Bitcoin surges in Zimbabwe after military seize power
timeslive.co.za
timeslive.co.za
Therelies the problem with bitcoin, why would someone in zimbabwe pay 1 week of their salary to move 3 weeks of pay and still not be sure if the money will still be there tomorrow?
In my country some years ago, in a time of crisis for example the government locked all foreign currency in banks, and auto exchanged it for the national currency, at a rate set by them, it was robbery basically, prices would jump up like 25% day to day, so the national current was worthless, oh, they did the same with all the private owned gold in banks or so they could grab, sold for national currency, same scenario I think it happened in Basil too, government locking money in banks.
prices = inflation = jumps up and up
Zimbabwe has been in a hyperinflation downward spiral for almost two decades now[1].
If you hold your Zimbabwe Dollars overnight, they are only worth a fraction of what they were the day before. In hyper-inflationary periods, people would rather buy goods immediately than hold onto cash because the cash depreciates FAR faster than commodities.
[1] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#/me...
Which form? At some point Zimbabwe economy was (is?) so fucked up that currency does not hold any value, so barter is all there is. Money literally evaporates overnight:
> The peak month of hyperinflation occurred in mid-November 2008 with a rate estimated at 79,600,000,000% per month
(Whether it's reasonable to project that past behavior into the future is another discussion, of course.)
And 60 days ago I said to buy in at $3k: https://news.ycombinator.com/item?id=15259134
After Bitcoin crashes, it's always a good idea to buy.
A 25% fluctuation is still the norm. Sure, it takes 3 days rather than 1 day, but it's not mistaken.
Z$ record inflation was 79,600,000,000% a month[0] before it disappeared. Bitcoin's short term volatility looks quite manageable in comparison.
[0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#Inf...
BTC is accepted pretty much nowhere, and it's difficult to exchange for any given currency.
I can't fathom for a second why BTC would be more popular than BTC at least on those terms. Exchanges may be more readily available for BTC, as USD movement is controlled, you need banks etc..
Especially given the level of technology required ... I don't think that Zimbabwe is realistically the driving force here.
For Bitcoin to succeed, it needs to conquer the US market adoption and it is not even close to doing that. All price gains are just speculation and market manipulation.
Genuinely: Why is that axiomatic?
Why is there no path that is, reductively, in parts of the world where electronic payments are already normal, bitcoin becomes the instrument?
I can't think of any technology besides micro-finance that has trickled-up to USA.
To make a counterpoint you need to find something popular in USA with no uptake outside of it or something that influenced USA but came from outside.
https://www.statista.com/statistics/266136/global-market-sha...
It's also supposedly (I can't remember where I heard that, some tech channel on YT) the only non-Chinese brand that's popular at all in China.
[0] Admittedly I have no idea for context of the picture and had to get it from google pictures since I couldn't visit business insider, I keep getting redirected to a Polish version of business insider that has NO TEXT AT ALL (?!).
Also, what do people find so wrong with me pointing out that "here's 2 apps popular out of US but not in it" strengthens the "USA influences the world but not vice versa"?
Even if you're not convinced until you see it conquer USD, you should still expect to see what we're seeing now[0]... weaker currencies falling before strong ones as BTC adoption follows along an S-curve of adoption.
[0] http://nakamotoinstitute.org/mempool/speculative-attack/
Deflationary currencies generally will produce less frivolous spending, which is a good thing. Lower time preference [0] vs fiat high time preference of today's economy will result in much more savings and investment vs consumption spending.
Longer time horizons vs short termism that plagues markets now. Overall, an increase in prosperity and economic growth and decrease in debt and credit cycles (BTC immune to M0/M1 credit expansion and contraction = decrease in business cycle roller coaster)
Bitcoin is tiny as currencies go or as industries go. What is it $100 billion "market cap"?
> Whales are not gods.
Sure. But in such a tiny volume entity like bitcoin, any large player can easily move markets.
It doesn't even have market makers or any real rules yet.
