Comment by firekvz | Hacker News Reader

Comment by firekvz | Hacker News Reader

Venezuelan here, bitcoin is only used as a fast bridge between VEF and USD* mostly money laundering.

That's it.

So how it works is that people have tons of VEF from different sources, go to localbitcoins and get some btc and sell as soon as possible for usd in other places.

The thing got so crazy that USD:VEF black market rate was stable at 1USD:200,000 VEF for like 2 weeks but the "bitcoin dollar" was trading at 1USD:350,000VEF

Besides that, bitcoin has absolutely no use.

And for the people saying that "mining" bitcoin is good in venezuela, they are totally wrong, mining bitcoin is a business you wouldn't want to go in, there is alot of mafia (because of what i said above) and alot of weird things happening, only those who are related to mafia/gov/drugs/illegal gold mining/corruption in general are the ones who can mine without the risks, if you are the average techie guy you are in huge risk, from like getting all your hardware stolen [1][2][3] to even be jailed and charged as terrorist [4]

[1] https://losbenjamins.com/2018/01/vea-regimen-roba-maquinas-b...

[2] https://www.criptonoticias.com/sucesos/desmantelan-centro-mi...

[3] https://www.el-carabobeno.com/pareja-detenida-por-comercio-i...

[4] http://www.el-nacional.com/noticias/sucesos/incautaron-compu...

For a counter-point from another self-purported Venezuelan:

https://np.reddit.com/r/CryptoCurrency/comments/60x8wv/freed...

That's not so much a tale of "how Bitcoin is useful for normal people in Venezuela" as "here's why I, a cryptolibertarian, think Bitcoin is going to beat down fiat currency" where the cryptolibertarian happens to live in Venezuela.

It's not just a political statement. He/she provides a practical effect of cryptocurrency on their life:

>>I´d rather buy bitcoins from localbitcoins in less than 5 minutes than risk my safety buying USD from some really speculating, shady people. I invest most of my crypto savings long term in alt coins

For someone whose private wealth is always at risk of seizure, and is in a impoverished country where the majority are at the brink of extreme deprivation, it seems pretty reasonable that cryptocurrency would help.

Minimum wage is ~915,000 VEF thats less than 3$

University teacher (my mom) does ~4,000,000 VEF thats 10$

Wages and salaries in venezuela suck as you can see, there is no way that a salary is over 50$ a month for regular Venezuelans.

I dont see this guy buying 3$ worth of bitcoin monthly, this is probally a made up story or the guy is into those shaddy business that I named in the root post.

Once again, regular venezuelans can't afford to buy bitcoins, its even more expensive than USD.

How does your currency fluctuation affect people on a daily basis: fuel, rent, income, groceries, etc...

People just become poorer every day. Only few who rely on remittances can mantain their lifestyle

Services, fuel and basic groceries have regulated prices so at least as a regular venezuelan you can survive but you can't afford to improve your life (buying new things, traveling, housing, etc) you couldn't even afford health care (please don't even mention public/free healthcare in venezuela, it's a complete joke)

This is why everyone is leaving the country. From my highschool class (we were 75 people) only 5 are still in the country, fromy my university class of about 45 only 4 are in the country, the young "educated" population pretty much dissapeared.

Pardon the blunt question, but why are you still there?

Is a common question, don't worry.

Remote working + business within the country. I can't really leave as opportunities for me are here. Other people do have to flee as they dont have USD income or good living conditions so emigrating is their only way, most of my family is outside too so I travel back and forth alot.

How about bartering?

Do you know what the people selling BTC for VEF are doing with that VEF? I'd guess that they're buying USD at bargain rates and then buying BTC with that USD to sell.

Exactly that.

Most of the "bargain rates" usd comes from small transactions of people sending USD to their family in Venezuela and are not up to date with pricing or inflation.

You can see people still selling USD at 210,000 VEF while bitcoin usd is almost hitting 400,000 today.

Others just buy alot of merchandise of any kind in VEF (stock it few months) and sell it at big prices later.

>bitcoin has absolutely no use.

I would think that putting your savings into bitcoin would have use over holding a currency (Bolivar) with an annual inflation of ~6000%? It is your argument that using bitcoin as an inflation hedge isn't useful? or maybe that there are better inflation hedges?

why would anyone do that with bitcoin when they can buy USD and avoid all the problems that come with btc (scamming, losing, price variation, etc)?

Inflation here merely depends on USD exchange rate to VEF, thats it.

If i need to "protect myself" (and I do) all i do is open facebook, find someone selling USD in a BOfA account, give them my zelle email wait for the money and transfer them VEF in regular venezualan banks accounts (instant transfers).

USD >>>>>>>> BTC anytime in terms of "protection agains inflation".

>why would anyone do that with bitcoin when they can buy USD

How is a Venezuelan suppose to buy things online with paper USD? If you have to order medicine to stay alive because there's a scarcity in Venezuela, you cannot use paper USD for that.

At 6000% inflation, your $100 worth of bolivar will be worth ~$1.66 at the end of the year. If bitcoin ends up the year down 90% (not unreasonable), it's worth $10. Sure that's more than $1.66 by a lot. But if you bought USD instead and heald that, it would be worth $98 or so.

Bitcoin's valuation is too unstable at the present to be a good store of value. This is going to be doubly the case if inflation has already destroyed your savings: you need highly liquid, highly fungible reserves, and things like gold or bitcoin are just simply not up to that task.

>Bitcoin's valuation is too unstable at the present to be a good store of value

Are you framing your Store-of-Value judgement on a very narrow, confirmatory window of time? There have only been 5 months out of the past 96 months of Bitcoin's existence where bitcoin trades have been at a net loss. Additionally ~81.7%[1] of buy volume is in the black (by a healthy amount: 20X).

>If bitcoin ends up the year down 90% (not unreasonable)

Would you sell me a call at 10% of spot-market price? I would love to buy that.

[1](14.786+1.379+1.158+1.265)/22.728

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