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Lebanon’s underground cryptocurrency market

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Re: Lebanon’s underground cryptocurrency market

#31

Post by nkuttler »

imtringued wrote: post #13

Let's say you build the perfect monetary policy into a cryptocurrency. Okay, now the basic institution of money is working again but what about everything else? >Over the last two years, Lebanon has been gripped by an economic death spiral, the culmination of years of government corruption and mismanagement. The electricity supply has collapsed, pharmacies and gas stations are empty, The article mentions infrastructu…

> First, how do you use cryptocurrencies with limited access to electricity?

You only need to charge your phone once per day. If power goes out, no problem. If you have no electricity at home somebody close by probably has a phone charging business.

Re: Lebanon’s underground cryptocurrency market

#32

Post by notimrelakatos »

tome wrote: post #20
robarker wrote: post #5

Being in a third-world country and part of the crypto community feels so liberating. You can feel the difference between you and a non-crypto person.

How would you describe that difference?

Not paying taxes to a corrupt managerial elite is one of them

Re: Lebanon’s underground cryptocurrency market

#33

Post by anonleb4 »

tromp wrote: post #30

> cryptocurrency is purchased abroad, sent to Lebanon, and then distributed That's not how it works. Cryptocurrency is not geographically bound.

It is though. I think you missed the part where it says you can't buy cryptocurrency from within Lebanon except with hard cash and from one of the exchangers. These exchangers have to get the cryptocurrency from somewhere to begin with. They mention that they wire the money to Nigeria and let someone there buy it for them.

Re: Lebanon’s underground cryptocurrency market

#34

Post by csomar »

mathgenius wrote: post #2

I guess that a similar story could have happened to Greece. Nice to hear that crypto is helping people in such dire need of economic stability, although it was not clear from the article what happens to the lebanese cash that was used to purchase USDT. Someone must be left holding the bag, there must be some FX liquidity that they tap into?

> Someone must be left holding the bag, there must be some FX liquidity that they tap into?

You must have missed that 1. Lebanon is very corrupt and 2. there is an official exchange rate. Someone is making a killing selling on the black market and buying with the official rate.

Re: Lebanon’s underground cryptocurrency market

#35

Post by Geee »

imtringued wrote: post #13

Let's say you build the perfect monetary policy into a cryptocurrency. Okay, now the basic institution of money is working again but what about everything else? >Over the last two years, Lebanon has been gripped by an economic death spiral, the culmination of years of government corruption and mismanagement. The electricity supply has collapsed, pharmacies and gas stations are empty, The article mentions infrastructu…

The idea, in Bitcoin standard, is that government projects should be financed with taxes; not by printing money. When money has no cost, it inevitably results in loss of responsibility and capital mismanagement. The usual story is that government uses the money printer to enrich themselves, and also funds an army to keep people from overthrowing them.

When government is funded with taxes, there are limits on how much can be spent, and spending follows democratic principles and responsibility. Authoritarian or incompetent governments wouldn't be able to fund themselves, when people refuse to pay taxes to them. This works, because bitcoin can't be inflated and it can't be confiscated.

Re: Lebanon’s underground cryptocurrency market

#36

Post by agumonkey »

disruptalot wrote: post #24
aorth wrote: post #21

Earlier quoted context omitted.

How is it different? How many goods and services can you pay for with cryptocurrency where you live? What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins? Who will help you?

You don't need to buy goods and services directly but it is a good way to store and invest your wealth. Most capital controls are mute once you've exited into crypto. On what basis do they hit you? Anyone that ever has any link to crypto? That's everyone. Crypto has a level of security and plausible deniability, that makes such things unrealistic. That's why you don't hear about it happening often. To many people und…

Understandably its a lot nicer to know your money doesn't evaporate.

Re: Lebanon’s underground cryptocurrency market

#37

Post by csomar »

aorth wrote: post #21
robarker wrote: post #5

Being in a third-world country and part of the crypto community feels so liberating. You can feel the difference between you and a non-crypto person.

How is it different? How many goods and services can you pay for with cryptocurrency where you live? What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins? Who will help you?

> How is it different?

You don't get 50% dilution of your savings within a year.

> How many goods and services can you pay for with cryptocurrency where you live?

In a liquid market, you can convert your weekly needs and pay using cash.

> What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins?

If they are going to do that (and some countries do that), they'll start with bank accounts and visible shit (goods moving in the street).

Re: Lebanon’s underground cryptocurrency market

#38

Post by tromp »

anonleb4 wrote: post #33
tromp wrote: post #30

> cryptocurrency is purchased abroad, sent to Lebanon, and then distributed That's not how it works. Cryptocurrency is not geographically bound.

It is though. I think you missed the part where it says you can't buy cryptocurrency from within Lebanon except with hard cash and from one of the exchangers. These exchangers have to get the cryptocurrency from somewhere to begin with. They mention that they wire the money to Nigeria and let someone there buy it for them.

Yes, money is geographically bound, which is why they need to wire it to Nigeria. But once cryptocurrency is bought with Nigerian funds, there is no "sending" it to Lebanon. That part is misleading. Sending is done not from one geographic location to another but from one owner to another.

Re: Lebanon’s underground cryptocurrency market

#39

Post by csomar »

notimrelakatos wrote: post #32
tome wrote: post #20

Earlier quoted context omitted.

How would you describe that difference?

Not paying taxes to a corrupt managerial elite is one of them

Most of these countries finances are based on direct unavoidable taxes as they are already struggle to collect taxes the western way due to low compliance.

Re: Lebanon’s underground cryptocurrency market

#40

Post by csomar »

imtringued wrote: post #13

Let's say you build the perfect monetary policy into a cryptocurrency. Okay, now the basic institution of money is working again but what about everything else? >Over the last two years, Lebanon has been gripped by an economic death spiral, the culmination of years of government corruption and mismanagement. The electricity supply has collapsed, pharmacies and gas stations are empty, The article mentions infrastructu…

> First, how do you use cryptocurrencies with limited access to electricity?

With a mobile phone. Unless network communications are also down...

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