
Bitcoin surges in Zimbabwe after military seize power - ca98am79
https://www.timeslive.co.za/sunday-times/business/2017-11-15-bitcoin-surges-in-zimbabwe-after-military-seize-power/
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pwaai
I feel like there are whales that simply manipulate the price based on news.
There's little evidence to suggest bitcoin has any usage in zimbabwe in
practical day to day usage.

Therelies the problem with bitcoin, why would someone in zimbabwe pay 1 week
of their salary to move 3 weeks of pay and still not be sure if the money will
still be there tomorrow?

~~~
kown223
if you didn't dealt with this you can't understand, but simply put, 1 week of
pay could be toilet paper next week(s), as it happened in Venezuela.

In my country some years ago, in a time of crisis for example the government
locked all foreign currency in banks, and auto exchanged it for the national
currency, at a rate set by them, it was robbery basically, prices would jump
up like 25% day to day, so the national current was worthless, oh, they did
the same with all the private owned gold in banks or so they could grab, sold
for national currency, same scenario I think it happened in Basil too,
government locking money in banks.

~~~
solaarphunk
.... but bitcoin frequently jumps 25% a day on NON-domestic news.... how is it
a better store of value?

~~~
nerdponx
That still beats hyperinflation or the currency collapsing outright. Also,
what other investment options do you have? I have no idea how easy or hard it
is to buy Vanguard shares on short notice in Zimbabwe.

~~~
charlesdm
Probably not hard for the elite or upper class, if you have access to the
internet and an interactive brokers account.

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rnhmjoj
I don't want to start the usual bitcoin scaling debate, but aren't the fees
extremely high now?

Using [1] an average transaction costs about 10$, this is particularly bad in
a poor country. I wonder if using a cryptocurrency is really the best option
in this case.

[1]: [https://bitcoinfees.earn.com/](https://bitcoinfees.earn.com/)

~~~
johnvonneumann
Average transaction cost has been shown to be a bad metric, context:

[https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newber...](https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newbery_responds_to_erik_voorhees_10_average/)

~~~
Kiro
24 hours? I want it to confirm in 1 second for even less fee than that. How
else can Bitcoin become a serious mean of payment?

~~~
ryanlol
How else can wire transfers become a serious means of payment??

~~~
Kiro
Do you pay online with wire transfer? My vision is a decentralised coin that
is as fast as VISA is perceived but a lot cheaper to transact. Obviously
that's not the vision of Bitcoin though?

~~~
johnvonneumann
Please don't start on the "Vision" rhetoric, look at the pipeline of core,
there is a clear path to VISA scale tx but it is an engineering challenge,
unfortunately the majority of people complaining and talking about scaling
blocksize (right now, with a terrible straight-up hard-fork) are (bad)
Operations people who are more than happy to shitcan half the benefits of a
decentralised, privacy focused system for a frankenstein system that in
reality still won't compete with VISA. Protip, if you're competing against a
behemoth incumbent, it's not enough to simply match their capabilities, you
have to surpass them. Lightning network fees will be cheaper than VISA, a lot
cheaper. Scaling a $120b financial network on a whim without a real
engineering team is not only a bad idea, it's downright fucking deplorable to
put users at risk.

~~~
Kiro
I've never said that Bitcoin Cash is any better. It may have lower fees right
now but it still takes ages to transact. I just doubt that any Bitcoin based
coin will ever match my vision and that we need something fundamentally
different. Maybe Lightning Networks will solve it but it doesn't seem clear.

------
dpflan
I'm intrigued by the idea that cryptocurrencies can exist and may help
alleviate economics crises, but in a dark plot twist can't governments
essentially own the majority of computing power, start their own
cryptocurrency, and outlaw all others? What does the world look like when a
decentralized concept like this is appropriated and brute forced into a more-
or-less centralized concept? (Or perhaps I'm way off track...)

~~~
wereHamster
Sure they can try to "outlaw" cryptocurrencies. Or the internet as a whole.
Good luck with enforcing it though…

~~~
RcouF1uZ4gsC
Or you outlaw changing cryptocurrency into fiat currency or providing any
goods or services in exchange for cryptocurrency. What would bitcoin's value
be right now, if it was illegal to convert into any fiat currency? No
established exchanges (just black market ones). In addition, due to the power
requirements, it is probably pretty easy to figure out who is mining.

~~~
mtgx
They can outlaw exchanges and then cryptocurrencies would "simply" become a
black market or "shadow" economy. But they can't stop it.

