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Author Topic: Argentina, on the verge of a new currency collapse  (Read 10640 times)
realnowhereman
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May 23, 2012, 06:38:55 PM
 #81

Well, that's interesting but wouldn't that coin be very tied to their economy? I think they'd rather have BTC at a premium rather than going that way and having to deal with the massive fluctuations. If you make a crypto-currency to trade it mainly in AR$, it's going to be just as "bad currency" as the AR$.

As "bad" as ARS except without the capital controls, export restrictions and ability to be debased by the government.  There's nothing wrong with the Argentinian economy that the removal of their economically inept government wouldn't fix.  Which is exactly what such a currency would do.


There is something very wrong with the Argentinian economy: monetary policy. You cannot possibly trade a cryptocurrency mainly and AR$ and isolate it from their monetary policy.

Haven't you just repeated what I said?  "nothing wrong that the removal of ..."

Once the stored value in the economy is not AR$ it is isolated.  The trade happens at an instant when the exchange rate is known, then it can be ignored -- once value is moved into Argencoin, the monetary policy can do whatever it likes.  The idea remember is that a cryptocurrency would allow Argentinians who wanted to get off the merry go round to do so.

The floating rate against the rest of the world would be handled by the BTC/Argencoin rate.  Since Argencoin can be exported it can be used to create the BTC/ARS exchange rate that government controls would, at present, restrict.

They could, for instance, sell stuff online partly in US$/€/£ and partly in BTC, declare the non-BTC part and be reasonably safe. But then again, they will have a hard time selling or using these BTC over US$. In Argentina, dealing with currencies outside of their central bank is outlawed! and a lot of people think that's normal and even supported. I'm amazed Argentina still manages to function reasonably well considering all the measures put in place.

Well yes, isn't this where the Argencoin idea that you're rejecting comes in?

Except with Bitcoin instead? or at least something global.

... and round we go again Smiley  The problem under discussion is how to get bitcoins into a country that has implemented export, import and capital controls.  The solution offered being Argencoins.

I don't say that it would work, merely that you were quick to reject something that might be worth trying.

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muyuu
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May 23, 2012, 06:42:18 PM
 #82

I disagree. I think the way to get bitcoins is goods and services.

Provided that AR$ are bad money, a cryptocurrency strongly linked to AR$ offers no significant advantage. Just an extra hoop and something else to worry about. Mining would be required that would be much better invested in BTC.

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May 23, 2012, 07:24:46 PM
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I disagree. I think the way to get bitcoins is goods and services.

There's is not disagreement there, just an alternative approach. To be successful we have to implement both. Some people will find easier exchanging their goods and services for bitcoins and others will be fine with argencoins. Some others will just stay with ARS or will keep trying to get USD or gold or anything that they consider valuable...

Provided that AR$ are bad money, a cryptocurrency strongly linked to AR$ offers no significant advantage. Just an extra hoop and something else to worry about. Mining would be required that would be much better invested in BTC.

The cryptocurrency would be an easy bridge for people accustomed to ARS, but won't be linked only to ARS. It would be as global as BTC itself.

Mining will be required, but it won't compete with BTC. People who is already mining BTC would be better keeping doing so. The currency I'm planning would be merged mined, to allow easy adoption, even on a global scale. And at first it'll be using scryp as POW, to allow mining on standard hardware. The idea, to begging with, is merged mining it with litecoin, but I would really like to go even further, and I'm thinking about the possibility of making a currency able to use multiple POWs. So, you could MM it with bitcoins, litecoins and other cryptos... If possible, it would be something interesting to make...
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May 23, 2012, 10:43:56 PM
 #84

I disagree. I think the way to get bitcoins is goods and services.

There's is not disagreement there, just an alternative approach. To be successful we have to implement both. Some people will find easier exchanging their goods and services for bitcoins and others will be fine with argencoins. Some others will just stay with ARS or will keep trying to get USD or gold or anything that they consider valuable...

Provided that AR$ are bad money, a cryptocurrency strongly linked to AR$ offers no significant advantage. Just an extra hoop and something else to worry about. Mining would be required that would be much better invested in BTC.

