Really fascinating and informative article. The snippets on Gates and Buffet made me think of how gaining power often results in the same individuals wanting to preserve or grow their power, also making them resistant to change that may cause them to lose even just a small fraction of it.
As for the likes of Bill Gates and Buffet, Mo said they might understand the technology behind Bitcoin, but they will never be happy about it because it is coming to seize a place on the global stage that they used to have just for themselves. In direct contradiction to billionaire claims that Bitcoin is worthless and has no social value, Mo knows many Sudanese who rely on it as a lifeline. Maybe, Mo said, the critics just cannot see past their financial privilege.
You make a good point. Perceptions of public personas can be easily skewed based on the headlines I choose to click on. Powerful people are not all power hoarders; still, those with more power are more likely to go unpunished from rule-bending or for behaviors that are decried.
Bill Gates, who also used to be the world’s richest person, has said Bitcoin is a “greater fool theory” investment, and that he would short it, if he could.
When Gates made that statement, Bitcoin was worth nearly $9,300, so if you compare it with today's value of $36,800 it looks like a moronic statement. But if Gates had shorted Bitcoin on that date for one week later, he would have made 10.6% on his investment. A month from that date? 25.6%! Shorting for a year would have earned him 33.9% (but probably left him sweating since Bitcoin surged 41.3% in April 2019).
People, she said, are quite aware that the elites are stealing from the citizens through debasement.
Wikipedia has an article about debasement, but it only explains how it works with commodity (precious metal) coins. Can the elites really stal from the rest of citizens by intentionally debasing fiat currency?
At the same time, Bashir launched a tribute system to finance his activities. On top of what was taken through traditional taxation and seigniorage, citizens had to pay a portion of their income to help the martyrs of their dictator’s wars.
"Monetary seigniorage" is where sovereign-issued securities are exchanged for newly-printed banknotes by a central bank, allowing the sovereign to "borrow" without needing to repay.[3] Monetary seigniorage is sovereign revenue obtained through routine debt monetization, including expansion of the money supply during GDP growth and meeting yearly inflation targets.[3]
Seigniorage can be a convenient source of revenue for a government. By providing the government with increased purchasing power at the expense of public purchasing power, it imposes what is metaphorically known as an inflation tax on the public.
Worth noting that the article doesn't actually present seigniorage as a necessarily bad thing.
Today, after a series of devaluations and constant inflation, a Sudanese pound will officially obtain around .0025 dollars. According to Mo, inflation is 340%.
According to XE.com, inflation is 32.40%. Which is still high, but an order of magnitude lower than Mo's estimate. I'm thinking this is likely a misquote, that what he actually said was something along the line of "from year x to year y, inflation was 340%".
Mo is beginning to see just how massive the Lightning Network will be for Sudan because most users will be in the micropayment space, sending transactions of $5 or $10, and will not be able to afford the increasingly high on-chain fees. If international exchanges can choose to service Sudan, and enable Lightning withdrawals and deposits, he said that would be an enormous step forward for financial empowerment.
I'm not very familiar with the Lightning Network, but apparently it's a workaround for Bitcoins well-known scalability problems.
Inflation is officially reported at around 20%. Kassa is not sure what the exact rate is, but said that Ethiopians traditionally buy a chicken or sheep or lamb for Easter, and these prices go up steadily every year. When he arrived in Ethiopia in 2013 to start a consulting job, one lamb went for around 1,500 birr. Today, it can go for 5,000 or even 7,000 birr.
Kassa said the biggest obstacle to Bitcoin adoption in Ethiopia might be the false promise of alternative cryptocurrencies. In particular, he has identified Cardano as a threat. In a recent video, the currency’s creator spoke about working with the Ethiopian regime to incorporate 5 million students onto the Cardano blockchain, and boasts that then they could be tracked with metadata throughout their life and career.
“Our vision and goals,” he said, “are directly in line with the goals of the Ethiopian government.” In contrast, Kassa is glad that Bitcoin’s goals are not in line with the aims of the thieves and bureaucrats who run his country. He worried that many may fall prey to schemes like Cardano.
Alternatively; the real promise of altnerative cryptocurrencies. I don't know wnything about Cardano specifically, but there are definitely better cryptocurrencies out there than Bitcoin for actual use as a currency.
They do not see the water that they swim in, and are seemingly blind to the trillions of dollars of money laundered each year through the banking system. For them to ignore the harms that the dollar system has caused on the developing world, Kassa said, and instead focus on the flaws of Bitcoin, is naive and self-serving.
Let's not pretend that Bitcoin isn't used for money laundering and other criminal activities. This article is very one-sided, presenting only the beneficial uses of Bitcoin, none of the more shady uses.
And for those comfortable in the dollar bubble? It’s time to check your financial privilege.
