I’m not so sure. The volatility of crypto makes it really unattractive to me as a place to keep most of my money. Sure that volatility seems pretty tolerable if my national currency plunges 30% overnight but that’s a pretty unusual thing to happen. So I really wonder how crypto is supposed to help regular people who just a few weeks ago thought this war wasn’t going to happen.

Yup, for Bitcoin it's pretty normal and expected to see double-digit changes in either direction.

Would you really argue the Ruble is more stable than Bitcoin?

>Sure that volatility seems pretty tolerable if my national currency plunges 30% overnight

I feel like that addresses the Ruble.

>but that’s a pretty unusual thing to happen.

Is the larger point. If you can magic 8 ball your country's future with all certainty, then yes, it is a good idea. Otherwise it's just speculative investment with your actual savings?

Yes? Just look at a chart of conversion rates between the two to USD over the past 5 years.

Easy, use an stablecoin like DAI or MIM you can get also as much as 12% APY.

Edit: previously I used the example USDC which you can argue can be controlled by Coinbase.

Earning interest like that requires leaving your money with a custodian, which negates any protection against confiscation.

No, checkout decentralized finances (DeFi). You are leaving your money with an smart contract, which is an inmutable piece of software.

https://en.m.wikipedia.org/wiki/Decentralized_finance

So they must have solved the problem of writing completely bug-free software then? Otherwise leaving your money with an unpatchable service seems like a really bad idea.

I can see you didn't click the link otherwise you will have read the section about that.

"They" didn't solve that problem, it is not the solution to all problems in finances. So, whats your point? Vaccines does not prevent 100% of infections, does that means that they are worthless?

Nirvana fallacy: https://en.wikipedia.org/wiki/Nirvana_fallacy

Which section are you referring to? The one that says "Coding errors and hacks are common in DeFi"?

You said that the contract, i.e. the software, is immutable. This means that it can't be patched. If it can be patched it's not immutable, excepting semantic trickery like each version of the contract being immutable while what "the contract" points to can be changed in order to patch it.

And if you buy Turkish bonds you may get as much as 53%. Your point is?

Fair point, I shouldn't have mention that you can put your stable coins into a DeFi protocol because even if that's interesting is not the point of the answer.

I wanted to address that in the world of crypto there are stable assets pegged to some other FIAT if you want that.

Sorry if this becomes long but I need to explain my point of view. I live in a country that is not as authoritarian as Russia but is not a free economy like the US, people don't trust on FIAT and on banks because it had happened before that they took all our savings [1]. Even if this might seem like an isolated event, it happens every day. For example, if you work remote for a company abroad, the gov will exchange your USD on a wire transfer for the local currency and then not allow you to buy back USD. Our currency had a 60% of inflation last year.

I don't like the speculative aspect of crypto currencies, its volatility creeps me out. I wouldn't want to put my life saving on this. But I can see its value to circumvent corrupt governments and to make a free world. I do believe in humanity, the Putins are an exception and when you give people the opportunity to collaborate, most of them will choose to have a peaceful living.

Now, going back to your Turkish bonds vs DeFi. The difference is you can't buy those anonymously and at any point the gov. or exchange. They actually pay that much because no one wants to buy them, primarly because they don't trust they are going to pay that much. In a way, you can think of DeFi protocols are immutable math functions [2].

[1]: https://en.wikipedia.org/wiki/Corralito [2]: https://en.wikipedia.org/wiki/Decentralized_finance

It's true. Crypto-currencies operate in a black market and therefore enable people to circumvent financial regulations. But circumventing regulations put up by incompetent governments doesn't address the root of the problem which is the fact that you have an incompetent government, and this has a whole range of consequences that go beyond mere currency issues, and that you won't be able to "circumvent" with or without crypto-currencies. So, in my opinion, you really need to address the problem and abandon the illusion that crypto-currencies will fix anything.

it is interesting that you referred to “black market”. If you come from a working democracy where what is “just” is close to what is “fair”, then “black market” can make you think of drugs, weapons, or these sort of ilegal things. But I want to let you know that in some countries we have to go to the black market to buy another FIAT with less inflation because it is illegal to exchange our currency even to protect our savings.

