This won't work.
Our problems go way beyond having a way to store our wealth
It's literally impossible to do bitcoin transactions in normal circunstances because this is not San Francisco and your regular store doesn't even have internet access, we have one of the worts internet acess in the world [1].
Then there is the problem created by the violence/crime[2]. I myself have to leave my phone at home everytime I go out, there is no way to take public transportation regulary without suffering a robery, it's just so common that it became a meme within Venezuelans.
There has been so many cases where people has been killed over the most stupid and trivial things to the point that if you google from venezuela "lo mataron por ______" (Murdered because ____) you get pages and pages of crazy reasons of why venezuelans have killed other venezuelans. Fast examples:
Murdered for playing carnival (throwing water ballons to other ppl during carnival, venezuelan tradition) https://www.el-carabobeno.com/lo-mataron-de-un-disparo-por-j...
Murdered to steal 60$ he had on his pocket: http://runrun.es/nacional/337760/monitordevictimas-mataron-a...
So now imagine someone figures out that I have bitcoins and that they have a value of lets say 300$. There is no fucking way I will risk my life that way.
So in order to use bitcoin in Venezuela i have to do this:
1. Risk my life by having to pull my phone or using my phone outside.
2. Risk my life by letting others know that I own/hold bitcoin.
The merchant has to:
1. Fight all the problems to be able to accept it (electricity problems, internet access).
2. Hope that someone doesnt just come into your store and steal your hardware.
3. Gov crazy actions.
------
It doesn't fix our economics problems, it doesn't fix our social problems.
And thats what this post was about, the guy intends to fix our economy or "Solve Venezuela’s Hyperinflation" by just giving away free bitcoins.
P.S: Me (and every other venezuelan) would gladly take the free bitcoin. But it will just make me have some extra $ held in some bitcoin wallet, I won't ever use it to go "buy coffe", most likely every young venezuelan who gets free bitcoin will use it to leave the country and scape from this madness
Thank you for injecting your experience. Its always good to see comments from people who are actually there!
Additionally, the transaction fees have dropped not because of the introduction of LN or batched transactions or SegWit adoption, but because of the decline of Bitcoin transactions in general. Enough retailers have stopped accepting Bitcoin that there are fewer transactions and the fee-market pressure has lowered. Adding in an entire nation of people using Bitcoin multiple times a day, even with some of them on LN, will bring usage and fees to unseen-before levels.
That's one theory. Another theory is that bad actors were spamming the mempool and have stopped.
A quick look at historical mempool stats: https://dedi.jochen-hoenicke.de/queue/#1y
Makes it look far more likely certain people with an agenda were spamming the network.
Both Steam and Stripe stopped accepting Bitcoin, that's a fact.
It's only logical that people stopped transacting when fees grew sky high.
It would be extremely expensive to spam the mempool that extensively. It's totally implausible that some party was spamming it for the length of time that Bitcoin was suffering from extraordinarily high fees (e.g. >$10 per transaction).
Can it happen again? It's a very serious attack.
What if genuine (non-spam) on-chain transaction demand increases 10x?
Would it be harder to spam if block size limit increased from 1MB to 32MB or 1GB?
This would have never been possible with BTC, why? Mainly because the meal's cost was .5 NANO, which currently amounts to ~5 USD, that would have been the cost of the transaction fee alone for BTC, or even more. Nano is feeless and has transactions taking 10 seconds on average to complete.
Nano is a cryptocurrency that is already making an impact in Venezuela specifically, check it out. Bitcoin days are numbered.
Tweet: https://twitter.com/Mrlutavo/status/963948510679830528
Nano's website: https://nano.org/en
Please, stop shilling.
There couldn't be a more relevant cryptocurrency for this than Nano. Especially because Nano isn't mined, it has a fixed supply that was distributed via faucet by solving a very complicated captcha. Many coins went to people in Venezuela because they found solving captchas a more profitable way of spending their time than a real job. So Nano is already popular in Venezuela and does a better job working as a currency than bitcoin.
I have a very favorable opinion of the technology behind Nano and not so favorable of BTC, so my post might be regarded a shill. However, given the reasons above I think mentioning Nano is relevant to the thread.
If you're genuinely concerned about astroturfing or shilling on HN, please email us at hn@ycombinator.com so we can look into it. One thing we'd do is look for a pattern of such behavior. At first glance, I'm not seeing that here, and the Venezuelan connection seems specific enough not to be forced.
I realize that he tried to address this in the article, but the reasons are contrived. And the "$5 wrench attack" simply won't stop when you only give up one wallet.
[1] https://www.npr.org/sections/parallels/2014/03/24/293874845/...
You're not going to securely store anything in Venezuela until order and a functioning government system is restored. Venezuela is an entirely collapsed nation at this point. You're lucky to have any access to electricity to use Bitcoin and things are still getting worse there.
Safely store your Bitcoin. Gun to the head, you lose your Bitcoin and your life if you don't give up whatever access is needed.
You store your USD in your home (or wherever). Gun to the head, you lose your dollars and your life if you don't give it up.
