I am pretty lucky that I only have to transfer money to between 2 countries that have heavily linked banking systems (US -> Canada), but I am not entirely sure what Bitcoin would get me in terms of transferring money. The fees are quite small on Transferwise, and also, I have…I don’t know what you want to call it…accountability? Reversibility? Reliability? Whatever fee I have to pay, the fact I get a known third-party with a papertrail is peace of mind.
It’s great to live a in developed world during the peace time.
Sometimes you have to transfer money in and out of the country at war with it’s currency in free fall and capital controls in place. At times like that “normal” ways take about 30% of the sum as transactional overhead, while bitcoin doesn’t.
Sometimes “normal“ ways just don’t work normally. Sometimes your government is actively working against your ability to transfer your money for whatever reason — be it drug laws or capital controls or what not. Sometimes you enter account number into the “normal“ system and field just turns red for no reason at all. Sometimes you have your access to “normal“ system severely restricted because of your legal status and residency rights.
So yeah transferring money between Canada and US being resident of either of them and not doing anything funny — is not a use case for Bitcoin.
Does this hypothetical situation you describe exist anywhere outside of the hypothetical situation posited by a character in a Neal Stephenson novel?
Seriously in reality the specifics of any sort of wild situation like the one you describe matter. Which countries? Which currency? Which kind of illegal behavior?
And (I ask out of ignorance) in this scenario you describe why would whatever group managing whatever bitcoin exchange or whatever is being used remain virtuous and not charge a 30% markup themselves?
> Does this hypothetical situation you describe exist anywhere outside of the hypothetical situation posited by a character in a Neal Stephenson novel?
That indeed is a bunch of real situations that have happened to me in 2014-2015 and some of that is still a thing. Check your privileges, sweet summer child.
Like seriously — for the first 30 years of my life it was outright illegal to have a bank account in a foreign country in my name. Not enforceable in practice, except I can’t make wires between two.
So 2014, fucking Russia is being Russia again, USD wired from foreign clients goes in... and is sold for UAH at government mandated rate. I sit in a third country, withdraw it through ATM. Guess what? It is converted back to USD at a market rate. Of course you can still bring cash or btc in and sell it at market rate plus some margin, but not 30 damn percent.
Sometimes it’s less dramatic and web interface of your bank doesn’t have regexp for IBAN format of destination country. Ridiculous but have happened as well, so I have proxied IBAN that starts with GB instead of UA and that always works.
This exact situation is happening now in Argentina. If someone sends you USD, they get converted to pesos at a ridiculously low rate. That's why most freelancers use crypto as a way to get their earnings.
But, like, the classic "society could collapse" fear-and-doubt, doom-and-gloom, grab-the-gold-and-the-burner-laptop-and-the-ammo argument can be used for just about anything.
Heck, even when society actually is collapsing, the argument isn't actually that great an argument!
I'm not even arguing that cryptocurrency couldn't have value in the scenario you describe. Just that genuine, specific, examples are more compelling than generalized scenarios. Generally speaking ; )
For example, all of the more specific examples folks talk about below (Argentina, etc).
Plus the parent poster made fair points, based on my limited knowledge, about accountability issues with cryptocurrency. And trust. Especially for nontechnical folk, and even for technical folk. Even (especially!) when society is collapsing, there's always someone out to scam you ...
For arguments sake, if someone is in the scenario you describe, what are good initial resources for a nontechnical person? For instance, should I use something like a coinbase wallet?
Well, I haven’t really talked about collapse of society here. I guess it’s difficult to even define what it means precisely. I could imagine that Sarajevo siege and few years around 1991 in former USSR could qualify.
Then again people who I talked to in 2014, were still a bit in denial till the start of school year and only then left the area directly affected by war.
My point is simple — you take the ability to access banking system for granted, when it’s far from universal. It’s also not as unrestricted and interconnected as bitcoin or internet itself. Sometimes you have a bank and a card, but your ability to transact is restricted. It doesn’t always mean that you sit in the basement hiding from daily artillery strike or wandering post-nuclear desert on a cool bike.
