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Venezuelans turn to Bitcoins to bypass currency controls

reuters.com

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Re: Venezuelans turn to Bitcoins to bypass currency controls

#61

Post by josu »

FloresHernandez wrote: post #47
josu wrote: post #17

The problem here is that nobody wants Bolívars (the Venezuelan currency), since it's almost imposible to convert them back to USD or any other currency. A sales manager for Marriot was telling me that in Caracas they charge 40$ a night if you pay with USD or 300$ if you pay with bolívars. So the only people that would be willing to exchange bitcoins for bolívars would be people who live in Venezuela. So I assume that…

Actually, is the other way around. It is cheaper to pay in Bolivars than Dollars. Right now is 9000 Bolivars (Around 90 Dollars) vs. 130 Dollars a night at the Marriott in Caracas. It used to be crazy before, if you paid in Bolivars it was only 100 dollars vs 600 dollars if you paid in USD. Fun fact, even if you were paying in Bolivars way less, you still used to get Marriott points as if you were spending 600 dollar…

According to the Marriott page, the exchange rate that they apply is 1USD=50VEF [1]. This is 7 times the official exchange rate, on par with what I was saying. But I haven't been to Venezuela, so I might be missing something.

[1] http://i.imgur.com/D1wLoQM.png

Re: Venezuelans turn to Bitcoins to bypass currency controls

#62

Post by jMyles »

aba_sababa wrote: post #9
bsbechtel wrote: post #2

This is why I think a lot of VCs are investing in the Bitcoin space, and I why I think there is an extremely bright future for the currency. Many economists (i.e., Paul Krugman) can't get past the idea that a currency needs to be backed by a state to be a real currency. That's the most ridiculous claim ever...currencies existed long before nation-states ever did. Events like this are proving those economists wrong.

I agree with you in that this is an excellent and demonstrably valuable use case for Bitcoin - we saw the same thing happen in Cyprus with the protests there. I don't think I agree about this meaning there will be a bright future for it. Venezuela and Cyprus are unstable, extremely corrupt governments. Bitcoin thrives in that environment. A bet on Bitcoin seems to be a bet that those kinds of environments will endure…

> America isn't actually a corrupt, evil police state

I won't say evil, because I think most problems in government are attributable to incompetence, but I think it's a plenty corrupt police state.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#63

Post by tsotha »

anigbrowl wrote: post #41
imaginenore wrote: post #35

Earlier quoted context omitted.

The dollar is around 99% down off its peak. So? Yo just chose some arbitrary timeline that bitcoin looks bad at. That's bad logic.

Not year-on-year it's not.

Well, sure, but how do bitcoins look if you go back two years?

Re: Venezuelans turn to Bitcoins to bypass currency controls

#64

Post by innguest »

themodelplumber wrote: post #21
natrius wrote: post #12

People have figured out how to hold stable value on blockchains by using them to issue contracts for difference. You can acquire a token that maintains the same value as the dollar, backed by people betting on price changes between the dollar and the blockchain's internal currency. Volatility isn't a drawback of cryptocurrencies anymore, and it's going to be entertaining when countries with capital controls discover…

>and it's going to be entertaining when countries with capital controls discover this How would you explain that to a high school art student? (Please)

That means e.g. Venezuelans would be able to instantly drop out of the Bolivar and get into a stable currency, therefore instantly bringing about the tail end of hyperinflation, which drops the value of the Bolivar to zero - because now not only does no one want it (as is the status quo in real life), but also no one has it, which is what Venezuela currently has control over (by not letting people freely get out of the Bolivar).

Re: Venezuelans turn to Bitcoins to bypass currency controls

#65

Post by personlurking »

climber_mac wrote: post #57
rafaelm wrote: post #53

Earlier quoted context omitted.

