Slashdot Mirror
Greek Financial Crisis Is an Opportunity For Bitcoin
An anonymous reader writes: Greece's economy has been in trouble for several years, now, and a major vote next weekend will shake it up even further. The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro. One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable. "Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250. Part of the reason why the crisis is so tempting for proponents of the cryptocurrency is the echoes of a previous crisis in the Eurozone: the banking collapse in Cyprus in 2013, which saw that nation also impose capital controls to prevent massive outflows of currency from the panicking country. That collapse came at the same time as the first major boom in the price of bitcoin, which began the year at less than $20 and peaked at ten times that by early April – before it all came crashing down."
"Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. "
In hopes of getting everyone to quickly buy Bitcoins so it actually rises and he can sell. Nice try.
>> alternative currencies like Bitcoin suddenly look much more attractive
The problem most Greeks suddenly face is that their money is now locked up as electronic balances in banks that have shut down for a week and won't let them have more than 60 euros at a time. After crises like this (even America's own "great recession"), people tend to prefer forms of money are more than just bits or fiat paper, such as gold and silver.
The greek financial crisis was brought on by a neoliberal government that promised the moon and stars, never collected tax, and drove itself into bankruptcy by securing loans (some predatory) that it could never repay. 23 years of national economic policy are coming home to roost, much as they did in the united states during the housing collapse, except the frameworks are radically different.
Greeks aren't generally accustomed to paying tax. Free medical and social services, some wildly more generous than the average western nation, are normatives they enjoy, and expect to enjoy regardless of income. shifting greece from a two decade model of tax evasion to even moderate tax reform will be met with cars burning in the streets because the average greek voter isn't privy to the fact that the government, in order to remain popular and in power, basically spent itself into oblivion.
exiting the euro may be the cure. Greece seems to be a country that doesn't consider capitalism in the western sense. theyve shunned the world bank strategies of privatized education and water. Evergrowing GDP. endless investment, and cloistered monied elite don't necessarily factor into the countries priorities. It will be a hard road for greece because many other nations will be very reticent to trade after an exit, but it will also afford numerous opportunities for local industry to emerge and thrive.
Good people go to bed earlier.
Ponzi
Scam
MtGox
Not backed by anything
No "Full faith and credit"
Can't pay taxes
Money Laundering
Drugs
Silk Road
DPR
>50%
Gold
Executive Order 6102
Ok, now that is out of the way, we are ready to discuss the issue at hand.
Prove anything by multiplying Huge Number times Tiny Number
As opposed to every other currency, because they're backed by threats instead of backed by willing acceptance.
I know when my country is looking at economic collapse I'd look to move all my money into a currency that's going to double-quintuple in value nearly overnight. That's the stability I want and look for. Plus think of the literally 2 or 3 actual real retailer in the country that even know what a bitcoin is, let alone accept it for payments that I'll be able to spend my new found wealth
The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro and face even worse austerity.
FTFY.
Leaving the Euro will mean that the country has defaulted, and whatever currency they put in place will have no value at all. The government will be bankrupt and will not be able to pay civil servants or pensioners. There are only 3 ways this goes:
- Creditors accept to write-off some of the debt. They cut their losses and allow Grece to survive, in a situation which is actually bearable.
- More austerity, from inside the euro. Hard times ahead.
- Default. Chaos, Civil War.
Humanity and Finance don't go together very well...
Just 2 years ago the legal retirement age in Greece was 57. I think it's been changed to 61 now and there was talk of moving it to 63, but generations of Greeks have been coddled and given so many handouts by the government that they are going to riot if they have to face reality. As you point out, bit coin can't solve the problem of an entire nation so addicted to entitlements that it can't accept any way out of the crisis that doesn't involve no changes or hardships at all.
One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable.
Bitcoin will not be more stable or attractive than other currencies including the dollar or probably even the euro except in some weird corner cases. If someone is putting money into bitcoin because they think it is even relatively stable then they are an idiot. If someone wants to use bitcoin to transfer money then there is a relatively small risk there but you'd have to be pretty dumb to just buy and hold bitcoins for any substantial length of time. Even if Greece does exit the Euro it isn't going to make bitcoin meaningfully more sensible than it already is. If someone wants to swap currencies to hedge against currency fluctuations I can think of a huge number of options I'd consider long before bitcoin for that purpose.
Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250.
I rest my case. If it can go up that fast then it can (and probably will) go down just as fast. Bitcoin is not a place anyone should be comfortable keeping their money for long unless they are speculating.
Yeah. Actually Bitcoin is a terrible idea. To replace one deflationary currency they can't print (Euro) for another (Bitcoin).
No my dear friend. It's fiat currency they need right now.
Not to mention that 1Y ago it was $650 per unit, and was almost $1000 a year before that.
So on top of a massive inflation over two years, they are saying they are so stable they predict a 200-300% deflation thanks to how awesomely stable it is...
I don't understand how anyone can testify to the stability of bitcoin with a straight face.
XML is like violence. If it doesn't solve the problem, use more.
fiat currencies are a ponzi scheme.
Bitcoin works by convincing others to buy into the game for the promise of returns, thus pushing up the price. So take any 'expert' who claims the value of bitcoin is going to boom, or "can only go up" with a bag of salt as its more likely that they are following their own interests and not yours.
