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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

#81

Post by bjfish »

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…

Does anybody there take out loans in Bolivar, use the Bolviar to buy $300 at the official exchange rate, then sell a few of those purchased dollars in the black market to repay the loan immediately?

Re: Venezuelans turn to Bitcoins to bypass currency controls

#82

Post by celticninja »

cjensen wrote: post #5

That's interesting, but I'm pretty sure a physical dollar bill is more useful. A physical dollar can be used to make purchase stuff locally without a computer, and is easily accepted for a sale. In the example given in the article, the only reason the first guy in the article uses bitcoins is to buy an Amazon gift certificate (denominated in dollars) to buy stuff mail order. The only real lesson to be had from the Ve…

So do far right governments. It's almost as if we need a sort of middle ground.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#83

Post by sanoli »

aet wrote: post #79
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…

Why don't you mine for BC using the super-cheap gas (6 cents a gallon)? (the ultimate insult to environmentalist, such as myself, everywhere)

You mean using a gasoline generator to power the miners? I wonder if using the house electricity isn't cheaper. If it cost more, wouldn't people all begin using generators?

Re: Venezuelans turn to Bitcoins to bypass currency controls

#84

Post by AJ007 »

thewarrior wrote: post #72
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…

How did Veneuzuela end up like this ?

When attempting to consolidate power very destructive economic policies are often used out of fear that those forces could threaten ones' power. Similar thing happened in Zimbabwe. Russia is on this same path now too.

Venezuelans who can should request to be paid in bitcoin from foreigners. This probably would work best for those abroad since the bitcoin can be remitted as if there was no border at all. Venezuelans who have knowledge labor -- programmers, researchers, data entry, could also be paid in bitcoin. Eventually when enough people have bitcoin it could also be used to exchange value without the country.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#85

Post by AJ007 »

joosters wrote: post #8

Not long ago, it was the Chinese who were apparently using Bitcoin to bypass currency controls, and that was to be the 'big thing' that would propel bitcoin on to greatness. Now that effect seems to have petered out and the hype has switched countries... why will it be any different this time?

If the purpose is to bypass currency controls, it is to get money out of China, not back in. You don't want to sell Bitcoins for yuan (though it is certainly happening.)

Chinese miners are spending yuan to buy mining hardware. This answers the question of why run an "unprofitable" mining operation. Rather what you are doing is converting yuan to bitcoin. The mining operation is not for profit but rather a currency conversion. How much of the mined bitcoin is being converted to dollars? If it is being sold right away, that is pushing the price down not up. If they are just sitting on it, then a cause to sell it all could push the price down hard.

This same thing applies to money laundering in general. At some point, if not already, authorities would investigate who is buying massive quantities of hardware that is viable for mining. Of course there have been shortages, which PC gamers hate, so perhaps third party sellers like eBay hold more answers than nVidia.

If I was making big bets on the price Bitcoin I would have my researchers trying to answer these questions above all else. Are there miners sitting on huge quantities of bitcoins who will at some point in the near future are likely to become motivated sellers? Secondly, I would be trying to figure out if any of the major exchanges are involved in fraud like Mt Gox was.

Amusingly all of the bitcoin speculators equate the success or failure of bitcoin with the increase of its price. That is completely missing the point of cryptocurrency.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#86

Post by hopeee »

bjfish wrote: post #81
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…

Does anybody there take out loans in Bolivar, use the Bolviar to buy $300 at the official exchange rate, then sell a few of those purchased dollars in the black market to repay the loan immediately?

ye this is a pretty common practice, in fact, this is mainly the reason of why we have such high inflacion (because there is people, who, of course are gov related but also anti-gov, who only care to make free money from exchange corruption and they have alot of intentions to keep this going on).. also there is a 3000$ allowance to expend in travels wich you pay at 11 Bsf per USD, wich made a huge business for your average joe people since you pay the gov 33k Bsf but once you "cheat" the system, you get a return of 270k BsF after paying the gov. This is the major reason of all those flights problems in our country, because in order to get this 3000$ quota, you need to buy a plane ticket, airlines also want their cut on the huge bussiness so they sell overpriced tickets that people who will "cheat" will still buy, also note that the "big debt" that the gov has with the airlines is because when airlines sell a plane ticket in BsF they take the 100 Bsf Per USD rate, but then they expect the gov turns all those BsF into USD at official 6,3 rate, thus the gov "owes" the airlines billions of billions.

Anyways this is just a resume to see how everything is related, anyways as alot of people says here, bitcoin wont help at all. Sorry for mistakes in english . :) Edit: BsF = Bolivar

Re: Venezuelans turn to Bitcoins to bypass currency controls

#87

Post by aet »

sanoli wrote: post #83
aet wrote: post #79

Earlier quoted context omitted.

Why don't you mine for BC using the super-cheap gas (6 cents a gallon)? (the ultimate insult to environmentalist, such as myself, everywhere)

You mean using a gasoline generator to power the miners? I wonder if using the house electricity isn't cheaper. If it cost more, wouldn't people all begin using generators?

Gas is apparently 0.06 cents (USD) a gallon. A gallon of gas provides roughly 30 kW/hr. How much is a kW/hr of electricity in Venezuela? If it is more than 0.002 (USD) a kW/hr you might be better of w/ electric generator. Anyone have any more recent numbers? I see an article from 2013 that says prices in Venezuela are roughly 0.03 cents per kW/hr. Maybe someone can check these calculations. Could have made an error.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#88

Post by hopeee »

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…

this also used to apply for airlines miles, it used to be awesome :D

Re: Venezuelans turn to Bitcoins to bypass currency controls

#89

Post by Retric »

aet wrote: post #87
sanoli wrote: post #83

Earlier quoted context omitted.

You mean using a gasoline generator to power the miners? I wonder if using the house electricity isn't cheaper. If it cost more, wouldn't people all begin using generators?

Gas is apparently 0.06 cents (USD) a gallon. A gallon of gas provides roughly 30 kW/hr. How much is a kW/hr of electricity in Venezuela? If it is more than 0.002 (USD) a kW/hr you might be better of w/ electric generator. Anyone have any more recent numbers? I see an article from 2013 that says prices in Venezuela are roughly 0.03 cents per kW/hr. Maybe someone can check these calculations. Could have made an error.

I think there paying far more than 6cents per gallon.

Still, you forget generators are less than 100% efficient. At 30% that 30kW/hr = 9kW/hr for 6 cent. = 1.5 cents per kW/hr + cost of generator which is far from free.

Anyway, your far better off just selling the gas.

Re: Venezuelans turn to Bitcoins to bypass currency controls

#90

Post by aet »

Retric wrote: post #89
aet wrote: post #87

Earlier quoted context omitted.

Gas is apparently 0.06 cents (USD) a gallon. A gallon of gas provides roughly 30 kW/hr. How much is a kW/hr of electricity in Venezuela? If it is more than 0.002 (USD) a kW/hr you might be better of w/ electric generator. Anyone have any more recent numbers? I see an article from 2013 that says prices in Venezuela are roughly 0.03 cents per kW/hr. Maybe someone can check these calculations. Could have made an error.

I think there paying far more than 6cents per gallon. Still, you forget generators are less than 100% efficient. At 30% that 30kW/hr = 9kW/hr for 6 cent. = 1.5 cents per kW/hr + cost of generator which is far from free. Anyway, your far better off just selling the gas.

I think it is the efficiency that I didn't consider. As far as I know, gas is roughly 5 cents a gallon.
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