[2021-08-21] Inside Afghanistan's cryptocurrency underground as the country plu

[Woodie]

Inside Afghanistan's cryptocurrency underground as the country plunges into turmoil

Farhan Hotak isn't your typical 22 year-old Afghan.

In the last week, he helped his family of ten flee the province of Zabul in southern Afghanistan and travel 97 miles to a city on the Pakistani border. But unlike others choosing to leave the country, once his relatives were in safe hands, Hotak then turned around and came back so that he could protect his family home – and vlog to his thousands of Instagram followers about the evolving situation on the ground in Afghanistan. 

He has also been keeping a very close eye on his crypto portfolio on Binance, as the local currency touches record lows and nationwide bank closures make it next to impossible to withdraw cash.

"In Afghanistan, we don't have platforms like PayPal, Venmo, or Zelle, so I have to depend on other things," said Hotak.

Afghanistan still mostly operates as a cash economy, so money in Hotak's crypto wallet won't help him put dinner on his table tonight, but it does give him peace of mind that some of his wealth is safeguarded against economic instability at home.

It also offers bigger promises down the road: Access to the global economy from inside Afghanistan, certain protections against spiraling inflation, and crucially, the opportunity to make a bet on himself and a future he didn't think was possible before learning about bitcoin.

"I have very, very, very limited resources to do anything. I'm interested in the crypto world, because I have earned a lot, and I see a lot of potential in myself that I can go further," he said.
Run on the banks
For many Afghans, this week has laid bare the worst-case scenario for a country running on legacy financial rails: A nationwide cash shortage, closed borders, a plunging currency, and rapidly rising prices of basic goods.

Read more https://www.cnbc.com/2021/08/21/bitcoin-afghanistan-cryptocurrency-taliban-capital-flight.html
I guess this has become a trend for struggling economies to turn to bitcoin when things hit rock-bottom, we have seen this in Zimbabwe, Venezuela etc and now Afghanistan,  we can say bitcoin is a financial savior.

[Slow death]

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists and expects other countries to do the dirty work. i like bitcoin but in case of afghan problems the solution is in the hands of the afghan people, if the afghan people just watch the terrorists do what they want then nothing will change for the better anytime soon

[NeuroticFish]

I guess this has become a trend for struggling economies to turn to bitcoin when things hit rock-bottom, we have seen this in Zimbabwe, Venezuela etc and now Afghanistan,  we can say bitcoin is a financial savior.

In a mostly cash based economy, Bitcoin cannot help much. Maybe a little in the bigger cities, but now, since the legislation is on a change, anything unusual is suspect and can cause troubles.
While Bitcoin is great for those who have economies "stored" in BTC and now leaving the country, yes. But the others... may not be able to benefit for quite a while from now on.

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists and expects other countries to do the dirty work. i like bitcoin but in case of afghan problems the solution is in the hands of the afghan people, if the afghan people just watch the terrorists do what they want then nothing will change for the better anytime soon

From what I've read the army was basically bought to not fight. The Taliban leaders are super rich. I guess that there was an anti-American narrative going on for many years too. A big chunk of the population may see this defeat as a victory; since the democracy was fragile and the corruption high, many won't lose much or, better said, won't understand what they've lost. It's... complicated.

[SFR10]

we can say bitcoin is a financial savior.

To a certain extent, yes, but not yet as a whole ^{[for now]}.

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists

In addition to what NeuroticFish mentioned, a large portion of their population has already lost a lot in the last decade or so, and with little to no access to weapons, they can't fight back ^{[even if they want to, it'll never be a fair fight]}.

In a mostly cash based economy, Bitcoin cannot help much.

Despite having a volatile nature, in this case, it'd help them to preserve/retain their wealth's worth/value.

A big chunk of the population may see this defeat as a victory;

Based on the interviews I've watched recently, I have to respectfully disagree.

[Vishnu.Reang]

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists and expects other countries to do the dirty work. i like bitcoin but in case of afghan problems the solution is in the hands of the afghan people, if the afghan people just watch the terrorists do what they want then nothing will change for the better anytime soon

The Afghan national army numbered 350,000 as per official sources, but most of these soldiers existed only in paper. The real strength was in five digits. And even these guys had no apatite to pick up fight with Taliban. When the Jihadis came, they just signed deals with them, handed over their weapons, equipment and uniform, and returned to their hometown. That is how Taliban managed to conquer all of Afghanistan in a matter of few weeks, with just tens of thousands of fighters. And the national currency will become devalued and many of the Afghans will be forced to use foreign currencies (Pakistani Rupee, Iranian Rial.etc), or cryptocurrency.

