There have also been several instances in time where BTC has lost 80% of its value (and many more instances of 50%+), so it doesn't protect against the downside risk of needing money in an emergency.
Sell your BTC for cash, in person.
> There have also been several instances in time where BTC has lost 80% of its value (and many more instances of 50%+)
Better than the 90% inflation (or withdrawal "correction") in Lebanon.
This is totally absurd - you need to buy real goods, they are priced in USD, there is shortage of USD in the country. noone will trade with you
your only chance is to pay bitcoin to someone abroad who can exvhange them for USD there and ship goods to you that you can trade locally
There are P2P non custodial exchanges where you can sell your BTC in person (e.g. LocalCryptos), in case you need to stop hodling for some sudden expense, like the medical bills for your dad.
And the latter has no listings at all in Lebanon.
The entire reason he held up a bank is because NOBODY HAS CASH in Lebanon.
The hospital might not take it directly, but he’d still retain control of it and be able to find a way to exchange it for something the hospital does take.
In a country with a sound financial system, 6 months of expenses in a savings account might suffice. However in a country without a sound financial system you'd want 6 months of expenses in a savings account to protect against your own job loss, and maybe 6 months of expenses in bitcoin/offshore account to protect against a local financial system collapse.
Hoarding USD could also work, but it may be harder to get and it's definitely harder to protect/move in large amounts.
Clearly holding Lebanese currency in a bank may not be useful for holding emergency funds. But I do not believe that it's been shown that at point in time an asset which can drop 50% in value over two months, which is the type of acute timeline in which an emergency can occur, and requires transacting into LBP anyways in this scenario, is useful for holding emergency funds either.
A: his money would be on the blockchain where it's unable to be seized by the bank.
B: as Bitcoin is a world currency it's unlikely would face inflation to the level that the local currency has
C: if he was unable to change Bitcoin into the local currency to pay for the medical procedures, he could transact with someone like a money changer instead
This scenario is kind of the whole reason the Bitcoin exists
And inflation is also not so much a concern if the value of the asset itself drops 50% in two months.
That's like saying TOR is centralized because you interact with a "centralized" peer.
the comment I responded to specified a "money changer". I don't know if you've used one before, but they quite literally are forex broker/dealers.
Even if we move the goalposts from the "money changer" which was specified, TOR is not really comparable to in-person exchange (not to mention an individual can certainly be considered a centralized entity). Anyways, sure, let's call it a counterparty if you wish, the semantics debate isn't really relevant to the point.
The only time I've used one and not a bank is when making land crossings between countries in Central America. The money changers are just a random assortment of dudes walking around the bus depot ready to swap between 2-4 different currencies. And I've only done it for a small amount of cash to have on hand in case of immediate need.
I imagine a cottage industry would pop up as a result of situations like Lebanon given the government enforced cash shortage. I remember reading an article a while back, which I'm failed to dig up, which described a similar system appearing in Venezuela as inflation was getting out of control. Money changers would come to you to swap bitcoin for other currencies.
But I understand your point and this would be a sketchy alternative for the amount of money discussed.
> Though the money supply did contract sharply, neither trade, commerce, nor industry came to a grinding halt.
> How? People created their own currencies, to substitute for the collapsing money supply. They kept using checks to pay one another, but then, people’s checks began trading within communities. Here’s how Antoin Murphy, one of the few scholars to have studied these strikes, which took place in the 1970s, describes it: “a highly personalized credit system without any definite time horizon for the eventual clearance of debits and credits substituted for the existing institutionalized banking system.”[0]
There is also a great chapter in Money, The Unauthorized Biography that covers it.
Somewhere your money has to go into the countries financial systems. Which makes sense. Money isn’t just for trade. It’s to exert soft power.
If the banking system doesn't let people use their own money that they've deposited, I don't see what else he can do.
Whether you're talking USD or Lebanese Pounds, you could fit this into something much smaller (eg. an envelope, with reasonably large denominated bills).
It's all very safe though. There is some guy standing around the corner with an ak behind a counter, and you can be sure 7.62mm size holes end up in the head of anyone who would try to rob the people doing the exchange. On one occasion the money trader made a very obvious calculation heavily in my favor, that he likely did not intend to make. I tried to walk away quickly with the money, and 3 men chased me down. I'm quite sure if I had stolen the money instead of merely gotten "lucky" they would have chopped an arm off instead of nicely asking to reverse the transaction (which I found wise to do).
The whole thing could be extended to BTC quite easily, and it's been awhile since I've been to the ME but it wouldn't surprise me if they've already added BTC to the mixup. From a western perspective it sounds insane to hear large sums of cash could potentially be traded easily and readily in a relatively "impoverished" nation on the street but for these people it's just regular business in the cash-economy world they live in.
This is Lebanon, not someplace like France. This could be a money changer with an AK at his side, a buyer with AK at his side, money and BTC changes hands and after the confirmations finish out on the BTC side they're on their way, simple as.
If Bitcoin drops in value substantially, that has the same effect to retail shoppers as inflation.
And with all of the bonkers things to happen in the last decade, seeing Bitcoin drop to a small fraction (like 1/10th) of its current value in the next 2-3 years seems unlikely but not entirely out of the question. And that's a pretty big downside when talking about ones' life savings or even ones' emergency fund.
The major problem with this is that these people have to use systems that’s full of scams and the value of their money is controlled by people in the first world with tons of cash to burn.
Yes, Bitcoin doesn't solve THE inflation problem, it solves one out of many.
Unless you use an exchange, which a lot of people do. You don't have to, of course, but you could also keep your savings in cash - which would not only avoid the above problem, but also rid you of the need to exchange it.