~~~
matthewbauer
But at that point wouldn’t people just use cash?

~~~
jstanley
Cash doesn't work over the internet and is not immune to central bank
meddling.

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lend000
Is this a legitimate news source? I have a difficult time believing this part:

> The events unfolded as Zimbabwe is in deep crisis. The economy has halved in
> size since 2000, an estimated 95% of the workforce is jobless and as many as
> 3 million Zimbabweans have gone into exile.

95% unemployment?

~~~
nostrademons
Fact check on it:

[https://africacheck.org/reports/is-zimbabwes-unemployment-
ra...](https://africacheck.org/reports/is-zimbabwes-unemployment-
rate-4-60-or-95-why-the-data-is-unreliable/)

Basically, it's complicated, and nobody knows what to believe. The 95% figure
is taken from the CIA World Factbook, and has been repeated frequently in
mainstream media and on Wikipedia. However, depending on who you ask and how
you count, it could be as low as 4%.

Keep in mind that not everyone in the world takes Western institutions (like a
national government, rule of law, and functioning economy) for granted. More
than half the world's population still lives on subsistence agriculture: they
tend a small plot of land, which generates enough food to feed their family
and trade with surrounding villagers. These people are still "employed" in the
sense that they work to support themselves, but they don't participate in any
traceable economic activity.

~~~
egeozcan
I thought "economic unemployment" is defined by the people who seek a job
while not having a current one. People who do not seek a job aren't counted.
It's been a very long while since the economy classes though.

~~~
nostrademons
...how do you define "seek a job" in a place where the concept of full-time
employment is alien?

Therein lies the rub. If you dig into the stats, the 10% unemployment rate
quoted in official government statistics - and measured accordingly to the
methodology economists usually use, excluding people who have "given up on
searching for a job - is based on a definition of "job" where they have worked
(in cash or in kind) for at least one hour in the past week. By those stats,
50% of the country was not in the labor force, 45% was "employed" (for at
least one hour a week), 5% was actively unemployed.

But then when you dig further, 75% of those classified as "employed" didn't
receive any payment for their work. They bartered. So now we're looking at
12.5% employment. And 84% of those employed worked in the informal sector,
i.e. maybe they did a couple hours of labor for another villager. Considering
the large overlap between the bartering & informal sectors, we're at around 5%
full-time employment in the country.