[Lucius]

He has also been keeping a very close eye on his crypto portfolio on Binance, as the local currency touches record lows and nationwide bank closures make it next to impossible to withdraw cash.

Let someone correct me if I'm wrong, but Afghanistan is one of the countries where Binance is not supported - and even if the person in the article uses a VPN, it's only a matter of time before they discover it and block his account. In addition, I get the impression that Binance serves as his main storage, so the whole story loses a bit of meaning. I think that there is no crypto underground in Afghanistan, but only isolated cases, considering that according to the data from the beginning of 2021, only 8.64 million had access to the Internet (total population 39.38 million).

That is how Taliban managed to conquer all of Afghanistan in a matter of few weeks, with just tens of thousands of fighters.

The defeat of the Afghan national army actually took place much earlier, and it all started with US negotiations with the Taliban in which everything was actually agreed. For some reason known only to them, they decided to withdraw from the country and leave it to those they had fought against for 20 years.

[Betwrong]

I guess this has become a trend for struggling economies to turn to bitcoin when things hit rock-bottom, we have seen this in Zimbabwe, Venezuela etc and now Afghanistan,  we can say bitcoin is a financial savior.

In a mostly cash based economy, Bitcoin cannot help much. Maybe a little in the bigger cities, but now, since the legislation is on a change, anything unusual is suspect and can cause troubles.
While Bitcoin is great for those who have economies "stored" in BTC and now leaving the country, yes. But the others... may not be able to benefit for quite a while from now on.

I think it depends on Taliban's policy regarding Bitcoin, which we can't know yet. There are no words in the Quran that condemn Bitcoin, so it can turn out to be pretty halal.

I absolutely agree regarding those leaving the country, though. Right now they are trying to buy BTC with all their possessions.

[Vishnu.Reang]

The defeat of the Afghan national army actually took place much earlier, and it all started with US negotiations with the Taliban in which everything was actually agreed. For some reason known only to them, they decided to withdraw from the country and leave it to those they had fought against for 20 years.

OK.. I got it. But still don't understand one point. If they had to leave Afghanistan like this, then what was the point in spending around $1 trillion from the US tax revenue there? They spent a larger amount in Iraq ($2 to $3 trillion), but in this case at least some of the American corporations got control of the oil fields. But the Afghan involvement was a loss making proposition for the United States. They spent $1 trillion, and didn't got anything in return. And obviously, this loss will be covered by printing a few trillion USD worth of banknotes by the federal reserve.

[stompix]

Let someone correct me if I'm wrong, but Afghanistan is one of the countries where Binance is not supported - and even if the person in the article uses a VPN, it's only a matter of time before they discover it and block his account.In addition, I get the impression that Binance serves as his main storage, so the whole story loses a bit of meaning

So, bottom line, Binance is his "savior" not bitcoin as he could simply hold $ there, it makes no difference if he withdraws bitcoins he has nowhere to spend if he withdraws $ he must deal with the banks. It's again one of those tales where BTC is saving everyone that turns out to be quite different in reality.

OK.. I got it. But still don't understand one point. If they had to leave Afghanistan like this, then what was the point in spending around $1 trillion from the US tax revenue there? They spent a larger amount in Iraq ($2 to $3 trillion), but in this case at least some of the American corporations got control of the oil fields.

"some" of the oil fields. Most of them are run owned by anything but American companies, from China and Russia, so 20 years later, let's simply drop this myth about Americans invading countries for their resources as it's getting pretty old. I love that the fact that everyone is talking about the riches of Iraq and Afghanistan but none of the ones in Korea or Vietnam, maybe because it doesn't fit the narrative, right?

[NotATether]

Lived in a 3rd world country before. Bitcoin cannot pay the bills there.

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists and expects other countries to do the dirty work. i like bitcoin but in case of afghan problems the solution is in the hands of the afghan people, if the afghan people just watch the terrorists do what they want then nothing will change for the better anytime soon

Because most of them are just civilians with no arms or combat experience (similar to Palestine vs Israel). Instead of building a state army Ghani just ran away with all the government cash.

It's... complicated.

Not really, you basically nailed it in your last paragraph. Nobody liked the former, corrupt, government so what happens is they see the Taliban terrorists as better than them (sadly) because they're the only choice they have.