The cryptocurrency would be an easy bridge for people accustomed to ARS, but won't be linked only to ARS. It would be as global as BTC itself.

Mining will be required, but it won't compete with BTC. People who is already mining BTC would be better keeping doing so. The currency I'm planning would be merged mined, to allow easy adoption, even on a global scale. And at first it'll be using scryp as POW, to allow mining on standard hardware. The idea, to begging with, is merged mining it with litecoin, but I would really like to go even further, and I'm thinking about the possibility of making a currency able to use multiple POWs. So, you could MM it with bitcoins, litecoins and other cryptos... If possible, it would be something interesting to make...

Extra complexity is not "free", it comes in at massive cost.

As is, Bitcoin is too complicated for most people to get their head around. Having so many elements at play (AR$, US$, mining on either, clients for either, etc) and needing to distinguish between two cryptocurrencies... I can only imagine it would make a lot of people simply desist, as it's something they won't understand, and it's wise to stay away from something you don't understand particularly when money is involved. That's not even considering the whole extra point of failure it adds, the difficulties bootstrapping the currency (51% attack much more likely on a small, new currency), the mess with clients and websites, etc...

Imagine a security hole is found in your fork, are you taking responsibility for it? Because you are not even anonymous, and Argentinian people are not particularly peaceful when they lose money.

I read the second part and as a software engineer I can only see a nightmarish scenario there. Extra complexity being thrown around as nothing happened. Every single addition you mention there is a gargantuan task on its own. As big as Bitcoin itself, that's actually struggling to finish implementing the original plans as we speak, after years being scrutinised by many people. It feels like when my cousin tells me about this idea for a game and comes with something even the biggest studios in the world wouldn't dare to try.

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MoneyIsDebt
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May 24, 2012, 01:11:14 AM
 #85

So exchanges are needed - but how would one do that?
I have the same problem in my country - there are no bitcoins to be had, so difficult to get any business going using it. But starting an exchange means selling bitcoin for the local fiat - why would one do such a thing, if one sees the ARS dropping and BTC rising? If you're fan enough of bitcoin to set up an exchange, you're probably also more keen on keeping BTC than ARS anyway.
Especially if your only way of getting those bitcoins are to convert ARS to USD illegally, then exporting those USD illegally to an exchange where you can buy the BTC you need to sell.
I'm not criticizing, I'm genuinely curious, because I wanted to set one up locally (at a small scale) to help get bitcoin going, but I just don't see how.

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May 24, 2012, 02:25:04 AM
 #86

Extra complexity is not "free", it comes in at massive cost.

As is, Bitcoin is too complicated for most people to get their head around. Having so many elements at play (AR$, US$, mining on either, clients for either, etc) and needing to distinguish between two cryptocurrencies... I can only imagine it would make a lot of people simply desist, as it's something they won't understand, and it's wise to stay away from something you don't understand particularly when money is involved. That's not even considering the whole extra point of failure it adds, the difficulties bootstrapping the currency (51% attack much more likely on a small, new currency), the mess with clients and websites, etc...

Imagine a security hole is found in your fork, are you taking responsibility for it? Because you are not even anonymous, and Argentinian people are not particularly peaceful when they lose money.

I read the second part and as a software engineer I can only see a nightmarish scenario there. Extra complexity being thrown around as nothing happened. Every single addition you mention there is a gargantuan task on its own. As big as Bitcoin itself, that's actually struggling to finish implementing the original plans as we speak, after years being scrutinised by many people. It feels like when my cousin tells me about this idea for a game and comes with something even the biggest studios in the world wouldn't dare to try.

You're right. Bitcoin is strange and suspicious enough to the vast majority of people.
If only one of the many Argentines with offshore accounts dared to set up an exchange...

http://elbitcoin.org - Bitcoin en español
http://mercadobitcoin.com - MercadoBitcoin
realnowhereman
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May 24, 2012, 10:33:55 AM
 #87

Provided that AR$ are bad money, a cryptocurrency strongly linked to AR$ offers no significant advantage. Just an extra hoop and something else to worry about. Mining would be required that would be much better invested in BTC.

