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Okay, now think about what would happen if Argentinians used Bitcoin. The same government would use the same powers to make the same request. Any business which accepted or made transactions in unapproved currencies would be punished. Any person keeping their money in a local exchange - as almost all Bitcoin users do given how expensive it is to do it solo - would have the seizure done automatically. The blockchain would be monitored by the government to identify non-compliant users — better hope you have perfect opsec and everyone have or will use it with does too! – and anyone whose lifestyle is incompatible with their declared income is going to be at risk, too.

There just isn’t a technical fix for a political problem. If you live under the jurisdiction of a government there’s such a wide range of mechanisms available for enforcement.



Everyone who had overseas bank accounts in 2002 Argentina did just fine. Bitcoin on a foreign exchange or in a self-custody wallet would also be just fine. Getting a foreign bank account is too expensive for your average Argentinian because you have to show up in person to set it up, but a self-custody wallet can be had on any minimal smart phone.


People who wanted self-custody could also keep their money under the mattress. The reason why most cryptocurrency users do not do that is because there are many failure modes which result in your money being gone forever.

You also left out the other part of the overseas bank accounts: you have to be rich enough not to need to touch the money — otherwise you'll run into the various restrictions on transfers. The same would be true of Bitcoin for the vast majority of people because very few people receive a paycheck in Bitcoin or can use it to pay their bills. Those meatspace connections are not easy to bypass as long as the government in question is willing to make an effort.


You vastly overestimate the effectiveness of the Argentinian government in enforcing currency controls and so forth.

Keeping money under the mattress is done in Argentina, but is not that common for large amounts since getting your hands on physical dollar bills in quantity in Argentina is extremely difficult. It's also difficult to determine if the bills are counterfeit, but Bitcoin does not have this problem.

I have heard stories of people paying their living expenses in Bitcoin and the people who receive it love that because the Argentinian peso is constantly devaluing. The person they pay spends all their money on the person paying them bitcoin because the currency devalues like crazy anyway, so it's much better to pay Pesos and save in Bitcoin.


My point is simply that usually when Bitcoin is highly successful at avoiding controls it's because usage has been too small-scale for the authorities to put effort into it. If it becomes large enough scale to be significant, I'd expect that to look a lot more like what we've seen so far in other countries where monitoring or even outright bans very quickly become effective.




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