So, yeah we can call it black market but I like the term “free market”.

https://en.m.wikipedia.org/wiki/Argentine_currency_controls_...

They call it black market because a black market is not the same thing as a free market, otherwise they would just call it free market.

Say the central bank of XYZ set a fixed rate of 100 $xyz per USD but it becomes illegal to buy USD and no any bank is willing to sell you USD. In a country like the United States you might hedge against inflation by buying some treasuries.. but in other places they just make it illegal to do anything else.

This automatically creates a “black market” of USD where the price is whatever the people are willing to pay, in the end the free market finds its way.

Again, a black market is not a free market. A free market exists within a legal framework in which rules are enforced. In contrast, a black market is a clandestine market, where illegal transactions take place. This means, for example, that participants in the black market don't have legal recourse in the event of fraud.

“ In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market without market coercions. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority other than those interventions which are made to prohibit market coercions.”

https://en.m.wikipedia.org/wiki/Free_market

And...?

The definition doesn’t say anything about legal, illegal or regulated. So, you have a different definition to most economists.

It is a market where prices are self regulated by supply and demand, without coercion. It perfectly suits for the exchange of of FIATs (or crypto) between parties.

You can call it whatever you want, anyways.

I recommend “Free to Choose” from Friedman as starting point.

You're mistaken. Most economists understand the difference between a free market and a black market in the same way that I do (I am an economist myself). The very definition of free market that you quoted implies the existence of a legal framework and of an authority with coercive power, since some behaviours are prohibited:

"In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority other than those interventions which are made to prohibit market coercions. Examples of such prohibited market coercions include: economic privilege, monopolies, and artificial scarcities."

Further, a market in which fraudsters can commit fraud with impunity is also not a free market but a dysfunctional market.

At any rate, the notion of free market is only vaguely defined, as it's not an important theoretical construct in economics.

As far as crypto-currency markets are concerned, these are not a single market, but many different markets, some of which are heavily regulated, so it's hard to argue that it's a free market.

My point is exactly the opposite, incompetent gov are a byproduct of having too much power to control the money supply. Do you think Putin will still be in power if he couldn’t control the economy, ie if he had no money? In that case, what’s the point of the sanctions?

The cicle which I am most familiar with, goes by like this: gov destroys private enterprise and free economy thru regulations and expropriations, unemployment goes up and people gets dependent on hand outs, the remaining jobs bears all the costs. Unemployed sees gov are they gods, they will kept voting for them forever, even if they live in complete missery, it is all they have.

They become a “cyst”, it is very hard to go back.

Well, this theory is easily refuted by the fact that there are governments that have the same degree of power and control over the economy and don't wreck the economy. Some governments cause hyperinflation, but most don't, even though all are in control of the money supply. The fact that a government can mismanage the economy doesn't mean that it will mismanage the economy. In fact incompetent governments such as the Argentinian government are not that common. In many parts of the world the rule is for governments to be competent, or at least to be competent enough to not cause an economic catastrophe.

Unfortunately data is not in your side. Most countries do not have economic freedom, moreover the less the economic freedom the worse the living conditions [1].

You might think that any country controls their money supply, that’s a fact. But can Biden for example, double the monetary base with his sole signature?

People in those countries could have great aspirations, to have a fair system, a working democracy, a better government and all that… but don’t forget they also need to live in the meanwhile, while fixing all those problems.

I’m not a user of crypto currently, but I see it as a way of shifting power. Similar to what the internet did for information.

[1]: https://www.heritage.org/index/ranking

All I'm saying is crypto is not going to make the institutions of your country work any better. Don't create the illusion that crypto solves a problem that it doesn't solve.

Seems to me like putting my money in to metal and burying it in my yar... an undisclosed location... would still be better than crypto.

