Leveraging Bitcoin to Solve Venezuela’s Hyperinflation(medium.com)
medium.com
Leveraging Bitcoin to Solve Venezuela’s Hyperinflation
https://medium.com/@jonathan.wheeler/leveraging-bitcoin-to-solve-venezuelas-hyperinflation-9f60c71d380b
65 comments
If you could choose between bolivares and some valuable cryptocurrency, what would you choose?
Obviously I would pick any crypto or any other currency everytime over VEF but thats just wealth storage.
It doesn't fix our economics problems, it doesn't fix our social problems.
And thats what this post was about, the guy intends to fix our economy or "Solve Venezuela’s Hyperinflation" by just giving away free bitcoins.
P.S: Me (and every other venezuelan) would gladly take the free bitcoin. But it will just make me have some extra $ held in some bitcoin wallet, I won't ever use it to go "buy coffe", most likely every young venezuelan who gets free bitcoin will use it to leave the country and scape from this madness
It doesn't fix our economics problems, it doesn't fix our social problems.
And thats what this post was about, the guy intends to fix our economy or "Solve Venezuela’s Hyperinflation" by just giving away free bitcoins.
P.S: Me (and every other venezuelan) would gladly take the free bitcoin. But it will just make me have some extra $ held in some bitcoin wallet, I won't ever use it to go "buy coffe", most likely every young venezuelan who gets free bitcoin will use it to leave the country and scape from this madness
It pains me to hear that the situation is so dire in your country. Are there any plans to bring internet to the masses?
What happened to the 160 TONNES of Gold that Chavez repatriated in 2011? Where did that go??
http://www.bbc.com/news/world-latin-america-15900885
http://www.bbc.com/news/world-latin-america-15900885
Noone really knows but i guess they are slowly doing this: https://www.reuters.com/article/us-venezuela-economy/venezue...
> Venezuelan here.
Thank you for injecting your experience. Its always good to see comments from people who are actually there!
Thank you for injecting your experience. Its always good to see comments from people who are actually there!
The author seems to be ignorant of some real facts related to Bitcoin availability. Lightning Network going live on Mainnet was against the advice of the LN developers who feel that it's not ready for prime-time usage and admit that the network cannot scale very large without some core difficulties being solved.
Additionally, the transaction fees have dropped not because of the introduction of LN or batched transactions or SegWit adoption, but because of the decline of Bitcoin transactions in general. Enough retailers have stopped accepting Bitcoin that there are fewer transactions and the fee-market pressure has lowered. Adding in an entire nation of people using Bitcoin multiple times a day, even with some of them on LN, will bring usage and fees to unseen-before levels.
Additionally, the transaction fees have dropped not because of the introduction of LN or batched transactions or SegWit adoption, but because of the decline of Bitcoin transactions in general. Enough retailers have stopped accepting Bitcoin that there are fewer transactions and the fee-market pressure has lowered. Adding in an entire nation of people using Bitcoin multiple times a day, even with some of them on LN, will bring usage and fees to unseen-before levels.
> Enough retailers have stopped accepting Bitcoin that there are fewer transactions
That's one theory. Another theory is that bad actors were spamming the mempool and have stopped.
A quick look at historical mempool stats: https://dedi.jochen-hoenicke.de/queue/#1y
Makes it look far more likely certain people with an agenda were spamming the network.
That's one theory. Another theory is that bad actors were spamming the mempool and have stopped.
A quick look at historical mempool stats: https://dedi.jochen-hoenicke.de/queue/#1y
Makes it look far more likely certain people with an agenda were spamming the network.
Those mempool stats doesn't suggest spam at all. It's basically impossible to identify spam transactions.
Both Steam and Stripe stopped accepting Bitcoin, that's a fact.
It's only logical that people stopped transacting when fees grew sky high.
Both Steam and Stripe stopped accepting Bitcoin, that's a fact.
It's only logical that people stopped transacting when fees grew sky high.
Sure, but if it was Steam and Stripe that caused the insane fees wouldn't the growth have been more organic?
I look at that graph and see ridiculous spikes in transactions followed by months of very few. I have a hard time believe Steam and Stripe's transactions would follow that sort of pattern.
I look at that graph and see ridiculous spikes in transactions followed by months of very few. I have a hard time believe Steam and Stripe's transactions would follow that sort of pattern.
