[oarabbus_]

Once he finds a local Lebanese money changer willing to exchange LBP for bitcoin (for how large of a fee?) and sends the BTC, he now finds himself in the exact same situation as the bank - having to trust a centralized entity.

And inflation is also not so much a concern if the value of the asset itself drops 50% in two months.

[notch656a]

Trusting a 'centralized' entity of your own choosing, rather than a limited choice of broken banks, for a short period of time for a single transaction is a big step up to having to trust a centralized bank of little of your own choosing in the midst of a banking crisis _for the entire duration of ownership of the money_.

This is Lebanon, not someplace like France. This could be a money changer with an AK at his side, a buyer with AK at his side, money and BTC changes hands and after the confirmations finish out on the BTC side they're on their way, simple as.

[peyton]

What centralized entity? Do you mean counterparty?

[2muchcoffeeman]

Well even if you had BTC and can convert it to cash somehow, where do you put that cash? How does this guy pay the hospital? Turn up with $30k in a duffle bag?

Somewhere your money has to go into the countries financial systems. Which makes sense. Money isn’t just for trade. It’s to exert soft power.

[notch656a]

I'm just curious how many people here have been to a money changer in the middle east. I've interacted with them in Iraq and Syria. A dude will stand there with gigantic bricks of currency in a clear box on a cart, including stacks of hundreds. He could easily have 50k+ there.

It's all very safe though. There is some guy standing around the corner with an ak behind a counter, and you can be sure 7.62mm size holes end up in the head of anyone who would try to rob the people doing the exchange. On one occasion the money trader made a very obvious calculation heavily in my favor, that he likely did not intend to make. I tried to walk away quickly with the money, and 3 men chased me down. I'm quite sure if I had stolen the money instead of merely gotten "lucky" they would have chopped an arm off instead of nicely asking to reverse the transaction (which I found wise to do).

The whole thing could be extended to BTC quite easily, and it's been awhile since I've been to the ME but it wouldn't surprise me if they've already added BTC to the mixup. From a western perspective it sounds insane to hear large sums of cash could potentially be traded easily and readily in a relatively "impoverished" nation on the street but for these people it's just regular business in the cash-economy world they live in.

[2muchcoffeeman]

Fair enough. My point is that the local power can enforce how transactions work and Bitcoin is still at their mercy. Most governments will want to retain control and crypto isn’t going to change that.

[PontifexMinimus]

> Turn up with $30k in a duffle bag?

If the banking system doesn't let people use their own money that they've deposited, I don't see what else he can do.

[rkagerer]

> Turn up with $30k in a duffle bag?

Whether you're talking USD or Lebanese Pounds, you could fit this into something much smaller (eg. an envelope, with reasonably large denominated bills).

[imtringued]

Soft power? Henry George argues owning land is "hard power" but ground rent is a residue, money can absorb ground rent through interest payments, making money also "hard power".

[oarabbus_]

No, I mean the local centralized entity that would need to have sufficient LBP available for exchange for BTC to solve this man's problem. He needs to pay a hospital, not trade crypto with an anonymous counterparty.

[myownpetard]

That's still just a counterparty. It would be centralized if there were a third actor that mediated all transactions between two parties, e.g. a FOREX exchange or bank that processed the transaction.

That's like saying TOR is centralized because you interact with a "centralized" peer.

[oarabbus_]

>It would be centralized if there were a third actor that mediated all transactions between two parties, e.g. a FOREX exchange or bank that processed the transaction

the comment I responded to specified a "money changer". I don't know if you've used one before, but they quite literally are forex broker/dealers.

Even if we move the goalposts from the "money changer" which was specified, TOR is not really comparable to in-person exchange (not to mention an individual can certainly be considered a centralized entity). Anyways, sure, let's call it a counterparty if you wish, the semantics debate isn't really relevant to the point.

[myownpetard]

Another interesting potential alternative is the systems that arose as a response to the Irish banking strikes in the 1960's and 70's.

> Though the money supply did contract sharply, neither trade, commerce, nor industry came to a grinding halt.

> How? People created their own currencies, to substitute for the collapsing money supply. They kept using checks to pay one another, but then, people’s checks began trading within communities. Here’s how Antoin Murphy, one of the few scholars to have studied these strikes, which took place in the 1970s, describes it: “a highly personalized credit system without any definite time horizon for the eventual clearance of debits and credits substituted for the existing institutionalized banking system.”[0]

There is also a great chapter in Money, The Unauthorized Biography that covers it.

[0]https://hbr.org/2010/11/the-irish-banking-crisis-a-par

[myownpetard]

Maybe my experience with money changers colors my view.

The only time I've used one and not a bank is when making land crossings between countries in Central America. The money changers are just a random assortment of dudes walking around the bus depot ready to swap between 2-4 different currencies. And I've only done it for a small amount of cash to have on hand in case of immediate need.

I imagine a cottage industry would pop up as a result of situations like Lebanon given the government enforced cash shortage. I remember reading an article a while back, which I'm failed to dig up, which described a similar system appearing in Venezuela as inflation was getting out of control. Money changers would come to you to swap bitcoin for other currencies.

But I understand your point and this would be a sketchy alternative for the amount of money discussed.