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?
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.
That's definitely a real concern for some countries, but Zimbabwe has only used other currencies for years. When I went 5 years ago, you could pay for your entrance visa in either USD, GBP, or EUR. All large grocery stores had that day's exchange rates posted near the entrance in USD, ZAR, and at least one other currency (GBP, EUR, or Botswana pula are the ones I remember).
Things have changed in the 5 years - Zimbabwe now has a (quasi)currency - the "Bond notes" which are officially 1:1 with the USD. Getting access to cash in this quasi-currency is hard, getting it in USD is well-neigh impossible^w^w expensive.
Historically, Bitcoin has had high short-run volatility but also strong longer-term appreciation trend. That means it's been a good store of value, but not one you want, ideally, to rely on in situations where you might want money on short notice with little control of timing.
(Whether it's reasonable to project that past behavior into the future is another discussion, of course.)
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.
There hasn't been hyperinflation in Zimbabwe for years. The main currency is USD, with some parallel use of South African Rand, Botswana Pula and Zambian Kwatsha.
No it doesn't. It has been several years since that was true. Big jumps these days are 5-10%. The recent drop during the BCH pump and dump didn't even get to 25% in day. I would encourage you to consult charts, as most of those memes are out of date.
Zimbabwe has been in a hyperinflation downward spiral for almost two decades now[1].
If you hold your Zimbabwe Dollars overnight, they are only worth a fraction of what they were the day before. In hyper-inflationary periods, people would rather buy goods immediately than hold onto cash because the cash depreciates FAR faster than commodities.
No, I wasn't joking. I was asking sincerely, if you're reason for holding bitcoin is that you want to be able to buy goods next week without worrying about inflation, why not just buy the goods now and avoid the risk of owning bitcoin.
But if you spend all your money on goods and then you need something else in a week or two then what do you use to buy it? Sell/trade the goods you already purchased? I think it makes sense to hold on to some form of currency.
Which form? At some point Zimbabwe economy was (is?) so fucked up that currency does not hold any value, so barter is all there is. Money literally evaporates overnight:
> The peak month of hyperinflation occurred in mid-November 2008 with a rate estimated at 79,600,000,000% per month
You can go anywhere in the world and use USD, or exchange it for local currency.
BTC is accepted pretty much nowhere, and it's difficult to exchange for any given currency.
I can't fathom for a second why BTC would be more popular than BTC at least on those terms. Exchanges may be more readily available for BTC, as USD movement is controlled, you need banks etc..
Especially given the level of technology required ... I don't think that Zimbabwe is realistically the driving force here.
It doesn't have to have any use in Zimbabwe to be attractive to a subset of Zimbabweans. Trading 1,000,000 USD worth of BTC in a month doesn't suggest any widescale adoption IMO, I do wish Bloomberg had gone a bit further into just how significant this actually is. Dramatic volatility in small, local markets is pretty standard in Bitcoin.
If you read about what has already happened in Zim, you'll understand why people would do that sort of thing with ease at even the thought of upheaval. I agree with you on the whales but man... back in the 2000s people were desperately trying to change fiat into anything at all that would hold value. Consumer goods like dvd players, you name it. Hyperinflation is no joke. On a side note in places like SA bitcoin is viewed as less volatile than fiat a lot of the time.
Yeah I hate these "Bitcoin is happening in (Insert African/Latin Country here)" type of remarks.
For Bitcoin to succeed, it needs to conquer the US market adoption and it is not even close to doing that. All price gains are just speculation and market manipulation.
That's not a counterpoint but a confirmation of the first part of the original argument. You just listed two examples of such apps that fail to influence America despite being huge in other countries.
To make a counterpoint you need to find something popular in USA with no uptake outside of it or something that influenced USA but came from outside.
It's also supposedly (I can't remember where I heard that, some tech channel on YT) the only non-Chinese brand that's popular at all in China.
[0] Admittedly I have no idea for context of the picture and had to get it from google pictures since I couldn't visit business insider, I keep getting redirected to a Polish version of business insider that has NO TEXT AT ALL (?!).