Not if you needed to flee.

if such a fantasy situation were true, it would mean world governments would have vastly less leverage to pressure Russia to end their attack, greatly increasing the chance of a longer and possibly more widely-involved war, and in the more general sense making such countries much more comfortable for war mongering despots to flourish (for some awful definition of "flourish"). The Russian financial situation is a feature, not a bug, of a regulated financial system.

The financial system is controlled by the US, so it's just another weapon for the US to wield. Countries that want to remain sovereign (independent of the US) like China and Russia would do well to avoid it, and create an alternative system.

If you want to propose a non-state currency which can rival state-backed ones, solves problems, etc. please go ahead.

crypto ain't it

I don't follow. Do you see crypto as state-backed or allied to state-backed currencies?

Neither. Just trash.

OP is in favor of:

A) "non-state currency"

B) currency that "rival state-backed ones"

C) "solves problems"

One could argue cryptocurrencies don't solve any problem (good luck convincing Russians and Argentinians, but anyway). But they are "non-state" and they "rival state-backed" currencies.

Cryptocurrencies are absolutely a "non-state" and "rival state-backed" asset class, but I'd say it's mostly arguable, given the instability, illiquidity, and general inability (in most places) to exchange crypto for goods and services, whether they are "currencies".

Yes, hand over your crypto keys or you may fall out a window.

That would not be unusual for Russia, and they'd first threat to throw out your immediate family.

In the soviet era, there was a period of political persecution focused on people suspect of having gold or hard currencies. People would be held indefinitely, and subject to harsh torture, until they let go of their assets. Good if you have some, worse if you actually don't. See Aleksander Solzhenitzyn, somewhere near the end of the first volume. And of course, the people torturing were part of the same organization that brought up Vladimir Vladimirovich Putler.

>Vladimir Vladimirovich

Using the middle name (unlike finger) is a high praise in Russia, though.

The US & EU are attacking the ruble now. We have yet to see them attack crypto.

There's no reason to believe that it can handle the kind of pressure the ruble is facing.

I would say the exact opposite. So much pressure can be applied against an oppressive fascist regime thanks to the fact that the world is still using fiat. Russia cannot be trusted as a trade partner when Putin, just one guy alone, decides to put at risk more than 25% of worldwide wheat export just to satisfy his personal dream of a lost past glory. He is using nuclear threats to satisfy his own ego. That type of insane behaviour should be completely inacceptable in a global economy and has to be exponentially expensive to do if we want stable peace.

Trust between trade partners is one of the most important element of an economy but for ideological reasons crypto-currencies enthusiasts believe that should instead be delegated to a protocol. I think it's a fundamental mistake.

This. Sure, in the micro, maybe crypto helps Russian citizens protect assets during a difficult period, but so can gold. And, in the macro, these fiat levers are much more punitive to the regime and the elites that support it.

Not to mention crypto can help the wealthy targets skirt sanctions.

On balance, given that we are dealing with a war of aggression and loss of life, I'm grateful for these tools. And, even to the extent it causes some pain for the Russian people, that further erodes support for the regime's unjust campaign and turns up the heat on them.

I just read that Russia is the 5th largest gold holder in the world.

Yes, they spent the past ~10 years preparing for Western sanctions by buying gold and foreign currencies. They were warned by western countries before 2014 and took the time to adjust their strategy.

IMHO the most interesting change they did is to become self-sufficient regarding their food production, and even net exporter of wheat, corn, and other cereals. They correctly identified that was a risk and made necessary changes to reduce it to the point where they can leverage their position against other actors.

> He is using nuclear threats to satisfy his own ego.

I think its more likely Putin is having to deal with a complex internal financial crisis which could affect Russian national stability. Putin may have something personal to gain from this, but there are bigger problems afoot if Russia descends into chaos. Something, mostly likely financial in nature, has happened to trigger the invasion into Ukraine. Raw access to resources?

So, whether a small portion of economic value is locked up on chain (or not) is unlikely to be relevant at this point.

> Trust between trade partners is one of the most important element of an economy but for ideological reasons crypto-currencies enthusiasts believe that should instead be delegated to a protocol.