Plausibly given the extreme murder going on there, you lose your life regardless if it becomes known you have any money, whether it's in USD or Bitcoin.
Take "PlayPump" as a word of caution. https://en.wikipedia.org/wiki/Roundabout_PlayPump
Massive charity handouts almost always end in dismal failure. Because the philanthropists don't understand the core problem, and thus the money is inevitably wasted.
----------------
Instead, Bill Gate's model of "Economic Philanthropy" looks like it can truly scale. Bill Gates sells malaria nets and vaccines to the people of Africa. Why?
Because if the customer doesn't want to pay for it, its probably because the customer knows something you don't know. Malaria Nets were the solution: the people of Africa buys it, and that's how we know that its a good solution.
Bitcoin is already a potential solution to the people of Venezuela. If the people of Venezuela believed in Bitcoin, they'd be buying it. They're not dumb. Very likely, for reasons unbeknownst to us, they've chosen to do something else. We have to trust THEIR decision on this. After all, Venezuelan citizens are living in the crisis. They likely know more about their own situation than any Goldman Sachs executive who has lived in the USA.
Alternatively: if BTC is a solution and Venezuelan citizens are buying up BTC, then the problem will solve itself without need of a handout. IIRC, I've heard some stories about some businessmen in Venezuela using BTC before. But I live thousands of miles away: its hard for me to know if its an isolated curiosity or something that really is permeating the nation.
Any valid solution that benefits a Venezuelan Citizen, would allow us to "sell" said solution to those citizens. One-sided charity efforts are often doomed to failure.
In the Brazil situation the country had control of both currencies and could set the exchange rate. I don't see how using Bitcoin would eliminate the problem that the country is experiencing: an unstable currency. Most developed countries target around 2% inflation. Bitcoin has not had that kind of stability recently.
Additionally to be a good currency you want people to think in terms of it, e.g. I'm paying for this coffee with 0.005 bitcoins, not I'm paying for this coffee with $5 worth of bitcoins.
[1] - https://www.npr.org/sections/money/2010/10/04/130329523/how-...
Let's look at how it affects savers for example. LN channels have a maximum debit-delta capacity established by their BTC collateral. When one party is receiving BTC much more often than they're sending it, the LN channel reaches capacity, and a new LN transaction has to be created with its own collateral.
Any party that saves any portion of their revenue will quickly see their LN channels filled, and new ones required.
This essentially means that low-income savers, like what you would expect to see in Venezuela, will see their income eaten up by transaction fees for continual LN channel setup transactions.
The author should have looked to Bitcoin Cash, which will permit low-cost on-chain transactions at large scale usage levels, or Ethereum. Ethereum is processing 4X as many transactions, representing several times as much USD value, as Bitcoin per day. Its transaction fees are much lower and it has a comprehensive on-chain scaling plan that it is pursuing.
Semi-reliable internet only requires semi-reliable electricity. If you have neither of those, then crypto is pretty much useless.
Electricity is only needed to send a transaction.
> and internet first
You can send a transaction via sms.
Any reason why the Venezuelan Government would continue to keep SMS BTC transactions live?
IIRC, Venezuelan Government owns all of the infrastructure: electricity, cell phone towers, and the like. They're a socialist nation IIRC, and would easily have the power to crush this option.
it has obvious benefits (and some cons) over the bolivar or a foreign fiat currency, but ya know, baby with the bathwater
i look forward to seeing where this goes
but i do agree about LN mainnet not being appropriate to use yet
This is also not the first time I see these suggestions that bitcoin is going to solve all of Venezuela's troubles. Overall these suggestions strike me as foreign bitcoin holders hoping that the venezuelans will push up the value of their speculative investment.
"will soon be outlawed." >> You speak like it relies on any ones countries laws and a law would vaporize it. Anyone who read the SEC announcements, understand that even they seem to understand that.
It's sad so many people know so few things about history. Fleeing with your money was not the problem.
The article makes it look like everything would have been fine if people could transfer money with a password in their head.
Obviously not defending what had happened here, but that doesn't seem unreasonable in a time of war? Currently the US also levies an exit tax of around 25% on unrealised gains.
At the time it was also quite easy for wealthy people to evade taxes and not be prosecuted for it, for the better part of the 20th century.
I'm assuming, at the time, people had more pressing issues to deal with than their money...
>Fleeing with your money was not the problem.
Then they can't easily control Bitcoin.
Then they will increase prison sentences for owning Bitcoins and Bitcoin apps.
Then they will not be able to control that.
Then they will monitor the internet for bitcoin transfers.
Then they will outlaw any encryption.
Then they will send out undercover police who try to pay with Bitcoin.
etc.
No government well let anyone take away their privilege to print money.
A) Criminals/Bitcoins-enthusiasts/elites leave the country for the next unregulated paradise.
B) Criminals/Bitcoins-enthusiasts/elites overthrown the government due to strict policies regarding free trade.
The government can't enforce a laws by itself it needs his citizens to abide by those rules.