Right. The article makes no sense. The Euro isn't collapsing, Greece and its banks are. If you have the Euros with which to buy bitcoins, you're better off keeping the Euros. Just don't deposit them in a Greek bank.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
When the first country leaves the Eurozone, then it will make it easier for the next country in crisis to do the same.
This will cause those in weaker countries to look to something other than the Euro to store their long-term savings in. Bitcoin will be one of many options, as will metals, other major world currencies, land, art, collectables, and other items that are likely to keep their "real value" in the event this person's country exits the Euro and all bank accounts are re-denominated into a weaker-than-the-Euro currency.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Trying to push bitcoin only shows that the author has a poor understanding and an agenda. While you could, potentially, argue bitcoin in cases where a country's currency has collapsed, or is unable to be used to buy things from other countries. Bitcoin is highly volatile, a very poor store of wealth, but it is something you can spend and transfer, in some places at least, and at present it has value.
Well, that isn't an issue with the Euro. It is an extremely important and widely used currency, second only to the US Dollar. All Eurozone countries use it (by definition) which is quite a few major economies. As such it is also widely sought after in international currency exchanges. Euros are very easy to spend on the international scale. Many places will take them directly, and any bank will convert them.
Also the Euro is pretty stable. When you look at it compared to other major currencies like the Dollar, Pound, and the Yen it compares very well. All fluctuate, of course, but not very quickly. So it is a good store of value, you don't have to worry about losing your money. Works long term too, as many nations with good credit will sell debt instruments in Euros.
So there is nothing bitcoin solves here, because bitcoin is a currency and currency isn't the problem in Greece. This isn't Zimbawbe where the currency was worth nothing.
The only way it could "help" is to move money out in the event of capital controls on Greek banks. But of course:
1) You have to get the money out of the bank first, which a capital control can slow down.
2) The only way it facilitates that would be being less traceable. As I said, Euros are taken everywhere, you can convert them to Dollars or anything else.
3) Most importantly that wouldn't help the situation at all, it'd make it work. Might help an individual save money, but it would only worsen the situation.
Anyone who uses something as volatile as Bitcoin as a long-term store of value only has themselves to blame when things go south.
For me, personally, Bitcoin's primary utility is as a medium of exchange, not as a store of value. Thanks to Bitcoin-based and similar low-friction (read: low transaction fee) means of exchange, I can buy stuff from merchants that accept BC without dealing with typical currency-conversion fees. If I'm a seller, I can sell without dealing with the typical merchant fees associated with credit cards. Then again, I have the advantage that my nation uses a currency that is, for the time being at least, considered one of the world's major stable currencies.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Part of the issue in the Eurozone is that countries have control of fiscal policy, as in how money is spent and taxes collected, but not monetary policy, as in how much money is supplied and to where.
While monetary policy doesn't let you magic your way out of any situation (see Zimbawbe for an example) it can be useful. Have a currency that is weak or strong isn't inherently good and bad, but rather useful in different ways. So one country might wish to have a weaker currency, another a stronger one. Also it can allow for things such as higher inflation, which can be a problem, but can also be useful in some situations.
It wouldn't solve Greece's problem, to be sure, but there are ways it could potentially help.
You should trust trustworthy algorithms, not just all algorithms. Bitcoin in particular is a pyramid scheme algorithm.
Using Bitcoin to trade doesn't make any more sense than using Google or Apple stocks to trade (with the difference that Google and Apple stocks fluctuate less rapidly in value). Oh, and the state-controlled water companies and the mostly state-controlled electricity company of Greece () accept payment only in Euros. And the special tax on all fuels (heating diesel, vehicle diesel, gasoline, LPG and CNG), which is seperate from VAT, is paid in Euro only, so gas stations have to charge in Euro. Even in if everyone else decides to sell you stuff Bitcoin, you still have to use Euros to live. BTW, if a country's currency become worthless (like a new Drachma will be), people typically use US dollars (see Zimbabwe), not obscure libertarian cryptocurrencies. Sorry.
It's a completely arbitrary distinction in many ways. Forget the money: the problem is about stuff (goods, services, etc). The Greek government has been borrowing so that its people can have more stuff, and at this point It's not even about paying what they've borrowed so far, there's a substantial ongoing deficit that they need to deal with. As such, the people are poorer than they thought, and they're going to have to cope with it somehow. They can do that by accepting the poverty and choosing austerity: cutting benefits, raising taxes. Or they can respond to that with reforms in the labor market and other markets (working harder/smarter).
All you get by replacing the currency and then paying people in the new currency that's worth less is austerity by stealth, with a side of chaos and disruption. Which is what the leftists in charge of Greece will pick, since they ideologically reject the reforms and can blame evil outside influences for the chaos and disruption.
The World Wide Web is dying. Soon, we shall have only the Internet.
Not long ago, value of Bitcoin was around $1200. Now it is around $250.
Anyone buying Bitcoin for stability is too stupid. Anyone suggesting that the value of Bitcoin is about to rise to $600 or $1200 is attempting to pump the price in order to dump their holdings.
Such nonsense. Austerity is not 'reform'. It is larceny.
“He’s not deformed, he’s just drunk!”