I'm the author of the thread. For what it's worth, I grew up as a refugee whose mother had to find incredibly inventive ways to send USD to family back home, where it was illegal to possess.
What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency. My hunch is that a lot of the value of cryptocurrency in those countries comes from the fact that it's been astronomically increasing in value, not that it's a great way to move money around remittance barriers.
I don't know anything but it's not hard to see how this might work somewhere like Venezuela. Cryptocurrency seems most useful for black marketers to get funds out of the country, which will create a demand for it. If ordinary people get cryptocurrency from relatives, they can trade locally to get local currency, then use it to buy black market goods. The local money recirculates and the cryptocurrency funds sanctions-evading imports.
Whether this is a good thing or not probably depends on what you think of illegal markets in desperate situations.
If you look at that thread, people are relying on a company called Reserve, that essentially issues its own currency (a 'stablecoin'). This is the part that I don't get—how is it cryptocurrency when you are relying on trusted third parties?
I've been trying to find coverage of Reserve from non-Bitcoin/Cryptocurrency publications - basically because I don't trust any of those publications - and I've not been able to find anything convincing yet.
This is a general problem I have with crypto stories: every crypto coin has a built in incentive for people who hold it to hype it so it's really hard to tell if actual regular users are finding it useful yet.
> What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency.
The final goal is not to be able to convert crypto to fiat, the goal is to keep everything in crypto. Do you think all this infrastructure is being build just to convert it back to fiat, what cypherpunks want is to destroy fiat.
I understand the final goal, but if I want to send my relative in Venezuela half my paycheck this week, how does she spend it on groceries and at the pharmacy before the Crypto Revolution comes?
Inevitably the answer is "some trusted third party" that turns it into a vanilla remittance.
I live in Argentina, not Venezuela, but here there are 3 ways to go crypto -> fiat.
- If you have a bank account you can go through crypto exchanges. Centralized of course.
- There are p2p platforms that connect buyers with sellers. So in the platform, similar to Binance p2p, you can see how many transactions other people have and buy/sell crypto from them.
- There's a black market which has home-delivery. So you contact them through the internet (you can find links in reddit and other sites, most go through Discord) and they send you a person with your crypto/fiat and make the transaction in your home. You can also go to their location if you prefer.
Not sure if that really answers the question, but if I was receiving remittances from abroad doing options 2 or 3 would be simpler and cheaper than using any traditional finance tools, which all require you to have a bank account in the first place (a LOT of people don't have one here because of the requirements to open one) and have higher fees and bureaucracy.
Once you have enough liquidity of cryptocurrency in the country this isn’t an issue. And the incentives to own cryptocurrency in a place like Venezuela is high.
But how, you can't use Bitcoin for day to day transactions due to slow settling times and high transaction costs. You could use some of the alt-coins, but how do you coordinate which to use and why would you trust it?
These pieces[1][2] on the economy of soviet Poland say there was a black market of US Dollars:
> "the government, which controlled all official foreign trade, continued to maintain a highly artificial exchange rate with Western currencies. The exchange rate worsened distortions in the economy at all levels, resulting in a growing black market and the development of a shortage economy.[25] The only way for an individual to buy most Western goods was to use Western currencies, notably the U.S. dollar, which in effect became a parallel currency. However, it could not simply be exchanged at the official banks for Polish złotys, since the government exchange rate undervalued the dollar and placed heavy restrictions on the amount that could be exchanged, and so the only practical way to obtain it was from remittances or work outside the country. An entire illegal industry of street-corner money changers emerged as a result. The so-called Cinkciarze gave clients far better than official exchange rate and became wealthy from their opportunism albeit at the risk of punishment, usually diminished by the wide scale bribery of the Militia.[23]"
> "As Western currency came into the country from emigrant families and foreign workers, the government in turn attempted to gather it up by various means, most visibly by establishing a chain of state-run Pewex and Baltona stores in all Polish cities, where goods could only be bought with hard currency."
>> What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency.
For all the harsh words you posted without evidence, thankfully you've at least admitted you don't understand much.
Your premise is that cryptocurrency is not "spendable currency" which is simply false. I pay people in hyperinflationary environments in cryptocurrency variants with low transaction costs and fast speed, and they in turn directly spend it on physical goods like food.
I think NFTs will transform the concept of ownership, and take power away from major corporations in the process. This is just one aspect of crypto that I think more than justifies its value. But there is a ton of hype and a ton of bad stuff going on yes, but that will be pushed to the background as it goes more mainstream. All people inside the industry think this is just the beginning and there is a lot of value to be extracted. Is it overvalued for what it delivers on today? 100%. But I believe it will catch up and surpass it soon. There are multiple singular companies that are more valued than the entire crypto market right now. It’s a drop in the bucket.
I don't understand the belief that any of this takes power from corporations. If you look at NFTs right now, big participants include the NBA, Sotheby's, and a whole lot of venture capital. What's the dynamic that's going to shut them out as they become more lucrative?
Creators of content controlling that content without the need for big corp involvement, which can be corporations yes, but also the little people. This could be access/distribution, royalties, licensing, and more.
The big corporations have binders full of techniques to take control of content from the little creators and claim it for themselves. A popular one right now goes: A one-person operation making and selling designs could find their online work subject to pointless DMCA complaints or even threats. They'd crumble at even the threat of a big corporation actually suing for infringement. Now the big company copies the individual's designs, and collects rent on something it didn't create.
An NFT is ... a digital receipt that “money” flowed at one moment in time. The referenced digital artwork or something is only referenced by an URI. That is ownership? Seems a very transformed concept to me.
My supermarket gives me an NFT in paper form every-time I buy something.
I think NFTs will transform the concept of ownership
The current concept of ownership appears to be that if I own something, broadly speaking, that means people generally agree (and the state, and ultimately their monopoly on force, will back up) that I get to say what gets done with it and who gets to make use of it, and that it's not OK for someone else to take it away from me without my consent.
If NFTs are going to change that, I'm not sure I like it.
What I don't understand about the crypto remittances argument is how the people sending and receiving them are supposed to convert them into spendable currency. My hunch is that a lot of the value of cryptocurrency in those countries comes from the fact that it's been astronomically increasing in value, not that it's a great way to move money around remittance barriers.