That shows the difficulty in applying models built for an industrial economy
to regions that still primarily function on an agrarian economy. The
definitions they use are nonsensical - they don't apply to how people
qualitatively work. (There're similar difficulties applying models made for
industrial economies to _post_ -industrial economies - how do you classify
someone who drives for Uber & Lyft at the same time while AirBnBing out their
house, doing Instacart runs, running an Amazon import-export business over the
Internet, trading in Bitcoin, and selling stuff on Etsy? Is that 0, 1, or 7
jobs? Are they a financier or taxicab driver?)

~~~
gowld
a more sensible approach is counting how many people maintain a certain
standard of living (determined by local or global metrics, whatever you are
interested in) without relying on government assistance or charity.

------
sangnoir
For additional context: when you see the $13,000 price - don't think that is
USD, even if it nominally is.

A year ago Zimbabwe introduced a surrogate currency known as the "bond
note"[1] that is officially pegged 1:1 with the USD. Because of Gresham's
law[2] (and higher utility of USD compared to the Bond note), the USD
disappeared from the market and now commands a premium. Just to confuse things
further, there are cash shortages even for bond notes as the central bank is
attempting to rein-in inflation - electronic money (bank balances) is the 3rd
tier of currency that is commonly available, and the bond notes command a
premium over electronic money that you can wire in and out of your account.

The Zimbabwean exchange in this story (Gollix) strictly uses bank wires to
trade (only Zimbabwean banks), so the denomination of the bitcoin price isn't
real USD, but something less valuable. If you were to sell your bitcoin on
this exchange, you'd pay a premium to convert you electronic balance into USD
- and incidentally, you'll end up with roughly the same price as other
exchanges (in USD).

1\. [http://www.dw.com/en/zimbabwe-introduces-bond-
notes/a-364964...](http://www.dw.com/en/zimbabwe-introduces-bond-
notes/a-36496437)

2\.
[https://en.wikipedia.org/wiki/Gresham%27s_law](https://en.wikipedia.org/wiki/Gresham%27s_law)

------
paxpelus
Yeah it is probably Zimbabwe that helped bitcoin increase in value. A country
that has 16 billion GDP and $600 GDP per capita [1] Even if all the people in
Zimbabwe tried to buy bitcoin that day, the value of bitcoin would remain the
same.

[1] -
[https://en.wikipedia.org/wiki/Economy_of_Zimbabwe](https://en.wikipedia.org/wiki/Economy_of_Zimbabwe)

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ca98am79
Actually the quoted price is from an exchange with low liquidity and the real
price is around $7k:

[https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-
act...](https://qz.com/1130147/bitcoins-price-in-zimbabwe-is-not-
actually-13000/)

------
robk
I find it hard to believe ANYONE wants to take the other side of this and sell
bitcoin for local currency. In cases like this or Venezuela, even at
exorbitant prices I can't see why anyone would want to hold the local
currency.

~~~
tmalsburg2
The article says that there is no local currency. Zimbabwe adopted USD and SA
rand some years back and the bitcoin exchange sells BTC for USD.

~~~
robk
Then where is the inflation? 1 usd = 1 usd

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Apocryphon
Could there be a future type of financial vehicle based on news? Since
political instability has market effects. From what I understand, prediction
markets are simply like sports betting. But what I'm thinking is something
that's pegged to currency / commodity price fluctuations.

Did the Saudi purge similarly boost crypto value as well?

~~~
sp527
You’re basically describing derivatives, which represent a multi-trillion
dollar market...

------
nikcub
A million a month in Bitcoin trade might not sound like much, but Zimbabwe's
total GDP is only $1.3 billion per month

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zman0225
very small correlation between situ in Zimbabwe and price of bitcoins.
[https://coinmarketcap.com/currencies/bitcoin/#markets](https://coinmarketcap.com/currencies/bitcoin/#markets)
Either a pump from Korea or China.

~~~
nrp
Agreed that this seems fishy. Given that Zimbabwe no longer has a local
currency, this seems to be USD->BTC on an exchange that happens to be in
Zimbabwe. If you have the financial freedom to move your USD, it seems highly
unlikely that you'd want to do so into BTC at a price much worse than at other
exchanges.

Can anyone familiar with Zimbabwe shed some light on what's happening?

~~~
zman0225
Not just fishy -- fake news all the way. There's just not enough capital out
of Zimbabwe to dictate a global market cap surge of 10-20 Billion (in the past
3 days)

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valuearb
This is a counter-example to the tired meme that crypto-currencies are only a
benefit for criminals.

~~~
tmalsburg2
How do you know that the people buying BTC in Zimbabwe are not criminals?

~~~
gatmne
I'd downvote you if I could.

How would you know that the people buying groceries in your store are not
criminals?

It's how a currency is used not by whom. I'd say guarding your life savings
against the reckless actions of your government is a legitimate use case.

------
Nbadal
Are there any other examples of this kind of surge happening?

~~~
gaius
It would be interesting to see what would happen to Uber prices

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DonHopkins
We can only hope the military seizes power in the US.

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tryingagainbro
Zimbabwe looks poor but I'm 100% certain that thousands of people have
billions and trillions of dollars stored at home
[https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zi...](https://upload.wikimedia.org/wikipedia/commons/thumb/3/3c/Zimbabwe_Hyperinflation_2008_notes.jpg/1280px-
Zimbabwe_Hyperinflation_2008_notes.jpg)

~~~
Grangar
That was Nigeria...