I'm not suggesting a "strongly linked" cryptocurrency and AR$... I'm suggesting a cryptocurrency like bitcoin except an independent chain.  That's it.  There is no "link" other than it becomes possible to run an exchange with AR$.  It's not possible to run an AR$/BTC exchange, but is possible to run an AR$/Argencoin exchange.

You're right that mining would be required, but that could be done with any PC and I'm sure they already exist.

The money you suggest would be better invested in BTC: I agree completely... but the essential problem being addressed here is that there is no practical way for that to happen with the rules the government has in place.

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May 24, 2012, 02:46:38 PM
 #88

[Self-fulfilling prophecies] Argentine President Fernandez: "Money in Itself" Is Worthless
May 24, 2012 • 7:47AM
During a bilateral meeting May 18 with Angolan President Jose Eduardo dos Santos, Argentine President Cristina Fernandez de Kirchner made incisive remarks about the insanity of the current, collapsing global financial system, which is based on the idea that money is worth something.

http://larouchepac.com/node/22798

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May 24, 2012, 03:06:40 PM
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[Self-fulfilling prophecies] Argentine President Fernandez: "Money in Itself" Is Worthless
May 24, 2012 • 7:47AM
During a bilateral meeting May 18 with Angolan President Jose Eduardo dos Santos, Argentine President Cristina Fernandez de Kirchner made incisive remarks about the insanity of the current, collapsing global financial system, which is based on the idea that money is worth something.

http://larouchepac.com/node/22798

Coming from a government and central bank used to print money at will without any backing, this is completely understandable.

CFK is absolutely clueless and it shows every time you just let her in front of a microphone. Dunning-Kruger effect in full force.

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May 24, 2012, 06:04:46 PM
 #90

Provided that AR$ are bad money, a cryptocurrency strongly linked to AR$ offers no significant advantage. Just an extra hoop and something else to worry about. Mining would be required that would be much better invested in BTC.

I'm not suggesting a "strongly linked" cryptocurrency and AR$... I'm suggesting a cryptocurrency like bitcoin except an independent chain.  That's it.  There is no "link" other than it becomes possible to run an exchange with AR$.  It's not possible to run an AR$/BTC exchange, but is possible to run an AR$/Argencoin exchange.

You're right that mining would be required, but that could be done with any PC and I'm sure they already exist.

The money you suggest would be better invested in BTC: I agree completely... but the essential problem being addressed here is that there is no practical way for that to happen with the rules the government has in place.

If your target market can only realistically use AR$ to exchange them, it will be strongly linked to it any way you look at it.

Nobody is going to use anything else other than Argentinian Pesos to trade a cryptocurrency exclusively used there. Foreign currencies come with a premium there, so people keep them if at all possible.

And I didn't say that money would be better invested in BTC. That's also true, but what I said is that MINING would be better invested in BTC, negating the point of mining this other alternative currency that simply is very unlikely to achieve any traction.

IMO the best starting point for them is to start offering services online, but this cannot be their main job as they will have to patiently wait for their opportunity to convert these BTC in currency.
See here for reference: http://www.bitcoinclassifieds.net/Services/

For instance, this chap http://chrisacheson.net looks like a decent dev, I wouldn't think any less of him if he happened to be from Argentina  Tongue

I'd gladly convert their BTC to a currency of their choice at market rates, with little to no commission. But I rarely visit Argentina.

So basically this is a hindrance to adoption but it would be alleviated by a higher presence of bitcoin businesses there, so they could use their BTC directly without needing conversion.

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rdponticelli
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May 27, 2012, 04:00:42 PM
 #91

So exchanges are needed - but how would one do that?
I have the same problem in my country - there are no bitcoins to be had, so difficult to get any business going using it. But starting an exchange means selling bitcoin for the local fiat - why would one do such a thing, if one sees the ARS dropping and BTC rising? If you're fan enough of bitcoin to set up an exchange, you're probably also more keen on keeping BTC than ARS anyway.
Especially if your only way of getting those bitcoins are to convert ARS to USD illegally, then exporting those USD illegally to an exchange where you can buy the BTC you need to sell.
I'm not criticizing, I'm genuinely curious, because I wanted to set one up locally (at a small scale) to help get bitcoin going, but I just don't see how.

