El Salvador's experiment with Bitcoin is an 'Incredible Humanitarian Improvement'

Reply on DGroups | 7 comments

Sept. 20, 2021, 4:29 a.m.

[Hidden email]

Dear colleagues,

The purchasing power of fiat correncies, even hard currencies like the
US Dollar, has fallen sharply over the last century due to money
supply and inflation. Therefore, it is only normal that alternatives
like bitcoin come up. We always had gold but, in the digital era, a
digital asset like bitcoin have some clear advantages over gold.

In my opinion this is a slow process and something to watch in the
long term. Right now I think bitcoin is too volatile for humanitarian
programmes/ CVA. Even if the transfer fee is zero, bitcoin's exchange
rate changes so quickly and so sharply that you cannot consider it as
an option.

Sincerely

Isidro

2021-09-17 23:09 GMT+04:00, David Panetta <[Hidden email]>:
> On what grounds does Bitcoin qualify as an “incredible humanitarian
> improvement”?
>
> Much has been written on Bitcoin’s failure to fulfill the three main
> functions of
> money <https: 02="" 173917="" 18="" 2014="" bitcoin-lacks-the-properties-of-a-real-currency="" www.technologyreview.com="">.
> Bitcoin is a terrible store of value – it is 10X more volatile than major
> currencies. It cannot be an effective unit of account – its fixed supply is
> incompatible with a growing economy and population. And It is not a
> widely-accepted medium of exchange – admittedly, it could be, but not for
> now.
>
> As others have noted, the mining and transaction of Bitcoin is extremely
> damaging to the environment; and due to its anonymity, it enables money
> laundering, financial crimes, and terrorism
> financing <https: archived="" bitcoin-frenzy-making-the-world-less-safe.htm="" realworldresearch="" world_events="" www.emeraldgrouppublishing.com="">.
>
> As for the excitement about “costless” cross-border transactions, there are
> more convenient and cost-effective ways. And the number and quality of
> mechanisms for global remittances is rapidly improving.
>
> Cryptocurrencies are often heralded as the democratization of money – beyond
> the control of central banks and all their supposedly sinister plots.
> Instead, cryptocurrency peddlers transfer that influence to billionaires and
> market manipulators. The market is, in fact, dominated by a culture of
> misinformation and cyberviolence.
>
> The technical deficiencies of cryptocurrencies are not insurmountable. But
> development and humanitarian agencies would be well advised to tread
> carefully into what Reuter’s describes as the worst of all financial
> worlds <https: bitcoin-is-now-worst-all-financial-worlds-2021-05-19="" breakingviews="" www.reuters.com="">.
>
> David Panetta
> Director of Programs
> The SEEP Network
> www.seepnetwork.org | @TheSEEPNetwork <https: theseepnetwork="" twitter.com="">
> S: david.panetta.lgp | P: +1.514.831.8665
>
>

Sept. 17, 2021, 7:08 p.m.

David Panetta

On what grounds does Bitcoin qualify as an “incredible humanitarian improvement”?

Much has been written on Bitcoin’s failure to fulfill the three main functions of money <https: 02="" 173917="" 18="" 2014="" bitcoin-lacks-the-properties-of-a-real-currency="" www.technologyreview.com="">. Bitcoin is a terrible store of value – it is 10X more volatile than major currencies. It cannot be an effective unit of account – its fixed supply is incompatible with a growing economy and population. And It is not a widely-accepted medium of exchange – admittedly, it could be, but not for now.

As others have noted, the mining and transaction of Bitcoin is extremely damaging to the environment; and due to its anonymity, it enables money laundering, financial crimes, and terrorism financing <https: archived="" bitcoin-frenzy-making-the-world-less-safe.htm="" realworldresearch="" world_events="" www.emeraldgrouppublishing.com="">.

As for the excitement about “costless” cross-border transactions, there are more convenient and cost-effective ways. And the number and quality of mechanisms for global remittances is rapidly improving.

Cryptocurrencies are often heralded as the democratization of money – beyond the control of central banks and all their supposedly sinister plots. Instead, cryptocurrency peddlers transfer that influence to billionaires and market manipulators. The market is, in fact, dominated by a culture of misinformation and cyberviolence.

The technical deficiencies of cryptocurrencies are not insurmountable. But development and humanitarian agencies would be well advised to tread carefully into what Reuter’s describes as the worst of all financial worlds <https: bitcoin-is-now-worst-all-financial-worlds-2021-05-19="" breakingviews="" www.reuters.com="">.