Trust (assets) shared between trade partners which is not on-chain can be more easily manipulated as needed in a perceived crisis. We can see the US backed sanctions against Russia's interest are not being applied to Russian fuel exports, but instead target the wealth holder's stored assets. That implies a desire for control over the decision making process itself.

Cryptocurrency based assets would be more resistant to being influenced in this way and would limit the ability to manipulate the wealth holders, but only if their assets were on-chain.

I don't see how cryptocurrency changes this much, given the trust in raw assets relies on physical control of the asset, not a protocol that defines (or limits) how the asset is controlled.

It is in everyone's best interest this crisis in Russia and adjacent regions is addressed. How it is addressed, philosophically, is the real debate here.

> Something, mostly likely financial in nature, has happened to trigger the invasion into Ukraine.

I think he believe parts of his rhetoric. Of course the majority of what he communicates is posturing and lies but we can see recurrent themes in his speeches and articles. My understanding is that he really sees Ukraine as part of the Great Russia empire he wants to build and saw an opportunity to take action following events in the Western world from the past decade or so: instability in the US before and during Trump, Brexit and other fragmentation of Europe, NATO seen as weak and useless, US switching its focus to Asia instead of Europe, the way US left Afghanistan, rise of US and European isolationism, etc.

Regarding the ideology driving the Kremlin you can see those two Wikipedia articles: - the book "Foundations of Geopolitics ": https://en.wikipedia.org/wiki/Foundations_of_Geopolitics

- its author and "philosopher" Aleksandr Dugin: https://en.wikipedia.org/wiki/Aleksandr_Dugin

Those people aren't just cynical crony capitalists who want to make money for themselves. They have a clear fascist view of the world, with an ideal based on a "natural order" of the strong dominating the weak and dreams of a lost glory of the past. They developed a historical, spiritual, and political view of the world that defines their culture as the one that should dominate.

True, but I would argue that oppressive facist regimes pretty much exists because they can print their money to rip off common and working people. I am sure that if you ask russians if they are willing to give away their hard earned money to buy tanks in order to support a crazy dictator they probably will answer no.

We also have to consider they don't need to keep everything in crypto. Just use it to get out of the Ruble and later figure out what to do.

Whilst hoping that their savings don't get further devalued by extreme price volatility.

In the last month I have watched my crypto holdings fluctuate by something like 50%. There is no way in hell I would use crypto as a store of value for anything I cared about under those conditions.

If you want to peg your wealth to the USD, use a stable coin pegged to it. That's what Russians seem to be doing right now.

What you are saying would be similar to: there's no way I would use the financial system, look how the futures exchange is volatile!

Just keep it in cash, then, but you don't have to ditch the entire system because parts of it are volatile.

Does the futures market swing 50%?

Sure the smart ones use a stablecoin. But what about everyone else?

Yeah how's that working out for El Salvador?

what happens when the telecomms infrastructure is hit and shuts down? or when there is no power?

Traditional currencies are already 99% digital, I don't see a considerable downside to using crypto with regards to this.

The 1% analog is redundancy in traditional currencies. Outside the developed economies a huge chuck of transactions is still done with physical cash.

I imagine it would be a lot more convenient to have some hard currency at hand when fleeing a conflict zone. One might need to bribe border guards at some remote location with unreliable (or non-existent) internet connection, to get to safety.

Sure, holding crypto doesn't prevent anyone from also holding physical cash.

Both are quite valuable tools to defend oneself. They have different balances between risk, convenience, liquidity, anonymity.

Genuinely curious, what happens if the country instead firewalls/cuts off their internet from the outside world, how does Crypto handle that?

Because that is essentially what has happened now with the SWIFT sanctions.

SWIFT is not the only way for banks to communicate.

Cutting off internet from outside world is much more drastic measure, highly unlikely to happen for a prolonged period of time.

Even if it does happen, you can still use telephone lines to connect. [1] [2]

[1] https://www.dw.com/en/european-activists-offer-dial-up-inter...

[2] https://www.france24.com/en/20110201-speak-to-tweet-egypt-tw...