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Comment by stale2002 | Hacker News Reader

stale2002

> If it were true that somehow a crypto currency could hold its own in a collapsing economy

I am not sure why you are speaking in hypotheticals. The economy of lebanon did collapse. And if you were holding bitcoin, you'd be much better off than holding that local currency.

Economies collapse all the time, around the world. And because the coin is a global market, it is insolated from local collapse.

> it really doesn't matter what sort of currency you use

But it did matter! Just look at the current situation, in Lebanon right now. If you were holding the local currency, you'd be screwed. If you were holding a global currency, you'd be much better off.

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Actually, you’d be way better off with a stack of crisp $100 US bills or silver coinage.

Good luck finding a way to convert your bitcoin into some sort of locally fungible currency while that economy is in a state of collapse and the crypto brokers are on a similar path.

Would you be? If the economy doesn't produce enough food, what food there is just goes up in price. You can say "buy from the global market" but that requires having money, a tall order for a country with a weak economy.

> Would you be?

Think about the existing right now situation. Imagine if someone, in lebanon, had 50k USD equivalent, in a lebanon bank.

Now, imagine the same person, who had 50k equivalent value, in not the lebanon bank.

Who's better off? Clearly the person who had the global currency.

> You can say "buy from the global market" but that requires having money

Oh, you mean like the money that now wasn't confiscated or inflated away to being worthless? That money?

Yes, that is what you would use the money for. The money that now wasn't taken away, or was not made worthless, is what you would use to buy things.

Situation A: you have no money. Or you have 10 thousand percent inflated money.

Situation B: you do have money, in a global currency. And yes that money can be used to buys things from the international market.

Situation B is better. Much better.

Only if there's actually a mechanism in place to get such things to your door. Various regulations and logistical impediments are likely to mean many basics simply cannot be shipped from overseas and delivered to you just because you were holding currency to buy it with. But I suppose at least you can keep your Netflix subscription (assuming the infrastructure to keep high speed internet connectivity is still being maintained adequately and you can afford to pay for that).

I always wonder if these collapses happen all around the world, why does nobody have the decency to simply accept Bitcoin in their local farm as payment?

Of course there are many reasons, probably the most prominent being that you need to download a 400GB blockchain on your device to actually be secure. No wonder all these Bitcoin people want their technology to have as few transactions as possible, because popularity will ruin it's decentralized nature.

This means you will need a custodial solution like lightning which merely uses game theory to create rewards and incentives for following the rules in a decentralized way but ultimately it is still custodial and knowing and trusting the counterparty is still superior.

This gets to the crux of the problem. Due to the custodial nature of scaling Bitcoin transactions, you will have a centralised organization that can be shut down by the government. The local Bitcoin bank or PayPal equivalent will have the exact same problem as any other bank.

If you argue that this entity can exist outside of the borders of the collapsing country, so do USD banks. Despite its flaws even the USD is a better medium of exchange than Bitcoin.

> why does nobody have the decency to simply accept Bitcoin in their local farm as payment

Farmers do not accept payment in any currency on their farm. They sell futures on the commodity market before the growing season begins to lock in a price and hedge against volatility.

> you need to download a 400GB blockchain on your device

You can use light wallets such as Electrum without trusting a third party, and with no loss of security (though it potentially sacrifices privacy).

Even if that weren't true, a 512GB drive costs $10 these days. That shouldn't be a barrier for anyone.

> This means you will need a custodial solution like lightning

Lightning is not custodial. You do not need to trust any counterparty.

etc.

This entire comment is very misinformed.

> “This entire comment is very misinformed.”

Could be the reply added to most of HN comments about Bitcoin/crypto.

Thanks for replying.

It’s strictly better and gives you more options.

You can try to get out of your country with your wealth intact.

It doesn’t magically solve all your issues, but it’s definitely better to have some access to your wealth than having it confiscated.

> You can try to get out of your country with your wealth intact.

Sure, but how scalable is that? I'm not really interested in solutions that are only going to work for a tiny % of the population.

It’s pretty scalable - just depends on technical capability.

People in countries like Venezuela and occupied Ukraine have managed to make it work.

Good point - if 12 million people could leave Ukraine in the middle of a war in principle a decent % of Lebanon's population could do the same. You do wonder what effect that might have on the chance of the economy then recovering again within a reasonable timeframe.

> "You do wonder what effect that might have on the chance of the economy then recovering again within a reasonable timeframe."

Yeah - my take on this is if the government has failed the people to this extent then the people have the right to exit and the government should not be able to hold them and their wealth hostage. Naturally if the government can, it probably will, which is why the capability of self custody provided by bitcoin (and other cryptocurrency) is such a powerful thing.

Sure you could get this by hoarding cash or gold in theory, but in practice that's way harder and it's way harder to safely move it, especially across a border.

With BTC you memorize 12 seed words and you're good, can go anywhere and recreate access to your wealth on the other side safely.

Once again. 2 situations.

Situation 1: Person has no money, or worthless money.

Situation 2: Person has 50k USD worth of global currency.

Situation 2 is obviously better. Massively. It is absurd to pretend like situation 2 isn't clearly, obviously, and massively better.

Yes there are some issue with global trade, or whatever. But it is clearly, and obviously better, to have 50k USD in an offshore account, or 50k worth of currency somewhere else.

Think about this situation, specifically. No, it is not just "you can keep your Netflix subscription".

That is a bad argument. It is worth more than that.

> Various regulations and logistical impediments

No. You would be wrong to just say "regulations" means that having 50k worth of USD money somewhere is now worthless. I can promise you, that anyone at all, living basically anywhere in the world would be better if if they had 50k USD in an offshore account.

You cannot seriously, with a straight face say "yep! Having 50k in an offshore account is worthless!"

> You cannot seriously, with a straight face say "yep! Having 50k in an offshore account is worthless!"

Good job I didn't say it seriously then, or at all, for that matter.

I was writing in context of a thread about a guy who "robbed" a bank to get back his own money to pay for essentials. I still don't see how owning crypto or any sort of global currency would have helped him (or the millions of other Lebanese currently in the same boat) very much at all.

> Good job I didn't say it seriously then, or at all, for that matter.

Awesome! So then you agree that having 50k$ of equivalent value, outside of the lebanon bank would not be worthless, and would instead be worth a lot! Glad you agree with me.

> I still don't see how owning crypto or any sort of global currency would have helped him

Well, it would be because now they have 50k$ of equivalent value, in a place that is not the Lebanon bank. Therefore the Lebanon bank can't take it from them.

That is how it would have helped. Having that money, outside of a local collapsing banking system, would mean that any of those people would now have 50k$ of value, in a place that the Lebanon bank can't take it.

And you agree with me on this, because you are not saying "yep! Having 50k in an offshore account is worthless!".

You aren't saying that. Which means that you agree with me completely, that it would not be worthless to have that money, or equivalent value of that money, in an offshore account.

"Worthless" and "unhelpful in this situation" are not the same thing.

I guess I’m protesting that while B is better for an individual, it doesn’t work for the whole country. It’s the equivalent of having a well-connected relative abroad to get you out. It’s a godsend, but it doesn’t scale.

Assuming you could buy basics from an international market and somehow get them delivered to you at a reasonable price using said global currency, true. But how realistic is that?

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