[simonw]

I hear this a lot. I want details:

- Which countries?

- What portion of the population are benefiting from crypto? Is it a tiny portion of nerds or has it become more mainstream now?

- With the crash in cryptocurrency over the last few months are these people in those countries still glad that they used this, or are they regretting it?

I don't doubt that there exist individuals in countries with high inflation who have befitted from the crypto boom. I want more than just anecdotes about individuals: I want to understand if this is a widespread, sustainable trend.

[gitanes]

Argentina. 100% of annual inflation. People use crypto everyday to get money in and out of the economy.

[simonw]

Argentina does look like the most interesting country to dig deeper into here.

As always with crypto stuff, a big challenge is finding trustworthy news outlets. I generally don't trust stories from the crypto press.

Found this on the BBC from one of their foreign correspondents (hence someone who will be held to BBC editorial and conflict-of-interest standards): https://www.bbc.com/news/business-60912789

It does note that: "So far it is the preserve of a minority - largely a young, male, tech-savvy, and relatively affluent population. It's tech workers, not farmers, who are being paid in Bitcoin."

That story is also from April. I'd like to see updated coverage now that the crypto market has crashed. How many people in Argentina got burned badly by that?

[dorgo]

> now that the crypto market has crashed.

I don't understand this "crypto market has crashed" narrativ. Ether is +60% in the last month... It's crypto. It never really crashs. A crypto crash would be something like -99.99%. Everything else is business as usual.

[seibelj]

This is absolutely true - binance plus stablecoins is how the economy works there.

[hnthrow1010]

That seems obvious to me that they absolutely don't want crypto. If it's stablecoins they're after then what they really want is USD, so badly that they'll use whatever shady unregulated crypto bank sells it to them.

[seibelj]

They will use crypto because it’s far more difficult to censor. The governments have been able to prevent individuals from storing and saving wealth, but this is becoming a lot harder and will continue to be ever harder.

[hnthrow1010]

I've never seen any reasonable explanation for that to be true. Crypto is very easy to censor, just ban the exchanges. Or if the government is really nasty, shut down the national internet.

And if you think they could set up a satellite connection and a mesh net in response to this, they could also use that kind of setup to transact strictly in USD, with an offshore bank. No crypto required.

[caskstrength]

> I've never seen any reasonable explanation for that to be true. Crypto is very easy to censor, just ban the exchanges.

You are correct. First thing that National Bank of Ukraine did when the war started is they banned buying foreign currency electronically (theoretically people could still buy actual physical foreign currency, but nobody would sell except for very high markup), transferring money outside of Ukraine, and _any kind of so-called quasi-cash operations_ including buying cryptocurrencies or transferring money to exchanges. And paying salaries in anything but national currency is of course illegal. So tech-savvy folks could still try to find local who owns crypto and would sell it for cash, but for regular people crypto doesn't offer any respite.

[seibelj]

A lot of poor countries with socialist / corrupt governments like Argentina rely extensively on informal money transmitter networks as well as money remittances. Exporters earn hard currency which is stolen by the central bank and converted into disgustingly inflated fiat, and then politically favorited importers get access to whatever hard currency hasn’t been looted outright by politicians. Small people have to get dollars other ways.

Stablecoins are acquired in less-authoritarian countries and then sent to people in Argentina and other socialist / corrupt countries. They then circulate among the people just like paper dollars do. As this black market grows it is very difficult to shut it down.

Anything is possible but I think it’s more likely the socialists try to adapt to this new world rather than shut down the internet. It will be interesting to see what new theft they come up with.

[espadrine]

> The governments have been able to prevent individuals from storing and saving wealth

Do you have evidence for that? While the Argentinian economy is struggling, and the government has defaulted in the past few years, I don’t know of widespread, illegal government theft of private citizens’ assets. The opposite seems true: they want people to get richer in exports, so they get more in taxes.

Is your argument that taxation is theft? They do need taxation in order not to default again.

[Fnoord]

And those people who circumvent the censorship are faithful in their tax reports?

No, they are not. They are abusing cryptocurrency (the correct term, no matter how often you use 'crypto') to commit tax fraud. Which makes the government even more inefficient as it already is.

[yao420]

Any proof? Have you personally seen and used it?

Seeing as you’re the CTO of a nft company you clearly have bias.

[seibelj]

I’ve been in this space for a long time, know a lot of people. Lebanon is another country that is heavily using crypto. You will see a lot of countries with corrupt governments and central banks become bottom-up crypto centric, but this won’t be reported for a long time until suddenly the NYT will release an article and only then it is “actually” happening.

