How to earn Bitcoin and create a winning solution for one of the harshest economies in the world, Venezuela.
The average monthly salary in Venezuela stands at around $100 today (for those that know English), plus free food & gas. Most adults in Venezuela, however, freelance extra work throughout the week to truly thrive as internet is expensive ($25) and so are goods that are priced internationally (computers, and so on).
A two-way solution
During the past few days I've been talking with 12 Venezuelans who are very polite and would make highly motivated assistants, eager to work for $5 per hour, with good to great English. Obviously using Dollars isn't ideal, so we will be paying them in a conversion of Bitcoin. Now, how can you profit from this? Perhaps you have: A topical blog - Need artistic renderings - Need memes and marketing - Convert PDF data to Access or Excel - Need to update a Database - Need some wears marketed and sold - Need research compiled - Need ad design - Direct Customer Sales - Programming - Or papers, scripts, or books written, whatever. These fees are a lot for them, yet low enough for you to make profit and reinvest These are just some ideas. For a cost of $100 to $200 you could get a completed product, that might take 40 hours to produce, and then you can turn around and sell it for $1,000's. These profits can be reinvested into starting more projects, hiring more Venezuelans, and acquiring Bitcoin. This is one way to earn Bitcoins, fast. Whereas professional services may go for $80 per hour in America, you can section off parts of these services, and then lump sum to arrive at profit. Let's say you sell 10 hours @ $80 and hire 20 hours of Venezuelan assistance @ $5, your profit is not $70 per hour but a lump of $700 - as you are not bogged down with details, only polish and finish (2 hours) - allowing you to sell, sell, sell :)
I already know a never-been employed house mom who started this 3 years ago, and is now making $250,000 per year profit. How? Finding the right items to sell, the right team, and aggressively expanding.
Once she makes $1k from one product, she'd hire 20 assistants to maximize return. Trial, error, exponential returns. Now what do you do with all this money? Buy Bitcoin of course! Her typical profit structure is aiming for $5,000 in sales with a cost of $300 in Vene assistants, with a few failures in between. What can you create?
Personnel and costs
Now, here's the pricing and the people. I'm no middle man, you got to contact them directly, pay them directly. I'll link them this thread, and they can reply to market themselves, with a list of skills and so on. But let me be clear, this is NOT handouts. This is profit, for you, and reward for applying a skill, for them. No need to listen to sob stories, instead promote work stories of accomplishment. We want proud capitalists engaging in fair exchange, not groveling leaches, which become all to frequent in freebie societies. (to be updated with user replies)
Here are the rates:
$100 (or less) - $5 per hour - Trial Projects
$200 per month - $4 per hour - Regular Go-To
$300 per month - $3 per hour - Full time, exclusive
Upper-tier work, $5 to $15 per hour, flat.
Living costs in Venezuela run about $300 per month, for moderate living, and $500 per month for mid-upper class. So know that anyone making $300 per month is doing pretty good... $3 full-time work is $480 monthly, not bad. However, less hours cost more. I've had some communications as well with: u/Live_Think_Diagnosis - Project Manager This user can set you up a crew of 10 easy. If the op runs big and you want to set up a full office, you'll need about $350 for Rent, $100-250 for Internet, and a gas generator for power (pretty much free) - so all in all about $700 monthly for an office of 10 workers - with labor, you are talking $5,500 monthly for 1,600 hours - that's a lot of projects; a lot of profit.
Live_Think_Diagnosis guided me through some possibilities and the costs. They have a lot of contacts and know how to get the ball rolling from thought into result. It's a very different world, so this guide can help! The captain gets a 20% cut, and they will also do consulting to advise on projects, help you brainstorm ideas, etc, for $10 per session (1 hour). Rates for smaller projects are same as above (starting at $5). Many users have contacted me for work. If you want to contact them directly (no manager), I'll be inserting their names above as they reply. I hope Bitcoin likes this project! It's an important step in spreading capitalism, TRUE FREE MARKET CAPITALISM, to our southern brothers. This is NOT throwing Bitcoin away, this is FOR YOU to PROFIT. This is not a competition for who can grovel the loudest, but an exchange of benefits, scale-able the world over. The stay-at-home mom now sends $6,000 per month to humans trapped in communism, and profits $15,000. Her $72k yearly of 'charity' teaches job skills, and is likely to increase to $150k per year in the future... you can't scale like that by throwing away money for storytelling, not ever.
