
Bitcoin interest spikes in Spain as Cyprus financial crisis grows - JumpCrisscross
http://www.wired.co.uk/news/archive/2013-03/20/bitcoin-spain-currency-run
======
dobbsbob
Bitcoin is also the savior for Iranians right now. Students who live abroad
can't receive or send money home, so they're now buying bitcoins with cash
locally, and their family is cashing it out 10 minutes later in the streets of
Tehran using localbitcoins.com and farsi ecurrency forums for a pretty good
rate too.

Bitcoin is going to kill a lot of money transfer companies eventually

~~~
TruthElixirX
Do you have a source for this? I find it very believable, but would like to
read more.

~~~
dobbsbob
Go on localbitcoins.com and type in 'Tehran'. There's also a very popular
mailing list/forums for trading in Farsi I have to dig up the link when I
leave my office.

Argentina has also embraced bitcoins en masse considering it's now illegal to
transfer any money out of the country, and no Argentinian trusts their bank to
not steal all their deposits. On payday in Argentina you see huge lines of
people at the ATMs withdrawing everything they own to keep under a mattress,
or smuggle to Uruguay to deposit in a stable bank.

~~~
caf
If it's illegal to transfer money out of the country, how are new bitcoins
getting in to the hands of Argentinians? They could mine a small amount, but
if they want to purchase bitcoins owned by someone overseas, they'll need to
transfer money out to effect that purchase, won't they?

~~~
Calcite
Tourists have bitcoins and are willing to trade them for pesos at a much
better rate than the ATM.

------
wklauss
So the old saying goes that correlation does not imply causation. Why are
spaniards, but no portuguese or italians or irish seeing this spike in
bitcoin-related app downloads?

Theres a far more simple explanation that just sticking the "its Cyprus
fault". Several popular spanish blogs and newspapers have run big stories
about Bitcoin recently (Xataka, El Mundo...). That probably has sparked
curiosity among spaniards on the Bitcoin phenomenon. Simple as that.

~~~
analog
Spain's economy is in a pretty bad state at the moment. Worse than the other
countries you mentioned as far as I'm aware.

In the town where I live the local police hadn't been paid for two months, so
they made up their wages by setting up checkpoints and fining drivers.

When you're seeing that level of dysfunction it's not hard to see how the
situation in Cyprus would make people question how safe their Euro accounts
are.

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cs702
I'm not at all surprised. The decentralized nature, extreme versatility, and
optional anonymity of Bitcoin make it an ideal vehicle for storing value in
the face of financial crises, collapsed economies, toppled governments,
military conflicts, etc.[1]

\--

[1] My full thoughts on the matter: [http://cs702.wordpress.com/2011/05/29/on-
the-potential-adopt...](http://cs702.wordpress.com/2011/05/29/on-the-
potential-adoption-and-price-appreciation-of-bitcoin-in-the-long-run/)

~~~
sliverstorm
Maybe better than a collapsing currency managed by a collapsing government,
but hardly an _ideal_ storage vehicle. Much too volatile.

~~~
johncagula
the volatility will decrease as more people start using it

~~~
dublinben
That hasn't been the case so far. It has become more volatile as more people
enter the market.

~~~
oleganza
Do not define consistent growth with volatility. As Bitcoin is getting more
valuable in the eyes of more people, its price necessarily must grow. If it
doesn't, it means only one thing: everyone bought (or didn't buy) all BTC they
wanted and not much trade is happening.

Draw the trend line and see the variance of 2-day average around that trend.
The volatility is silly compared to how much you can gain if you invest early.

------
technotony
Maybe we should gather together a group of hackers and fly to Cyprus to launch
a Bitcoin currency to help people restart their livelihoods. Opportunities
like this don't come around too often.

What do you think HN community?

Edit: By launch bitcoin currency I mean raise awareness and tailor existing
bitcoin tools to local needs

~~~
ChuckMcM
ROFL, seriously? Feel free to try to get the Cyprian government to adopt
Bitcoin as legal tender but be aware that putting the national reserves into a
commodity that can be "stolen" in its entirety in about 30 seconds of computer
footwork and it doesn't pass the sniff test. The original gold standard,
flawed as it was, depended in part on the fact that it was infeasible to
actually steal all the gold out of the reserves. (Hence Goldfinger's devious
plan of simply making it unusable)

As a research project though this idea is fantastic, go through and figure out
all the things that would have to be true to base the Cyprian economy on
Bitcoin. Start with a solid Micro and Macro economic model of the economy,
factor in reserves and currency transfers. There is a lot of data you can
gather by going over Argentina's economic policies and their actions with
regard to currency. A great way to learn from that is to say "This is what
Argentina did, this is how you would/wouldn't do that with Bitcoin."