Here’s an informative episode on a podcast if you actually care https://podcasts.apple.com/us/podcast/the-bitcoin-standard-p...

[simonw]

The summary of that podcast episode says:

> Thomas Semaan is an ex-student of Saifedean who has been active in the Lebanese bitcoin scene. He joins us to tell us about the Lebanese fiat crisis, how bitcoin has helped him and other bitcoiners, and compare its effectiveness to political activism and delusions of reform.

This is the problem. Obviously bitcoin is of use and interest to bitcoiners. What we're trying to understand is if regular, non-bitcoiners are getting value from it on a large scale.

Is crypto in Argentina and Lebanon something that has a real impact on regular people who are not deeply involved in the technology?

This is why I only believe it when a publication like the BBC or the NYT cover it: crypto incentivizes people who hold it to boost it, so it's very hard to trust stories that don't come from news sources with strong conflict of interest policies and a long standing reputation for journalistic integrity.

That podcast is called "The Bitcoin Standard"!

[hnthrow1010]

I don't have time to listen to this podcast (I'll read a transcript if you have it) but just to respond to your comment: I've never seen the question of what happens after a society becomes "bottom-up crypto centric" get addressed. You have a country where the central bank is suddenly not doing anything, tax fraud is rampant, and the local currency is now further on the brink of collapse. All the citizens' money is effectively being funneled away into entities operating as foreign banks. The government is forced to accept crypto to avoid insolvency and now makes it so you have to pay your taxes in it. If they're still corrupt they'll force people to follow the same regressive restrictions again, and no one will be able to do anything about it because the blockchain is all public. How is this going to help anything? I'm trying not to be bleak here but the idea here seems to be disregarding any hope of reasonable reform.

[seibelj]

I am a libertarian and I fundamentally believe the current central banking model is not only hopelessly corrupt but morally evil. Politicians have been able to steal from common people via inflation for a century while the rich are easily protected.

This is a long topic but to summarize I am quite hopeful that the ability for governments to extract wealth is limited greatly by the rise of crypto. If the government wants taxes they can do it by selling services to people who can pay for them if they agree it has value.

Of course I’m a minority but like all movements crypto is selling something to average people but the grand plan is only understood by a minority. Countries like Argentina have been basket cases for decades despite endless bailouts and IMF shenanigans. It’s time for something new that I believe is a valuable experiment with clear theoretic and ideological underpinnings that couldn’t possibly be worse than the socialist nightmare destroying billions of common people.

[Fnoord]

> I’ve been in this space for a long time, know a lot of people. Lebanon is another country that is heavily using crypto

Every country uses cryptography.

[RestlessMind]

Afghanistan, from a reputed source like Reuters: https://www.reuters.com/article/crypto-currency-afghanistan- idUSL8N2QU39A

> I want to understand if this is a widespread, sustainable trend.

Why? What if there is not widespread trend and it is only anecdotes? Why should every new technology be "widely adopted or bust" instead of simply being a new interesting tech which a hacker can tinker with just because? Blockchains, NFTs and smart contracts are far more interesting than yet another iteration of a web framework or yet another way to track user data.

[simonw]

Because if it's a widespread trend affecting real people then it's interesting to me. If it's a small group of bitcoin nerds doing what bitcoin nerds do but in another country then it's not.

I want to see evidence that the benefits of blockchains etc are outweighing the very obvious harms they are causing.

[RestlessMind]

What are the "very obvious" harms?

A genuine one I am concerned about is the energy consumption of Proof of Work chains. But the tide is shifting towards Proof of Stake, with Ethereum network achieving 2 significant milestones towards that recently (Ropsten, Sepolia) and a third penultimate one (Goerli) planned in the week of Aug 6th. So the main chain's transition towards Proof of Stake is likely to happen in September and Ethereum's energy consumption drops 99% or even more.

Other purported disadvantages (gambling, sucking in capital and brains etc etc) are totally non-obvious and highly debatable.

[davidguetta]

At least Argentina, venezuela, turkey, lebanon, pakistan and probably sri lanka by now.

Half of the world currencies has done worse than crypto even on small time scales.

[malaya_zemlya]

As of the last month, crypto and certain shady exchanges were the only (known to me) way to send money to Russia.

[toolz]

El Salvador uses it as a government enforced national currency. I struggle to understand how people still make the claim that it's useless or that it's niche - it's a recognized and enforced national currency now, not some neat project.

