Altcoins Talks - Cryptocurrency Forum
Further Discussions => Economics , Sociology & Politics => Topic started by: Quantum X on February 11, 2021, 05:36:11 PM
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In third world country we can see that many are suffering from poverty and desire financial freedom. After cryptocurrency had been discovered it is now became the center of attraction and a country like Cambodia is now adopting bitcoin and built its own blockchain with its digital currency-like called bakong.
I believe such adoption is for the fact that there is more chance of making profit while leading the country into a modern way of payment system. What I'm thinking, even they have such opportunity for profit and modernization we can't deny the fact that losing could also be their future since crypto currency is volatile.
Do you think cryptocurrency can elevates the economy of a poor country despite its volatility.
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It's going to be such a hard decision for many countries to channel some of their reserves into Bitcoin but if the value of bitcoin can keep growing without collapse that we used to have in the past, its really an incredible opportunity but as I said, it's dangerous because you can't predict Bitcoin movements sometimes. We all saw that crash that happened last year march during pandemic, once traditional markets is affected, crypto becomes too.
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For now, Cryptocurrency cannot improve a country's economy. Because there are still many countries in the world that have not legalized cryptocurrency transactions. Moreover, investing in cryptocurrency is high risk, because market movements are unstable and difficult to predict. That's why many countries don't want to invest in cryptocurrency. Cryptocurrency is a digital money investment for individuals.
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May be for a short period of time. It's a pure gambling for an economical nation to put a part of it reserves in cryptocurrency.
Perhaps, they can do it in bull run but we all know what bitcoin can do and can undo. All institutions are here for the gram and as soon as it makes a u turn, they will leave.
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In my opinion so far if for a country that is trying to develop cryptocurrency, it is better that the country needs to provide space for a trusted exchange first. once everything is set up and running well. let's say Cambodia is making its own crypto, but on the other hand this is not yet the reason that the economy can be resolved. Cambodia needs to stimulate and be friendly between the people there and world exchanges, such as legalizing cryptocurrency exchanges for 1 year. to see the extent of people's enthusiasm for crypto. if there is improvement, then feel free to make crypto yourself. Haven't we seen many countries make their own crypto and end up not as expected. because it has not fully interacted with large investors around the world.
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Yes, Cryptocurrencies can save the economy! The government charges a tax from business owners, and many teenagers are now owning different businesses because of the profit that they earned from crypto "a side business". In my country there are many college graduates who joined the crypto world in 2017 including me, 90% of us have managed to start our own business apart from crypto and we pay tax to our government. So because we invested in crypto in 2017, we are now helping in growing our country's economy by paying tax to the government as business owners.
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Unfortunately bitcoin and cryptocurrencies in general, cannot change or improve the economy. Bad economy is not a consequence of the choice of settlement currency or currency technology, but of the mistakes of the government, ministers, heads of the central bank, who instead of solving problems are engaged in populism, corruption and similar processes that kill the economy. And if the conventional local currency is replaced by bitcoin, NOTHING will change.
So, unfortunately, this idea is a deep misconception. And imagine - if it was a real solution, would countries stall and not accept bitcoin and cryptocurrencies to replace the fiat system? Would everyone have solved their problems and lived happily ever after?! But...? no one is doing it.
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Unfortunately bitcoin and cryptocurrencies in general, cannot change or improve the economy. Bad economy is not a consequence of the choice of settlement currency or currency technology, but of the mistakes of the government, ministers, heads of the central bank, who instead of solving problems are engaged in populism, corruption and similar processes that kill the economy.
You are right, politics decide about economy.
But the state of the "money system" of a country impacts its economic system - I'm thinking about inflation, the depreciation of the currency of a country: Money losing purchasing power with time, forcing individuals and businesses to take decisions - also economical decisions - that they would have not taken otherwise.
So, can cryptocurrency - not only Bitcoin! - help to improve the the money system of a country? i.e. the "quality of what is accepted as money" in a country?
I think they can!
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Unfortunately bitcoin and cryptocurrencies in general, cannot change or improve the economy. Bad economy is not a consequence of the choice of settlement currency or currency technology, but of the mistakes of the government, ministers, heads of the central bank, who instead of solving problems are engaged in populism, corruption and similar processes that kill the economy.
You are right, politics decide about economy.
But the state of the "money system" of a country impacts its economic system - I'm thinking about inflation, the depreciation of the currency of a country: Money losing purchasing power with time, forcing individuals and businesses to take decisions - also economical decisions - that they would have not taken otherwise.
So, can cryptocurrency - not only Bitcoin! - help to improve the the money system of a country? i.e. the "quality of what is accepted as money" in a country?
I think they can!
I'll give you my opinion :)
1. I still do not think that cryptocurrency can improve the monetary system. Why ? The answer is simple - try to simulate a real situation, and let's discuss - what changes will happen and how ?
2. What I agree with - that PART of the population that wisely invest their savings in local currency, in crypto-assets, can lead and they will not only not lose but also earn on this process. But the volatility and unclear legislative position of cryptocurrencies in general, can play a cruel joke.
Now everyone is waiting for the approval of spot ETF bitcoin. If it happens, the market will grow, and those who invested now will profit. But... what if the approval is denied? And such a chance exists and is quite realistic ! Then there will be a loss from investments. The same will happen if the state adds bitcoin to its currency reserves, for example. Only the potential losses of the state will be much larger, in case of a negative development of the situation
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I'll give you my opinion :)
1. I still do not think that cryptocurrency can improve the monetary system. Why ? The answer is simple - try to simulate a real situation, and let's discuss - what changes will happen and how ?
2. What I agree with - that PART of the population that wisely invest their savings in local currency, in crypto-assets, can lead and they will not only not lose but also earn on this process. But the volatility and unclear legislative position of cryptocurrencies in general, can play a cruel joke.
Now everyone is waiting for the approval of spot ETF bitcoin. If it happens, the market will grow, and those who invested now will profit. But... what if the approval is denied? And such a chance exists and is quite realistic ! Then there will be a loss from investments. The same will happen if the state adds bitcoin to its currency reserves, for example. Only the potential losses of the state will be much larger, in case of a negative development of the situation
I appreciate always opinions, particularly when they come from someone with the nickname DrBeer :D :D
Cryptocurrencies can improve the economic system by improving the monetary system.
How, you ask.
For example, giving to unbanked and underbanked people the opportunity to transfer money electronically.
Imagine the business options that open for them!
A second example: facilitating cross-border payments.
For un- and underbanked workers who work abroad these transfers (Western Union etc.) are very expensive.
Imagine how much more wealth could flow in in countries with a considerable portion of work emigrants, and how much of that wealth could turn into business initiatives!
A third example: overcoming religious barriers.
Debt/interest banking is prohibited in muslim communities.
Now think of cryptocurrencies that are not debt/interest based i.e. cryptocurrencies that are shariah compliant.
Imagine the opportunities for muslim societies deriving from the access to new banking instruments.
Let's talk about a real case: Indonesia
This is what a gold-backed stablecoin (Kinesis) can do for the economy of Indonesia.
Challenges
Poor financial access
Across the nation of Indonesia, an estimated 70-80% of all citizens are unbanked or underbanked. These Indonesian citizens are left stranded outside of the financial system, deprived of financial access. Unable to save funds securely, the unbanked and underbanked live with no financial security.
Exploitative remittance services
Limited remittance provision in the region provides Indonesian citizens with no cost-effective solution for cross-border payments. As a result, Indonesians citizens are left at the mercy of costly and profit-centric providers, with remitters in the region charged an average fee of 5%.
Non-inclusive financial services
With 86.7% of the Indonesian population belonging to the Islamic faith, a large percentage of citizens find themselves excluded from traditional interest-bearing or debt-associated financial services for religious reasons.
The Indonesian population
260+ million
Population Unbanked or underbanked
70-80%
Active smartphone users
80%+
Solution
Mobile financial access
Through POS GOLD (*), Kinesis is delivering the financially underserved citizens of Indonesia, low-cost mobile access to vital financial services for payments and savings, in the stable value of physical gold.
Fair remittance provision
Indonesian citizens will require only a smartphone and internet to access instant, inexpensive cross-border payments. With a flat, <1% fee for international payments, the application presents citizens with a fair alternative to remittance provision in the region.
Shariah-compliant financial services
POS GOLD is supported by the Sharia Supervisory Board formed by the National Sharia Council. The Sharia-compliant platform enables Indonesia’s predominantly Islamic population to manage their wealth in debt and interest-free gold bullion via mobile device.
