Currency

Bitcoin a Refuge For Argentines Tired of Government's Currency Despotism

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Credit: jmalievi/flickr

Bitcoin's popularity in the U.S. is gradually rising as it branches out from tech-savvy and libertarian circles into the mainstream financial world. But who may benefit most from the technology are residents in countries like Argentina, where independent observers estimate inflation at 25 percent and the government imposes strict capital controls.

The price of Bitcoins in Buenos Aires are about 30 to 40 percent higher than those in neighboring Uruguay, and last week, a Bitcoin Meetup brought 150 Argentines to the nation's capital to discuss the advance of the technology in the country.

From Forex Magnates:

With the Peso undergoing yet another period of severe inflation at a rate of 20%, and now President Kirchner's attempt to lure citizens back into the banking system over which they have absolutely no trust, by attempting to repatriate the US dollars held overseas or in hidden accounts by citizens in exchange for the domestic Cedin, the demand for Bitcoins has rocketed…

The nation exercises capital controls, preventing citizens from exporting their funds to Uruquay for exchange into Dollars, creating even higher demand for crypto-currencies that circumvent the domestic rulings.

The rise of Bitcoin in Argentina reflects the citizens' growing desire to subvert the government's repressive monetary controls and soaring inflation. A short documentary about the digital currency was released earlier this year highlighting the practical uses of Bitcoin in the once-prosperous country. Supporters, like Daniel Alós of the Meetup group, who appear cautious about revealing their motivations, say on their event page they hope it will be soon become an everyday payment method.

I think Bitcoin will gain more momentum and confidence of the public to the extent that it will start to be accepted by most shops and businesses. I just was in touch with a site that delivers organic vegetables with payment in Bitcoin. I was struck by how nice and friendly the user interface of the site was.

Alós wrote that he intended to purchase vegetables for his restaurant from the site using Bitcoins.

The meetup was organized by an advocacy group called the Foundación Bitcoin Argentina. They don't detail its virtues of relative certainty and privacy on their website, but that is understandable—Bitcoin advocates receive threats even in America. But inherent in the cryto-currency camp's message is that more Bitcoin users in the country would benefit Argentines. And with a stateless alternative currency, more transactional privacy would be possible, as Reason's J.D. Tuccille wrote in May.

Why all this effort—and legal risk—to keep communications private? Because much of the world's population lives under the thumbs of nosy rulers, whether overtly malevolent or just overly officious…

It's not clear that Bitcoin can live up to its promise. It's the first serious crypto currency, unanchored to a government or to a physical presence, and it's just now being tested. What's obvious, though, is that people want what Bitcoin is supposed to be, and that desire will certainly be fulfilled either by it or by a successor technology that can live up to the billing.

Residents in countries like Argentina who are advised to avoid banks and pay cash because the government can't be trusted would certainly be served by Bitcoin or whatever alternative arises in the free market, if only for the peace of mind.

Why Bitcoin is here to stay:

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  1. Good luck.

  2. I still think Argentina requires a French Revolution.

    1. Hell, they are already printing Assignats…

      1. More like Asshats! Amirite?

  3. other nations are certain to follow argentina’s lead. argentines should be applauded for saying “no” to inflation and using bitcoin as the means to a magnificent end. http://littlebiggy.org/4755888

  4. I’ve said it before, I’ll say it again, Bitcoin is a scam. Anyone who understands economic theory knows it’s a scam. A fourth of all bitcoins in are held by one person. It was always a scam, a ponzi scheme, by which the early adopters would get rich and everyone else would get screwed as soon as the early adopters sold their stash. Hoarding is inherent in the system. I’ll tel you, the time has already past. It is amazing that it has even gone on this long. If you have money in bitcoins, get out now.

    1. Is it a pyramid scam in the way a gold standard is a pyramid scam?

      1. By Rudy’s definition – yes.

    2. Parody?

      1. Parodies are totally pyramid schemes! Support the Satire Standard.

    3. It amazes me how, uh, invested anti-bitcoin people are in the idea that it is a scam.

      Seems like they feel the need to shout their view from the rooftops, in ways most people don’t.

      1. “That’s what they WANT you to think”

    4. It’s not a scam, but it’s not great, either. It’s fiat currency like anything else.

      Just because it’s from a private company doesn’t mean it’s better than what a government is printing and calling money.

      1. But is algorithmically supply-limited currency really any more “fiat” then a gold standard? I mean, gold is not intrinsically valuable (nothing is), it just has some nice properties as a store of value that people agree on. So do crypto currencies…

      2. Actually, it isn’t fiat currency.

        I would highly recommend this relevant paper:
        http://papers.ssrn.com/sol3/pa…..id=2000118

      3. Bitcoin is NOT from a private company. That is the most common misconception about bitcoin, and it is also the main thing that seperates bitcoin from any other currency in history. Bitcoin is an algoryphm, a mathematical formula – there is no corporation, no company, no people behing bitcoin, just pure mathematics, which can be checked and understood by anyone in the world (well, by anyone educated in mathematics/cryptography).

  5. Dude I am totally liking all that bitcoin stuff!

    http://www.Privacy-Planet.com

  6. Bitcoin is cool… as long as you don’t use it as a store of wealth. Maybe one day. But not today.

  7. “Why all this effort?and legal risk?to keep communications private? Because much of the world’s population lives under the thumbs of nosy rulers, whether overtly malevolent or just overly officious…”

    bitcoin isnt really private. You can track every single bitcoin through every transaction back to its origin. If Argentinians *just* wanted privacy in their transactions, they would just use cash, they use bitcoins because their cash options are limited.

  8. Many people including myself are just starting to hear about Bitcoins even though they have been around since 2008-2009. They are a very new “currency” and will allow you to profit without ANY fees of transfer, any freezing of funds, doesn’t require banks and is currently feared by established financial institutions to the way of trying to ban it. The funny thing is that is it`s impossible to ban or prohibit because no one owns it!

    There are a group of clever developers are working on a tool that will allow people to make bitcoins every single day! There is a nice short to the point video that explains the “Human Greed” factor and why this is an entirely new and unexplored market!

    This is unlike anything you have ever seen or heard off and it makes perfect sense that early birds knowing this info will make alot of money off the backs of people that come into a new moneymaking market too late. The beauty of this is that you stay anonymous and in nowadays world flying under the radar is important. The recent scandals of governments spying on its citizens are making “transparency” a scary thing so don`t let anyone meddle in your private affairs!

    There is a free presentation seat to be grabbed so you can be the first to learn more about this bitcoin robot that is due to be released very soon to a small circle of people that follow its development.

    Check it out now: http://ezhomefunds.com/btcsm

  9. If you are interested how much people do cash trades with Argentinian pesos to bitcoin and vice versa, here are so starts:

    https://localbitcoins.com/country/AR/?ch=1af

    It IS popular in Argentina.

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