Please take a listen to this
http://podcast.runtogold.com/podcast/BTCK-127-2015-01-20.mp3It's an interview with a guy trying to set up a south American exchange that is beneficial to south Americans.
You are the only guy I pseudo-know that it's from that area and your analysis of this would be greatly appreciated.
Specifically the parts about bitcoin transfers allowing the local currencies to stay local, while still allowing people to transfer funds across borders.
I could not listen to the interview to the very end. From the part that I heard, his project is a set of bitcoin exchanges, one in each country, that allow you to do two matched trades in one operation: e.g., buy N bitcoins in Peru, with soles, and sell them in Argentina, for pesos which will be deposited into someone else's account.
One can do that now, but it would involve two independent exchanges, and the first user would have to withdraw the bitcoins from one exchange ad deposit them into the other one. The guy's company (
Bitinka, I suppose). would remove those two extra steps so that the users would not need to "touch" the bitcoins.
As the guy points out, a nice feature of that schema is that it does not require users to exchange their national currency for dollars (as they would have to if they used Bitstamp, say), which could attract the unwelcome attention of the central banks.
That core service, by itself, would have the merit of using bitcoin as it was intended to be -- a payment medium. Remittances via Bitinka would not be free, of course, because Bitinka would have to charge fees or profit from BTC price spreads at both ends.
However, to the users, that service would look pretty much like any Western Union or any other classic remittance service. Since the bitcoin transfers are done inside the system, they can be lumped and deferred. If Jose and Juan send the equivalent of 10 BTC each from P(eru) to A(rgentina), and Manuel sends the equivalent of 15 BTC from A to P, the company needs to send only 5 BTC from P to A; and may do that later, if the Argentina branch has enough reserves.
They may even manipulate the exchange rates and fees to match the flow in both directions, so that they would not even have to move any bitcoins. Or they may use banks to exchange the currencies and move them across borders -- if, for some reason, they find that option more convenient than buying and sending bitcoins.
But if the trades are not balanced -- say, there is more value sent from P to A than the other way around -- and they do not want to use banks, then the company would have to buy bitcoins in P and sell them in A. What is the money flow in that process?
The two prmary parties in a money transfer from P to A can be lumped together as one "family", so the sending and receiving cancel out: the "family" does not lose or gain anything, except some fees, and can be excluded from the analysis. The remaining net money flow is: someone in A gave his money (and got some bitcoin) to someone in P (who parted with some of his bitcoin).
Thus, apart from the implied change of currencies, the situation is the same as when someone buys BTC from someone else, with dollars or any other currency. Any profit that the seller makes comes out of the buyer's pocket. If the seller bought for 500$ and is selling for 200$, then he is keeping 300$ of his initial 500$ loss, and passing the other 200$ to the buyer.
In summary, the matched trades that Bitinka propose to do would be proper use of bitcoin, but by themselves they would not generate much demand: the bitcoins would be kept by Bitinka only for a few days at most. Bitinka will be "good for bitcoin" (i.e. help push the price up) mainly if it encourages people to buy bitcoins
and hold them (like that guy in A who bought the bitcoins from the company). And you already know what I think about investing in bitcoins...
Moreover, if Bitinka is successful, it would be "stealing" remittance service customers from the local banks, by undercutting their fees. Good luck getting bank accounts and the necessary approvals from the local governments...
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