Also, what do people find so wrong with me pointing out that "here's 2 apps popular out of US but not in it" strengthens the "USA influences the world but not vice versa"?
If Bitcoin gains significant adoption overseas, that pushes up Bitcoin's value everywhere, USA included; geographical differences in price will be arbitraged away. The increase in price might or might not lead to greater US adoption, but it'll still benefit US holders.
You’re just pushing your axiom up a level. You’re still presuming US adoption is the measure of success. WeChat isn’t used in the US, but it’s still successful.
Bitcoin will conquer weaker currencies first. How could it happen any other way?
Even if you're not convinced until you see it conquer USD, you should still expect to see what we're seeing now[0]... weaker currencies falling before strong ones as BTC adoption follows along an S-curve of adoption.
Sure as it appreciates rapidly I agree. Eventually the expectation is the appreciation will slow down as X % of global currency/gold value is absorbed into the market cap of Bitcoin. At that point, you would expect to see more stability or at least slower appreciation. Then, the opportunity cost will be much lower than today.
Deflationary currencies generally will produce less frivolous spending, which is a good thing. Lower time preference [0] vs fiat high time preference of today's economy will result in much more savings and investment vs consumption spending.
Longer time horizons vs short termism that plagues markets now. Overall, an increase in prosperity and economic growth and decrease in debt and credit cycles (BTC immune to M0/M1 credit expansion and contraction = decrease in business cycle roller coaster)
Bitcoin is too big for a few "whales" to have a sizable effect on major price trends -- even if significant groups of them were somehow coordinated. This explanation is commonly used in general cryptocurrency forums and even some trading forums, but it really comes down to not understanding how markets work and trying to assign some meaning (not so different from religion). Whales are not gods.
The volume today was over $4 billion. Let's say you'd need 5% of that to move the market enough for people to take notice. (Given the large volatility, this actually seems conservative) Are you suggesting that there are people who are regularly buying and selling more than $200 million worth of cryptocurrency a day?
> It doesn't even have market makers or any real rules yet.
Blatantly false -- you clearly don't monitor crypto exchange order books full time (I do). Even most small-cap altcoins have active market makers running 24/7 for ALT/BTC, ALT/ETH and ALT/USD (where supported).
> But in such a tiny volume entity like bitcoin, any large player can easily move markets.
Do you know from experience? There are some extremely low market cap altcoins -- you should give it a try. I do not think manipulating markets for any length of time is as easy as sideline commenters seem to believe, and it certainly is difficult to make it profitable.
Also note that many of the highest market share Bitcoin investors were early crypto enthusiasts or wealthy venture-cap-type investors, not professional/active traders. If and when there is concerted market manipulation with hundreds of millions behind it, these early adopters are certainly taking heavy losses.
Do you know from experience? There are some extremely low market cap altcoins -- you should give it a try. I do not think manipulating markets for any length of time is as easy as sideline commenters seem to believe, and it certainly is difficult to make it profitable.
And even then, most pools are largely decentralized and heterogeneous -- controversial political/technical changes by the pool owner would absolutely trigger an exodus of hashrate from the pool. (As happened during the BTC/BCH fork.)
I don't want to start the usual bitcoin scaling debate, but aren't the fees extremely high now?
Using [1] an average transaction costs about 10$, this is particularly bad in a poor country. I wonder if using a cryptocurrency is really the best option in this case.
People in these countries don't use Bitcoin for daily purposes. The poor don't use Bitcoin. The middle upper class business owners who can't get access to large amounts of U.S dollars use Bitcoin.
They can have offshore bank accounts but getting the physical cash into and out of the country is tied up in mountains of bureaucracy and corruption. I met a guy in Panama who had to spend half his money getting the other half out of Venezuela. With Bitcoin it is actually possible to save and transfer Bitcoin to cash as needed. Carrying suitcases of hundred dollar bills around is not practical and getting cash in and out of a country like that is almost impossible.