$100 one-time is less good than $150,000 year-over-year.
What can you achieve? I recommend talking with Live_Think_Diagnosis yourselves and see what you can come up with. Need a resume, need a programming tutor, need your name published in trade journals? Maybe a Venezuelan can help you out! And the world of international commerce becomes more decentralized, with one of the BEST use cases of Bitcoin, global capitalism. Without Bitcoin, this would never be possible. Use this golden opportunity, and spread money and happiness to the world. Good luck, and I hope you like this concept. Together, we can make this world a freer place, for all.
Will Bitcoin be a long-term solution for Venezuela's economy?
🇻🇪 Venezuela, the country with the highest inflation rate in the world, with a non-existence decentralize currency, has struggled to obtain cash to finance their daily needs leading to starvation of the general population. The socialist nation saw a fall in oil prices, throwing the entire economy into disorder. Experts predict that Venezuelan's inflation could go as high as 1,600%. No wonder the awareness of Venezuelans in the consequences of government-funded and supported banking and financial systems. There's an arguable irresponsible monopoly in charge of their currency where a bright solution comes in a digital form. Bitcoin has gradually changed the mindset of the global population, and Venezuelans are the ones who could benefit directly with the ability to gain control of their money and obtain financial freedom from their government. The rising demand and interest in bitcoin in Venezuela also make the possibility of the replacement of national currency with a digital store of value, that's where "Petro" came to play. Petro, here's the Wikipedia definition "Announced in December 2017, it is claimed to be backed by the country's oil and mineral reserves, and it is intended to supplement Venezuela's plummeting bolívar fuerte currency, purportedly as a means of circumventing U.S. sanctions and accessing international financing." (the entire link: https://en.wikipedia.org/wiki/Petro_(cryptocurrency) Petro has been everywhere on state TV and government-run social media, promoting its benefits. There's even a catchy Twitter hashtag #PetroParaVencer, (“Petro to conquer”) which has been regularly used by politicians and government Twitter accounts. Ok, so what has happened with Petro so far? Declared as unconstitutional, one of Venezuela's two opposing lawmaking bodies using hard rhetoric has denounced the project as not only a fraud but a threat to potential investors. What's next for Venezuela? The same body declared: "This deepens the crisis that we are living in. The PTR is another [example] of corruption, and we will come out of this crisis with measures that we have announced from this Parliament." What's your view on Venezuela's faith?
Tracing a "Bitcoin is saving the economy of [country]!" claim to its roots: Venezuela
Another excerpt, I'm sure you'll enjoy. I've linked the refs, the Reason article is bloody rabid. Probably won't bother with the fabulous Bitcoin fanfic since, the actual media are bad enough on this one. Venezuelans are relying on Bitcoin to eat! Periodically, there will be a rash of news stories claiming that Bitcoin has become popular in some country suffering economic problems, such as Venezuela, India or Argentina – because the word “Bitcoin” makes a headline catchy, even if there’s nothing to the story. This transmutes into claims that Bitcoin will definitely take over the world, any day now. Or in response to scepticism about Bitcoin, advocates will just answer “But, Venezuela!” These always fall apart on closer examination. Venezuela is a typical example: all the coverage traces back to a story in Libertarian magazine Reason, fiercely advocating Bitcoin as a way to avert the spectre of socialism and regulation. One of their interviewees had been arrested for stealing electricity to mine bitcoins, which the author describes as a “government crackdown” on “freedom” because “bitcoin mining is arguably the best possible use of electricity in Venezuela”. A story in The Guardian in the wake of the Reason story appears to be where the rest of the press picked it up. It speaks of some Venezuelans relying on Bitcoin for “basic necessities,” and was based on interviews with a Bitcoin exchange owner, one of his employees and two of his customers. The author had previously written of Argentina and bitcoin. These two questionably-founded stories were echoed and elaborated upon by the rest of the press, including – amongst many others – the Washington Post claiming that Bitcoin mining is “big business” in Venezuela, the New York Times that Bitcoin has “gained prominence” because of Venezuela or BBC News repeating claims from a Bitcoin boosterism blog – all of this being factoids repeated in a media game of “telephone.” The Venezuelan volume on LocalBitcoins (a site for arranging person-to-person Bitcoin trades) at the time was on the order of 300-400 BTC/week, which isn't nothing but is negligible in the context of a whole country, and tracked fairly closely with LocalBitcoins usage in other countries. . 1 Jim Epstein. “The Secret, Dangerous World of Venezuelan Bitcoin Mining: How cryptocurrency is turning socialism against itself”. Reason, January 2017. 2 Kamilia Lahrichi. “Growing number of Venezuelans trade bolivars for bitcoins to buy necessities”. The Guardian, 16 December 2016. 3 Kamilia Lahrichi. “Argentina’s Bitcoin Scene Booms”. International Finance Magazine, July-September 2015. 4 Mariana Zuñiga. “Bitcoin ‘mining’ is big business in Venezuela, but the government wants to shut it down”. Washington Post, March 10 2017. 5 Nathaniel Popper. “S.E.C. Rejects Winklevoss Brothers’ Bid to Create Bitcoin E.T.F.” Dealbook, New York Times, 10 March 2017. 6 Leisha Chi. “Bitcoin digital currency hits three-year high of $1,000”. BBC News, 3 January 2017.