>>Another theory is that bad actors were spamming the mempool and have stopped.
It would be extremely expensive to spam the mempool that extensively. It's totally implausible that some party was spamming it for the length of time that Bitcoin was suffering from extraordinarily high fees (e.g. >$10 per transaction).
It would be extremely expensive to spam the mempool that extensively. It's totally implausible that some party was spamming it for the length of time that Bitcoin was suffering from extraordinarily high fees (e.g. >$10 per transaction).
Why they were able to spam?
Can it happen again? It's a very serious attack.
What if genuine (non-spam) on-chain transaction demand increases 10x?
Would it be harder to spam if block size limit increased from 1MB to 32MB or 1GB?
Can it happen again? It's a very serious attack.
What if genuine (non-spam) on-chain transaction demand increases 10x?
Would it be harder to spam if block size limit increased from 1MB to 32MB or 1GB?
Is there a disincentive to spamming the network? I.e. is there a fee associated with putting up a transaction that never goes through?
no, although I don't see what the issue with that is. transactions are mined starting with the highest fees, and transactions are evicted from the mempool lowest fees first.
There are far better cryptocurrencies to do this than BTC. Today, an actual venezuelan, part of the team working on a cryptocurrency called Nano, twitted that he paid for his meal with it.
This would have never been possible with BTC, why? Mainly because the meal's cost was .5 NANO, which currently amounts to ~5 USD, that would have been the cost of the transaction fee alone for BTC, or even more. Nano is feeless and has transactions taking 10 seconds on average to complete.
Nano is a cryptocurrency that is already making an impact in Venezuela specifically, check it out. Bitcoin days are numbered.
Tweet: https://twitter.com/Mrlutavo/status/963948510679830528
Nano's website: https://nano.org/en
This would have never been possible with BTC, why? Mainly because the meal's cost was .5 NANO, which currently amounts to ~5 USD, that would have been the cost of the transaction fee alone for BTC, or even more. Nano is feeless and has transactions taking 10 seconds on average to complete.
Nano is a cryptocurrency that is already making an impact in Venezuela specifically, check it out. Bitcoin days are numbered.
Tweet: https://twitter.com/Mrlutavo/status/963948510679830528
Nano's website: https://nano.org/en
> , part of the team working on a cryptocurrency called Nano
Please, stop shilling.
Please, stop shilling.
That breaks the site guidelines, which we'd appreciate it if you'd read and follow when commenting here: https://news.ycombinator.com/newsguidelines.html.
If you're genuinely concerned about astroturfing or shilling on HN, please email us at [email protected] so we can look into it. One thing we'd do is look for a pattern of such behavior. At first glance, I'm not seeing that here, and the Venezuelan connection seems specific enough not to be forced.
If you're genuinely concerned about astroturfing or shilling on HN, please email us at [email protected] so we can look into it. One thing we'd do is look for a pattern of such behavior. At first glance, I'm not seeing that here, and the Venezuelan connection seems specific enough not to be forced.
I thought the post what about how to help with Venezuela's hyperinflation.
There couldn't be a more relevant cryptocurrency for this than Nano. Especially because Nano isn't mined, it has a fixed supply that was distributed via faucet by solving a very complicated captcha. Many coins went to people in Venezuela because they found solving captchas a more profitable way of spending their time than a real job. So Nano is already popular in Venezuela and does a better job working as a currency than bitcoin.
I have a very favorable opinion of the technology behind Nano and not so favorable of BTC, so my post might be regarded a shill. However, given the reasons above I think mentioning Nano is relevant to the thread.
There couldn't be a more relevant cryptocurrency for this than Nano. Especially because Nano isn't mined, it has a fixed supply that was distributed via faucet by solving a very complicated captcha. Many coins went to people in Venezuela because they found solving captchas a more profitable way of spending their time than a real job. So Nano is already popular in Venezuela and does a better job working as a currency than bitcoin.
I have a very favorable opinion of the technology behind Nano and not so favorable of BTC, so my post might be regarded a shill. However, given the reasons above I think mentioning Nano is relevant to the thread.
Why is this better, or different, than just helping Venezuelans obtain and use the USD that they already want [1]? If it's a matter of government controls, the government will surely apply the same policy to BTC.