This is a very good explanation of the scaling issues Bitcoin is having and how many could be solved if people understood more about how Bitcoin actually works (and SegWit for that matter).
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?
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.
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.
See Their's Law, good money drives out bad.[0] People will hodl Bitcoin and spend fiat, driving up the price of BTC in terms of fiat until it absorbs some significant portion of global currency value. There are only 21 M coins; a deflationary crypto currency isn't for buying coffee or micro-payments.
It is displaying similar qualities to Gold in countries where governments have debased the currency.
How can this be? BTC is deflating far faster than USD is inflating, considering USD purchasing power. So BTC can't be picking up USD's weakness, it must be a speculative bubble.
Because it's not at a steady state yet. At what price did you expect it to reach some semblance of stability? 0.10.. $10, $100... ?
Well, there are some broad metrics we can think about. If Bitcoin become a sort of reserve currency, or a digital gold, or a combination of both, shouldn't its total market value be a proportion of what currently occupies that title?
So, do the math. X% of Gold, or X% of reserve currency. Inject that value into 21 million Bitcoin (or the circulating supply at a given moment).
Here's a valuation prediction applying Bitcoin daily trade volume of 10% of foreign exchanges which are $5 Trillion[0]. This would price BTC at $100,000.
Only after it approaches somewhere close to these numbers, would you expect to see appreciation in the range of fiat inflation.
There is little reason to prefer Bitcoin to US Dollars or Euros for those looking to avoid the effects of inflation. There is nothing uniquely difficult about getting hard currencies on the black market in such places, it's simply that most people cannot afford it - and will not be able to afford Bitcoin either. It's a dumb suggestion from breathless fanboys who didn't really think about the actual problem before pushing their solution.
Torture only works if you are sure of the existence of such a thing. It's easy to order the police to go from home to home, confiscating valuables. It's a lot harder to know if someone has bitcoin, and if so how much they have. Even if you can get them to admit they have it, and give you access to n wallets, they may always have n+1
> Torture only works if you are sure of the existence of such a thing.
I don't think you comprehend the workings of "mass terror". Here's how it goes: we'll make you watch while we beat up your wife and kids until you tell us something worth knowing.
No evidence necessary. Pretty much everybody has some valuables, or knows someone who does, and if not who cares? It's your funeral.
Once again, the nerdy preconception that thugs somehow operate on a legalistic or technical basis is just completely wrong. You'll be the one "giving" the valuables to them, to make it stop.
Surely when these hypothetical thugs are going around beating people up and confiscating their paper money, they can spare a few moments to beat people up and take their Bitcoin while they're at it?
The 137,000 satoshi price quoted isn't an average - it's the price to have your transaction almost guaranteed to be accepted in the next block
It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction
I believe, dust collection is prohibitively costly. And if one's using Bitcoin any actively, they'll end up generating a lot of dust, I think.
At the current BTC/USD rates, I have a few dollars worth of dust. However, it's spread over 17 inputs, so it's basically unspendable. It would require ~3.1KB transaction so even at 30sat/byte the fees would be, like, 0.00093 BTC ($6.5 at $7K/BTC).
For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money.
Many wallets and users don't do dust sweeps anymore since it associates all the utxo's with a single user and reduces your privacy
Theres nothing wrong with having many utxo's of varying sizes - good wallets will give you a choice on how to select them when composing a transaction (such as Electrum) and you can sweep part of it back to yourself in what would otherwise look like any other transaction
I think it's important to consider the alternative.
In Zimbabwe, you could lose a significant percentage of your cash's value if you delay a purchase. Taking a risk that the other side of the transaction might not be as big of a problem if you can look at their account balance before the transaction begins.
Sure, you risk getting caught in a double-spend that is rejected from the blockchain, but if the alternative is to hold onto cash or to lose out on a transaction in a tough economy, you might be willing to take on that risk.
i think that's strawman at this point. even if bitcoin had 1GB block sizes, bringing the wait time to 1 block (10 minutes), it's still not going to be acceptable for POS. it's either going to be on-chain with no confirmations, or through layer2 protocols.
