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Comment by rrrrtttt | Hacker News Reader

You're incorrect about me. I live in a country that went through hyperinflation a few decades ago, and I was born in another country whose currency was wiped out in the late 90's. In both of these places society responded by converting de facto to US dollars. People would stuff their mattresses with dollars and prices for anything other than groceries would be named in dollars. Sure Bitcoin offers an alternative if you live under a regime that can tell you what kind of currency you can hold, but wouldn't that sort of a regime also crack down on holders of Bitcoin if that were to catch on?

P.S. Correct me if I'm wrong, but didn't Argentina go through a dollarization phase at some point?

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The trick in Argentina's case is that they have fixed the exchange rate to USD at an unfair amount and have enacted capital controls restricting the movement of currency into and out of the country. This is basically for the purpose of preventing people from trading their money into USD.

Brief Economist coverage here: http://www.economist.com/blogs/americasview/2011/11/argentin...

There was a decade in which pesos were directly convertible to USD at 1:1 exchange. That system collapsed when the government became insolvent.

With regard to your experience with hyperinflation -- why do you thus think it is a solved problem? Surely there are some advantages to encrypted digital wallets over "stuffing dollars in a mattress" in the same way that emails are better than snail mail. At the very least it is nice to have multiple alternatives.

With regard to "dollarization" in Argentina - Yes, and it should serve as another counterexample to your point. During the 90s when everything was fine Argentina "backed ever peso with a dollar". At stores no one cared if you used dollars or pesos as they were 1-to-1. (Similar to how the US used to back every dollar with gold). Then when things went south they "undollarized" (once again robbing people of their money as devaluation soon followed).

And sure, a country could crack down on holders of Bitcoin too. But the point is that it is a lot harder to catch someone purchasing with bitcoin, or even holding bitcoin, than it is to catch someone with dollars in their mattress or trying to buy something in a physical black market with physical dollars. Its really hard to catch someone with bitcoin "on hand" in general.

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