(*) PT Pos Gold is part of the app of the state-run national postal service, PT POS.
"As the value of Kinesis cross-border payments replaces costly remittance providers, additional wealth will flow into the Indonesian economy, through citizens purchasing essentials and investing in wealth creation activities. Over time, Indonesia will experience a rise in living standards and inclusive, sustained economic growth, which betters every member of society."
https://kinesis.money/projects-indonesia (https://kinesis.money/projects-indonesia/?gclid=Cj0KCQjwm66pBhDQARIsALIR2zAdVmALVG5v_tgOorFRcrsb30IHir8xh2-tw1t6I0fT6xAtaYF40LgaAhcDEALw_wcB)
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I appreciate always opinions, particularly when they come from someone with the nickname DrBeer :D :D
Cryptocurrencies can improve the economic system by improving the monetary system.
How, you ask.
For example, giving to unbanked and underbanked people the opportunity to transfer money electronically.
Imagine the business options that open for them!
A second example: facilitating cross-border payments.
For un- and underbanked workers who work abroad these transfers (Western Union etc.) are very expensive.
Imagine how much more wealth could flow in in countries with a considerable portion of work emigrants, and how much of that wealth could turn into business initiatives!
A third example: overcoming religious barriers.
Debt/interest banking is prohibited in muslim communities.
Now think of cryptocurrencies that are not debt/interest based i.e. cryptocurrencies that are shariah compliant.
Imagine the opportunities for muslim societies deriving from the access to new banking instruments.
Let's talk about a real case: Indonesia
This is what a gold-backed stablecoin (Kinesis) can do for the economy of Indonesia.
Challenges
Poor financial access
Across the nation of Indonesia, an estimated 70-80% of all citizens are unbanked or underbanked. These Indonesian citizens are left stranded outside of the financial system, deprived of financial access. Unable to save funds securely, the unbanked and underbanked live with no financial security.
Exploitative remittance services
Limited remittance provision in the region provides Indonesian citizens with no cost-effective solution for cross-border payments. As a result, Indonesians citizens are left at the mercy of costly and profit-centric providers, with remitters in the region charged an average fee of 5%.
Non-inclusive financial services
With 86.7% of the Indonesian population belonging to the Islamic faith, a large percentage of citizens find themselves excluded from traditional interest-bearing or debt-associated financial services for religious reasons.
The Indonesian population
260+ million
Population Unbanked or underbanked
70-80%
Active smartphone users
80%+
Solution
Mobile financial access
Through POS GOLD (*), Kinesis is delivering the financially underserved citizens of Indonesia, low-cost mobile access to vital financial services for payments and savings, in the stable value of physical gold.
Fair remittance provision
Indonesian citizens will require only a smartphone and internet to access instant, inexpensive cross-border payments. With a flat, <1% fee for international payments, the application presents citizens with a fair alternative to remittance provision in the region.
Shariah-compliant financial services
POS GOLD is supported by the Sharia Supervisory Board formed by the National Sharia Council. The Sharia-compliant platform enables Indonesia’s predominantly Islamic population to manage their wealth in debt and interest-free gold bullion via mobile device.
(*) PT Pos Gold is part of the app of the state-run national postal service, PT POS.
"As the value of Kinesis cross-border payments replaces costly remittance providers, additional wealth will flow into the Indonesian economy, through citizens purchasing essentials and investing in wealth creation activities. Over time, Indonesia will experience a rise in living standards and inclusive, sustained economic growth, which betters every member of society."
https://kinesis.money/projects-indonesia (https://kinesis.money/projects-indonesia/)
Let me be clear - do not consider me a crypto-pessimist :) I am more of a pragmatist who believes it is better to know the real situation and take into account the real risks than to "hang in the clouds", which I think is unacceptable for financial management....
It is very pleasant to hear an ARGUMENTED answer, with a wide coverage of problem areas ! Quite a rare answer ! Thank you ! + :)
And I will comment, from my own point of view.
1. about "people who are unbanked and underbanked". Both agree and a bit, in my opinion, controversial. To clarify.
- If we are talking about people who don't have the technical ability to use banking apps, they are also "useless" for the crypto world, since cryptocurrency is the ONLY technological solution for any crypto action.
- I agree - there are people who can't, don't want to, don't have the ability to deal with banks. Yes, cryptocurrency can be a substitute for them. But. Provided that cryptocurrency becomes an official means of payment. Otherwise, in light of the regulation of cryptocurrencies, he will be EXPECTED to work with the banking system. because you can buy products, pay for services can only fiat currency. And withdrawal of funds from the exchange - only to card accounts.
2. "It is estimated that 70-80% of all Indonesian citizens are unbanked or underbanked." - ok, a real problem. But can I clarify - what are the CAUSES of this state of affairs ? Leaving aside the specific problem of interest aversion, according to the creed, banking services are not only interest on loans. It is primarily banking transactions - from payroll to payments. What is the problem with that ? Is it about p.1 ?
3. "Not being able to save safely". There is a subtle issue here. Saving money, if we are talking about inflation, is in a sense getting .... additional interest from the growth of the value of some asset, by means of which a person tries to compensate for the loss of value, for example, of the local currency. Isn't that contrary to the religious canons? Please do not take this as an attempt to "play on religious feelings", just a really contradictory nuance, at least for me.
4. Is cross-border payments really such a big problem for Indonesian residents ? Perhaps it's just the banking system is "really greedy" ? I have in Ukraine, cross-border transfers, the cost of these services is quite in line with your expectations.
The second issue is the cost of transactions in the network for example bitcoin. Let's be honest - I do not think that there will be a mass need for ordinary people to transfer amounts of tens of thousands of dollars. Most likely it will be in the range of 50-500 dollars. And here is the problem - the cost of the transaction can be commensurate with the transfer itself, and this has no effect on the network load.
I see the alternative solution as CBDC - it's a blend of a standard financial system, with the benefits of blockchain technology, and minimal end user hardware requirements.
Another reason why cryptocurrency won't be able to help is trivial - most likely the government will simply not allow the realization of a parallel financial system that the government can't control.
PS You know, previously, while my country was at peace, I traveled often and a lot, including being in the beautiful country of .... Indonesia :) So I didn't get the feeling that banking services are underdeveloped or underutilized. ATM, card payments - everything was available and I used it without any problems.
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Let me be clear - do not consider me a crypto-pessimist :) I am more of a pragmatist who believes it is better to know the real situation and take into account the real risks than to "hang in the clouds", which I think is unacceptable for financial management....
It is very pleasant to hear an ARGUMENTED answer, with a wide coverage of problem areas ! Quite a rare answer ! Thank you ! + :)
And I will comment, from my own point of view.
1. about "people who are unbanked and underbanked". Both agree and a bit, in my opinion, controversial. To clarify.
- If we are talking about people who don't have the technical ability to use banking apps, they are also "useless" for the crypto world, since cryptocurrency is the ONLY technological solution for any crypto action.
- I agree - there are people who can't, don't want to, don't have the ability to deal with banks. Yes, cryptocurrency can be a substitute for them. But. Provided that cryptocurrency becomes an official means of payment. Otherwise, in light of the regulation of cryptocurrencies, he will be EXPECTED to work with the banking system. because you can buy products, pay for services can only fiat currency. And withdrawal of funds from the exchange - only to card accounts.
2. "It is estimated that 70-80% of all Indonesian citizens are unbanked or underbanked." - ok, a real problem. But can I clarify - what are the CAUSES of this state of affairs ? Leaving aside the specific problem of interest aversion, according to the creed, banking services are not only interest on loans. It is primarily banking transactions - from payroll to payments. What is the problem with that ? Is it about p.1 ?
3. "Not being able to save safely". There is a subtle issue here. Saving money, if we are talking about inflation, is in a sense getting .... additional interest from the growth of the value of some asset, by means of which a person tries to compensate for the loss of value, for example, of the local currency. Isn't that contrary to the religious canons? Please do not take this as an attempt to "play on religious feelings", just a really contradictory nuance, at least for me.
4. Is cross-border payments really such a big problem for Indonesian residents ? Perhaps it's just the banking system is "really greedy" ? I have in Ukraine, cross-border transfers, the cost of these services is quite in line with your expectations.
The second issue is the cost of transactions in the network for example bitcoin. Let's be honest - I do not think that there will be a mass need for ordinary people to transfer amounts of tens of thousands of dollars. Most likely it will be in the range of 50-500 dollars. And here is the problem - the cost of the transaction can be commensurate with the transfer itself, and this has no effect on the network load.