I realize that he tried to address this in the article, but the reasons are contrived. And the "$5 wrench attack" simply won't stop when you only give up one wallet.
[1] https://www.npr.org/sections/parallels/2014/03/24/293874845/...
I realize that he tried to address this in the article, but the reasons are contrived. And the "$5 wrench attack" simply won't stop when you only give up one wallet.
[1] https://www.npr.org/sections/parallels/2014/03/24/293874845/...
How are they going to securely store those USD?
You're getting into the same exact box with Bitcoin.
You're not going to securely store anything in Venezuela until order and a functioning government system is restored. Venezuela is an entirely collapsed nation at this point. You're lucky to have any access to electricity to use Bitcoin and things are still getting worse there.
Safely store your Bitcoin. Gun to the head, you lose your Bitcoin and your life if you don't give up whatever access is needed.
You store your USD in your home (or wherever). Gun to the head, you lose your dollars and your life if you don't give it up.
Plausibly given the extreme murder going on there, you lose your life regardless if it becomes known you have any money, whether it's in USD or Bitcoin.
You're not going to securely store anything in Venezuela until order and a functioning government system is restored. Venezuela is an entirely collapsed nation at this point. You're lucky to have any access to electricity to use Bitcoin and things are still getting worse there.
Safely store your Bitcoin. Gun to the head, you lose your Bitcoin and your life if you don't give up whatever access is needed.
You store your USD in your home (or wherever). Gun to the head, you lose your dollars and your life if you don't give it up.
Plausibly given the extreme murder going on there, you lose your life regardless if it becomes known you have any money, whether it's in USD or Bitcoin.
> You're not going to securely store anything in Venezuela until order and a functioning government system is restored.
Better not hold your breath for that one..
Better not hold your breath for that one..
To each their own I guess. There's numerous reasons I'd feel safer with my savings in Bitcoin.
The thought of a very rich man from one of the most developed countries in the world, giving away tons of BTC in an attempt to "solve Venesuela's problems" strikes me as arrogant and naive. The heart is in the right place. But different countries work differently. It would take someone who knows a lot about Venezuela to solve Venezuela's problems.
Take "PlayPump" as a word of caution. https://en.wikipedia.org/wiki/Roundabout_PlayPump
Massive charity handouts almost always end in dismal failure. Because the philanthropists don't understand the core problem, and thus the money is inevitably wasted.
----------------
Instead, Bill Gate's model of "Economic Philanthropy" looks like it can truly scale. Bill Gates sells malaria nets and vaccines to the people of Africa. Why?
Because if the customer doesn't want to pay for it, its probably because the customer knows something you don't know. Malaria Nets were the solution: the people of Africa buys it, and that's how we know that its a good solution.
Bitcoin is already a potential solution to the people of Venezuela. If the people of Venezuela believed in Bitcoin, they'd be buying it. They're not dumb. Very likely, for reasons unbeknownst to us, they've chosen to do something else. We have to trust THEIR decision on this. After all, Venezuelan citizens are living in the crisis. They likely know more about their own situation than any Goldman Sachs executive who has lived in the USA.
Alternatively: if BTC is a solution and Venezuelan citizens are buying up BTC, then the problem will solve itself without need of a handout. IIRC, I've heard some stories about some businessmen in Venezuela using BTC before. But I live thousands of miles away: its hard for me to know if its an isolated curiosity or something that really is permeating the nation.
Any valid solution that benefits a Venezuelan Citizen, would allow us to "sell" said solution to those citizens. One-sided charity efforts are often doomed to failure.
Take "PlayPump" as a word of caution. https://en.wikipedia.org/wiki/Roundabout_PlayPump
Massive charity handouts almost always end in dismal failure. Because the philanthropists don't understand the core problem, and thus the money is inevitably wasted.
----------------
Instead, Bill Gate's model of "Economic Philanthropy" looks like it can truly scale. Bill Gates sells malaria nets and vaccines to the people of Africa. Why?
Because if the customer doesn't want to pay for it, its probably because the customer knows something you don't know. Malaria Nets were the solution: the people of Africa buys it, and that's how we know that its a good solution.
Bitcoin is already a potential solution to the people of Venezuela. If the people of Venezuela believed in Bitcoin, they'd be buying it. They're not dumb. Very likely, for reasons unbeknownst to us, they've chosen to do something else. We have to trust THEIR decision on this. After all, Venezuelan citizens are living in the crisis. They likely know more about their own situation than any Goldman Sachs executive who has lived in the USA.