Blatantly false -- you clearly don't monitor crypto exchange order books full time (I do). Even most small-cap altcoins have active market makers running 24/7 for ALT/BTC, ALT/ETH and ALT/USD (where supported).
> But in such a tiny volume entity like bitcoin, any large player can easily move markets.
Do you know from experience? There are some extremely low market cap altcoins -- you should give it a try. I do not think manipulating markets for any length of time is as easy as sideline commenters seem to believe, and it certainly is difficult to make it profitable.
Also note that many of the highest market share Bitcoin investors were early crypto enthusiasts or wealthy venture-cap-type investors, not professional/active traders. If and when there is concerted market manipulation with hundreds of millions behind it, these early adopters are certainly taking heavy losses.
Ripple (XRP): https://news.ycombinator.com/item?id=15203894
But small enough to have miner pools controlling 50% of the hash rate.
And even then, most pools are largely decentralized and heterogeneous -- controversial political/technical changes by the pool owner would absolutely trigger an exodus of hashrate from the pool. (As happened during the BTC/BCH fork.)
Using [1] an average transaction costs about 10$, this is particularly bad in a poor country. I wonder if using a cryptocurrency is really the best option in this case.
It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction
3-12 blocks is half a hour to two hours wait. The chart shows 30 satoshis/byte to take 40 minutes to a 19 hours total wait.
(Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.)
So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.
In Zimbabwe, you could lose a significant percentage of your cash's value if you delay a purchase. Taking a risk that the other side of the transaction might not be as big of a problem if you can look at their account balance before the transaction begins.
Sure, you risk getting caught in a double-spend that is rejected from the blockchain, but if the alternative is to hold onto cash or to lose out on a transaction in a tough economy, you might be willing to take on that risk.
Merchant picks a solution based on who they integrate with - something like BitGo Instant[0], GreenAddress[1] or an analytics/fraud API provider that adds a risk score to a tx no different to a credit card transaction
That two-hour figure is the amount to get the transaction to the point of irreversibility so it can be re-spent without worry. The equivalent figure for credit cards is ~45 days and checks can take a week to clear.
But you're right, making transactions on chain is not going to be practical in an untrusted environment and it still depends on intermediaries.
Still, that argument was made against RBF and was enough of a hindrade to consensus that RBF was made opt-in. And it still is. So you are absolutely free to accept zero conf transactions, and take the risk, as long as you don't accept those who flag for RBF. Most wallets won't even make them by default (which in my opinion is stupid with the fees we have today).
The argument for a golden age before RBF isn't a good one. It was never reliable. And what little reliability it had is unchanged.
At the current BTC/USD rates, I have a few dollars worth of dust. However, it's spread over 17 inputs, so it's basically unspendable. It would require ~3.1KB transaction so even at 30sat/byte the fees would be, like, 0.00093 BTC ($6.5 at $7K/BTC).
For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money.
Or ten... You're a little out of touch for whom you speak for.
Theres nothing wrong with having many utxo's of varying sizes - good wallets will give you a choice on how to select them when composing a transaction (such as Electrum) and you can sweep part of it back to yourself in what would otherwise look like any other transaction
See Their's Law, good money drives out bad.[0] People will hodl Bitcoin and spend fiat, driving up the price of BTC in terms of fiat until it absorbs some significant portion of global currency value. There are only 21 M coins; a deflationary crypto currency isn't for buying coffee or micro-payments.
It is displaying similar qualities to Gold in countries where governments have debased the currency.
[0] http://nakamotoinstitute.org/mempool/speculative-attack/
Were Beanie Babies good money driving out bad? https://qz.com/114753/meet-the-family-who-lost-100000-when-t...
Well, there are some broad metrics we can think about. If Bitcoin become a sort of reserve currency, or a digital gold, or a combination of both, shouldn't its total market value be a proportion of what currently occupies that title?
So, do the math. X% of Gold, or X% of reserve currency. Inject that value into 21 million Bitcoin (or the circulating supply at a given moment).