I see the alternative solution as CBDC - it's a blend of a standard financial system, with the benefits of blockchain technology, and minimal end user hardware requirements.
Another reason why cryptocurrency won't be able to help is trivial - most likely the government will simply not allow the realization of a parallel financial system that the government can't control.
PS You know, previously, while my country was at peace, I traveled often and a lot, including being in the beautiful country of .... Indonesia :) So I didn't get the feeling that banking services are underdeveloped or underutilized. ATM, card payments - everything was available and I used it without any problems.
I think that was the longest posting I ever saw in this forum :D
My postings are sometimes long too, but mostly because I copy and past 8)
I'm going to reply later, at the moment I'm going to just quote a posting of mine (https://www.altcoinstalks.com/index.php?action=helpadmin;help=see_member_ip), as a second example of how cryptocurrencies can improve the economy of one - in this case of a whole block of countries
Currently - starting the 1st of January - Russia has the presidency of the BRIC organisation (I hope I'm not wrong).
If they are serious with this gold-backed stablecoin idea, I think they'll propose it in the next months within the organisation.
This stablecoin should be used in order to settle surplus/deficits in international trades between BRIC countries.
This would be a solution for the fact that those countries don't trust each other's national currencies.
Using gold - the most trusted currency in the world - as settlement medium would boost international trades within BRIC countries.
Now you say Fine but in this case too it's about a gold-backed crypto. So can you give also examples of how cryptos can improve economies, other than gold-backed cryptos?
No :)
I'm sure there are such instances but I'm not knowledgeable enough.
My theory - please don't ask me examples for that :D - is that the smoother the financial system works, the better for businesses and in general for the economic system.
The economic boom in Europe during the Renaissance and the 17th century was substantially supported by the birth and growth of a modern banking system, first with the banks in Florence, Italy, then in Germany etc.
Cryptocurrencies - thanks also to blockchain technology - can in my view help to overcome flaws of the current banking system.
Also, as long as the instability - in terms of purchasing power - of a currency impacts economic decisions of individuals and businesses, thus hindering economic development, cryptocurrencies can overcome the instability of a national currency through some mechanisms, e.g. - like BTC - making impossible to multiply arbitrarily the quantity of a currency in circulation.
( as I said, I'm going to reply to your posting later)
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Thanks for the reply + !
I would love to hear your detailed opinion !
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1. about "people who are unbanked and underbanked". Both agree and a bit, in my opinion, controversial. To clarify.
- If we are talking about people who don't have the technical ability to use banking apps, they are also "useless" for the crypto world, since cryptocurrency is the ONLY technological solution for any crypto action.
- I agree - there are people who can't, don't want to, don't have the ability to deal with banks. Yes, cryptocurrency can be a substitute for them. But. Provided that cryptocurrency becomes an official means of payment. Otherwise, in light of the regulation of cryptocurrencies, he will be EXPECTED to work with the banking system. because you can buy products, pay for services can only fiat currency. And withdrawal of funds from the exchange - only to card accounts.
Ok, misunderstanding about unbanked and underbanked :D
Un- and underbanked are people who - for whatever reasons - don't have or have limited access to banking services.
I'm not talking about banking apps but about banking services in general.
Indonesia: according to statistics most of the population - particularly in rural regions - use the postal service for money transfers.
But there isn't a postal office at every corner. So they have to travel to the next postal office. In rural regions that's not a 30 minutes journey on a highway.
Unbanked: If you don't have a bank account, where do you keep your money?
Underbanked: If your bank account allows you only to send/receive money but no options of buying financial products, how do you protect your money from inflation?
How do you invest your savings?
One of the biggest sources of capital inflows into Indonesia are Indonesians migrant workers.
A considerable part of them either don't have bank accounts or their families in Indonesia don't have bank accounts, so they use Western Union, MoneyGram & Co.
How much do Indonesians pay for sending money to Indonesia?
"Among Indonesians who often send money abroad, most are generally aware of the two primary costs in international transfers: the upfront transaction fee and the exchange rate. However, many are still unaware of the actual cost of remittances. Today, the global average fee of sending money abroad is at 6,3%. This means that transferring USD 1,000 (± Rp 15 million) to Indonesia still adds up to USD 63, equivalent to about Rp 1 million in fees.
While upfront fees are usually stated by providers, they often do not represent the total cost of the transaction. In fact, providers tend to add an undisclosed markup on the exchange rate, instead of using the fair, mid-market rate, resulting in consumers being unknowingly charged more than the initially advertised amount.
This issue recently became a topic of discussion on Twitter or X, after Ayudia Chaerani, also known as Ayudia Bing Slamet, an Indonesian actress, writer and musician, shared her experience of sending money abroad to her family and friends on the social media platform. “I remembered there was a time when I transferred money to my friends and family. I know there was supposed to be a fee but when the money arrived, it was less than what I received. If I had known about this, I would have found other ways to transfer money,” she tweeted."
newsroom.wise.com (https://newsroom.wise.com/en-CAS/231080-new-wise-research-reveals-indonesians-pay-15-09-trillion-rupiah-for-foreign-exchange-transactions-in-2022)
Value of remittances sent to Indonesia from other countries or territories worldwide in 2021 (https://www.statista.com/statistics/1382677/bilateral-remittances-indonesia/)
9,4 Billions USD
So, average cost of sending money to Indonesia - according to Wise - 6,3%
Kinesis currencies transfer fee 0,45%
Calculate the difference and then multiply it by $9,4B
Please note: This are not capital inflows of some foreign hedge funds, this is additional money at disposal of Indonesian ordinary people.
Imagine the impact on the economy, particularly at the brick-and-mortar level.
"Indonesian foreign workers are also another group that encounters hidden fees.
Consumers sending money to Indonesia from abroad are paying a total of Rp 7,61 trillion, which includes Rp 4,76 trillion in transaction fees, and Rp 2,84 trillion in exchange rate margins.
Of the share of total fees paid on inward remittances to Indonesia in 2021, Saudi Arabia, which has the second-largest number of Indonesian workers, ranked first at 37.5%, followed by Malaysia (25.2%), United Arab Emirates (7.5%), and Singapore (4.1%)."
newsroom.wise.com (https://newsroom.wise.com/en-CAS/231080-new-wise-research-reveals-indonesians-pay-15-09-trillion-rupiah-for-foreign-exchange-transactions-in-2022)
Using kinesis stablecoins the Indonesian migrants don't save only on transfer fees, they save also on exchange rate fees, as there are none: kinesis kau's get bought at gold spot price and get sold at gold spot price.
No spreads, no buy/sell fees, no exchange fees...
Again: Imagine the impact on the Indonesian economy of such amounts of additional capital at disposal of families and little businesses.
P.S. I had opened a thread in the Indonesian section of the forum (https://www.altcoinstalks.com/index.php?topic=306779.0;topicseen) hoping for some feedback but unfortunately until now none :D
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2. "It is estimated that 70-80% of all Indonesian citizens are unbanked or underbanked." - ok, a real problem. But can I clarify - what are the CAUSES of this state of affairs ? Leaving aside the specific problem of interest aversion, according to the creed, banking services are not only interest on loans. It is primarily banking transactions - from payroll to payments. What is the problem with that ?
Well maybe the cause is simply that there parts of that country that are not enough developed yet.
In my country too, when I was younger, there were underdeveloped regions.
3. "Not being able to save safely". There is a subtle issue here. Saving money, if we are talking about inflation, is in a sense getting .... additional interest from the growth of the value of some asset, by means of which a person tries to compensate for the loss of value, for example, of the local currency. Isn't that contrary to the religious canons? Please do not take this as an attempt to "play on religious feelings", just a really contradictory nuance, at least for me.
Saving - protecting your purchasing power - by getting interest on capital can be contrary to religious canons. For example it was contrary to Christianism until 1500.
Saving through precious metals is something different and AFAIK is not contrary to any religion.
Usually shariah prohibit cryptocurrencies.
Kinesis' gold-backed stablecoins have been accepted as shariah compliant, because saving and transacting gold is permitted by Islam.
The problem for those people in Indonesia are...
where can you buy (and sell) precious metals?
Buy/sell spreads can be huge.
Keeping precious metals at home?
Etc.
By the way, you cannot use those pieces of metals in order to buy things. Not under normal circumstances.
All these problems are solved through gold-backed stablecoins.
Saving, protecting the purchasing power of one own wealth, in a safe and simple way, is a huge benefit for ordinary people.
Will it have an impact on the local economy? I think so!
