Bitcoin Forum

Data shows that the volume of BTC transactions on the over-the-counter peer-to-peer marketplace, LocalBitcoins, has increased dramatically in countries suffering from high inflation rates.

While the numbers are not quite as high as some of the most popular cryptocurrency markets in some of the larger developed nations like the United States, for example, trading volume is certainly increasing at a considerable rate.

The volume of transactions occurring on LocalBitcoins has increased considerably in countries experiencing economic turmoil, including Argentina, Chile, and Venezuela. It has been widely reported how the citizens of these countries have turned to cryptocurrencies, most notably Bitcoin, to tackle the high inflation rates, simply just to feed themselves.

Read full News here (https://beincrypto.com/bitcoin-trading-volumes-soar-in-venezuela-and-other-inflation-stricken-countries/)
(Not click campaign, just sharing information)

I do think the high inflation rate countries citizens have used Bitcoin in such inteligent way.

Considering those have a bad economic growth, these people are able to "escape" sort of from their economical prison and start earning some profits on their own.

Specially due to if they are only getting profits from their daily life real jobs and taxes are higher than how much you get for yourself at the end of the month. This is just a great move for them.

I am glad such population has found a way to use Cryptocurrencies to achieve something great for them. And i hope more people thinks the same way as there will be more adoption and investors.

We also saw many who start buying BTC in dec 2017 when it was going up. What happen to all those buyers ? They are only regretting that move.
Is it established that bitcoin can solve the economic crisis of Venezuela? If that is not proven then this buying is another fomo

FOMO or not, what is clear right now is that Bitcoin has the potential to be of help when a country can be suffering from many economic issues and the meltdown of the national currency resulting into widespread runaway inflation. However, as with the nature of Bitcoin, there are always inherent risks that one has to be aware of because Bitcoin is a very volatile asset hence those people who entered into Bitcoin in 2017 made the bad decision which they regretted.

I think it's mainly wealthy people trying to get their money out of Venezuela, and bitcoin is an easier method than dollars (because of capital controls).

Most Venezuelans don't even have a few dollars spare because their currency is wrecked, inflation so high and the economy is not working. They can't afford to buy a bitcoin (the fees to send will be more than they can afford to buy).

What we are seeing here is capital flight by the rich.

Venezuela and Argentina citizens see Bitcoin as a store of value and have understood that it is helping them to keep their wealth intact.
They don't actually care about Bitcoin's price but they care more about their wealth being devalued every day from hyperinflation.

This is not Fomo but a logical procedure. Put yourself in their position, having your money in the bank being constantly reduced to dust.

I often thought the Venezuela talk was just more Cyprus/Greece rubbish but it isn't, a lot of people are trading there compared to elsewhere. Even more impressive when you take into account how low wages there are and how hopeless their own currency is.

It would be interesting to see a chart for volume to per capita income per country.

Crypto has enabled people to safeguard their money from depreciation. Though the selling of more currency would create more depreciation, but with the crypto in hands, the people would have a better chance of improving the economy rather than fighting the depreciation. The whole money concept of IMF would soon fall in favor of crypto used for universal trade.

This is the proof that when fiat currencies go the wrong way drastically people are able to choose the better solution, one without inflation and that is not manipulated by any government. The thing is that on more developed countries the inflation is much lower and people don't comprehend the toll their finances take by making economies and holding cash.

The next generations will feel the consequences though and crisis is imminent from time to time. But why does that have to happen when we have better solutions? The answers are corruption, personal interests, population control, etc.

I sometimes think if everyone thinks bitcoin is the best solution to maintain their wealth because of the country's inflationary pressures, then this trend applies generally which results in increased panic demand. but what happens next is that they face the same conditions when bitcoin drops dramatically like the end of the previous Halving moment, psychologically they will be more frustrated than when holding other assets.

One thing I'd like to know is about dollar availability in such places.

I wonder whether this volume is from people who can't get their hands on dollars or whether BTC is an actively sought choice.

Everyone still has to pay taxes, fines, fuel, utilities even when the money you pay it with is useless. Not sure how much mining is going on there but that electricity has to be paid for and dollars aren't going to be accepted, officially at least. 

This is no longer the case, the "official" rate is nearly on par with the "street" rate. But the State doesn't sell anything but Petros anymore so it is of little importance. There are people making money trading on Localbitcoins, especially people not living in the country, those make the volume. There are even foreigners that rent local bank accounts to try and get in the action.

There is however some weird stuff going on involving the Petro, which is also being traded in a similar fashion using a State exchange.

If you are "rich" (or foreigner), you can make money in Localbitcoins, because the price for small trades is so different to the large trades. You can buy "in bulk" then sell it back immediately "at detail" profiting in the process and gaining trades to brag on localbitcoins. You can also offer less money for small bitcoin amounts, and when consolidated sell the bulk at higher price.

---

Services are so dirt chip you can almost write them as "free", yes including electricity. When you mine you don't earn USD, you earn whatever you are mining, and that you exchange in Localbitcoins or elsewhere for the little money you need to pay those services.

