A once rich country, an educated population, a fairly developed economy, now on its knees due to monetary mismanagement with hyperinflation reaching legendary levels.
What better opportunity to showcase digital cash, the people’s currency, which can’t be inflated away by the whims of corrupt or well meaning bureaucrats and politicians?
An opportunity that Bitcoin Cash has taken and with both arms. It started organically, ordinary cryptonians online tipping Venezuelans. Then it took a more organized form as some entrepreneurial samaritans there established crypto to food pipelines.
Now there are rewards for getting Venezuelan businesses to accept Bitcoin Cash. How much they are rewarded is not disclosed, but there are “restaurants, bakeries, pizzerias, electronic stores and locksmiths across Venezuela” accepting Bitcoin Cash.
In addition there is the Bitcoin Cash Fund which has ambition “to help Bitcoin Cash (BCH) serve one billion users within five years.”
Shoot for the stars and you might land somewhere, but the situation in Venezuela might hopefully soon change enough. Their president recently announced plans to drop some zeros, just like that, and to back the now zero-lean currency with Petro, the bond-token.
Undoubtedly the widening of BCH adoption has exerted some pressure on the fiat money managers who after a tipping point might find it hard to get people in Venezuela back onto their funny money.
Nor would the government necessarily force them as some believe, including Paul Krugman, who says fiat has value because men with guns say so. What problem does crypto solve, he then asks.
Well, the men with guns problem, some witty cryptonians retorted, but why should men with guns prefer fiat over crypto?
Governments, and by extension men with guns, are paid through taxes, not central banks. Central banks serve commercial banks and keep an eye on them so that they do not print too much money through debt.
Governments, on the other hand, serve the people and for that service the people can pay them in BCH, eth, or moon tokens for all they care.
Which might explain why governments tend to u-turn after learning what all this crypto stuff is, and usually they then tend to even become enthusiastic about it. While central banks have reeed cryptos and keep reee-ing cryptos and probably always will until the younger bankers develop better crypto based tools for a new monetary system.
That won’t happen overnight, if it happens at all. It’s not something that can be forced, but by free choice. If they are persuaded then fine, if not then they can keep using whatever they want.
Plenty in Venezuela are being persuaded because there it solves an immediate and a very real problem. They basically have no monetary system, so cryptos are naturally a substitute.
Nor is it limited to Venezuela. Edge cases combine across the globe with bitcoin’s network transferring something like $8 billion worth a day, while BitPay processes a bitcoin payment every ten seconds.
Those are big numbers in a way and small numbers when we’re talking of a global arena. Just as Venezuela is seeing growing adoption, but still it is relatively tiny compared to the entire economy.
Yet tiny it has to start. Gradual and incremental growth is necessary because people need to be educated so they don’t throw away keys, current institutions need to adapt, coders need to refine and so on.
With Bitcoin Cash currently, however, what is somewhat unique about it is that it can actually start. Eth of course has little capacity at this stage, which will change in the coming months. Bitcoin is experimenting with a completely untried, in the wild, second layer.
While Bitcoin Cash has plenty of capacity and is willing to allow growth in resource requirements for nodes in a bet of sorts that if demand does so significantly increase then there would be businesses and entities across the globe that need to run a node thus making collusion difficult if at all possible.
In return they get a tried and proven network that is pretty simple in design and in its foundations while having plenty of capacity for 10 million transactions a day which can be increased to accommodate more.
In other words, they could arguably handle all of Venezuelan commerce right now. For Venezuelan demand to significantly rise, however, some time is needed.
But the seeds have started taking root in the country, and they might proliferate, potentially giving us one local where in some years time a complete production cycle is done through paying by cryptocurrencies.