As Hyperinflation Hits Lebanon, Crypto Debit Cards Look Appealing

in #crypto4 years ago

lebanonmarket1200.jpg

According to this article from Bitcoin.com news that I was reading this morning Lebanon's economy has entered hyperinflation with food prices rising 200% in the last month.

Annual inflation sits at 462% but it's really the cost of fulfilling basic survival needs that get most of the focus in a crisis. So a 200% increase in food prices in 1 month period is a serious issue.

Bitcoin As A Store Of Value

Here is a chart showing the Bitcoin price over the last 3 months:

btc last 3 months.png

Worst case scenario, you would have bought Bitcoin at the top of the red rectangle in May and sold it for a 19% loss.

That's significantly better than your money losing more than half of it's purchasing power.

It's a bit late for the Lebanese but this is why I wrote The Bitcoin Savings Plan - The No-Skill Strategy To Protect The Value Of Your Money With Bitcoin.

Crypto Debit Cards

But what if hyperinflation comes to my own country? My local food retailers do not accept crypto as payment.

This is where I see a huge benefit in having a crypto debit card. You get the store of value benefit of Bitcoin and then only liquidate as much as you need to as you spend it.

Plus, from your point of view the experience is as simple as using a regular debit card.

How We Can Help The Lebanese

Think win/win.

Right now I have no doubt that a large number of skilled Lebanese remote workers would like nothing more than a gig or two online that pays in Bitcoin.

We don't even have to take the risk of holding Bitcoin and losing money on the price. We can just wait until it's time to pay and then purchase the Bitcoin then.

I did have high hopes for https://ethlance.com but it doesn't seem to have much use.

Where would I fine Lebanese freelancers that I could pay in Bitcoin? Please post the URL of any platforms you know of in the comments below.

The Cause

From the article:

The underlying causes of inflation are always the same. Governments start running larger and larger fiscal deficits and call on the central bank to fund those deficits because tax and bond financing avenues are inadequate. In hyperinflations, central banks are required to virtually fund the governments entire fiscal operations.

The result?

The Lebanese pound has lost 82% of its value against the U.S. dollar on the black market since January.

We're Next

How would you know if your own country were heading for hyperinflation?

You would see whether your government was running a larger and larger fiscal deficit. You would see if (and how often) the government was calling on the central bank to help to fund those deficits.

Look up your own national statistics to reveal the situation in your own country.

This is the case in most developing and developed countries. So it's only a question of the order in which the countries will experience hyperinflation. The problem is systemic.

It's a flaw at the root of the money system, so there's no solution that can be applied to the existing system. A new monetary system is needed.


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Won’t be the first or the last I see Argentina A satoshi is now worth 1 peso cent and I’m sure more countries will follow! Won’t be long before my own county hits hyperinflation too

Protecting my downside by getting more BTC

Yeah, although fiat in my country is EUR (which is relatively stable), I am converting most of it to BTC too! And I agree about Crypto debit cards! They are easy to use, and instead of paying bank fees you actually get cash-backs! @tipu curate

We see it happening to country after country in this modern day, yet still so many of us believe its like a car accident and will never happen to you. I can't wait to see the inevitable new monetary system, I just hope it is sooner rather than later

I hope they overlap so no one gets hurt.

Excellent stuff.
I'm so curious to see how this plays out and whether it hits the US. I mean printing trillions but not hitting inflation yet. Or at least not obviously. But the flight to BTC and gold has to say something.

Yeah, I didn't mention Gold. I used to have an account with https://www.goldmoney.com. They used to provide a debit card that would allow you to spend your Gold in the same way that crypto debit cards do today. This was before crypto was a thing though.

I recieved the Uphold debit card last week.
It is the only crypto debit card working in the U.S.A. that I know of. There is a tax report function if you choose to use it.
I am careful to deposit to the USD section which is available immediately and calms the sending bank. External sends from crypto deposits have a 24 hour hold for new deposits.
Choose which coin, metal or fiat to fund the card before debit transaction.
I can now have savings and liquidity.

That's great news. I know it's a bit of a regulatory minefield in the US.

Bitrefil have a good blog post on the different crypto free lance platforms.

Lot's of good options in the crypto debit card space!

I like that Bitcoin price is interesting both of it's stable or volatile.

Debit cards have always intrigued me because when you swipe you are not only selling your crypto at that moment in time to convert to fiat but you may also be incurring in a taxable event so even if you buy crypto the same day you spend it in fiat your cost needs to account for short-term /long term capital gains.

Not sure what happens with stable coins though. If that's not an issue would the benefit against buying straight up Dollars be that you would eliminate the bank risk?

I've been dreading about yield farming I think if you can create a debit card that takes your unused balance (or a portion thereoff) to benefit from crypto lending that would be Best for your living expenses crypto bag. (Do you know if something like this exist?)

Sorry for the rant but this is an area in which I'm extremely interested and an area that can benefit not only territories with high inflation but also special circumstances such as providing income to the special needs population or to ease retirement.

Another link for gigs using crypto is https://anytask.com/
Today I used 1st time a visa prepaid card (prepaid using crypto) to buy groceries, Awesome!

You ate some of your crypto 😄