Economics is challenging because it seems very very squishy as a "science"
(the gears in the machine are people after all) but there is a lot of really
solid stuff which can inform on the question of what role currency plays in an
economy, politics, and global trade.

~~~
zevyoura
> Feel free to try to get the Cyprian government to adopt Bitcoin as legal
> tender but be aware that putting the national reserves into a commodity that
> can be "stolen" in its entirety in about 30 seconds of computer footwork and
> it doesn't pass the sniff test.

I'm not a Bitcoin expert, but my understanding is that you can encrypt a
wallet and store it offline somewhere protected, like a safe-deposit box at a
bank. I'd expect any large scale and bureaucratic organization with Bitcoin
reserves to have those kinds of safe guards.

~~~
pseudonym
The thing is that for a national currency, multiple sources have to agree that
"yes, this money is not in this account anymore" for money to actually move
from point A to point B. If I write a check, I can send it to person B. I can
then go and put a stop payment on it, which prevents them from cashing it. Or,
if they got my checkbook somehow and wrote themselves a check, I can go to my
bank and say "This was a fraudulent check" and go down the legal road. These
are things that happen many, many times on any given day, and the same goes
for things like debit and credit cards.

Bitcoin, on the other hand, by it's own proselytes, is an "anonymous crypto-
currency" with "no chargebacks" and "no way to recover a lost wallet", as if
any of those things is a benefit to any nation, any consumer, or any person
who's ever had to access a "recover password" form.

Bitcoin has it's uses, and is fantastic under certain circumstances. But this
is not one of them.

------
ionwake
I love you guys.

1 year ago, top comment on Bitcoin article "worthless fad"

2 weeks ago "I will feel stupid if those guys were right"

Today "Im not at all surprised"

I guess this is how we see a community slowly come round to the idea of
something. I am just suprised it took HN this long.

~~~
jellicle
Yep, it's basically the textbook trajectory of a speculation bubble.

Once you get 90-year-old grandmas wandering around trying to put their money
in "coinbits like I heard about on Oprah" then you'll know the end is nigh.

------
anonfunction
Central banks are losing credibility, fueling the market for Bitcoins.

[http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-
fo...](http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-for-
bitcoins-.html)

~~~
slg
Just like anarchy isn't the answer to a poorly run government, I don't think
the answer to a poorly run central bank is to go to a currency which isn't
supported by any central bank.

~~~
dmm
Markets are good at finding prices. Why not use a market to find the price of
a currency?

~~~
uvdiv
Markets aren't good at finding prices for pseudo-"assets" that have no value.
A bitcoin price of $0 is a valid market equilibrium, and a stable one.

Your argument is a rationale for a commodity currency. Markets _are_ good at
finding prices for high-volume competitive commodities such as wheat [0]. No
one will ever turn down a wheat dollar: you can eat it.

[0] <http://www.google.com/finance?q=WEAT>.

~~~
dmm
Gold can't be eaten. Why is it so expensive?

~~~
dualogy
A bitcoin can't be eaten, why is it worth $70?

Maybe... BECAUSE it can't be eaten and has "no (economic) use". Think about
it.

You save your excess production for future consumption (your retirement and/or
your offspring) -- in apples and burritos?

~~~
dmm
;)

------
fierarul
And at the all time high of $70/btc they couldn't have picked a better time to
invest! Pump and dump in progress.

~~~
kristopolous
Although I'm just a lowly programmer I feel that a swift and dramatic price
crash is in the cards right now. And then; then I shall buy.

~~~
ewillbefull
> And then; then I shall buy.

This is why it will not crash long enough to give you the opportunity. That's
the nature of the market. Everyone else is going to be doing the same thing,
especially speculators. It will probably crash soon enough, but some negative
event will need to trigger it.

And it'll have to be worse than a website getting hacked or a hardfork, which
were the kinds of things that caused crashes years ago when the market was
younger.