Unfortunately while cheap, those services tend to be unreliable, and 2019 has been the worst. 10 Years ago we rarely ever had blackouts, but in 2019 alone i think we have had more than a whole month of no power summing all events, and its much worse in the rest of the country, were some mining farms exist. That is because around 2017 the gov was inviting foreign miners to come here but at the same time some authorities abusing their power stole, extorted, kidnapped miners that did not have some sort of connection with "someone in power". The main infrastructure has been neglected during the last decades and its constantly breaking apart.

After all this time I still haven't seen anything to prove that the Petro actually exists. Is there anything out there that provides any evidence that it does?

There was lots of blag back in the day. Then it seems to have gone silent. Maybe I haven't been paying enough attention.

Well it does exist in the sense that a game money exists: Because a central server says so. If you trust them, sure. I don't think the traders care about it, they buy it and sell it later, and can end with a little more money than when they started with.

I told you its "weird"... Could be a State Ponzi scheme for all i care...

could it be a sign that bitcoin will experience a big increase, but it doesn't seem to have any effect on the price of bitcoin, until now there is almost no difference in the price of bitcoin from yesterday, bitcoin is still between 7000 and 7500.

There will be an even better solution...  It is called

LIBRA COIN

Bitcoin has FAILED its promise to be something that can be used as currency.   Everyone thinks it is great Venezuelans are using bitcoin, but it is not great.  The fact that Bitcoin is used more in Venezuela just shows how utterly bad, and out of options people have to be before they will resort to using Bitcoin as money.   So when there are options, people chose NOT to use Bitcoin as currency.

Hard Facts

Of course, it won't affect the price per se. So don't expect that because the price of Bitcoin is very high in countries such as Venezuela or recently Iran (around $24,000-$26,000 per pop as reported), it will reflect on the global scale.

Obviously, because Venezuela's Bolivar has no value at all, they just hedge their wealth to cryptocurrency such as Bitcoin. So it is a form of alternatives to those countries with hyperinflation. At least we can proved that Bitcoin has a purpose on those countries.

This is one manifestation of how economic problems theoretically could increase demand in Bitcoin. Though contrary to most believe, Bitcoin couldn't solve economic problems of countries. It could just act as another alternative currency when the one provided by the government fails, like the situation in Venezuela. Or a store of funds rather than store it as fiat in local central bank.

But it will be too helpful for them to take advantage of these currencies if their central bank and government couldn't handle the economic problems anymore. People will stand out to use bitcoin to transact with other people and their basis would be the USD instead of their own fiat currency in which I find helpful. Though, I remember when some high inflation countries having their banks and ATM's closed is a big issues, I just hope their internet would not.

That might be true, but the situation right now is nothing even close to what happened at the end of 2017. 

It is interesting to me that people are rushing to buy bitcoin in these countries.  I get that their local currencies are in trouble and are losing value pretty quickly, but bitcoin isn't exactly the best store of value if you're looking for stability.  You'd think that they'd be trying to get their hands on some US dollars or another currency that isn't undergoing hyperinflation.  And believe me, I'm not knocking bitcoin here, just wondering about why it's going crazy in Venezuela and elsewhere.

Wouldn't gold or silver be a better way to hedge?  That's what people usually buy if they're looking to preserve buying power.  Bitcoin's volatility alone makes it not such a good choice for that purpose.

Wouldn't gold or silver be a better way to hedge?  That's what people usually buy if they're looking to preserve buying power.  Bitcoin's volatility alone makes it not such a good choice for that purpose.
[/quote]

In Venezuela you can buy a house with an ounce of GOLD, and you can eat for MONTHS for an ounce of silver.  Not is Gold and Silver only a hedge, its value SKYROCKETS in cases of hyperinflation like is happening in Venezuela.

Gold and Silver have outperformed Bitcoin in Venezuela thousands of times over. 

So you are VERY WRONG saying Gold is just a hedge in Venezuela, it is a way to be extremely wealthy in that environment.

Hard Facts

The increase in the exchange of bad money for good money, but in terms of dollars remains at about $800K per day.
You can verify this information for yourself by using yadio.io

The growing volumes of Bitcoin in Venezuela will continue to increase, and it should be emphasized that it is not a country in which all its people have knowledge about Bitcoin, many speculate based on the dollar and local money, everything is sold in dollars and the government issues its payments in local currency and has a very low value.

Due to the lack of knowledge of Bitcoin, those who know are the ones that move the market in Localbitcoins, they are usually people or companies that only dedicate themselves to trading, since the in general  production is at very low rates.

Now, with the information they have about the failed petro, people are beginning to know more about the technology, they will gradually reach Bitcoin, the road is easy, so the volume will increase due to the degree of knowledge and as inflation increases , the adoption will be a fact.

Bitcoin trading is a good way to escape a bad economy in a poor nation or troubled economy, for example in my country, I get a daily message of youth and teenagers wanting to learn about bitcoin investment after seeing how bitcoin is uplifting people from poverty and increasing their purchasing power.

I dont think its common Joe whose trying to trade in a country like Venezuela, rather its the middle men who are making profits from legal/illegal ways and taking their money offshore. It will be impossible for them to use the Dollar so crypto might be the best way to get their money out. We have already seen that the Venezuelan population is making very little to no money and its hard for them to even fulfill the daily needs.