Also I don't like how he's still keeping his money on Binance when they have an impending withdrawal limit clusterbomb about to explode, I hope someone warned him about that.

[bbc.reporter]

What is everyone’s comment if Jack Mallers went to Afghanistan and talked to the Taliban leadership to bring his Strike technology to hyperdollarize the country through a stablecoin with bitcoin used only as the medium to send value similar to the original plan for El Salvador?

[Lucius]

OK.. I got it. But still don't understand one point. If they had to leave Afghanistan like this, then what was the point in spending around $1 trillion from the US tax revenue there?

Lots of money, lots of bribes, and corruption - and I believe a good portion of that money ended up in the private accounts of Americans, Afghans, and everyone else who used that country 20 years for their war-political games. It would be interesting to follow the trail of money coming from the US to Afghanistan, and these days I have read an article about all the absurdities of various projects being done in that country, and they have served literally nothing. I have to correct you about the amount, because since 2001, American taxpayers have paid more than $2 trillion for Operation Afghanistan, and they must be very proud of all those clowns who approved it.

What is everyone’s comment if Jack Mallers went to Afghanistan and talked to the Taliban leadership to bring his Strike technology to hyperdollarize the country through a stablecoin with bitcoin used only as the medium to send value similar to the original plan for El Salvador?

Why do you think the Taliban would embrace a new technology when it comes to people who are quite traditional and don’t allow some fundamental things like foreign music, movies, and beauty salons? Although it is true that they currently have a problem with payment services, because Western Union has currently blocked its service for Afghanistan, and $800 million in foreign remittances came through it.

I don't really want the Taliban to start using Bitcoin, do we want to link to terrorism, even though the US suddenly says they are no longer terrorists - what's next, an apology to kill Bin Laden and put Al-Qaeda on the list of friendly organizations?

[cr1776]

I guess this has become a trend for struggling economies to turn to bitcoin when things hit rock-bottom, we have seen this in Zimbabwe, Venezuela etc and now Afghanistan,  we can say bitcoin is a financial savior.

I wouldn't call Bitcoin as financial savior, but good alternative to
1. Unstable currency which hardly accepted outside their country.
2. Fiat replacement, where people have control over their money (usually against authoritarian government).

It can be a financial savior if people prepare in time. The people of Hong Kong could've converted some assets to bitcoin to save them from the communists. The people of Taiwan should be protecting themselves this way.  Just as the people of Afghanistan have had the chance to do so.

Anything that needs a cross border asset transfer that can't be confiscated easily if someone doesn't know you have it.

[bbc.reporter]

What is everyone’s comment if Jack Mallers went to Afghanistan and talked to the Taliban leadership to bring his Strike technology to hyperdollarize the country through a stablecoin with bitcoin used only as the medium to send value similar to the original plan for El Salvador?

Why do you think the Taliban would embrace a new technology when it comes to people who are quite traditional and don’t allow some fundamental things like foreign music, movies, and beauty salons? Although it is true that they currently have a problem with payment services, because Western Union has currently blocked its service for Afghanistan, and $800 million in foreign remittances came through it.

I don't really want the Taliban to start using Bitcoin, do we want to link to terrorism, even though the US suddenly says they are no longer terrorists - what's next, an apology to kill Bin Laden and put Al-Qaeda on the list of friendly organizations?

That is outside the argument. I am only asking if Jack Maller’s original idea to hyperdollarize El Salvador through stablecoins would work in dollarizing a country in disorder similar to Afghanistan.

Also, it is not for you, me or anyone who dictates who should or should not use this technology. They might presently be using it and we do not know, similar to criminals use of American dollars in the black market.

[NeuroticFish]

Nobody liked the former, corrupt, government so what happens is they see the Taliban terrorists as better than them (sadly) because they're the only choice they have.

I don't see it that much in black and white. Some - especially women with higher education - know that under the talibans their life will become harsh. Some know that they just lost democracy. I guess that they are - by far - too few. Also I'm sure that there were some that had great benefits under that fragile and corrupted democracy. All these could have done more, I guess... that's why I see it as being rather complicated.

I think it depends on Taliban's policy regarding Bitcoin, which we can't know yet. There are no words in the Quran that condemn Bitcoin, so it can turn out to be pretty halal.

I've seen in many places: it doesn't matter that much what the book tells, it matters the most how the priests interpret it/what they say.
Imho, if some of the taliban leaders do have Bitcoin, then it will probably not be banned; but I kinda doubt that.