Putting $400M of Bitcoin on your company balance sheet
Also posted on my blog as usual. Read it there if you can, there are footnotes and inlined plots. A couple of months ago, MicroStrategy (MSTR) had a spare $400M of cash which it decided to shift to Bitcoin (BTC). Today we'll discuss in excrutiating detail why this is not a good idea. When a company has a pile of spare money it doesn't know what to do with, it'll normally do buybacks or start paying dividends. That gives the money back to the shareholders, and from an economic perspective the money can get better invested in other more promising companies. If you have a huge pile of of cash, you probably should be doing other things than leave it in a bank account to gather dust. However, this statement from MicroStrategy CEO Michael Saylor exists to make it clear he's buying into BTC for all the wrong reasons:
“This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a bitcoin standard.”
Let's unpack it and jump into the economics Bitcoin:
Is Bitcoin money?
No. Or rather BTC doesn't act as money and there's no serious future path for BTC to become a form of money. Let's go back to basics. There are 3 main economic problems money solves: 1. Medium of Exchange. Before money we had to barter, which led to the double coincidence of wants problem. When everyone accepts the same money you can buy something from someone even if they don't like the stuff you own. As a medium of exchange, BTC is not good. There are significant transaction fees and transaction waiting times built-in to BTC and these worsen the more popular BTC get. You can test BTC's usefulness as a medium of exchange for yourself right now: try to order a pizza or to buy a random item with BTC. How many additional hurdles do you have to go through? How many fewer options do you have than if you used a regular currency? How much overhead (time, fees) is there? 2. Unit of Account. A unit of account is what you compare the value of objects against. We denominate BTC in terms of how many USD they're worth, so BTC is a unit of account presently. We can say it's because of lack of adoption, but really it's also because the market value of BTC is so volatile. If I buy a $1000 table today or in 2017, it's roughly a $1000 table. We can't say that a 0.4BTC table was a 0.4BTC table in 2017. We'll expand on this in the next point: 3. Store of Value. When you create economic value, you don't want to be forced to use up the value you created right away. For instance, if I fix your washing machine and you pay me in avocados, I'd be annoyed. I'd have to consume my payment before it becomes brown, squishy and disgusting. Avocado fruit is not good money because avocadoes loses value very fast. On the other hand, well-run currencies like the USD, GBP, CAD, EUR, etc. all lose their value at a low and most importantly fairly predictible rate. Let's look at the chart of the USD against BTC While the dollar loses value at a predictible rate, BTC is all over the place, which is bad. One important use money is to write loan contracts. Loans are great. They let people spend now against their future potential earnings, so they can buy houses or start businesses without first saving up for a decade. Loans are good for the economy. If you want to sign something that says "I owe you this much for that much time" then you need to be able to roughly predict the value of the debt in at the point in time where it's due. Otherwise you'll have a hard time pricing the risk of the loan effectively. This means that you need to charge higher interests. The risk of making a loan in BTC needs to be priced into the interest of a BTC-denominated loan, which means much higher interest rates. High interests on loans are bad, because buying houses and starting businesses are good things.
