow rubs me the wrong way when people openly discuss it like this on the internet.

[kragen]

> you are circumventing local laws and taxes while living in Argentina by using Bitcoin. TransferWise and Paypal may not work in Argentina (I'm pretty sure TW works but just doesn't offer you a favorable exchange rate), but you could still receive a normal bank transaction from abroad and sell your dollars cheaper as stipulated by the laws in the country you choose to live in.

I can't receive a normal bank transaction without a bank account, and my experiences trying to open an Argentine bank account have been very disappointing, though admittedly I haven't tried in many years. https://pirlutravel.com/transferwise/ claims TransferWise no longer works in Argentina, since January 02020; I haven't tried it myself.

At present there are no local laws or taxes specifically on Bitcoin, so I'm not actually breaking them by receiving Bitcoin (though I am breaking laws by working for a living), but a charitable reading of your comment is that Bitcoin, like Western Union, is a loophole in the laws. And I think that's plausible.

> Not true. Illegal immigrants can be registered as autonomous workers

That's good news! But it contradicts what the clerk at AFIP told me last time I tried to get a CUIT; they told me I needed to regularize my immigration status first. Maybe the policy has changed since then. (Or maybe the clerk made a mistake—but mistakes made by clerks at AFIP still amount to law enforcement decisions.)

> Also, the VAT is not the lion's share of tax collection in Argentina, but income taxes.

So, it turns out that this is sort of false, but also sort of true, in a way I hadn't appreciated. https://www.cronista.com/economia-politica/Presupuesto-2021-... says the estimate for 02021 is that the IVA (VAT) is 28.9% of the federal budget, while the impuesto en ganancias (including both corporate income taxes and personal income tax) is 20.1%. It also has monotributo impositivo (the "autonomous worker fees" you mention) at 0.39%. So personal income tax stricto sensu is much smaller than the VAT.

(The vast majority of Argentine workers don't make enough to be subject to the income tax; with the recent legal reforms, as I understand it, the threshold has been raised to $150000 per month, excluding 90% of the workers in Argentina. Historically I would sometimes have made that much money, but it's been a long time.)

However, social-security contributions are 22.8% of the federal budget; in theory those contributions are not really "income taxes" in the sense that instead they fund your retirement, and when I had set up an Argentine company, we didn't have to pay them—we paid into a private retirement fund instead. But that legal option no longer exists, and unlike a private retirement fund, the government is not prudently investing those contributions in carefully managed investments that will ensure its solvency when I retire; it's just spending them. So in fact those contributions are income tax in all but name. And maybe that's what you meant. If you add social-security contributions together with the actual legal personal income tax, the sum is as big as IVA, or maybe even a little bigger.

If we're getting into real taxation versus de jure taxation, though, most of the government's budget comes from printing money, which in real terms is a tax on anyone holding pesos.

> I'm Argentinian. I simply chose to migrate away to a country without stupid taxes or laws rather than having an unfair advantage over my countrymen

I came here to help develop Argentina's economy with my skills and understand the reality of the world system. I have contributed to Argentina's human capital by teaching people my skills, by collaborating on projects, by giving talks, and most importantly through one-on-one mentorship; by exporting my services, I bring money into Argentina which is then ultimately used to pay down Argentina's foreign debt and for importation of urgently-needed goods and services. It's deeply unfortunate that Argentina's government puts obstacles in my way at every turn, but so far that hasn't stopped me, just injured me, and given me a much deeper understanding of the origins of poverty. But I am confident that every Argentine is better off, if only infinitesimally, because I am here—even if the government won't let me directly pay into the retirement fund como corresponde.

Even though I am living in poverty without access to adequate health care or banking and cannot visit my family, there are always people who will criticize me for having "unfair advantages" because they think I ought to be living in even worse straits. (It's a little unusual when the person criticizing me for those material advantages is in a much better material situation than I am, as in this case.) But I don't think worsening my situation is actually the way to improve the situation. Instead we should build civil society, human capital, and institutional infrastructure that are capable of lifting us out of the poverty trap our history has put us in.

You have probably made the best choice from a selfish perspective in leaving, but from the point of view of the Argentine project, I wish you were also here helping us out, because it's really hard to develop an intellectual community that can nurture nascent programmers when the best and brightest constantly move abroad. But who knows—even if you aren't teaching people in Argentina to program, maybe you're bringing more money into the country (via family remittances) than I am? (One of the Argentines I mentored is doing so.)

If so, what money transfer service do you use?