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Bitcoin Is Disrupting the Argentine Economy
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."
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!
Is it just my observation, or are there way too many stupid people in the world?
"But Argentina has been quietly gaining renown[...]" No kidding... Ill say "extremely quietly". As a tech savvy Argentinean that has been living in Argentina for the last 33 years (that is all my life), I never heard of BitPagos, Rock Hostel or all those 8000 convenience stores apparently accepting BitCoins. I guess I should really get out more. The inflation is real though. And it sucks.
"I'm from Buenos Aires, and I say kill 'em all!"
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.
..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.
Who put this thing together? Me, that's who.
Their currency loses 25% per year ...
Bitcoin recently lost 75% in a year.
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.
>> 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.
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.
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.
"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.