Would countries reliant on remittances adopt cryptocurrencies? Price premiums providing an incentive for arbitrage in international transfers. To get money from the UK to India, Western Union will charge 5% in fees while Bitcoin will charge -20%. They can stop one person doing it, but they can't stop everyone or they're going to have to search a lot of luggage in the airports.
</p>If they start finding papr wallets, people will start memorising seeds and walk across the border with remittances. Mining factories and ant miner smuggling in Venezuela. Being involved with Bitcoin in Venezuela can put you in jail. If you live in the West - you think Bitcoin is hard, that it’s too difficult to enter an 8-character password with symbols? Go talk to a Venezuelan about what they go through.</p>
Transcript
[AUDIENCE] I have a two-part question. Imagine you have a country with a huge amount of remittances. [Inaudible] [ANDREAS] I will repeat the question. [AUDIENCE] Thank you.
The second part is... in India, there could be multiple possible scenarios. It could be not just currency wars, but political moves that the incumbents are making. [ANDREAS] Right.
[AUDIENCE] How do we differentiate the two? [Inaudible] [ANDREAS] So the first question was... Will countries adopt cryptocurrency as a whole? That will not happen.
[AUDIENCE] Only for remittances, that is what I am asking. [ANDREAS] I think it is really important to look at remittances because remittances don't go away. What has happened is, when you have a premium on the price of bitcoin in a country due to lack of liquidity, that creates an enormous incentive for arbitrage. Here is the new slogan for remittances: want to transfer money from the UK to India?
Western Union will charge you about 5%, while Bitcoin will charge you -20%. Because you can [buy] bitcoin here [at a discount] of £770, and then sell it in Indian for £1,000 [in rupees]. Sure, they can stop one or two people doing this, but they will need to search a lot of luggage in the airports. People will start moving 20% premium paper wallets; if [airport security] starts finding these paper wallets, they will learn how to memorize twelve word mnemonic seeds, and still walk across the border with remittances.
We as Westerners, most of us live in a privileged world where the amount of pain we must undertake... to adopt Bitcoin is limited. In Venezuela, [some aspects of] being engaged in Bitcoin could put you in jail for the rest of your life. That is, if you escape with your life.
Two miners have been prosecuted in Venezuela. They are now smuggling Antminer S9s across the border to set up mining factories inside Venezuela, using the free electricity to mine bitcoin, using the revenue from bitcoin to buy food from Amazon, have that food delivered to an adjacent country, and then smuggled over the border. You think it is difficult to figure out how to create a password of eight [random words], if it also requires a capital letter and a symbol? "Oh, this Bitcoin wallet is too fucking complicated." "I don't know why you people bother.
I have Visa Debit." Go talk to Venezuelans about what they will go through. [Applause]