Have you ever tried to buy bitcoins with our annual internet allowance ($300 per year on online purchases with credit card)? That's one way to get an instant 1000% profit (the official rate is Bs.11 per $ and the black market rate has been swinging between Bs.98-100 per dollar.) I think holding USD in Venezuela is much more valuable. Most people wouldn't know what to do with bitcoins in the country. With USD, you can…

I have never bought bitcoin with the allowance. In case anyone is wondering, the government sells each Venezuelan $300 per year at the official exchange rate. This is the only amount that we're given without having to go through a lengthy process that typically involves having 'friends' within the government to pull strings for you. People usually buy Amazon gift cards with the money. It's too scary to put your money…

Are there no alternative currencies in Venezuela (like the Palma in Brazil)?

http://en.wikipedia.org/wiki/Banco_Palmas

Re: Venezuelans turn to Bitcoins to bypass currency controls

#66

Post by lmb »

presty wrote: post #50
climber_mac wrote: post #29

I am from Venezuela. In case you are wondering how terrible the Venezuelan economy is right now, think about this: Our biggest denomination bill (100 Bolivares) is not enough to buy $1 USD [1]; in january 2013 you could buy $14 USD for the same amount. Also think about the fact that Venezuela has the largest proven oil reserves in the world [2]. I'm not even going to try to explain the currency exchange and control m…

Would using BTC for remittances have any advantage to the way people currently do it? How is it usually done now? Through USD? Is holding USD in Venezuela more valuable than BTC?

Remittances are all about cash management, where BTC doesn't help. There is (was) a company called Buttercoin that wanted to do it, but I think they have since switched to a white label exchange model.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#67

Post by gabzuka »

StavrosK wrote: post #40
climber_mac wrote: post #37

Earlier quoted context omitted.

Tourists generally don't go to Venezuela because the country is extremely unsafe. The capital, Caracas, is ranked as the second city with the highest murder rate in the world [1]. There is an extremely low regard for life - petty criminals will kill you for your phone. However, we do have some of the most unreal places on the planet! [2] [1] http://www.theguardian.com/world/2014/jan/12/violent-crime-m... [2] http://1…

Damn, that's a nice waterfall. Not "worth dying over" nice, but close to it.

That's the Kerepakupai Vená or Angel Falls, highest waterfall in the world [1].

[1] http://en.wikipedia.org/wiki/Angel_Falls

Re: Venezuelans turn to Bitcoins to bypass currency controls

#68

Post by gabzuka »

personlurking wrote: post #65
climber_mac wrote: post #57

Earlier quoted context omitted.

I have never bought bitcoin with the allowance. In case anyone is wondering, the government sells each Venezuelan $300 per year at the official exchange rate. This is the only amount that we're given without having to go through a lengthy process that typically involves having 'friends' within the government to pull strings for you. People usually buy Amazon gift cards with the money. It's too scary to put your money…

Are there no alternative currencies in Venezuela (like the Palma in Brazil)? http://en.wikipedia.org/wiki/Banco_Palmas

I don't know if they have an alternative currency but there are some community banks similar to that one operating there (http://www.bankomunales.com/ (in Spanish)).

Re: Venezuelans turn to Bitcoins to bypass currency controls

#69

Post by gabzuka »

climber_mac wrote: post #29

I am from Venezuela. In case you are wondering how terrible the Venezuelan economy is right now, think about this: Our biggest denomination bill (100 Bolivares) is not enough to buy $1 USD [1]; in january 2013 you could buy $14 USD for the same amount. Also think about the fact that Venezuela has the largest proven oil reserves in the world [2]. I'm not even going to try to explain the currency exchange and control m…

People in Venezuela will still need Bolivares for everyday life, though. So, just like people now buy USDs or Euros as savings they could also do it with bitcoins I guess, no?.

Also, as far as I know, it's illegal in Venezuela to buy/sell foreign currency outside of the systems provided by the state. The anonymous nature of bitcoins could be an advantage in that sense.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#70

Post by crdoconnor »

imaginenore wrote: post #32
climber_mac wrote: post #29

I am from Venezuela. In case you are wondering how terrible the Venezuelan economy is right now, think about this: Our biggest denomination bill (100 Bolivares) is not enough to buy $1 USD [1]; in january 2013 you could buy $14 USD for the same amount. Also think about the fact that Venezuela has the largest proven oil reserves in the world [2]. I'm not even going to try to explain the currency exchange and control m…

> because no one will want to sell for Bolivares What about tourists? You should encourage tourists to bring bitcoins.

Yeah, this. I would much preferred to have taken in bitcoin.

Either you use the ATM and everything is 3x as expensive as it should be or you carry around a minimum of $1000 on your person in one of the most violent countries in the world.

$300 of my USD stash got stolen by the Venezuelan army guard while strip searching me on the border with Colombia.

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