I guess I was more pointing out that right now it seems highly scenario-specific whether or not cryptocurrency can help in the way you described.
Doesn't it depend on the amount of money you're dealing with, what you may or may not need to do with said money in the near-future, your own technical competence/facility, and perhaps even the current state of cryptocurrency itself?
The government doesn't have to collapse for BTC to be useful for this (indeed, if it did, it'd likely bring down the infrastructure that BTC runs on!).
You just need to be in a situation where the law prohibits, or somehow restricts or severely taxes, the money transfer itself, or the use of that money to procure something you need.
Your 'real' situation contains fallacies. How is Russia involved in money transfers to Ukraine? UAH is hryvna. Ukraine has it's own currency since 1991. RUB is used in Russia.
Argentina is literally in that situation now.
The government charges a surplus 30% tax on any foreign currency purchase (cash, Netflix, anything outside the country), and only allows you to buy 200 usd a month legally.
The inflation rate is over 50% there, Bitcoin is more stable than the Argentinian peso.
Basically, the government has made it illegal for you to legally save money on a different currency than the Argentinian peso.
How would you even know that? Most of the value in terms of pesos would be from a small number of wealthy people who have a very strong interest in secrecy, and are likely using VPNs and other means to shield their activities. My guess is that, for wealthy people who are somewhat tech savvy or know someone who is who they can trust, it's a very good option. Certainly better than sending relatives on a plane with $9k in USD cash to get it to a relative abroad for safe keeping.
Yes, what you call hypothetical situation is my daily life. The country where I live, Argentina, frequently imposes heavy restrictions on buying and selling foreign currencies. There is a hard monthly limit of $200 per person per month and there are talks of reducing the limit even further.
Sometimes crypto is the only way of sending/receiving money from other countries reliably and cheaply.
Other countries are much worse, Venezuela for instance has destroyed the value of their money, so bad that people use it wallpaper.
A few years ago my company had to get US dollars out of Nigeria from the sale of the products we manufactured to pay the suppliers we have in other countries. Perfectly legitimate reason, but due to currency restrictions in Nigeria the finance guys had to use a scheme using a mix of crypto currencies (mostly bitcoin, I think, but not only). I don't know the cost of the transaction, but we barely covered it from the sales.
I heard there was a similar problem in Egypt, no idea if and how it was solved.
Iraq, Afghanistan, Pakistan, Syria, Libya, Iran, Kosovo, Venezuela, El Salvador: these are all places where war and strife and economic turmoil and the Wests' sanctions have led a significant number of their citizens to use Bitcoin - and other cryptocurrencies - to manage their lives and feed themselves, and their families.
It beggars belief that someone would so callously call the situation in these countries 'hypothetical'. Please, inform yourself about the war and strife that is occurring outside your own bubble. Its very important that we in the West stop ignoring the plight of the people our military industrial complex is targeting with their weapons.
Bitcoin has held things together in many such places.
Yeah, I didn't see the questioning as "is there really war someplace right now?" but rather "is there really a place where you (or your grandparents) can get bread and milk for bitcoins when normal money collapsed?"
We were specifically talking about BTC as a way to transfer money, as opposed to being used as money itself. I can't think of any place where you'd buy bread with BTC, but there are a few where you might be receiving BTC transfers, cashing them out locally, and using that money. A hawala based on blockchain rather than pure trust, so to speak.
Some time ago I had a bunch of Chinese yuan on a Chinese account that I wanted to transfer to Europe. I couldn't do a wire transfer, and I couldn't bring them as cash since my German bank didn't want them. I could either pull 500 € a day via ATM (with large fees), or just send it via Bitcoin.
I don't know if "reliable" is a good word for the legacy banking system. The banks in Cyprus for example siezed money from peoples accounts only a few years ago... its much harder for banks to seize bitcoin that you self-custody. Many wealthy people and now companies are beginning to view bitcoin as a safe haven asset because of its decentralized security model and censorship/seizure resistant properties.
Argentina did exactly that on 2001. Life savings stolen forever. To this day, most people save their dollars in their houses because no one trust banks in the long term.