[Ozero]

Ironic in all of this is knowing that the population of Afghanistan outnumbers the Taliban terrorists, but the population does not unite to fight the terrorists and expects other countries to do the dirty work. i like bitcoin but in case of afghan problems the solution is in the hands of the afghan people, if the afghan people just watch the terrorists do what they want then nothing will change for the better anytime soon

In Afghanistan, events are unfolding so badly that there is practically no hope for normal economic development. The Taliban have practically fought all their lives, they walk and sleep with weapons. They are no longer adapted for a peaceful life, not to mention the possibility of using cryptocurrency by them. Therefore, they will look for reasons to continue fighting and take property from others. In this regard, it is likely that the international community isolates them from the outside world, and if the Taliban attack their neighbors or seriously violate the rights of civilians in Afghanistan itself, then missile and bomb strikes will be launched against the accumulations of Taliban personnel and equipment. However, the re-introduction of foreign troops is only possible as a last resort. After the shameful surrender of government troops to the Taliban, along with a significant amount of weapons, no one will help them. Afghans will have to rely mainly on their own strength.
The Taliban now have access to less than one percent of the funds previously held by the former government. Therefore, there will be a financial collapse very soon. Where this will lead, we'll see soon.

[bryant.coleman]

"some" of the oil fields. Most of them are run owned by anything but American companies, from China and Russia, so 20 years later, let's simply drop this myth about Americans invading countries for their resources as it's getting pretty old. I love that the fact that everyone is talking about the riches of Iraq and Afghanistan but none of the ones in Korea or Vietnam, maybe because it doesn't fit the narrative, right?

Then why the same mistake is being repeated, again and again? Did they stopped after Vietnam? Korea was different, because at that point almost all the cold war superpowers got involved. But Vietnam was an internal power struggle and the US had no business there. And take the example of Iraq. The justification given was that Saddam was manufacturing WMDs. Two decades have passed. Where are the so called WMDs? And then came Afghanistan. After that it was Libya. A country that was one of the most prosperous in the African continent is now even worse than Somalia.

[NeuroticFish]

Then why the same mistake is being repeated, again and again? Did they stopped after Vietnam? Korea was different, because at that point almost all the cold war superpowers got involved. But Vietnam was an internal power struggle and the US had no business there. And take the example of Iraq. The justification given was that Saddam was manufacturing WMDs. Two decades have passed. Where are the so called WMDs? And then came Afghanistan. After that it was Libya. A country that was one of the most prosperous in the African continent is now even worse than Somalia.

I see 2 possible directions here:

1. The Americans really believe that by trying to fight those (anti-American, dictatorial) regimes and "export" democracy they'll avoid nuclear war and keep... not necessarily peace, but the war away from their home.

2. Weapon manufacturing industry is very powerful and influential in the US. Those super expensive weapons and ammo must be used in order to get new ones made (better and even more expensive). And afaik the US even try to recover the cost of those weapons from the "liberated" countries. So it's a good business for some.

[Lucius]

That is outside the argument. I am only asking if Jack Maller’s original idea to hyperdollarize El Salvador through stablecoins would work in dollarizing a country in disorder similar to Afghanistan.

The idea of implementing something like this in a country like Afghanistan hardly makes sense unless you think you can compare that country to El Salvador. I don’t think the Taliban regime would allow such a thing, despite all the stories of how they have changed.

Also, it is not for you, me or anyone who dictates who should or should not use this technology. They might presently be using it and we do not know, similar to criminals use of American dollars in the black market.

It is not up to me to determine who will use what, but I express my opinion with good reason that positioning Bitcoin to a higher level in a country now ruled by alleged former terrorists would only bring more problems than benefits. I doubt the Taliban use cryptocurrencies, as far as I can see they specialize in using weapons, torturing and killing anyone who doesn't think like them - so if they can't control something, then they won't even accept it.

[buwaytress]

Reminds me of this news item that made its rounds in the last crypto boom -- this was also the period where teaching girls to code and empowering girls/women in post-Taliban Afghanistan was all the rage. Always wondered how many Afghan girl bounty hunters ended up on this forum, I never ran across any!

Not that I'm not supportive of these efforts, I think it's great anyway that girls and boys everywhere should learn to code, it's the most underrated skill to equip yourself for the next decade or so. I just always think they overestimate how useful these crypto-related things are.