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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."
seriously guys, you missed the boat and you're angry, we get it!
now have a rational discussion for once!
As usual, if you can't understand that you can't screw your users without losing them, you merit losing ground to new technologies.
Get free satoshi (Bitcoin) and Dogecoins
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!
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.
The uses for BitCoin as a currency for the Silk Road and other markets lasted a bit, then got shut down. Similar with BTC exchanges. We hear about how great the exchanges are... until they get big, then they shut down and all the BTC held by the exchange vanish into thin air. Well, we know whose wallet owns the coins... but who owns the wallet is completely different, and it might be that someone who sits on the coins for 7 years... time enough for the statute of limitations to run out, will have a bonanza on their hands, since BTC is now only trending up after its growing pains.
Now for the bad stuff: Bitcoin is 100% tracable. Yes, you can tumble coins, but there isn't anything that makes that cool tumbler that is only accessible from a .onion site just say "fuck you" and walk off with all the BTC. With enough police work, they can find who owns a wallet if any coins in that wallet are spent (hint... most Web browsers leave a fingerprint, and a lot of ISPs leave a X-UIDH tag that can be easily used as a fingerprint.
I won't be surprised to see:
1: People use BTC.
2: Argentina outlaws it.
3: ?????
4: Interpol and the Argentine popo seize a lot of servers and make a lot of arrests.
All and all, I wouldn't be surprised to see governments work together to create an extensive BTC tracing mechanism with geolocation, then use some other means of parallel construction to ensure a conviction.