Hacker News Reader

Comment by ejanus | Hacker News Reader

But Nigeria Naira is in free fall for more than 5 years now. The risk of holding Naira is more than that of BTC. We have two important exchange rates one at 372, another at 472. Only people with government link can easily source at so-called official rate. It is virtually impossible to import basic materials for small scale industries. Cryptocurrencies created windows for Nigerians to invest their money. We have inflation at 17% but CBN ordered banks to fix interest rate at around 1%. This is nothing but wealth destruction. Cryptocurrencies have helped Nigerians to work remotely and earn decent wages. I remember one guy from Nigeria who was making good money from a cryptocurrency based freelance company.

View on HN

Serious question - why is BTC a unique answer? Can't you buy index funds or ETFs? Can you not easily convert Naira to USD and/or Euro? Does the government forbid this?

Have you tried to do that while being part of non-first world financial system? Normally if local currency is being devalued by government it goes along with capital control mechanisms that essentially renders other investments impossible

Because the vast majority of people living in earth don't have access to traditional equity markets

the base case for cryptocurrency has and will always be democratizing finance, finance for the people that don't have the same access. banking for the unbanked, as naive as that sounds. uncensorable money, in the case of monero/zcash/privacy focused coins especially

Getting access to that is tricky, even for a lot of people towards the bottom of the income brackets in the developed world. There are regulatory or financial or other hurdles.

Just trying to send ordinary sums (say $1000) to someone in Venezuela, or Nigeria, or even India or China can be very tricky. Not everyone has PayPal. Even if they do, it may be subject to all sorts of capital controls or taxes that we do not see in most Western countries. It can often be either impractical or extortionate through the traditional financial system.

I have many reservations about Bitcoin, but if I just needed to send some money to someone in a developing country, it's pretty high up there on practical and simple ways to do so, if they can deal with the BTC on their end. Canada is quite free financially. I can send cash pretty much wherever, with no legal concerns if it's not funding crime and any investment returns are taxed. The legality on their end is another question, as this article shows.

Can't speak for Nigerians but Europeans don't have access to ETFs either. There truly is incredible entry barrier to many things if you're not born in a right country.

Huh? Where is this? I absolutely can put money into ETFs traded on the Frankfurt exchange via my broker.

I was talking about the American market. Unless you're a professional investor you can't touch ETFs if you're an euro.

> We have inflation at 17% but CBN ordered banks to fix interest rate at around 1%

I would‘ve thought it’s prudent to keep interest low in such a scenario, because it stimulates investments.

Low interest rates also make borrowing money cheap, which means people borrow money from banks, which increases the money supply (as well as the rate at which it's being turned over). This effect dominates any long term production increase which certain types of investment might facilitate.

Raising interest rates when inflation is high is Central Banking 101

Sure, CBN 101. But investment 101 is different,you try to beat inflation. Here, inflation destroys your currency value. Note that inflation in Nigeria is driven by foreign currency exchange rates and not interest rates.

Reply on news.ycombinator.com