Hacker News Reader

Comment by pcmonk | Hacker News Reader

Why? Why wouldn't they just sell it immediately, for all the reasons why merchants sell it now?

Because if you're in Argentina, you can only sell them for Argentine pesos, which aren't a clear winner over bitcoins.

So, we're going to try to stabilize our currency by tying it to every failing currency across the world? If bitcoin gets mainly used as a replacement for hyper-inflationary currencies, then it's never going to be a viable alternative to an even marginally strong currency. Tying all the world's currencies together isn't going to create a stronger currency than, e.g., the dollar or the euro. Thus, those who work in dollars or euros have economic reasons not to use bitcoins.

For developing economies with unstable currencies, does Bitcoin add anything to their current currency situation? Many countries, for example, use black market US Dollars for transactions. It's not clear yet if these countries with limited technical infrastructure will see a win of Bitcoin vs. USD cash, at least in the short/medium term.

Sure, BTC might win out of Argentinan Pesos, but it's certainly harder for the average merchant in Buenos Aires to accept and transact using BTC vs. paper USD. The barrier to entry to accepting foreign USD for transactions is 0; for BTC the entry is more difficult (currently).

People judge currencies by utility and future expected value. Developing economies have far more reason to use bitcoin than developed ones, but that shouldn't make it any less attractive. My paycheck is in dollars, but that doesn't mean I have an incentive for dollars to be worth more when compared to bitcoins. I can easily exchange between the two based on my view on their utilities and future expected values.

If Bitcoin is legal, easy, and cheap to use in developed economies, it doesn't matter where it starts being the most useful. It will spread everywhere.

Well technically if you're a bitcoin merchant you can just as easily convert to USD or any other currency that is more stable than the Argentine peso.

How? Few Argentines have USD bank accounts, so there's no electronic market where they can sell bitcoins for dollars. They can buy dollar bills with bitcoins on the street, but that's not really scalable.

If you have assets in BTC, you can easily cash them out for USD into an American bank account. Setting up a holding company in Delaware is cheap and easy.

Reply on news.ycombinator.com