BTC has a fixed supply, so these problems are built in
Some people think that going back to a standard where our money was denominated by a stock of gold (the Gold Standard) would solve economic problems. This is nonsense. Having control over supply of your currency is a good thing, as long as it's well run. See here Remember that what is desirable is low variance in the value, not the value itself. When there are wild fluctuations in value, it's hard for money to do its job well. Since the 1970s, the USD has been a fiat money with no intrinsic value. This means we control the supply of money. Let's look at a classic poorly drawn econ101 graph The market price for USD is where supply meets demand. The problem with a currency based on an item whose supply is fixed is that the price will necessarily fluctuate in response to changes in demand. Imagine, if you will, that a pandemic strikes and that the demand for currency takes a sharp drop. The US imports less, people don't buy anything anymore, etc. If you can't print money, you get deflation, which is worsens everything. On the other hand, if you can make the money printers go brrrr you can stabilize the price Having your currency be based on a fixed supply isn't just bad because in/deflation is hard to control. It's also a national security risk... The story of the guy who crashed gold prices in North Africa In the 1200s, Mansa Munsa, the emperor of the Mali, was rich and a devout Muslim and wanted everyone to know it. So he embarked on a pilgrimage to make it rain all the way to Mecca. He in fact made it rain so hard he increased the overall supply of gold and unintentionally crashed gold prices in Cairo by 20%, wreaking an economic havoc in North Africa that lasted a decade. This story is fun, the larger point that having your inflation be at the mercy of foreign nations is an undesirable attribute in any currency. The US likes to call some countries currency manipulators, but this problem would be serious under a gold standard.
Currencies are based on trust
Since the USD is based on nothing except the US government's word, how can we trust USD not to be mismanaged? The answer is that you can probably trust the fed until political stooges get put in place. Currently, the US's central bank managing the USD, the Federal Reserve (the Fed for friends & family), has administrative authority. The fed can say "no" to dumb requests from the president. People who have no idea what the fed does like to chant "audit the fed", but the fed is already one of the best audited US federal entities. The transcripts of all their meetings are out in the open. As is their balance sheet, what they plan to do and why. If the US should audit anything it's the Department of Defense which operates without any accounting at all. It's easy to see when a central bank will go rogue: it's when political yes-men are elected to the board. For example, before printing themselves into hyperinflation, the Venezuelan president appointed a sociologist who publicly stated “Inflation does not exist in real life” and instead is a made up capitalist lie. Note what happened mere months after his gaining control over the Venezuelan currency This is a key policy. One paper I really like, Sargent (1984) "The end of 4 big inflations" states:
The essential measures that ended hyperinflation in each of Germany,Austria, Hungary, and Poland were, first, the creation of an independentcentral bank that was legally committed to refuse the government'sdemand or additional unsecured credit and, second, a simultaneousalteration in the fiscal policy regime.
In english: *hyperinflation stops when the central bank can say "no" to the government." The US Fed, like other well good central banks, is run by a bunch of nerds. When it prints money, even as aggressively as it has it does so for good reasons. You can see why they started printing on March 15th as the COVID lockdowns started:
The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.
In english: We're going to keep printing and lowering rates until jobs are back and inflation is under control. If we print until the sun is blotted out, we'll print in the shade.
BTC is not gold
Gold is a good asset for doomsday-preppers. If society crashes, gold will still have value. How do we know that? Gold has held value throughout multiple historic catastrophes over thousands of years. It had value before and after the Bronze Age Collapse, the Fall of the Western Roman Empire and Gengis Khan being Gengis Khan. Even if you erased humanity and started over, the new humans would still find gold to be economically valuable. When Europeans d̶i̶s̶c̶o̶v̶e̶r̶e̶d̶ c̶o̶n̶q̶u̶e̶r̶e̶d̶ g̶e̶n̶o̶c̶i̶d̶e̶d̶ went to America, they found gold to be an important item over there too. This is about equivalent to finding humans on Alpha-Centauri and learning that they think gold is a good store of value as well. Some people are puzzled at this: we don't even use gold for much! But it has great properties: First, gold is hard to fake and impossible to manufacture. This makes it good to ascertain payment. Second, gold doesnt react to oxygen, so it doesn't rust or tarnish. So it keeps value over time unlike most other materials. Last, gold is pretty. This might sound frivolous, and you may not like it, but jewelry has actual value to humans. It's no coincidence if you look at a list of the wealthiest families, a large number of them trade in luxury goods. To paraphrase Veblen humans have a profound desire to signal social status, for the same reason peacocks have unwieldy tails. Gold is a great way to achieve that. On the other hand, BTC lacks all these attributes. Its value is largely based on common perception of value. There are a few fundamental drivers of demand:
Means of Exchange: if people seriously start using BTC to buy pizzas, then this creates a real demand for the currency to accomplish the short-term exchanges. As we saw previously, I'm not personally sold on this one and it's currently a negligible fraction of overall demand.