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4. Is cross-border payments really such a big problem for Indonesian residents ? Perhaps it's just the banking system is "really greedy" ? I have in Ukraine, cross-border transfers, the cost of these services is quite in line with your expectations.
The second issue is the cost of transactions in the network for example bitcoin. Let's be honest - I do not think that there will be a mass need for ordinary people to transfer amounts of tens of thousands of dollars. Most likely it will be in the range of 50-500 dollars. And here is the problem - the cost of the transaction can be commensurate with the transfer itself, and this has no effect on the network load.
As I quoted in my previous posting, over 6% is the average cost for cross-border transfers.
For people who aren't very wealthy and have to sustain their families, are huge transfer costs!
The second issue is the cost of transactions in the network for example bitcoin. Let's be honest - I do not think that there will be a mass need for ordinary people to transfer amounts of tens of thousands of dollars. Most likely it will be in the range of 50-500 dollars. And here is the problem - the cost of the transaction can be commensurate with the transfer itself, and this has no effect on the network load.
Those migrant workers cannot risk of losing money because of BTC volatility.
They would be forced to buy BTC, send, and their families to convert those BTC as quick as possible back into fiat.
That means costs.
Plus - during the process - they would have the volatility risk.
50-500$ are huge sums for them!
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Another reason why cryptocurrency won't be able to help is trivial - most likely the government will simply not allow the realization of a parallel financial system that the government can't control.
Well, in Indonesia we have that covered :D as Kinesis is cooperating with the Indonesian government (https://kinesis.money/projects-indonesia/).
In the Kinesis thread (https://www.altcoinstalks.com/index.php?topic=129595.30) I quoted Kinesis last Quarterly Report.
Take a look at the paragraph "Indonesia"
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I think the possibility of the economic system of a poor country being elevated depends on the resources of the country. Even if Bitcoin or crypto currency can help in any little way, the country must have very great resources that can aid in generating good revenue for the country. For example, there are some countries that have some natural resources, such as crude oil and gold, as well as very fine soil and enough free land for commercial agriculturagricultural purpose and the cultivation of farm produce.
If there is no means by which citizens can earn money from jobs, businesses, or other legal means, then no one will have money to invest in crypto currency. People need to work before they can generate enough money to be able to serve their needs, and they will still have some to invest. If there is no job or any means by which citizens of a country can generate a good income forthemselves, that means people in such a country will likely not be financially stable and will not think of making any investment because their primary needs at that moment will be food, shelter, and clothing.
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PS You know, previously, while my country was at peace, I traveled often and a lot, including being in the beautiful country of .... Indonesia :) So I didn't get the feeling that banking services are underdeveloped or underutilized. ATM, card payments - everything was available and I used it without any problems.
I'm going into the Indonesia Section of this forum and BEG for someone there to come here and tell us how it is :D
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It is impossible for cryptocurrency to improve the economy of a poor country, this is because cryptocurrency is not human and cannot think or know the situation or level of poverty that is in the country. Cryptocurrency is volatile in nature and any country that diversify the country's funds into bitcoin, because I believe that it is only bitcoin that the value increases with time line, will have to wait for maybe 20yrs-30yrs before the investment can help the country's economy. It is only the government of a country that can change the economy of a country by using the resources of the country wisely to generate income for the country. Corruption is what has made some countries poor due to bad government that are not ready to sacrifice for the development of the country. The embezzle public funds and leave in country economy to crash without thinking on how to help the economy. A good government will manage the resources of the country to generate revenue and grow the economy, no matter how small their natural resources is. El Salvador has adopted bitcoin as a legal tender but nothing has changed yet. Their bitcoin reserve is only increasing in value. Argentina is another country that we are looking out to see how their economy will be like through the adoption of bitcoin by the new president.
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PS You know, previously, while my country was at peace, I traveled often and a lot, including being in the beautiful country of .... Indonesia :) So I didn't get the feeling that banking services are underdeveloped or underutilized. ATM, card payments - everything was available and I used it without any problems.
I'm going into the Indonesia Section of this forum and BEG for someone there to come here and tell us how it is :D
I'm glad to return to the dialogue again, after a forced pause :)
1. Yes, the opinion and real description of the situation of people living in the territory we are discussing is the most valuable information, because it reflects reality!
2. To continue the substantive conversation, I went to study what Kinesis is :) I read the information on the site and looked at the description. I have a general picture but no details.
I also found some information about cryptocurrency and its status in Indonesia, for example this https://www.coindesk.com/policy/2023/01/25/indonesia-regulatory-switch-could-see-crypto-classed-as-securities -not-commodities/
So far I have a picture:
- cryptocurrency in Indonesia is not an official means of payment
- cryptocurrency is considered a kind of commodity and financial surrogate, and is not prohibited
- Indonesia has a fairly loyal policy towards crypto exchanges and crypto traders.
- Kinesis is a kind of bridge that works between the fiat and crypto markets. I saw something similar in the form of the PundiX project. True, the solution there is more tailored to accepting cryptocurrency payments from the population, to pay for goods in an ordinary store. I haven’t found any information on how the Kinesis mechanisms are actually implemented, I can only guess. The topic of gold and silver seemed a little strange to me, because I couldn’t understand - how is this gold and silver actually secured?
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Crypto currencies can save the economy at where either crisis of war or government structural aided designs tends to frustrate the world with their selfish decisions at where it could affect individual resources and sources of incomes.
The possibilities that crytop can safe the world from and economic downturn is strickly based on its decentralized and the custodian digitalized systems with the P2P transactions technological systems.
In the crytop space, Investors digital assets are secured and unaffected by the said crisis without the loosing any of its potnetials such as the volatilities of the pros and the cons where its investors would still make counts to profitabilities even while the ongoing crisis.
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It is impossible for cryptocurrency to improve the economy of a poor country, this is because cryptocurrency is not human and cannot think or know the situation or level of poverty that is in the country. Cryptocurrency is volatile in nature and any country that diversify the country's funds into bitcoin, because I believe that it is only bitcoin that the value increases with time line, will have to wait for maybe 20yrs-30yrs before the investment can help the country's economy. It is only the government of a country that can change the economy of a country by using the resources of the country wisely to generate income for the country. Corruption is what has made some countries poor due to bad government that are not ready to sacrifice for the development of the country. The embezzle public funds and leave in country economy to crash without thinking on how to help the economy. A good government will manage the resources of the country to generate revenue and grow the economy, no matter how small their natural resources is. El Salvador has adopted bitcoin as a legal tender but nothing has changed yet. Their bitcoin reserve is only increasing in value. Argentina is another country that we are looking out to see how their economy will be like through the adoption of bitcoin by the new president.
Corruption... They talk about it a lot, it is discussed often... The government, deputies, security forces are blamed for it... Yes, anyone!
But the main problem is that corruption, sad as it may sound, is generated and supported by us ourselves. But we consider our actions “forced” or normal :)
And most importantly, do not confuse corruption with kleptomania, trivial theft and impunity (due to corruption) at the highest echelon of power or “ordinary clerks”. These are slightly different entities, although they bring trouble to the population in the same way...
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So far I have a picture:
- cryptocurrency in Indonesia is not an official means of payment
- cryptocurrency is considered a kind of commodity and financial surrogate, and is not prohibited
- Indonesia has a fairly loyal policy towards crypto exchanges and crypto traders.
"Indonesia’s central bank prohibits the use of cryptocurrencies ... as legal payment instruments.
However, Indonesian regulators have not blocked cryptocurrency transactions."
https://btcpeers.com/legality-of-dogecoin-countries-where-it-is-banned-or-restricted/
Hi doctor,
In Indonesia cryptos cannot be used as means of payment.
The Indonesian gov is promoting an app - PosPay - through their postal office network.
With PosPay people can... pay :D
PosPay Gold is one of the functionalities of PosPay.
Through Pospay Gold the Indonesian gov is giving to the Indonesians the option of buying, selling and sending gold at extremely low cost and with the easiness of a smartphone.
KAUs aren't considered as a cryptocurrency but as a commodity (i.e. as gold).
This has facilitated the integration of KAUs into PosPay, also because Indonesia is a muslim country and there are scholars who consider cryptocurrencies non-compliant with Shariah.
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In third world country we can see that many are suffering from poverty and desire financial freedom. After cryptocurrency had been discovered it is now became the center of attraction and a country like Cambodia is now adopting bitcoin and built its own blockchain with its digital currency-like called bakong.
I believe such adoption is for the fact that there is more chance of making profit while leading the country into a modern way of payment system. What I'm thinking, even they have such opportunity for profit and modernization we can't deny the fact that losing could also be their future since crypto currency is volatile.