David Panetta
Director of Programs
The SEEP Network
www.seepnetwork.org | @TheSEEPNetwork <https: theseepnetwork="" twitter.com="">
S: david.panetta.lgp | P: +1.514.831.8665

Sept. 17, 2021, 4:59 p.m.

Simon Levine

Coincidentally, I've just seen a study showing that <https: 17="" 2021="" sep="" technology="" waste-from-one-bitcoin-transaction-like-binning-two-iphones="" www.theguardian.com=""> the physical waste from one bitcoin transaction is equivalent to junking 2 iPhones.

And it takes 4 times more energy <https: bitcoin-will-burn-planet-down-how-fast="" story="" www.wired.com=""> to mine $1’s worth of bitcoin than $1’s worth of copper.

Now, that’s drop-dead stunning ! And given the link between global heating and humanitarian crises, potentially a big boost for our industry.

Sept. 17, 2021, 4:31 p.m.

[Hidden email]

And as long as humans do not need the environment

https://amp.theguardian.com/technology/2021/sep/17/waste-from-one-bitcoin-transaction-like-binning-two-iphones?__twitter_impression=true

Guillaume
Sent from my iPhone

Sept. 17, 2021, 4:05 p.m.

[Hidden email]

Thanks for this,

Just wondering whether this development will facilitate flows of bitcoin in
our out of El Salvador or both. If it facilitates criminal gangs in sending
Bitcoin out will it be a wonderful humanitarian achievement?

Just a question.

Kind regards

Thomas Giblin

On Fri, 17 Sept 2021 at 12:52, James Shepherd-Barron <

Sept. 17, 2021, 2:47 p.m.

Simon Levine

It also depends on what the value of a bitcoin will be on the day when it’s cash out. (Which makes time spent on precise calculations of MEBs even more irrelevant.)

On the other hand, you can send money to an awful lot of people via mobile phones and with various apps (eg sendwave) with pretty low transaction costs (much less than the transport to a ATM for most people) and the value of the money is stable, which some might think an advantage. So I wonder how far this ‘drop dead stunning ..incredible humanitarian improvement’ is really that drop-dead stunning, incredible, relevant to humanitarian response or indeed an improvement. But apart from that, I fully endorse Mr Gladstein’s comment.

Sept. 17, 2021, 11:51 a.m.

James Shepherd-Barron

From a CNBC article highlighted in this weeks' Cash & Payments News'

*“Wherever you are now, you can send bitcoin to anyone with a Chivo wallet
in El Salvador, and in minutes, they have the value and then they can go to
one of the ATMs and take it out in cash without a fee,”said Alex Gladstein,
chief strategy officer for the Human Rights Foundation.*

*“That’s drop-dead stunning. It’s an incredible humanitarian improvement.”*

A stunning humanitarian improvement indeed. But one that depends, once
again, on the ability to cash out at an ATM.

https://www.cnbc.com/2021/09/09/el-salvador-bitcoin-move-could-cost-western-union-400-million-a-year.html

*James Shepherd-Barron MIH, PhD (hc)*
*Disaster Management Consultant* (*in case you're wondering, this means I
advise Governments, UN Agencies, International NGOs and the private sector
on the modelling and management of international disaster risk*)

I am also an Adjunct Professor at Fordham University and founder of *The
Aid Workers Union*, the support service for independent aid professionals (
https://www.aidworkersunion.org)

Mobile: +44 7785 70 34 90
Skype: james.s-b
Twitter: @jshepherdbarron
https://www.aidessentials.org

- DREAM BIG - Demonstrate vision and insight
- BE BOLD - Have the courage to take risks and make tough decisions
- OWN IT - Take full accountability for your decisions and actions
- WORK AS A TEAM - Don't just coordinate, collaborate
- DO THE RIGHT THING - Conduct yourself with honesty and integrity at
all times
- SHOW RESPECT - Treat others as you would expect to be treated
- LOVE WHAT YOU DO - Bring passion and pride to what you do

The information contained in this e-mail message may be privileged,
confidential, and protected from disclosure. Any unauthorised use,
printing, copying, disclosure, dissemination of or reliance upon this
communication by persons other than the intended recipient may be subject
to legal restriction, sanction or redress. If you think you have received
this e-mail in error, please reply to the sender to that effect and delete
this email promptly.

Please note: This email has been checked for computer viruses, but be
aware that this service is not 100% reliable. Do not open any attachment
unless you have specifically requested it. The sender bears no
responsibility for any such transmission.