You know what? I think that can be said for those in the Bitcoin bubble as well. I'm willing to bet the author of this article has a significant investment in Bitcoin, which gives them a vested interest in the wider adoption of it, and thus motivation for writing completely one-sided articles like this one. That's not to say I disliked the article though; For the most part it's well-written and informative, and I loved reading the perspectives from Bitcoin-adopters around Africa on how this technology has transformed their lives for the better. But the entire article needs to be viewed through a sceptical lens.
I don't understand the difference. Shorting is just like any other investment: Buy something, and hope to sell it at a higher price (or in the case of shorting; sell something, and hope to buy it at a lower price). Either way, you hope to take someone elses money and put it in your own pocket, just like those who bought Bitcoin in 2018 and sell it now.
Wild to hear that this often-dubbed “volatile” currency may be more practical and safe than national currencies in Nigeria, Sudan and Ethiopia. Their financial systems indeed sounds reprehensible. But I get the feeling Bitcoin can only help in limited ways if it gets outlawed... which seems something these regimes are intent on. There’s clearly more to fix there!
Super interesting article making a very convincing case for bitcoin. Especially as it relates to those involved in an unstable monetary system.
Anyone with access to the internet can now participate in Bitcoin, a new money system with equal rules for all participants, running on a network that does not censor or discriminate, used by individuals who do not need to show a passport or an ID and held by citizens in a way that is hard to confiscate and impossible to debase.
He said his penny drop moment actually came when he was at the airport in Addis last summer. As he was boarding the plane, he stood and wondered: If I had my wealth stored in gold or cattle, how could I take it across a border?
Really fascinating and informative article. The snippets on Gates and Buffet made me think of how gaining power often results in the same individuals wanting to preserve or grow their power, also making them resistant to change that may cause them to lose even just a small fraction of it.
I'm not sure if that's entirely fair. Gates has donated billions to charity, and Buffet is loudly advocating for taxing the rich harder.
You make a good point. Perceptions of public personas can be easily skewed based on the headlines I choose to click on. Powerful people are not all power hoarders; still, those with more power are more likely to go unpunished from rule-bending or for behaviors that are decried.
When Gates made that statement, Bitcoin was worth nearly $9,300, so if you compare it with today's value of $36,800 it looks like a moronic statement. But if Gates had shorted Bitcoin on that date for one week later, he would have made 10.6% on his investment. A month from that date? 25.6%! Shorting for a year would have earned him 33.9% (but probably left him sweating since Bitcoin surged 41.3% in April 2019).
Wikipedia has an article about debasement, but it only explains how it works with commodity (precious metal) coins. Can the elites really stal from the rest of citizens by intentionally debasing fiat currency?
I had to look up the word seigniorage on Wikipedia.
Worth noting that the article doesn't actually present seigniorage as a necessarily bad thing.
According to XE.com, inflation is 32.40%. Which is still high, but an order of magnitude lower than Mo's estimate. I'm thinking this is likely a misquote, that what he actually said was something along the line of "from year x to year y, inflation was 340%".
I'm not very familiar with the Lightning Network, but apparently it's a workaround for Bitcoins well-known scalability problems.
Actually, an increase from 1,500 birr in 2013 to 7,000 birr in 2021 comes out to an annual inflation of 19.26%.
Alternatively; the real promise of altnerative cryptocurrencies. I don't know wnything about Cardano specifically, but there are definitely better cryptocurrencies out there than Bitcoin for actual use as a currency.
Let's not pretend that Bitcoin isn't used for money laundering and other criminal activities. This article is very one-sided, presenting only the beneficial uses of Bitcoin, none of the more shady uses.
You know what? I think that can be said for those in the Bitcoin bubble as well. I'm willing to bet the author of this article has a significant investment in Bitcoin, which gives them a vested interest in the wider adoption of it, and thus motivation for writing completely one-sided articles like this one. That's not to say I disliked the article though; For the most part it's well-written and informative, and I loved reading the perspectives from Bitcoin-adopters around Africa on how this technology has transformed their lives for the better. But the entire article needs to be viewed through a sceptical lens.
I appreciate your fact-checking & critical eye here!
I don't understand the difference. Shorting is just like any other investment: Buy something, and hope to sell it at a higher price (or in the case of shorting; sell something, and hope to buy it at a lower price). Either way, you hope to take someone elses money and put it in your own pocket, just like those who bought Bitcoin in 2018 and sell it now.
Wild to hear that this often-dubbed “volatile” currency may be more practical and safe than national currencies in Nigeria, Sudan and Ethiopia. Their financial systems indeed sounds reprehensible. But I get the feeling Bitcoin can only help in limited ways if it gets outlawed... which seems something these regimes are intent on. There’s clearly more to fix there!
This comment was deleted on 9/17/2021
Super interesting article making a very convincing case for bitcoin. Especially as it relates to those involved in an unstable monetary system.