Topic: Venezuela Is Now More Than 50% Dollarized, Study Finds - page 2. (Read 709 times)

Venezuela adopted bitcoin/crypto because of TINA (there is no alternative). The case that occurred in the Venezuelan government had to adopt cryptocurrency due to a total economic embargo from the United States. There is no eternal friend and foe that is of eternal importance to Maduro. The policy taken is more political aimed at perpetuating its power amid the shock of the coup from its opposition rather than aiming at improving the country's economic conditions.

One reason why the role of cryptocurrency in Venezuela is displaced by the dollar is inseparable from the reduced economic support of China for Venezuela. As China's growth declines and crude oil becomes abundant after the fall of 2014 oil prices, China has little to gain from relations with Venezuela.

In addition, China is concerned about the Maduro government regime which is not recognized as a legitimate government by many countries in the World. In addition, China is also concerned about the allocation of aid use from China not in accordance with the China strategy (OBOR) as China worries about economic mismanagement and corruption under Maduro's leadership. The intensity of relations between China and Venezuela diminished when the opposition took control of the legislature and America gave full support to the opposition.

Venezuela is now undergoing a strategic partnership with Russia and continues to use the dollar as its currency exchange currency. Trump also began to be careful in dealing with Venezuela because Russia's involvement was very thick, with Russia's largest world oil company Rosneft marketing almost half of Russia's oil production. Rosneft is a large company and has a wide reach, too frontal with Russia could risk unwanted damage to the interests of America and its allies.

So when facing economic problems, crypto is only used as a tool or an alternative currency. When the world does not compactly adopt crypto, how can Venezuela minimize the use of dollars? Means the international world more trust in the dollar than crypto. This trust was formed not only because of the superiority of the American economy but also because of world reserves of 58% in dollars. so the use of dollars is considered an effective and fast solution to cure disease.

This will be the logical take on this, with bitcoin not being stable enough to be accepted as a currency and a couple more issues, they will slowly but surely dollarize themselves. They wouldn't be able to use bitcoin anyway even if it's not volatile as Venezuela has a power issue. If in any case they are able to solve this one way or another. Bitcoin might thrive in their country.

I don't think more than 50%, But if it was true, still lot of of people don’t have USD accounts and getting dollars in cash. Some stores started to accept PayPal, but they got tired of accounts being blocked or limited by the company pretty quickly. Cryptocurrencies are accepted in some places, but they are unstable makes them not practical for everyone. So, I think stores might be forced in the near future to accept online transfers from places like uphold, payeer, perfectmoney, etc. because is easier to get digital dollars from somebody abroad using these services and there are places where people can actually buy dollars this way without an international bank account.

Years ago, when europeans were afraid the euro would crash and lose all of its value. They bought big screen TV's, electronics. Anything they thought might hold its value better than fiat. Hyperinflation doesn't appear to be a major concern atm. I guess people truly believe militaries of the world will simply invade and steal from foreigners if their government bankrupts.

Investing 101 Protip In The Year 2020: "Worry not if you're government bankrupts on debt. They will simply invade foreigners and steal their capital and goods to compensate."  

Realistically, we should collectively be more concerned over matters relating to deficit and debt. The world it seems has gradually become more "reality optional" and its difficult for people to want to think about anything. Even topics strongly correlated with their own future health or survival.



The closest thing I've heard of is kong cash based cryptocurrency.

https://kong.cash/

But even that is electronic, if to a lesser degree. Based on smart contracts if I'm remembering correctly.

No. The assumption behind crypto is that electricity will always be there and the internet will always be there.

The internet is pretty robust in that it's designed to work even if some nodes are down. You would have to take down the entire world's internet cables to stop it.

Electricity is more vulnerable. Most electric grids are centralised and can be hacked by hostile countries. And they usually need fuel to power them, so if a country runs out of access to coal or gas, then they're stuffed. Solar panels only work when the sun shines and wind turbines only work when the wind blows, and battery technology is still in it's infancy so power can't be stored.