Alternatively: if BTC is a solution and Venezuelan citizens are buying up BTC, then the problem will solve itself without need of a handout. IIRC, I've heard some stories about some businessmen in Venezuela using BTC before. But I live thousands of miles away: its hard for me to know if its an isolated curiosity or something that really is permeating the nation.
Any valid solution that benefits a Venezuelan Citizen, would allow us to "sell" said solution to those citizens. One-sided charity efforts are often doomed to failure.
In 1992 Brazil faced similar inflation numbers (80% per month, or 1156% per year compared to what the article claims 1219% for Venezuela). I'm surprised the author does not reference Brazil in their article. The NPR Planet Money podcast/article does a good job of summarizing the events of 1992 [1].
In the Brazil situation the country had control of both currencies and could set the exchange rate. I don't see how using Bitcoin would eliminate the problem that the country is experiencing: an unstable currency. Most developed countries target around 2% inflation. Bitcoin has not had that kind of stability recently.
Additionally to be a good currency you want people to think in terms of it, e.g. I'm paying for this coffee with 0.005 bitcoins, not I'm paying for this coffee with $5 worth of bitcoins.
[1] - https://www.npr.org/sections/money/2010/10/04/130329523/how-...
In the Brazil situation the country had control of both currencies and could set the exchange rate. I don't see how using Bitcoin would eliminate the problem that the country is experiencing: an unstable currency. Most developed countries target around 2% inflation. Bitcoin has not had that kind of stability recently.
Additionally to be a good currency you want people to think in terms of it, e.g. I'm paying for this coffee with 0.005 bitcoins, not I'm paying for this coffee with $5 worth of bitcoins.
[1] - https://www.npr.org/sections/money/2010/10/04/130329523/how-...
The LN network has major limitations that don't allow it to be a full substitute for on-chain transactions.
Let's look at how it affects savers for example. LN channels have a maximum debit-delta capacity established by their BTC collateral. When one party is receiving BTC much more often than they're sending it, the LN channel reaches capacity, and a new LN transaction has to be created with its own collateral.
Any party that saves any portion of their revenue will quickly see their LN channels filled, and new ones required.
This essentially means that low-income savers, like what you would expect to see in Venezuela, will see their income eaten up by transaction fees for continual LN channel setup transactions.
The author should have looked to Bitcoin Cash, which will permit low-cost on-chain transactions at large scale usage levels, or Ethereum. Ethereum is processing 4X as many transactions, representing several times as much USD value, as Bitcoin per day. Its transaction fees are much lower and it has a comprehensive on-chain scaling plan that it is pursuing.
Let's look at how it affects savers for example. LN channels have a maximum debit-delta capacity established by their BTC collateral. When one party is receiving BTC much more often than they're sending it, the LN channel reaches capacity, and a new LN transaction has to be created with its own collateral.
Any party that saves any portion of their revenue will quickly see their LN channels filled, and new ones required.
This essentially means that low-income savers, like what you would expect to see in Venezuela, will see their income eaten up by transaction fees for continual LN channel setup transactions.
The author should have looked to Bitcoin Cash, which will permit low-cost on-chain transactions at large scale usage levels, or Ethereum. Ethereum is processing 4X as many transactions, representing several times as much USD value, as Bitcoin per day. Its transaction fees are much lower and it has a comprehensive on-chain scaling plan that it is pursuing.
For crypto currencies, don't you need reliable electricity and internet first?
> don't you need reliable electricity
Electricity is only needed to send a transaction.
> and internet first
You can send a transaction via sms.
Electricity is only needed to send a transaction.
> and internet first
You can send a transaction via sms.
On Lightning Network, node must be always online for receiving transactions.
Ok, but that's not what we're talking about is it?
I'm happy to switch the discussion to Lightning.
As a consumer, I don't always need to be online. I can open my channel and only come online when I want to send a payment to a merchant.
As a merchant, I need to be online only when accepting payments. I also need to monitor my open channels to make sure no one's trying to cheat. To monitor a channel, I would need to check roughly once per day -- though I could require channels created with me take 4 weeks to close if I desired.
I'm happy to switch the discussion to Lightning.