Where are you from?
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May 27, 2012, 04:12:45 PM
 #92

Extra complexity is not "free", it comes in at massive cost.

Yes, I'm well aware of it. Thanks for the advise, anyway. It's really appreciated.  Wink

As is, Bitcoin is too complicated for most people to get their head around. Having so many elements at play (AR$, US$, mining on either, clients for either, etc) and needing to distinguish between two cryptocurrencies... I can only imagine it would make a lot of people simply desist, as it's something they won't understand, and it's wise to stay away from something you don't understand particularly when money is involved. That's not even considering the whole extra point of failure it adds, the difficulties bootstrapping the currency (51% attack much more likely on a small, new currency), the mess with clients and websites, etc...

If anything anytime comes out of this, the idea is that it will be something that make things simpler for the people who can't understand bitcoin and everything related. If we can achieve that, great. If we can't, at least we tried...

Yes, it won't be easy...

Imagine a security hole is found in your fork, are you taking responsibility for it? Because you are not even anonymous, and Argentinian people are not particularly peaceful when they lose money.

I'm taking responsibility for everything I do. That's why I don't even need to be anonymous.

I read the second part and as a software engineer I can only see a nightmarish scenario there. Extra complexity being thrown around as nothing happened. Every single addition you mention there is a gargantuan task on its own. As big as Bitcoin itself, that's actually struggling to finish implementing the original plans as we speak, after years being scrutinised by many people. It feels like when my cousin tells me about this idea for a game and comes with something even the biggest studios in the world wouldn't dare to try.

Yes, maybe you're right and it won't ever advance a little bit... I haven't even touched the project for about 6 month now, and I hasn't even called for developers because I still don't know if this is the way to go. But well, we'll see... If at any time we see that this is the only way to go, at least some work is already done...
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May 27, 2012, 04:40:49 PM
 #93

Yes, maybe you're right and it won't ever advance a little bit... I haven't even touched the project for about 6 month now, and I hasn't even called for developers because I still don't know if this is the way to go. But well, we'll see... If at any time we see that this is the only way to go, at least some work is already done...

If you're interested in the computational/technical side of Bitcoin and want to continue learning and working on it, by all means please continue. I don't mean to discourage you.

I do think that these changes you propose won't help in the slightest with the adoption in Argentina. But that's a different matter. There are things to be done and alternatives to be tried that could be done globally and be successful.

If you've done research on the topic I'm willing to take a look and even help if possible. I have a number of ideas myself and we could assemble a number of people willing to work on this we can probably come up with something.

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June 08, 2012, 06:30:43 PM
 #94

“¡Qué Quilombo!”
http://feedproxy.google.com/~r/dailyreckoning/~3/19PftKxju08/

Quote:
"What seems peculiar about Argentina’s case is the government’s Herculean effort to ignore the immutable laws of economics in their pursuit of grand larceny. The country has seen five currencies in just the past century, averaging a collapse every twenty years or so. In 1970, the peso ley replaced the peso moneda nacional at a rate of 100 to 1. The peso ley was in turn replaced by the peso Argentino in 1983 at a rate of 10,000 to 1. That lasted a couple of years, and was then replaced by the Austral, again at a rate of 1,000 to 1. To nobody’s surprise, the Austral was itself replaced by the peso convertible at a rate of 10,000 to 1 in 1992. During the past four decades, when all was said and done, after the various changes of currency and slicing of zeroes, one peso convertible was equivalent to 10,000,000,000,000 (1013) pesos moneda nacional."

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August 19, 2012, 12:34:27 AM
 #95

Is there any easy way to send dollars/euros/pounds to Argentina

It took quite a time, but now, at least, there's an easy way to send funds with BTC Smiley

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