Venezuela after trying to have its own cryptocurrency too unable to recover from the economic collapse. The oil backed Petro initiated by the President gained the attention of the entire world, by the improper execution made it a failure. Later as the citizens have ignored the usage of their own currency and moved to USD small progress in the economy is achieved. Maybe if Venezuela has succeeded out of using cryptocurrency more countries could've got into it.

   With this part I agree totally! Rich and developed countries will adopt crypto-currencies first. With money you can buy equipment, with
good equipment you will have better infrastructure. In rich countries people are more open minded, they don't live under tough regimes.
   Venezuela is in huge problems for years, thorn apart in fractions. They have problems that crypto-currencies can't solve.

I wonder why there was many frequent black outs when bitcoin was being used as the a currency in Venezuela. If electricity was the only issue to use bitcoin, there are many portable generators sold in stores. That's what we've use when our city has been hit by a typhoon.

USD is always the number one choice when it comes to a failing economy but little do they know that USD will hit a recession in coming years and that's where bitcoin will once again be in use, as a safe haven.

Just shows that there is a minimum level of stability needed for crypto to be widely-adopted. No doubt the the USD looks far more attractive. I wonder how things would have been if frequent blackouts was not an issue.

IIRC both USD and BTC were banned by the government. Would BTC have been adopted at the same rate as USD? I mean, it would have been harder for the government to confiscate bitcoins if they ever decided to start raiding homes.

I have this worry about cryptocurrencies from all the time. If there is a situation in a country then the first thing they stop is either Internet or electricity, it will be harder to use a crypto in that moment. Was there any solution for this in crypto.? Has anyone thought of something to solve this issue..?

I still have high hopes for the more stable African countries that are already accustomed to mobile payments. These countries usually have enough electricity to run their phones but majority of the population is still unbanked. That's one niche cryptos can still fit in if it cannot completely replace the existing mobile system.

For now. I can imagine a future run on mesh networks instead of centralized ISPs and cell data providers. Portable generators, including increasingly efficient hybrid solar powered ones, are becoming cheaper and more common too.

Bitcoin is problematic in conflict zones and downed electrical grids in these early days, but I believe it will be much sturdier within a decade or two.

If the zombie apocalypse ever hits though (or any other situation where the grid permanently fails), then Bitcoin is pretty fucked. But then so is the USD or pretty much any form of money. Bullets and food/water would probably become the dominant currencies in that case.

The reality is that buying a dollar that is resistant to inflation was the best decision for the citizens of Venezuela. A stable currency is needed for everyday payments. The study only shows the currency in which purchases are made by Venezuelan citizens, but this does not mean that many of them have not invested in Bitcoin. Most likely, people just bought it in the hope that its price will rise later.

That's the saddest thing about crypto adoption in poor countries.
Anyway percentage of btc usage in Venezuela is still pretty high so it is worth it anyway

Lack of electricity can really hinders the cryptocurrency adoption in Venezuela then they physical alternative is still the best option for their financial situation. Only few can really adopt crypto whos capable of maintaining their electricity needs.

Dollar is the safest option for the Venezuelan citizens right now. They cannot be relying on their own fiat. That is for sure. They cannot be relying on their own coin Petro either because that is another failure. Bitcoin could have been much better but with the regular blackouts in electricity, they will have to be back on the more basic. The US dollar is the most convenient since it is the most internationally accepted currency.

Another problem arose amidst the hopes of cryptocurrency "saving" a failing economy. Such real-life examples bring out the issues that needs to be addressed, and what are the possible hindrances to adopting cryptocurrencies in solving such cases.

Paper money still has advantages over digital currencies. They provide anonymity, fast exchanges, and also not relying on any technology aside from it existing on a paper.

policies that are not supported by society, will bring a turning point that is not in accordance with its objectives. Although the government has set the rules, the motion of trust in the government has not yet been maximized, and this is what prevents crypto from developing

I'd forgotten about the Petro!!!

Doesn't that illustrate that whether a currency gets adopted or not is down to TRUST?

If Venezuela had a competent government and they issued a cryptocurrency backed by oil - which they have vast quantities of - the Petro would have taken off. It failed because people didn't trust Maduro.

But people trust dollars. So that's what they've spontaneously adopted.

Am addressing this OP's opinion, I might not quote it