Do you think cryptocurrency can elevates the economy of a poor country despite its volatility.
Cryptocurrency plays an important role in elevating the economy of a poor country despite it's volatility by providing jobs to those who are unemployed as long as they are taking part into it. Unemployment rate is one of the third world countries government a problem aside from it being corrupt. Cryptocurrency brought a lot of opportunities for less fortunate people to have the chance to achieve financial freedom through it.
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So far I have a picture:
- Kinesis is a kind of bridge that works between the fiat and crypto markets.
KAUs are proof of ownership of gold (and KAGs are proof of ownership of silver...)
When you buy an apartment, there is a paper signed by you, the seller and usually some state official.
That piece of paper is the proof that you are the owner of that apartment.
Currently you own 200 shares of Microsoft. Of that there are digital records in the bank's servers ... in your computer... you can print those documents, than you have a paper record too.
These records are your proof of ownership of those 200 shares.
1 KAU is the proof of ownership of 1 gram of gold.
That digital record lies on the blockchain.
The difference with the other two examples is that those other two read "DrBeer is the owner of apartment x" and "DrBeer is the owner of 200 Microsoft shares" while this last one reads "1 gram of gold stored in one of Kinesis' vaults belongs to wallet y"
I wouldn't call KAUs "a bridge that works between the fiat and crypto markets"
I prefer to call them a bridge between blockchain and gold bars
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Cryptocurrency plays an important role in elevating the economy of a poor country despite it's volatility by providing jobs to those who are unemployed as long as they are taking part into it. Unemployment rate is one of the third world countries government a problem aside from it being corrupt. Cryptocurrency brought a lot of opportunities for less fortunate people to have the chance to achieve financial freedom through it.
As long as the progress of crypto is for good purposes, it will provide an opportunity for those who want to use it to earn income, although you must always anticipate situations that might turn around because we know that crypto is very unstable and continues to change. If you speculate, it will have a bad impact on you. who do not prepare knowledge about crypto properly.But in principle, I agree that with the existence of crypto for poor and developing countries, there is an impact on the economy that can be absorbed by taking advantage of crypto developments.
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So far I have a picture:
- cryptocurrency in Indonesia is not an official means of payment
- cryptocurrency is considered a kind of commodity and financial surrogate, and is not prohibited
- Indonesia has a fairly loyal policy towards crypto exchanges and crypto traders.
"Indonesia’s central bank prohibits the use of cryptocurrencies ... as legal payment instruments.
However, Indonesian regulators have not blocked cryptocurrency transactions."
https://btcpeers.com/legality-of-dogecoin-countries-where-it-is-banned-or-restricted/
Hi doctor,
In Indonesia cryptos cannot be used as means of payment.
The Indonesian gov is promoting an app - PosPay - through their postal office network.
With PosPay people can... pay :D
PosPay Gold is one of the functionalities of PosPay.
Through Pospay Gold the Indonesian gov is giving to the Indonesians the option of buying, selling and sending gold at extremely low cost and with the easiness of a smartphone.
KAUs aren't considered as a cryptocurrency but as a commodity (i.e. as gold).
This has facilitated the integration of KAUs into PosPay, also because Indonesia is a muslim country and there are scholars who consider cryptocurrencies non-compliant with Shariah.
Hi Peter90 !
Yes, the full picture is now available. Blockchain has essentially become the "barn book" and "bridge" where transactions between citizens, assets and official payment systems are recorded. Well done, good solution. I am very happy that the people of Indonesia have a mechanism to secure and increase their savings !
PS Regarding the peculiarities of religious views - I have always wondered how cryptocurrencies with their commissions/staking and other nuances contrary to religious canons will be accepted in the Muslim world. The solution is extremely simple - don't consider it money ! :)
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True, the solution there is more tailored to accepting cryptocurrency payments from the population, to pay for goods in an ordinary store. I haven’t found any information on how the Kinesis mechanisms are actually implemented, I can only guess.
Hi doctor
Do you know the inner mechanisms of your bank?
Does it prevent you from using it?
That said, I don't know what do you mean with Kinesis mechanisms actually. I can only tell you this is a question professionals don't care about.
Professionals care only about Kinesis' currencies being 100% backed up by gold and silver.
Audits take care of that.
Metals come from Kinesis' liquidity providers: they are precious metals wholesalers.
You can buy KAUs and KAGs - or fractions of them - on the kinesis exchange - using fiat or crypto -, or you can get them sent to you by your girlfriend or by selling something to another kinesis user.
With kinesis' virtual debit card you can pay at point of sale with your gold and silver: kinesis has financial partners - don't ask me for details or inner mechanisms - that while you stay at Starbucks convert on the fly 0,2 of the KAGs that you have in your kinesis account into 5 $.. €... Y... whatever fiat currency that Starbucks store needs.
Kinesis virtual debit card is accepted where Mastercard is accepted.
Starbucks' cashier gets paid.
You drink your cappuccino.
You don't need a bank account.
Kinesis Virtual Card - Everything you need to know (https://support.kinesis.money/hc/en-gb/articles/12361265103517-Kinesis-Virtual-Card-Everything-you-need-to-know?_gl=1*1e9tf2r*_ga*MTEzNDAwODU2LjE3MDI4OTU4MzU.*_ga_YXKQ4WV7L4*MTcwNjcwMTY0Ny40Ny4xLjE3MDY3MDE3NjYuMzAuMC4w)
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I agree that with the existence of crypto for poor and developing countries, there is an impact on the economy that can be absorbed by taking advantage of crypto developments.[/size]
Yes, taxes on local cryptocurrency exchanges and electronic wallets might help contribute every country's economy for few percentage but if improved and there is mass adoption it will be more. Some other local businesses here in my country accepted Bitcoin as payment through Lightning Network and they're doing good because they are in partnerships with tourism industries. Imagine the flow of transactions in that specific department as we are talking about millions here in that industry alone.
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True, the solution there is more tailored to accepting cryptocurrency payments from the population, to pay for goods in an ordinary store. I haven’t found any information on how the Kinesis mechanisms are actually implemented, I can only guess.
Hi doctor
Do you know the inner mechanisms of your bank?
Does it prevent you from using it?
That said, I don't know what do you mean with Kinesis mechanisms actually. I can only tell you this is a question professionals don't care about.
Professionals care only about Kinesis' currencies being 100% backed up by gold and silver.
Audits take care of that.
Metals come from Kinesis' liquidity providers: they are precious metals wholesalers.
You can buy KAUs and KAGs - or fractions of them - on the kinesis exchange - using fiat or crypto -, or you can get them sent to you by your girlfriend or by selling something to another kinesis user.
With kinesis' virtual debit card you can pay at point of sale with your gold and silver: kinesis has financial partners - don't ask me for details or inner mechanisms - that while you stay at Starbucks convert on the fly 0,2 of the KAGs that you have in your kinesis account into 5 $.. €... Y... whatever fiat currency that Starbucks store needs.
Kinesis virtual debit card is accepted where Mastercard is accepted.
Starbucks' cashier gets paid.
You drink your cappuccino.
You don't need a bank account.
Kinesis Virtual Card - Everything you need to know (https://support.kinesis.money/hc/en-gb/articles/12361265103517-Kinesis-Virtual-Card-Everything-you-need-to-know?_gl=1*1e9tf2r*_ga*MTEzNDAwODU2LjE3MDI4OTU4MzU.*_ga_YXKQ4WV7L4*MTcwNjcwMTY0Ny40Ny4xLjE3MDY3MDE3NjYuMzAuMC4w)
Hi Peter90 ! :)
Yes, I know how the banking system works internally - I worked in the banking sector on the IT side :)
But if I were an ordinary person - I would not be interested in how a bank works, I would only care about the safety of my accounts, and the availability of a wide range of convenient services !
That is why I am interested in the "mechanics" and logic of the system. I worked with a project, which in some sense can be compared to what you are talking about. It is PundiX. They too offered an interesting solution, though without gold. They basically made a bridge between the fiat world and cryptocurrency. You have a PundiX wallet with cryptocurrencies, but you can pay in a regular store where you can pay with cryptocurrency. And the merchant can choose (depending on the legal framework):
- cryptocurrency
- fiat money. And here is the most interesting and tricky thing - you send a conventional bitcoin, it is dynamically sold through a layer (conventional exchange) that can work with local currency, and the seller is credited the amount in local currency. Although you paid in crypto.