As a consumer, I don't always need to be online. I can open my channel and only come online when I want to send a payment to a merchant.
As a merchant, I need to be online only when accepting payments. I also need to monitor my open channels to make sure no one's trying to cheat. To monitor a channel, I would need to check roughly once per day -- though I could require channels created with me take 4 weeks to close if I desired.
> You can send a transaction via sms.
Any reason why the Venezuelan Government would continue to keep SMS BTC transactions live?
IIRC, Venezuelan Government owns all of the infrastructure: electricity, cell phone towers, and the like. They're a socialist nation IIRC, and would easily have the power to crush this option.
Any reason why the Venezuelan Government would continue to keep SMS BTC transactions live?
IIRC, Venezuelan Government owns all of the infrastructure: electricity, cell phone towers, and the like. They're a socialist nation IIRC, and would easily have the power to crush this option.
> Any reason why the Venezuelan Government would continue to keep SMS BTC transactions live?
How would they stop them?
I could send the transaction via carrier pigeon if I really needed to. I can encode them however I please.
How would they stop them?
I could send the transaction via carrier pigeon if I really needed to. I can encode them however I please.
Depending on the level of control (and competency) the government has over telecom systems, they could easily block SMS transactions by scanning the data stream (SMS is sent in the clear over the network).
> I could send the transaction via carrier pigeon if I really needed to. I can encode them however I please.
For fucks sake, this bullshit needs to die. People have made claims like this for years now. It's bullshit. People used to say, "I don't need a network connection, I can conduct transactions on paper." Leaving out the detail that at some point it has to get into the bitcoin network itself.
Bitcoin is essentially useless for people without an internet connection.
> I could send the transaction via carrier pigeon if I really needed to. I can encode them however I please.
For fucks sake, this bullshit needs to die. People have made claims like this for years now. It's bullshit. People used to say, "I don't need a network connection, I can conduct transactions on paper." Leaving out the detail that at some point it has to get into the bitcoin network itself.
Bitcoin is essentially useless for people without an internet connection.
> People have made claims like this for years now. It's bullshit. People used to say, "I don't need a network connection, I can conduct transactions on paper." Leaving out the detail that at some point it has to get into the bitcoin network itself.
I think the claim has forever been that there are infinitely many ways to securely encode a transaction. The point is to get the transaction outside of whatever hostile territory you're in.
I think the claim has forever been that there are infinitely many ways to securely encode a transaction. The point is to get the transaction outside of whatever hostile territory you're in.
You do realize that Venezuela has widespread censorship laws in place, including the ability to shut-off communications (Internet, Phone, everything) on a moment's notice?
https://en.wikipedia.org/wiki/Censorship_in_Venezuela#Curren...
If you want to set up a carrier-pigeon based BTC system. Be my guest. It literally would take something on that level to defeat the censorship regime that Venezuela has placed on its people. I doubt that a "Bitcoin over IP over Carrier Pigeon" solution would work on a wide scale however, mostly because Pigeons die and it takes a lot of effort to train and feed those birds.
I mean, if the Pigeon that was carrying your transaction was eaten by a fox, what then? Its clearly not a good solution. It seems to me that it'd be basically impossible to figure out or verify the balance of a BTC wallet if you were waiting the several days it'd take for a pigeon to fly around.
Just publishing the current Black-Market exchange rate of USD <---> Venezuelan Bolivar is hard enough. I have my doubts that BTC would work under the censorship-heavy Venezuelan regime. And I have severe doubts that the crypto-libertarian dreamworld of BTC would ever become sanctioned by the current Venezuelan Government.
But that's my viewpoint as an outsider. I admit that I don't live in Venezuela, but it seems like they have a lot of problems and "Bitcoin over IP over Carrier Pidgeon" won't be able to solve.
https://en.wikipedia.org/wiki/Censorship_in_Venezuela#Curren...
If you want to set up a carrier-pigeon based BTC system. Be my guest. It literally would take something on that level to defeat the censorship regime that Venezuela has placed on its people. I doubt that a "Bitcoin over IP over Carrier Pigeon" solution would work on a wide scale however, mostly because Pigeons die and it takes a lot of effort to train and feed those birds.