[acdha]

Who's using it? How many people did more than get that free starter wallet and cash out? How many transactions happen daily? How many businesses would notice if Bitcoin dropped off the planet tomorrow?

(Hint: the fact that people were rioting in the streets to _avoid_ it suggests the answer is not many)

[spicymaki]

Is bitcoin an investment or a currency? I don't think it can be both.

If the value of bitcoin as speculative asset is going to rise, then it is best to not spend it, but to hoard it. If everyone is hoarding bitcoin how can you use it to buy things?

If it is a currency then it needs to have a stable value. If the value stabilizes, then no one will want to invest in it. Since it does not have any "real" commodity value it would then death spiral. I don't know how you square this circle.

[boppo1]

I agree that bitcoin needs to decide whether to be an investment or a commodity of exchange.

> If everyone is hoarding bitcoin how can you use it to buy things?

When people need something more than bitcoin, they'll trade for it. Food, shelter, medicine, etc. People will certainly trade for these things. But maybe they'll pass on replacing a phone that's only 2 years old or getting an xbox or 6 pack of beer.

It's fascinating to me that people say currency can't be deflationary or people will hoard it. You're so against people hoarding, i.e. saving money? People act like the economy will stop, but no matter how deflationary a currency is, people will still trade it for needs like food and shelter.

[hnthrow1010]

>You're so against people hoarding, i.e. saving money?

The problem with this kind of system: It's not just about saving. What's actually happening is those who have saved more are accumulating even more money by doing nothing, and everyone else who needs to spend it to buy food and shelter is suddenly losing more and more of their money. When it starts happening at a faster rate than the economy is producing actual value then you hit hyperdeflation and the economy spirals.

[boppo1]

Hmm. What if we had a central committee mandated to target 2% deflation? Just the right amount of saving, not too much.

[hnthrow1010]

That would be disastrous for anyone who has a debt to repay.

[WaitWaitWha]

Is there not an entire currency speculation market? [0]

> When speculative investing involves the purchase of a foreign currency, it is known as currency speculation. In this scenario, an investor buys a currency in an effort to later sell that currency at an appreciated rate, as opposed to an investor who buys a currency in order to pay for an import or to finance a foreign investment.

[0] https://www.investopedia.com/terms/s/speculation.asp

[spicymaki]

Sure, I get the idea of currency speculation. You can speculate on anything including currency. The problem is when you try to make currency out of a speculative asset. In this case of bitcoin the value is highly volatile, so you would not want to use it as a national currency. I do know that bitcoin was originally envisioned as a currency, but most people are using it as an investment. You also have not addressed the issues I presented.

[2muchcoffeeman]

I don't think it's reasonable to think about it in such a simplistic way.

BTC has been subject to massive swings. Just looking at CoinDesk, it was easy to find a time where it doubled in value in less than a month. Why would any reasonable person spend that sort asset?

I think the dynamics of the market are as important as the technical features that some digital currency has.

[hnthrow1010]

But for the average crypto investor who isn't a whale and isn't insider trading on the whales, the dynamics of the market are effectively just random. This isn't like a stock where you can objectively look at the company, compare it to other companies and understand how it derives profit. It can't work either as a currency or as a reliable investment.

[simonw]

The failure of crypto to actually take off in El Salvador is pretty well documented at this point I think.

[lr4444lr]

It's not enforced. It is legal tender, but the US dollar is still their currency, last I heard.

[Mr_P]

What a convenient source of liquidity for the various drug cartels in El Salvador who need to launder their money.

[toolz]

Yes, so convenient that over a decade after its inception, still well over 95% of the black market operates in fiat instead.

[douglaswlance]

Why would they use a public, transparent ledger to launder money?

[lumost]

Lower counterparty risk, and harder to confiscate. Money can sit in a crypto wallet and be used for illicit transactions until favorable circumstances allow conversion out of btc. You can’t do that with cash in a bank.

With the amount of shady alt coins and defunct btc exchanges separating authentic vs bogus transactions is even tougher for regulators.

[CodeShmode]

There are many ways to launder money.

[plebianRube]

What a staggeringly uninformed comment.

[upsidesinclude]

If you invested in bitcoin ten years ago, you are happy.

I invested in bitcoin five years ago and I an happy.

Ukrainians are heavily invested in crypto and consider crypto (at a governmental level) to be a significant contribution to their efforts in maintaining their sovereignty.

It's tiresome waiting for the unimaginative and uninsightful to open their eyes