In general - as implemented in kinesis, it may be interesting to "technical experts", and the user of the system see above, the main thing is that he can use a great service, which is kinesis ! For me kinesis has become a great REAL example of blockchain technology implementation in real life, with benefits for the ordinary consumer! Once again - I am sincerely glad that such a system has been realized and has a wide audience :)
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- how is this gold and silver actually secured?
Sure doc
Taken from their Trust and Security (https://kinesis.money/trust-security/) page
1) Counterparty risk protection
The holder of Kinesis currencies holds the full legal title of the underlying quantity of physical gold and silver.
At no point, will the bullion behind Kinesis digital currencies ever appear on the balance sheet of Kinesis or Allocated Bullion Exchange (ABX) (https://abx.com).
Resultantly, neither Kinesis nor ABX has any direct claim on the metals.
2) All gold and silver bullion held by Kinesis undergoes independent, third-party audits, four times a year
We employ the world-class independent audit and inspection specialist, Inspectorate International, a Bureau Veritas company, to conduct regular, independent, physical audits of all bullion underpinning Kinesis gold and silver-based digital currencies. The quantity of gold and silver held in our vaults is checked against the record of all KAU and KAG in circulation, stored on our blockchain.
Regular independent audits verify that every KAU and KAG within the Kinesis monetary system is based on an exact 1:1 allocated quantity of gold and silver bullion.
Additionally, independent auditors perform a series of assessments to ensure the weight and fineness of the bullion are as stated, and the quality of the storage is satisfactory.
The results of all of our audits are publicly available.
3) Immutable digital record
Each time new precious metals are introduced into the system a record is stored on the blockchain, maintaining an immutable and irrefutable ledger of all KAU (gold) and KAG (silver) within the system.
During our quarterly, independent audits, our blockchain enables auditors to ensure that the quantity of gold and silver held in our vaults corresponds exactly with the quantity of KAU and KAG in existence.
4) Secure and fully insured vault storage
Kinesis gold (KAU) and silver (KAG) are based 1:1 on physical gold and silver bullion, stored within fully insured, secure vaulting facilities in: Dubai, Hong Kong, Istanbul, Vaduz, London, New York, Singapore, Sydney, Toronto, Zurich, Panama City, Batam and Brisbane.
Furthermore, Kinesis is partnered with world-renowned vaulting providers: Loomis Zurich (Nasdaq OMX: LOOM); OZL Liechtenstein (Nasdaq OTCMKTS: OZMLF) and Brinks (Nasdaq NYSE: BCO).
5) Quality assurance
Under the ABX Quality Assurance Framework (QAF), all bullion has a verified audit trail and is stored in regularly audited, transparent holdings systems, with verification in place.
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- how is this gold and silver actually secured?
Sure doc
Taken from their Trust and Security (https://kinesis.money/trust-security/) page
1) Counterparty risk protection
The holder of Kinesis currencies holds the full legal title of the underlying quantity of physical gold and silver.
At no point, will the bullion behind Kinesis digital currencies ever appear on the balance sheet of Kinesis or Allocated Bullion Exchange (ABX) (https://abx.com).
Resultantly, neither Kinesis nor ABX has any direct claim on the metals.
2) All gold and silver bullion held by Kinesis undergoes independent, third-party audits, four times a year
We employ the world-class independent audit and inspection specialist, Inspectorate International, a Bureau Veritas company, to conduct regular, independent, physical audits of all bullion underpinning Kinesis gold and silver-based digital currencies. The quantity of gold and silver held in our vaults is checked against the record of all KAU and KAG in circulation, stored on our blockchain.
Regular independent audits verify that every KAU and KAG within the Kinesis monetary system is based on an exact 1:1 allocated quantity of gold and silver bullion.
Additionally, independent auditors perform a series of assessments to ensure the weight and fineness of the bullion are as stated, and the quality of the storage is satisfactory.
The results of all of our audits are publicly available.
3) Immutable digital record
Each time new precious metals are introduced into the system a record is stored on the blockchain, maintaining an immutable and irrefutable ledger of all KAU (gold) and KAG (silver) within the system.
During our quarterly, independent audits, our blockchain enables auditors to ensure that the quantity of gold and silver held in our vaults corresponds exactly with the quantity of KAU and KAG in existence.
4) Secure and fully insured vault storage
Kinesis gold (KAU) and silver (KAG) are based 1:1 on physical gold and silver bullion, stored within fully insured, secure vaulting facilities in: Dubai, Hong Kong, Istanbul, Vaduz, London, New York, Singapore, Sydney, Toronto, Zurich, Panama City, Batam and Brisbane.
Furthermore, Kinesis is partnered with world-renowned vaulting providers: Loomis Zurich (Nasdaq OMX: LOOM); OZL Liechtenstein (Nasdaq OTCMKTS: OZMLF) and Brinks (Nasdaq NYSE: BCO).
5) Quality assurance
Under the ABX Quality Assurance Framework (QAF), all bullion has a verified audit trail and is stored in regularly audited, transparent holdings systems, with verification in place.
In this context, I answer the question in the title of the topic:
When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.
You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme. The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.
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Indonesia
world’s 4th most populous nation (and most populous muslim country)
Largest economy in Southeast Asia and 7th largest economy in the world by PPP GDP (https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP))
(https://upload.wikimedia.org/wikipedia/en/timeline/98l6qoahz5rroxesagv6cfga9nmvoow.png)
so, I don't consider Indonesia as a highly limited society with a fairly simple scheme
Btw, credit to Indonesia's political leadership:
Indonesia has made enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999, to under 10 percent in 2019 (https://www.worldbank.org/en/country/indonesia/overview)
(https://upload.wikimedia.org/wikipedia/commons/1/10/Historical_economic_growth_of_Indonesia.jpg)
When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.
You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme.
The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.
Indonesia's gov is promoting Kinesis' gold-backed stablecoins because they think that platform can help the state and the economy of the state.
Obviously the Indo's gov thinks that K' gold-backed coins will correspond to the financial model of the state, will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy
(Just a random note: in my view gold-backed cryptos' role is not to replace fiat)
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When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.
You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme.
The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.
Indonesia's gov is promoting Kinesis' gold-backed stablecoins because they think that platform can help the state and the economy of the state.
Obviously the Indo's gov thinks that K' gold-backed coins will correspond to the financial model of the state, will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy
(Just a random note: in my view gold-backed cryptos' role is not to replace fiat)
The solution is good and if indeed they managed to reduce poverty so significantly - I applaud them ! Bravo ! As far as I know - in such a timeframe and with such an indicator, there are actually no examples in the modern world !
Especially for a country with a huge population. Bravo again !
It is impossible to call the decision "extraordinary", but we must recognize that, unlike other countries, Indonesia has succeeded. To give an opportunity, in fact to provide fiat assets of the population with stable GOLD ! and at the same time with a convenient, and what is important - ACCESSIBLE, for all, method.
I agree with the last remark. It is rather a mechanism for stabilizing the economy and curbing inflationary processes.
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I think the possibility of the economic system of a poor country being elevated depends on the resources of the country. Even if Bitcoin or crypto currency can help in any little way, the country must have very great resources that can aid in generating good revenue for the country. For example, there are some countries that have some natural resources, such as crude oil and gold, as well as very fine soil and enough free land for commercial agriculturagricultural purpose and the cultivation of farm produce.
If there is no means by which citizens can earn money from jobs, businesses, or other legal means, then no one will have money to invest in crypto currency. People need to work before they can generate enough money to be able to serve their needs, and they will still have some to invest. If there is no job or any means by which citizens of a country can generate a good income forthemselves, that means people in such a country will likely not be financially stable and will not think of making any investment because their primary needs at that moment will be food, shelter, and clothing.
You are right on both points Dr. B
1) natural resources can be an important factor for the economy of a country;
2) people need money in order to invest in crypto.
But:
Re 1), natural resources are not enough in order to guarantee the economy of a country to flourish.
Good political leadership - at central, regional and local level -... infrastructure... a functioning monetary and financial system... are just as important as natural resources.
For ex. Zimbabwe and Argentina are two countries very rich in natural resources, but their population has suffered because of their national currency devaluation.
Money losing its purchasing power over time, that's a cause of poverty.
With money losing purchasing power, people are forced to take decisions - maybe risky decisions - in order to protect themselves from currency devaluation.
As long as the instability - in terms of purchasing power - of a currency impacts economic decisions of individuals and businesses, thus hindering economic development, cryptocurrencies can overcome the instability of a national currency through some mechanisms, e.g. - like BTC - making impossible to multiply arbitrarily the quantity of a currency in circulation.