Criminal uses: Probably the largest inbuilt advantage of BTC is that it's anonymous, and so a great way to launder money. Hacker gangs use BTC to demand ransom on cryptolocker type attacks because it's a shared way for an honest company to pay and for the criminals to receive money without going to jail.
Apart from these, it's hard to argue that BTC will retain value throughout some sort of economic catastrophe.
BTC is really risky
One last statement from Michael Saylor I take offense to is this:
“We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” MicroStrategy CEO said in an interview
"BTC is less risky than holding cash or gold long term" is nonsense. We saw before that BTC is more volatile on face value, and that as long as the Fed isn't run by spider monkeys stacked in a trench coat, the inflation is likely to be within reasonable bounds. But on top of this, BTC has Abrupt downside risks that normal currencies don't. Let's imagine a few:
A critical software vulnerability is found in the BTC codebase, leading to a possible exploitation.
Xi Jinping decides he's had enough of rich people in China hiding their assets from him and bans BTC.
Some form of bank run takes hold for whatever reason. Because BTC wallets are uninsured, unlike regular banks, this compounds into a Black Tuesday style crash.
Blockchain solutions are fundamentally inefficient
Blockchain was a genius idea. I still marvel at the initial white paper which is a great mix of economics and computer science. That said, blockchain solutions make large tradeoffs in design because they assume almost no trust between parties. This leads to intentionally wasteful designs on a massive scale. The main problem is that all transactions have to be validated by expensive computational operations and double checked by multiple parties. This means waste:
BTC was estimated to use as much electricity as Belgium in 2019. It's hard to trace where the BTC mining comes from, but we can assume it has a huge carbon footprint.
A single transactions is necessarily expensive. A single transaction takes as much electricity as 800,000 VISA transactions, or watching 50,000 hours of youtube videos.
There is a large necessary tax on the transaction, since those checking the transaction extract a few BTC from it to be incentivized to do the work of checking it.
Many design problems can be mitigated by various improvements over BTC, but it remains that a simple database always works better than a blockchain if you can trust the parties to the transaction.
Just look at Venezuela, the country with the highest inflation rate in the world. The socialist nation has experienced a swift fall in oil prices, throwing the entire economy into turmoil. Venezuela Has Bitcoin Stash and Doesn’t Know What to Do With It By . Alex Vasquez. and . Patricia Laya, September 26, 2019, 10:10 AM EDT Central bank to decide if crypto can count as foreign ... Venezuela is in the midst of a political crisis. For 20 years the country has been governed by the socialist party, led by Hugo Chavez from 1999 until his death in 2013. Following his death, Nicolás Maduro, his preferred successor, took control of the country following a much-disputed election. Under Manduro, the economy and local […] Venezuela has been buying a lot more Bitcoin than other “at-risk” economies, such as Argentina, Colombia, Turkey, and Iran which have also seen Bitcoin volumes increase as a hedge against runaway inflation. Bitcoin volumes in Venezuela continue to outperform other troubled countries. 2019 LocalBitcoins volume: Venezuela 🇻🇪 – $305.93M The nation of Venezuela is in a state of crisis. Over the past few years, corruption and failed government policies have led Venezuela's economy to collapse, causing infrastructure to crumble and ...
Venezuela has launched a new digital currency, called PETRO. Some analysts are calling it an ingenious plan to counter US sanctions. Others say it's a desperate move to secure cash in the midst of ... According to the IMF, Venezuela’s hyperinflation will reach 10 million percent this year due to the sanctions implemented by the Obama and Trump administrations. However there are reports that ... Venezuela is in the midst of a political crisis. For 20 years the country has been governed by the socialist party, led by Hugo Chavez from 1999 until his de... Know more about BITCOIN & BlockChain Technology. Bitcoin ASIC mining. Bitcoin Venezuela: Join Bitcoin World. Avoid MADURO & cynicals runts controls. Venezuelan Bitcoin miners: go ahead!!!!! GOOD ... Recently we have been talking a lot about Venezuela and their economic situation. We can even say now that this country is one of the most active in the cryptocurrency industry. But Venezuelans ...