I mean, if the Pigeon that was carrying your transaction was eaten by a fox, what then? Its clearly not a good solution. It seems to me that it'd be basically impossible to figure out or verify the balance of a BTC wallet if you were waiting the several days it'd take for a pigeon to fly around.
Just publishing the current Black-Market exchange rate of USD <---> Venezuelan Bolivar is hard enough. I have my doubts that BTC would work under the censorship-heavy Venezuelan regime. And I have severe doubts that the crypto-libertarian dreamworld of BTC would ever become sanctioned by the current Venezuelan Government.
But that's my viewpoint as an outsider. I admit that I don't live in Venezuela, but it seems like they have a lot of problems and "Bitcoin over IP over Carrier Pidgeon" won't be able to solve.
In theory the users just need semi-reliable internet access (the ability to broadcast transactions, and periodically check the balance of their wallet).
Semi-reliable internet only requires semi-reliable electricity. If you have neither of those, then crypto is pretty much useless.
Semi-reliable internet only requires semi-reliable electricity. If you have neither of those, then crypto is pretty much useless.
lots of negativity here. i think it's a cool idea, and i hope he runs with this. if you're problem with bitcoin is "it's not quite perfect enough" then that's a bad reason to not attempt this
it has obvious benefits (and some cons) over the bolivar or a foreign fiat currency, but ya know, baby with the bathwater
i look forward to seeing where this goes
but i do agree about LN mainnet not being appropriate to use yet
it has obvious benefits (and some cons) over the bolivar or a foreign fiat currency, but ya know, baby with the bathwater
i look forward to seeing where this goes
but i do agree about LN mainnet not being appropriate to use yet
The problem with Venezuela isn't just inflation. Inflation is a symptom of the political and economical chaos they are going through. Before you can attempt to fix their inflation you need to first get them out of the borderline civil war they are going through.
This is also not the first time I see these suggestions that bitcoin is going to solve all of Venezuela's troubles. Overall these suggestions strike me as foreign bitcoin holders hoping that the venezuelans will push up the value of their speculative investment.
This is also not the first time I see these suggestions that bitcoin is going to solve all of Venezuela's troubles. Overall these suggestions strike me as foreign bitcoin holders hoping that the venezuelans will push up the value of their speculative investment.
[deleted]
Suite. Use the imaginary commodity that can't keep it's value to solve inflation because the currency is controlled by a tyrannical government. It's probably easier to overthrow their government than use a currency that will soon be outlawed.
Whether you like it or not, Bitcoin is here to stay.
"will soon be outlawed." >> You speak like it relies on any ones countries laws and a law would vaporize it. Anyone who read the SEC announcements, understand that even they seem to understand that.
"will soon be outlawed." >> You speak like it relies on any ones countries laws and a law would vaporize it. Anyone who read the SEC announcements, understand that even they seem to understand that.
This is fantastic. Disasters, while terrible, should be the time to think outside the box. Similar to Puerto Rico and the solar experiment – hopefully Venezuela and Bitcoin will be the proof of concept that convinces the "adults".
I'm always a bit suspicious of articles like this that plug for specifically bitcoin versus cryptocurrencies as a whole. Many cryptos can help to fill the needs of Venezuelan citizens. Are we not talking about them since they won't make the author rich?
Was this related to the recent 400 million in Bitcoin that was purchased?
"Imagine that you could flee Nazi Germany with all of your capital using nothing more than a password in your head"
It's sad so many people know so few things about history. Fleeing with your money was not the problem.
It's sad so many people know so few things about history. Fleeing with your money was not the problem.
The main problem was that you couldn't sell your stuff, were forced to sell way below market price to Nazis [1] and countries wouldn't take you in [2] So many people didn't even have money because they couldn't sell at market prices or were murdered because they could not flee outside of Europe. Of those that could flee and sell their stuff, yes, those had to pay a lot of money to get away. But they were only able to get away legally after paying the "tax" and have a certificate.
The article makes it look like everything would have been fine if people could transfer money with a password in their head.
[1] https://en.wikipedia.org/wiki/Aryanization_(Nazism)
[2] https://en.wikipedia.org/wiki/MS_St._Louis
The article makes it look like everything would have been fine if people could transfer money with a password in their head.
[1] https://en.wikipedia.org/wiki/Aryanization_(Nazism)
[2] https://en.wikipedia.org/wiki/MS_St._Louis
[deleted]
I just read on Wikipedia that the exit tax was 25% from $700k, later revised downwards to $200k. I'm assuming that's on total assets, not just unrealised gains.