Re 2) In this post (https://www.altcoinstalks.com/index.php?topic=191920.msg1466004#msg1466004) I have shown how Indonesian migrant workers can spare 9 billions $ using Kinesis' stablecoins instead of traditional money transfer companies.
You say people need money in order to invest in crypto.
Well that's money Dr. B
Most important, that's not 9 billions $ for Indonesian organisations or public agencies: It's 9 billions $ going directly to ordinary people, i.e. the families of those migrant workers
Imagine the impact on the Indonesian economy of such amounts of additional capital at disposal of families and little businesses!
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In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.
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In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.
Unfortunately this is where you are somewhat misguided. If your assumptions are based on classic cryptocurrencies - then I have to disappoint you - even buying 1 cent, you will pay a commission. And the smaller the payment, the higher in absolute value the commission.
Regarding security - here cryptocurrency as a decentralized solution looks much worse than fiat money - if you mistakenly send to a wallet number with an error - your money will disappear forever. If your seed phrase or wallet and its password are stolen - your money is irreversibly gone. Decentralization is a "two-way stick"
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In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.
I wish crypto can do this but this is not possible. Which coin can we use as an example for traditional transactions, do you know millions of transactions that need to be done in a day? I don't think it's even possible because the government need to watch most of the traditional transactions and because crypto has some anonymity on it layer, somethings will be difficult for government to approve and it will be hard for crypto to do what you mentioned.
Crypto gives opportunity to people that looks outside the traditional market and invest in them and research has shown that crypto always gives much profits than traditional markets. So people who doesn't have advantage in traditional market can make it in crypto market and become a what they want to be with patience.
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Cryptocurrency can aid in elevating poor country's economy over time because it's a modern technology aims at improving currency exchange in family of Finance
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In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.
a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.
b) I don't know
c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore :D
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In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.
a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.
b) I don't know
c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore :D
Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.
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In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.
a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.
b) I don't know
c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore :D
Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.
so you are addressing a)
My country: intra-national bank transfers between different banks, 1 day
Crypto - depending on which one -: seconds/minutes
My country: inter-national bank transfers into another continent: more than 1 day,
plus: high transfer fees + bank speculating on currency exchange = very high total transfer costs
Crypto - depending on which one -: seconds/minutes
Costs - depending on which one -: minimal
There is a reason why international banks like JP Morgan are developing blockchain based solutions (https://www.jpmorgan.com/onyx/coin-system) for funds transfers.
Btw, I forgot another advantage of cryptocurrencies vs. banks - thanks doc -, bank records can be forged, blockchain records - if I understand it correctly - can't.
The problem is that this world doesn't end with my country and your country, there are other countries too, for example countries like Indonesia (https://www.altcoinstalks.com/index.php?topic=191920.msg1466004#msg1466004).
Not everywhere in this world people can take the car and reach the next bank branch in 10 minutes.
Not everywhere in this world people can open and manage a bank account with the same easiness like you and me.
It's a big world.
In order to manage cryptos one needs only a smartphone.
In my country African migrants - like the Indonesian ones - were used to send money home through money transfer companies like MoneyGram or Western Union.
Maybe they can explain better the benefits of cryptocurrencies vs. traditional banking system.
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Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.
so you are addressing a)
My country: intra-national bank transfers between different banks, 1 day
Crypto - depending on which one -: seconds/minutes
My country: inter-national bank transfers into another continent: more than 1 day,
plus: high transfer fees + bank speculating on currency exchange = very high total transfer costs
Crypto - depending on which one -: seconds/minutes
Costs - depending on which one -: minimal
There is a reason why international banks like JP Morgan are developing blockchain based solutions (https://www.jpmorgan.com/onyx/coin-system) for funds transfers.
Btw, I forgot another advantage of cryptocurrencies vs. banks - thanks doc -, bank records can be forged, blockchain records - if I understand it correctly - can't.
The problem is that this world doesn't end with my country and your country, there are other countries too, for example countries like Indonesia (https://www.altcoinstalks.com/index.php?topic=191920.msg1466004#msg1466004).
Not everywhere in this world people can take the car and reach the next bank branch in 10 minutes.
Not everywhere in this world people can open and manage a bank account with the same easiness like you and me.
It's a big world.
In order to manage cryptos one needs only a smartphone.
In my country African migrants - like the Indonesian ones - were used to send money home through money transfer companies like MoneyGram or Western Union.
Maybe they can explain better the benefits of cryptocurrencies vs. traditional banking system.
[/quote]
Always interesting and enjoyable to read your replies - reasoned, meaningful, complete, thank you ! :)
Yes, I absolutely agree that on the globe, almost 200 countries have different banking systems, as well as their services, fees, etc. I agree that in some countries, as you gave an example - inadequate conditions, terms, commissions of banking services. This is a fact. And when I communicate with my friends, for example in Germany, it is a shock to me that transferring money from card to card can take more than 10-30-60 seconds!
But if we talk about differences, we should not forget that the attitude to cryptocurrencies is also VERY DIFFERENT! From total prohibition and persecution, to quite loyal. Therefore, cryptocurrencies, at least today - can be an alternative to the banking, classical system, only in a limited number of countries.
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Always interesting and enjoyable to read your replies - reasoned, meaningful, complete
No, not complete, only reasoned and meaningful :D
I forgot this one:
My country: depending on bank, account fees vary from 10€ to 20€ / month.
120/240 € / year, only to keep an account open.
My Kinesis account costs squat.
There are entire regions in this world where the banking system isn't developed like in your country.
There are millions, hundred of millions of inhabitants of this planet who are unbanked or underbanked - for whatever reason - but each one of them has a smartphone.
When comparing banking with crypto it's fair to consider these people too.
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Always interesting and enjoyable to read your replies - reasoned, meaningful, complete
No, not complete, only reasoned and meaningful :D
I forgot this one:
My country: depending on bank, account fees vary from 10€ to 20€ / month.
120/240 € / year, only to keep an account open.
My Kinesis account costs squat.
There are entire regions in this world where the banking system isn't developed like in your country.
There are millions, hundred of millions of inhabitants of this planet who are unbanked or underbanked - for whatever reason - but each one of them has a smartphone.
When comparing banking with crypto it's fair to consider these people too.
To be honest, I am surprised by such greed of banks in your country... Unfortunately, I don’t understand this....
I can’t call my country the most developed and advanced, but the banking sector in Ukraine has been rebuilt and has become friendly for any citizen of Ukraine a long time ago!
Opening and servicing card accounts has long been completely free. for example, for individuals, and this is from social (pensions and benefits) and salary cards, to just card accounts - the cost of owning a card is 0 UAH/month.
I have the main Visa Platinum card - not only is there no cost of owning an account, moreover, I have a lot of advantages that this type of card provides - from cashback on every purchase, to a set of quality services, for example, at airports I have free access to VIP lounge areas/ expectations. There is a concierge service, within which I am provided with many more services. Yes, to be fair, I must say that such conditions work if I spend a certain amount on this card every month. But my regular expenses are above this “entry threshold” - I pay her for everything - utilities for my apartment, for my parents and mother-in-law, taxes, shopping at the store, refueling the car, vacations, taxis...
Therefore, comparing what I have in my country and what is in your country, I agree that for a significant number of people, cryptocurrency is definitely an excellent alternative to banking services!
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To be honest, I am surprised by such greed of banks in your country... Unfortunately, I don’t understand this....
I can’t call my country the most developed and advanced, but the banking sector in Ukraine has been rebuilt and has become friendly for any citizen of Ukraine a long time ago!
Opening and servicing card accounts has long been completely free. for example, for individuals, and this is from social (pensions and benefits) and salary cards, to just card accounts - the cost of owning a card is 0 UAH/month.
I have the main Visa Platinum card - not only is there no cost of owning an account, moreover, I have a lot of advantages that this type of card provides - from cashback on every purchase, to a set of quality services, for example, at airports I have free access to VIP lounge areas/ expectations. There is a concierge service, within which I am provided with many more services. Yes, to be fair, I must say that such conditions work if I spend a certain amount on this card every month. But my regular expenses are above this “entry threshold” - I pay her for everything - utilities for my apartment, for my parents and mother-in-law, taxes, shopping at the store, refueling the car, vacations, taxis...
Therefore, comparing what I have in my country and what is in your country, I agree that for a significant number of people, cryptocurrency is definitely an excellent alternative to banking services!
It's not just my country.
