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."
That's incorrect. Gold fluctuates pretty wildly with mass hysteria, compete with massive deflation and inflation. Much like bitcoin. Prior to the 20th century, when communication wasn't quite so instant and pervasive, gold did a pretty good job because it was rare for *everyone* to panic more or be more confident all at once.
XML is like violence. If it doesn't solve the problem, use more.
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.
>Bitcoin is the world's first fringe currency.
pretty sure it's not.
There have been many fringe currencies. From company chits to Disney Dollars, there have been many fringe currencies throughout history, It's just that the term had yet to be coined.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
Exiting the Euro gives them some control over their destiny.
A country that is in such poor economic shape generally has it's currency devalued. This has two effects: first, imports are suddenly more expensive; and second exports are suddenly cheaper for the rest of the world to buy. As the economic mess cleans up, you have a capital inflow into the country, liquidity frees up and things get better.
Now Greece (or any other country in the EU): They don't have their own currency; they use the EU's. So they can't allow their currency to devalue; they are dragged along by the strength of the German economy, which effectively determines the value of the Euro. They can't control their economic destiny.
Exiting the Euro may be the only option to give the Greek economy exactly what it needs: a savage, sharp recession to flush out all the inefficiencies and get back to making stuff and exporting it. Or just producing enough for domestic consumption; that'll do. Staying in the EU probably means that it's going to be a long, drawn-out and painful process.
Eh. Don't oversell the old gold standard. For starters, a gold standard was typically a steady and persistent malaise of deflation, as economic output increased more steadily than the money supply. Second, this was punctuated by Fun Fun Fun bouts of inflation when something like a gold rush happened or someone colonizing the new world discovered new mines overseas. Third, the metallic standards' troubles were amplified when regimes inevitably tried to do something stupid like have currency in both gold and silver with the price ratio fixed, invariably leading to a straightforward application of Gresham's law where the overvalued money drove out the good (sometimes merely hoarding the good money, other times trading it out of the country for a better deal).
The World Wide Web is dying. Soon, we shall have only the Internet.
Interestingly, the National Bank of Greece is one of the eurozone institutions that has the facilities to print Euro bank notes.
Since November they have printed more than 13 billion euros of bank notes (against ELA funds) which Greeks are now storing under their mattresses.
One wonders what sorts of contingency the EU has for this. It would be the ultimate middle finger to the EU if Syriza decided to solve the ECB imposed liquidity crunch by literally firing up the printing presses, yet a uniquely convenient thing to do when stuck in a currency union. Normally, the ECB could punish them by cutting of access to the TARGET2 settlement system, but this is basically already the situation now with the ELA funds running dry and capital controls in place.
What a circus this could become.