Orphan blocks are common, one block has never been considered secure. Early in Bitcoin, a best practice emerged to consider six blocks secure. So that takes an hour, best case.
(Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.)
So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.
Accepting zero confirmation transactions at POS is a different problem to fees (which are atm admitantly high but that should improve)
Merchant picks a solution based on who they integrate with - something like BitGo Instant[0], GreenAddress[1] or an analytics/fraud API provider that adds a risk score to a tx no different to a credit card transaction
You definitely do want it to be instant, but this isn't quite an apples-to-apples comparison.
That two-hour figure is the amount to get the transaction to the point of irreversibility so it can be re-spent without worry. The equivalent figure for credit cards is ~45 days and checks can take a week to clear.
But you're right, making transactions on chain is not going to be practical in an untrusted environment and it still depends on intermediaries.
What you're describing sounds like zero confirmation transactions which bitcoin used to support before RBF. You can't reliably take zero-conf in btc anymore though. So you have to wait for settlement to turn over goods or services.
Zero conf was never secure. Many did demonstrate double spends long before RBF was thought of.
Still, that argument was made against RBF and was enough of a hindrade to consensus that RBF was made opt-in. And it still is. So you are absolutely free to accept zero conf transactions, and take the risk, as long as you don't accept those who flag for RBF. Most wallets won't even make them by default (which in my opinion is stupid with the fees we have today).
The argument for a golden age before RBF isn't a good one. It was never reliable. And what little reliability it had is unchanged.
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...)
That would require the government being able to coordinate controlling;
1. Internet access
2. Sales of computers
3. Imports
4. Citizens not revolting against that (including people using and accepting currency, so buy and sell side)
All of which are possible but not trivial. I actually think it becomes orders of magnitude more difficult to do this with a decentralised system like BitCoin than it is with fiat currency issued by a central bank.
China is trying to do all that, but about 90% of bitcoins growth in the last 4 years has come out of Chinese investment in it for both speculation and mining. Even outright attempts to outlaw it has not slowed down participation practically at all.
The fundamental problem is that it is incredibly hard to provide only some Internet access, be they a state actor, public school, parent, etc. The design of the protocols impairs censorship efforts.
If you want to censor the Internet, you pretty much have to start with a whitelist approach of allowed IPs and domains, and then stringently audit those to insure they don't act as proxies.
All you have to do is arrest people converting rebel cryptocurrencies into the one you can use at the grocery store. Since every transfer of legitimate money is now in the blockchain, they'll be able to identify them pretty quickly. Not sure if a government in turmoil could do it, but it's easy for a stable repressive regime.
I agree the government doesn't get any benefit from decentralization and would just have a MySQL DB in real life to make corruption and whatnot easier, but cryptocurrencies only work if the government tolerates them.
how would a government pay to secure their blockchain? how would they find those dealing everything in bitcoin? One of the reason of URSS going down was the huge administrative costs of spying / investigating, keeping up the oppression on its citizens.
> how would a government pay to secure their blockchain?
What do you mean? Aren't they inherently tamperproof?
> how would they find those dealing everything in bitcoin?
A few people might live that way, but unless the entire supply chain is bitcoin someone will have to buy the food/gas/land they need with govcoin and sell it in bitcoin, thus getting caught.
> One of the reason of URSS going down was the huge administrative costs of spying / investigating, keeping up the oppression on its citizens.
Since ever single transaction is tracked, you can automate 90% of the work. Just look for businesses making the same amount of purchases but less sales, or people sending money to or getting money from accounts that aren't registered as employers or stores. With modern anomaly detection techniques you'd hardly have to torture anyone.
The USSR just didn't have modern technology. It would have taken a team of agents to tail a single person; the ARGUS-IS can track everyone in a 36 square mile area with a single drone.
>start their own cryptocurrency, and outlaw all others?
