In Argentina, it was prohibited to buy, sell, or exchange foreign currency. Whenever the "blue dollar" (the free/black market exchange rate) surged significantly, the government dispatched police to apprehend currency exchangers and intimidate potential participants.
I struggle to see how this same pattern won't eventually replicate on a global scale. We may soon witness the emergence of a "bitcoin blue" rate that substantially diverges from the prices listed on regulated exchanges.
As I have observed in my country, the incentive to arbitrage are an overwhelmingly powerful. Purchasing restricted, undervalued bitcoins and reselling them in unregulated markets at repetition is something that no government intervention can stop.
Replies (9)
Isn’t it already the case with no-KYC Bitcoin premium on the p2p platforms ?
The real issue here is fungibility. If governments worldwide decided to destroy Bitcoin’s fungibility and enforce 100% KYC on every wallet - we saw FUD about KYC on non-custodial wallets recently - then the whole idea of buying “KYC coins” and reselling them on the street breaks down. Without fungibility, the arbitrage loop collapses.
This is exactly why governments push us toward “plastic”. Payment cards create choke points: there’s no P2P with plastic. Only vetted, tightly controlled vendors can accept card payments and they’re deputized to collect IDs for larger purchases. If that same model is extended to Bitcoin before we solve its fungibility problem, things could get very ugly.
In fact, we already see what this looks like. Cash itself is losing fungibility in many places. Notes are scanned at ATMs and at checkout counters by default. You withdraw $500 from the ATM, you spend it at the supermarket and the entire chain is recorded. Even physical cash, once anonymous, is now traceable.
We may already be living in a kind of financial panopticon - it just hasn’t fully tightened its grip yet.
As usual, only small steps can be taken : use your tainted new bank notes in exchange for used ones. Then make those circulate in between small actors.
I guess we will need to segregate KYC cash bank notes from mixed cash bank notes.
Forget it. For fungibility we need a system that enshrines it for all. You can't be the only anonymous person in a group of identified individuals.
Back to gold then ? 😉🙄
How many Bitcoiners understand this?
Once you are aware of what nostr:nprofile1qyt8wumn8ghj7etyv4hzumn0wd68ytnvv9hxgtcppemhxue69uhkummn9ekx7mp0qqsfuv8fgq3cek0ta0rr9qtkm4x3pxqjz22y9u4xcwrj0lrxlfl2jzsxl8lsg has written, you will notice that all the restrictions currently being implemented by the EU or other entities will only accelerate the transition to a parallel market (call it black market, if you want), which, unlike fiat, cannot be stopped. In other words, thanks to the way Bitcoin is built and functions, tyrants have no solutions, no matter how hard they try to prevent the Bitcoin revolution 🟠 .
nostr:nevent1qvzqqqqqqypzp83sa9qz8rxea04uvv5pwmw56yyczgffgshj5mpcwfluvma8a2g2qqstn2qhp5qypm3vpx4ytmr463lfelg5yjkgcaftchegf90hv38clfqvs6w8f
I wonder if this might sound sarcastic. I genuinely try to say that atoms are fungible until now.
I guess we will need to use different sort of currencies depending on what we want to do.
Complicated questions ahead.
It can be. Honestly I still don't see it. What I expect is to see bitcoin 5x the regulated price.
I don't disagree with you; instead, I see it as you do but from a different angle. Where I live, cash is worth more in the free economy than in the fenced one. You get all kinds of discounts if you pay in cash. In fact, just two years ago, it was problematic to pay with credit cards because nobody wanted to accept them or they demanded about a 20% extra.
Even if cash disappeared, one free bitcoin would be worth more than one under heavy surveillance.