~~~
pseudonym
>And it'll have to be worse than a website getting hacked or a hardfork, which
were the kinds of things that caused crashes years ago when the market was
younger.

Actually, despite the market being older, there's still only one major
exchange. If there were another competitor to MtGox that was moving the same
volume, I'd agree with you; but as it stands we're still only a MtGox hack or
crash away from some major changes in the BTC->USD prices.

~~~
unabridged
This is a big issue, the next biggest USD exchange has about a -10% price
difference and I'm not sure what that means.

~~~
joezydeco
Are you talking about BTC-E? Because I noticed that as well, until someone
pointed out that they're in Russia and it's nearly impossible to move USD out
of there, making arbitrage just a nice idea that can't really happen.

------
nazgulnarsil
This is much more likely to be the result of FinCEN ruling being favorable for
the Silicon Valley Bank/MtGox partnership, paving the way towards easy bitcoin
purchases in the future.

------
dmm
Europeans buying BTC because of the crisis seems unlikely to be driving the
latest rally because EURBTC is rising similarly to USDBTC.

~~~
mikeash
Wouldn't any significant difference between the two create an arbitrage
opportunity that would immediately correct them back to where they were? Any
imbalanced triangle in exchange rates can't last long.

~~~
phyalow
I have been building an arbing program for bitcoin over the last couple of
weeks, you need about $3000 US for liquidity and size (and not to get eaten up
by fixed fees etc) over exchanges. So far I've made 2.5K NZD. (42BTC)

This is over and above the monstrous returns in BTC over the last month!

~~~
dmm
That's less than I was estimating. Is this custom development? Do you need
more capital?

------
sc0rb
I've been to Spain multiple times. A lot of places didn't even take credit
card. Good luck getting people to use an internet currency.

Bitcoin is not ready for prime time yet. I can't wait for some malware to
empty everyone's wallets...

I'm guessing most USA based commenters here know nothing about Spain.

~~~
melenaboija
mmm...

What do you mean with 'A lot of places didn't even take credit card'? Are you
sure you've been in Spain?.

I guess YOU know nothing about Spain.

[http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomin...](http://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(nominal\))

~~~
sc0rb
I was in Madrid three weeks ago for work. I took my clients out to dinner and
had to pay in cash... It happens often.

The GDP of the country has little to do with credit card use. I was surprised
when I went to Australia and discovered that Debit cards are a new thing that
required marketing to spread. Credit cards were in wide use but paying for
things directly out of your bank account with a card is still relatively new.

Are you one of the many Americans that don't even have a passport never mind
exploring anywhere that doesn't take your cheap money?

[http://www.theexpeditioner.com/2010/02/17/how-many-
americans...](http://www.theexpeditioner.com/2010/02/17/how-many-americans-
have-a-passport-2/)

------
tocomment
Is there an easy way to buy bitcoins? I tried coinbase and it said it had hit
the 24 hour rolling limit whatever that means.

I then signed up for mtgox but all of the funding options look really onerous.
Why can't I use ACH or a credit card?

------
fesja
There is a simpler reason. The biggest blog of web/apps in Spain
(<http://www.genbeta.com>) has written several articles about Bitcoin this
week so there have been more downloads thanks to that.

Don't overthink ;)

~~~
dagi3d
and not only technical blogs have written about bitcoin. also more general-
interest newspapers have recently published articles about it. and also it
turns out that this article only speaks about the apps downloads but not about
how much money has been exchanged, so imho it's a little bit unfair to speak
about correlations or capital flight as others articles suggested

------
lowglow
I would buy gold before I invested in bitcoin. At least I could use gold to
make something. The value in the end lies in utility I suppose.

~~~
jhales
The value that gold derives from industrial uses is minimal today and
practically non-existent historically. Assuming you are talking about jewelry?
In that case it's important to consider how much of it's popularity in such
matters depend on its ability to be scarce and store value making its value
derive from a very similar psychological circle as bitcoins.

------
thezach
I'd rather buy Euro then I would buy bitcoin