Here's a valuation prediction applying Bitcoin daily trade volume of 10% of foreign exchanges which are $5 Trillion[0]. This would price BTC at $100,000.
Only after it approaches somewhere close to these numbers, would you expect to see appreciation in the range of fiat inflation.
That's how it can be.
[0] https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-1...
https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newber...
I don't think you comprehend the workings of "mass terror". Here's how it goes: we'll make you watch while we beat up your wife and kids until you tell us something worth knowing.
No evidence necessary. Pretty much everybody has some valuables, or knows someone who does, and if not who cares? It's your funeral.
Once again, the nerdy preconception that thugs somehow operate on a legalistic or technical basis is just completely wrong. You'll be the one "giving" the valuables to them, to make it stop.
They can have offshore bank accounts but getting the physical cash into and out of the country is tied up in mountains of bureaucracy and corruption. I met a guy in Panama who had to spend half his money getting the other half out of Venezuela. With Bitcoin it is actually possible to save and transfer Bitcoin to cash as needed. Carrying suitcases of hundred dollar bills around is not practical and getting cash in and out of a country like that is almost impossible.
You're not going to get everyone to use satellites to get data in and out. If you've ever been in an African country you'd know SMSs aren't on the cheap side either. You'd also know they have tools that can track and catch your VSAT dishes and fine you heavily.
It is more resistant, perhaps, to detection than cash on hand in foreign currency (though not necessarily particularly more than a foreign currency account where access information is memorized, depending on the threat profile of concern.)
A foreign currency account is not as easy to setup as a brain wallet.
That's also true of caches of foreign currency in cash (not to mention remote accounts.)
Of course, the difficulty of the subject proving full compliance is more of a problem for the subject than the torturer.
It's not hard to see why bitcoin has its appeal, no?
Since I gave the reason (added difficulty in detection, not confiscation) upthread, no, it's not hard to see why it has appeal compared to foreign currency for non-current savings (if you are spending in the domestic economy, which is observable by the authorities, the advantage of Bitcoin is mitigated) under certain threat models.
1. Internet access 2. Sales of computers 3. Imports 4. Citizens not revolting against that (including people using and accepting currency, so buy and sell side)
All of which are possible but not trivial. I actually think it becomes orders of magnitude more difficult to do this with a decentralised system like BitCoin than it is with fiat currency issued by a central bank.
Isn't China doing #1 - #4 to about 25% of the world's population already?
The fundamental problem is that it is incredibly hard to provide only some Internet access, be they a state actor, public school, parent, etc. The design of the protocols impairs censorship efforts.
If you want to censor the Internet, you pretty much have to start with a whitelist approach of allowed IPs and domains, and then stringently audit those to insure they don't act as proxies.
I agree the government doesn't get any benefit from decentralization and would just have a MySQL DB in real life to make corruption and whatnot easier, but cryptocurrencies only work if the government tolerates them.
What do you mean? Aren't they inherently tamperproof?
> how would they find those dealing everything in bitcoin?
A few people might live that way, but unless the entire supply chain is bitcoin someone will have to buy the food/gas/land they need with govcoin and sell it in bitcoin, thus getting caught.
> One of the reason of URSS going down was the huge administrative costs of spying / investigating, keeping up the oppression on its citizens.
Since ever single transaction is tracked, you can automate 90% of the work. Just look for businesses making the same amount of purchases but less sales, or people sending money to or getting money from accounts that aren't registered as employers or stores. With modern anomaly detection techniques you'd hardly have to torture anyone.
The USSR just didn't have modern technology. It would have taken a team of agents to tail a single person; the ARGUS-IS can track everyone in a 36 square mile area with a single drone.
I' extremely sceptical that people would do this. I most certainly wouldn't want to risk my life over one kind of (obscure) currency vs another.
This would be a waste of resources. If you're not going to be decentralized, it's way less complex to have a mysql DB of everyones bank accounts somewhere, and much easier to hide corruption.