This would be a waste of resources. If you're not going to be decentralized, it's way less complex to have a mysql DB of everyones bank accounts somewhere, and much easier to hide corruption.
This right here is what is so frustrating about the general engagement with blockchains in the last half decade. On one hand, I am knowledgeable about the subject domain and witnessed businesses offering some ludicrous compensation for working on blockchains for them, but to be informed is to know how misguided all these people are about why blockchains are useful, and talking to peers who did get involved in some of these projects (especially circa 2013 ones) companies spent a lot on a fad and just as quickly ended the experiment because blockchains are not magic money machines.
They are only beneficial to establish a trustless data store. That is the only function they serve. If you don't need trustless consensus, you don't need or want a blockchain. If you are a state actor or some major corporation, you trust yourself already, and you don't need trustless data stores, and at corporate scale any interaction with other entities that might validly use trustless data (like money tracked between banks) has the entities involved capable of influencing force of law to maintain systemic trust.
That is why Zimbabwe citizens value it, and why a Fortune 500 or European state power doesn't need one.
Yes, if the government backed CC becomes the new fiat, and I assume only federal participants for mining/computation, then yes, shortcircuit straight to federal Excel spreadsheets!
There’s a nonzero probability Satoshi burned it. They could’ve burned everything they mined and just buy small amounts during the ramp and they’d still be a multi multi millionaire now, while maintaining heir anonymity, and helping secure the stability of their creation.
Not saying that’s what happened, just that logic hardly precludes it.
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.
It's easy to ban mining in a country when you control the backbone infrastructure. At which point there is no difference between cryptocurrencies and any other foreign currency.
A brain wallet can be confiscated by rubber-hose cryptanalysis.
It is more resistant, perhaps, to detection than cash on hand in foreign currency (though not necessarily particularly more than a foreign currency account where access information is memorized, depending on the threat profile of concern.)
Torture may be used to find out the user has bitcoin, but you can never be sure you got it all. If they give you access to n wallets, how do you know they don't have n+1?
A foreign currency account is not as easy to setup as a brain wallet.
> It's not hard to see why bitcoin has its appeal, no?
Since I gave the reason (added difficulty in detection, not confiscation) upthread, no, it's not hard to see why it has appeal compared to foreign currency for non-current savings (if you are spending in the domestic economy, which is observable by the authorities, the advantage of Bitcoin is mitigated) under certain threat models.
Actually yes it is. Physical currency inside a country is hardly the same things as Physical or digital currency outside a country. Having bitcoins (etc) inside a country is arguably less secure and far easier to confiscate.
A bank in North Korea is under the complete control of North Korea, a bank in the Cayman Islands is not. Now if you're trying to hide from the United States government then you don't have a huge number of options. But, no government controls all banking.
You still need to move your wealth into bitcoins just as you need to move your wealth into whatever else. So, assuming an oppressive government bitcoins become harder to secure as you still need a foreign bank account but now you need steps after that point.
...because censorship (in general) work so well in the past? the bitcoin blockchain generates 6 one MB blocks per hour, that's 1.6 KB/s. i can think of multiple ways to smuggle data in at that bandwidth. blockstream apparently also has satelites broadcasting the blockchain. good luck shutting that down. transactions are even easier. they're less than 0.5KB, something you can easily fit in a few SMS, or in a envelope.
Everyone would need to smuggle data out, 50%+ of the chain within the country is all that's needed to win.
You're not going to get everyone to use satellites to get data in and out. If you've ever been in an African country you'd know SMSs aren't on the cheap side either. You'd also know they have tools that can track and catch your VSAT dishes and fine you heavily.
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.
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.
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.
...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?)
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.
Which is a simple thing to look at when you're in a first world country with a functioning Unemployment Insurance office you can query to count such things. When you try to map that into different cultures and economic development statuses, it gets far fuzzier.
I can't independently confirm, but Zimbabwe has long been in a downward spiral of hyperinflation[1] and the Wiki article describes the origins and some of the effects on the economy.
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).
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.
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.
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?
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?
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)
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?