Tango Argentino... with Bitcoins

While Argentinean policy makers are trying in all ways to stop the dollarization of Argentinean economy and to put an end to the inflation spiral of the last years, the “green banknote” is reaching his highest value on the black market and the people on the street are trying to avoid the pesos as much as they can.

In fact a heavy inflating currency looses easy the trust of people that are meant to use it. In countries with an instable domestic situation people tend to substitute the local currency with currencies thought to keep betters their purchasing value. “Good money” drives “Bad money” away.

But Argentina is not the only one facing problems with its domestic currency. The global financial crisis of 2007-2008 has put governments all over the world in difficulties and brought the trust in economic policies under pressure. The belief that inflating measures would be able helping countries to restore economic strength is fading among people.

In other words, different kinds of markets are looking for alternatives to save and transport value. It is not such a surprise therefore that this is the best economical climate to develop and start to use a currency like “Bitcoin”. A currency that is supposed to follow a deflating pattern, but above all, a currency that can keep and transport value without interferences of policy makers.

Bitcoin runs on the internet with no barriers between its users. It makes it easy for people to transfer value among each other without the necessity of building expensive infrastructures. Bitcoin makes use of a large network: generating exchange barriers or even shut down such a network would be for a government near impossible.

In many countries the use of Bitcoins would even mean gaining a competitive advantage for firms operating in regions with a poor and fragmented bank system. Think for example small and medium firms. The existing payment and exchange barriers means losing efficiency in international business transactions making a competition gain even harder to get. A simple transfer of money between banks can take up to more than 3 days and a lot of paperwork.  No wonder if in the near future emerging economies are going to use Bitcoins for their everyday business.