Obviously not defending what had happened here, but that doesn't seem unreasonable in a time of war? Currently the US also levies an exit tax of around 25% on unrealised gains.
At the time it was also quite easy for wealthy people to evade taxes and not be prosecuted for it, for the better part of the 20th century.
I'm assuming, at the time, people had more pressing issues to deal with than their money...
Obviously not defending what had happened here, but that doesn't seem unreasonable in a time of war? Currently the US also levies an exit tax of around 25% on unrealised gains.
At the time it was also quite easy for wealthy people to evade taxes and not be prosecuted for it, for the better part of the 20th century.
I'm assuming, at the time, people had more pressing issues to deal with than their money...
Yep, the money part was easy. Even back then most assets were sitting in a vault and on offshore bank accounts.
The government will make Bitcoin the same way illegal as US dollars.
Then they can't easily control Bitcoin.
Then they will increase prison sentences for owning Bitcoins and Bitcoin apps.
Then they will not be able to control that.
Then they will monitor the internet for bitcoin transfers.
Then they will outlaw any encryption.
Then they will send out undercover police who try to pay with Bitcoin.
etc.
No government well let anyone take away their privilege to print money.
Then they can't easily control Bitcoin.
Then they will increase prison sentences for owning Bitcoins and Bitcoin apps.
Then they will not be able to control that.
Then they will monitor the internet for bitcoin transfers.
Then they will outlaw any encryption.
Then they will send out undercover police who try to pay with Bitcoin.
etc.
No government well let anyone take away their privilege to print money.
You forget to add A and B scenarios to your conclusions....
A) Criminals/Bitcoins-enthusiasts/elites leave the country for the next unregulated paradise.
B) Criminals/Bitcoins-enthusiasts/elites overthrown the government due to strict policies regarding free trade.
The government can't enforce a laws by itself it needs his citizens to abide by those rules.
A) Criminals/Bitcoins-enthusiasts/elites leave the country for the next unregulated paradise.
B) Criminals/Bitcoins-enthusiasts/elites overthrown the government due to strict policies regarding free trade.
The government can't enforce a laws by itself it needs his citizens to abide by those rules.
The Venezuelan government killed [1] 163 people who believed in scenario B.
[1] https://en.wikipedia.org/wiki/2017_Venezuelan_protests
[1] https://en.wikipedia.org/wiki/2017_Venezuelan_protests
American Revolutionary War death toll 25,000 people who believed in scenario B
Venezuelan citizens are not armed as many in the US.
The Venezuelan government days are numbered
rsbartram(1)
This won't work.
Our problems go way beyond having a way to store our wealth
It's literally impossible to do bitcoin transactions in normal circunstances because this is not San Francisco and your regular store doesn't even have internet access, we have one of the worts internet acess in the world [1].
Then there is the problem created by the violence/crime[2]. I myself have to leave my phone at home everytime I go out, there is no way to take public transportation regulary without suffering a robery, it's just so common that it became a meme within Venezuelans.
There has been so many cases where people has been killed over the most stupid and trivial things to the point that if you google from venezuela "lo mataron por ______" (Murdered because ____) you get pages and pages of crazy reasons of why venezuelans have killed other venezuelans. Fast examples:
Murdered for playing carnival (throwing water ballons to other ppl during carnival, venezuelan tradition) https://www.el-carabobeno.com/lo-mataron-de-un-disparo-por-j...
Murdered to steal 60$ he had on his pocket: http://runrun.es/nacional/337760/monitordevictimas-mataron-a...
So now imagine someone figures out that I have bitcoins and that they have a value of lets say 300$. There is no fucking way I will risk my life that way.
So in order to use bitcoin in Venezuela i have to do this:
1. Risk my life by having to pull my phone or using my phone outside.
2. Risk my life by letting others know that I own/hold bitcoin.
The merchant has to:
1. Fight all the problems to be able to accept it (electricity problems, internet access).
2. Hope that someone doesnt just come into your store and steal your hardware.
3. Gov crazy actions.
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[1] http://www.speedtest.net/global-index/venezuela
[2] https://en.wikipedia.org/wiki/Crime_in_Venezuela