They are only beneficial to establish a trustless data store. That is the only function they serve. If you don't need trustless consensus, you don't need or want a blockchain. If you are a state actor or some major corporation, you trust yourself already, and you don't need trustless data stores, and at corporate scale any interaction with other entities that might validly use trustless data (like money tracked between banks) has the entities involved capable of influencing force of law to maintain systemic trust.
That is why Zimbabwe citizens value it, and why a Fortune 500 or European state power doesn't need one.
Logic, people...
Not saying that’s what happened, just that logic hardly precludes it.
> The events unfolded as Zimbabwe is in deep crisis. The economy has halved in size since 2000, an estimated 95% of the workforce is jobless and as many as 3 million Zimbabweans have gone into exile.
95% unemployment?
https://africacheck.org/reports/is-zimbabwes-unemployment-ra...
Basically, it's complicated, and nobody knows what to believe. The 95% figure is taken from the CIA World Factbook, and has been repeated frequently in mainstream media and on Wikipedia. However, depending on who you ask and how you count, it could be as low as 4%.
Keep in mind that not everyone in the world takes Western institutions (like a national government, rule of law, and functioning economy) for granted. More than half the world's population still lives on subsistence agriculture: they tend a small plot of land, which generates enough food to feed their family and trade with surrounding villagers. These people are still "employed" in the sense that they work to support themselves, but they don't participate in any traceable economic activity.
Therein lies the rub. If you dig into the stats, the 10% unemployment rate quoted in official government statistics - and measured accordingly to the methodology economists usually use, excluding people who have "given up on searching for a job - is based on a definition of "job" where they have worked (in cash or in kind) for at least one hour in the past week. By those stats, 50% of the country was not in the labor force, 45% was "employed" (for at least one hour a week), 5% was actively unemployed.
But then when you dig further, 75% of those classified as "employed" didn't receive any payment for their work. They bartered. So now we're looking at 12.5% employment. And 84% of those employed worked in the informal sector, i.e. maybe they did a couple hours of labor for another villager. Considering the large overlap between the bartering & informal sectors, we're at around 5% full-time employment in the country.
That shows the difficulty in applying models built for an industrial economy to regions that still primarily function on an agrarian economy. The definitions they use are nonsensical - they don't apply to how people qualitatively work. (There're similar difficulties applying models made for industrial economies to post-industrial economies - how do you classify someone who drives for Uber & Lyft at the same time while AirBnBing out their house, doing Instacart runs, running an Amazon import-export business over the Internet, trading in Bitcoin, and selling stuff on Etsy? Is that 0, 1, or 7 jobs? Are they a financier or taxicab driver?)
[1] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
A year ago Zimbabwe introduced a surrogate currency known as the "bond note"[1] that is officially pegged 1:1 with the USD. Because of Gresham's law[2] (and higher utility of USD compared to the Bond note), the USD disappeared from the market and now commands a premium. Just to confuse things further, there are cash shortages even for bond notes as the central bank is attempting to rein-in inflation - electronic money (bank balances) is the 3rd tier of currency that is commonly available, and the bond notes command a premium over electronic money that you can wire in and out of your account.
The Zimbabwean exchange in this story (Gollix) strictly uses bank wires to trade (only Zimbabwean banks), so the denomination of the bitcoin price isn't real USD, but something less valuable. If you were to sell your bitcoin on this exchange, you'd pay a premium to convert you electronic balance into USD - and incidentally, you'll end up with roughly the same price as other exchanges (in USD).
1. http://www.dw.com/en/zimbabwe-introduces-bond-notes/a-364964...
https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-act...
Did the Saudi purge similarly boost crypto value as well?
Can anyone familiar with Zimbabwe shed some light on what's happening?
How would you know that the people buying groceries in your store are not criminals?
It's how a currency is used not by whom. I'd say guarding your life savings against the reckless actions of your government is a legitimate use case.