Indonesia, international transfer fees = 6,3% (https://www.altcoinstalks.com/index.php?topic=191920.msg1466004#msg1466004)
6,3% vs. (example Kinesis) 0,45%
Huge difference, if you ask me
Don't think that unbanked and underbanked is something of poor countries:
"plenty of Americans never step inside their branches, download their apps or deposit money in their accounts. They’re known as the unbanked, and the most recent numbers from the Federal Deposit Insurance Corporation (FDIC) show that 4.5 percent of U.S. households — about 5.9 million people — are unbanked.
A further 14.1 percent of U.S. households are considered underbanked." bankrate.com (https://www.bankrate.com/banking/reasons-to-be-unbanked-or-underbanked/)
What are the main reasons for being unbanked or underbanked, you ask.
Well for example:
- Lack of Trust in Mainstream Banking
- Convenience and Access
- Problems with Language and Literacy
- Unemployed or Lack of Steady Income
- Your past financial behavior put you on a no-account list
- You’re aiming to avoid fees
- You’re worried about meeting minimum balance requirements
- You’re trying to avoid debt collectors
- etc...
When you compare pros and cons of banking system vs. cryptocurrencies it's unfair to consider your situation as the standard situation.
As soon as you consider the situation of hundreds of millions of unbanked and underbanked people around the world, the advantages of cryptos - well, of some cryptos at least - are immediately evident.
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....
It's not just my country.
Indonesia, international transfer fees = 6,3% (https://www.altcoinstalks.com/index.php?topic=191920.msg1466004#msg1466004)
6,3% vs. (example Kinesis) 0,45%
Huge difference, if you ask me
Don't think that unbanked and underbanked is something of poor countries:
"plenty of Americans never step inside their branches, download their apps or deposit money in their accounts. They’re known as the unbanked, and the most recent numbers from the Federal Deposit Insurance Corporation (FDIC) show that 4.5 percent of U.S. households — about 5.9 million people — are unbanked.
A further 14.1 percent of U.S. households are considered underbanked." bankrate.com (https://www.bankrate.com/banking/reasons-to-be-unbanked-or-underbanked/)
What are the main reasons for being unbanked or underbanked, you ask.
Well for example:
- Lack of Trust in Mainstream Banking
- Convenience and Access
- Problems with Language and Literacy
- Unemployed or Lack of Steady Income
- Your past financial behavior put you on a no-account list
- You’re aiming to avoid fees
- You’re worried about meeting minimum balance requirements
- You’re trying to avoid debt collectors
- etc...
When you compare pros and cons of banking system vs. cryptocurrencies it's unfair to consider your situation as the standard situation.
As soon as you consider the situation of hundreds of millions of unbanked and underbanked people around the world, the advantages of cryptos - well, of some cryptos at least - are immediately evident.
Once again, I will state my position in this case:
1. I am surprised that in many countries banking services are in such a state, such fees and terms of service provision. Since I have long been accustomed to a completely different level of banking services
2. I agree that cryptocurrencies are a good solution ! A good solution, at least where banking services are unacceptable, inconvenient, expensive.
3. how much cryptocurrencies can help a country's global economy is questionable.
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how much cryptocurrencies can help a country's global economy is questionable.
Well yeah sort of because this will also depends on how adoption of cryptocurrency in a specific country that could impact the growth of it's economy. For example here in my country SEC has strong and strict regulation on foreign crypto exchanges especially those that does not comply registration but I know it has pros and cons on that matter but what I wanted to see and hear is about massive adoption given that Bitcoin ETF is now on hot seat. For me as of the moment I can feel the slow adoption happening in my country I don't know why but that is the reality and I can say that it really is questionable.
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how much cryptocurrencies can help a country's global economy is questionable.
Well yeah sort of because this will also depends on how adoption of cryptocurrency in a specific country that could impact the growth of it's economy. For example here in my country SEC has strong and strict regulation on foreign crypto exchanges especially those that does not comply registration but I know it has pros and cons on that matter but what I wanted to see and hear is about massive adoption given that Bitcoin ETF is now on hot seat. For me as of the moment I can feel the slow adoption happening in my country I don't know why but that is the reality and I can say that it really is questionable.
I am more of the opinion that cryptocurrencies are not about “saving the country’s economy”, but about the opportunity for the very broad masses, with minimal investments, to ensure a more stable standard of living, and for some, to earn money. In its purest form, it is unlikely that anyone will allow cryptocurrency as an alternative to the state financial model, but there may be projects such as the project described by the respected Peter90 in this thread https://www.altcoinstalks.com/index.php?topic=314981
This is a really good and necessary project, built on the basis of blockchain, but does not replace the national currency.
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The integration of cryptocurrency within the economic framework of impoverished nations bears the allure of transformative potential, ostensibly offering a gateway to financial autonomy and technological modernization. However, this ostensible boon is juxtaposed with the inherent volatility endemic to cryptocurrency markets, engendering a precarious dichotomy wherein the promise of prosperity coexists with the specter of economic instability. While the adoption of digital currencies such as Bitcoin in countries like Cambodia signals a bold step towards financial innovation, the nascent and capricious nature of these assets underscores the palpable risks inherent in their utilization as instruments of economic upliftment. Thus, while the advent of cryptocurrency harbors the prospect of economic amelioration in impoverished regions, the concomitant exposure to market volatility necessitates a tempered assessment of its efficacy as a panacea for endemic poverty.
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In third world country we can see that many are suffering from poverty and desire financial freedom. After cryptocurrency had been discovered it is now became the center of attraction and a country like Cambodia is now adopting bitcoin and built its own blockchain with its digital currency-like called bakong.
I believe such adoption is for the fact that there is more chance of making profit while leading the country into a modern way of payment system. What I'm thinking, even they have such opportunity for profit and modernization we can't deny the fact that losing could also be their future since crypto currency is volatile.
Do you think cryptocurrency can elevates the economy of a poor country despite its volatility.
I don't understand how it would be reasonable to value a country's total reserves even though Bitcoin is a digital currency.
It would not be reasonable to store and transact a country's reserve currency through Bitcoin. In this case, it will not be possible to control the country's banking system and reserve system through Bitcoin, especially for a poor country like my country. ..
Moreover, when a country legalizes Bitcoin, both Bitcoin exchange and investment systems become very challenging because Bitcoin always fluctuates in the market with a situational structure based on price, so investments are always risky.
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The integration of cryptocurrency within the economic framework of impoverished nations bears the allure of transformative potential, ostensibly offering a gateway to financial autonomy and technological modernization. However, this ostensible boon is juxtaposed with the inherent volatility endemic to cryptocurrency markets, engendering a precarious dichotomy wherein the promise of prosperity coexists with the specter of economic instability. While the adoption of digital currencies such as Bitcoin in countries like Cambodia signals a bold step towards financial innovation, the nascent and capricious nature of these assets underscores the palpable risks inherent in their utilization as instruments of economic upliftment. Thus, while the advent of cryptocurrency harbors the prospect of economic amelioration in impoverished regions, the concomitant exposure to market volatility necessitates a tempered assessment of its efficacy as a panacea for endemic poverty.
I suggest we clarify:
- Cryptocurrencies as a substitute for national currency or an official means of payment in a country, will not bring improvements to the economy. And unregulated use of cryptocurrencies can harm the economy of the country
- Blockchain technologies introduced as additional services, including financial ones, can help the economy and the population as a whole. It can be convenient tools for attracting investment, new jobs, and more opportunities to access other financial instruments.
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In third world country we can see that many are suffering from poverty and desire financial freedom. After cryptocurrency had been discovered it is now became the center of attraction and a country like Cambodia is now adopting bitcoin and built its own blockchain with its digital currency-like called bakong.
I believe such adoption is for the fact that there is more chance of making profit while leading the country into a modern way of payment system. What I'm thinking, even they have such opportunity for profit and modernization we can't deny the fact that losing could also be their future since crypto currency is volatile.
Do you think cryptocurrency can elevates the economy of a poor country despite its volatility.
I don't understand how it would be reasonable to value a country's total reserves even though Bitcoin is a digital currency.
It would not be reasonable to store and transact a country's reserve currency through Bitcoin. In this case, it will not be possible to control the country's banking system and reserve system through Bitcoin, especially for a poor country like my country. ..
Moreover, when a country legalizes Bitcoin, both Bitcoin exchange and investment systems become very challenging because Bitcoin always fluctuates in the market with a situational structure based on price, so investments are always risky.
Yeah the volatile characteristics or nature of Bitcoin is for me not the best one to choose when talking about reserves as we all know that reserves needs to be stable like precious metals especially gold that some countries love to back their currencies with it just like BRICS if I am not mistaken.