Costs are apparently quite high for cryptocurrencies – especially the human costs:
People are already losing their savings after buying into misguided hype. In Argentina, where inflation reached 61% this year, some hoped to protect their money by placing it in TerraUSD, a stablecoin pegged to the dollar. Then, when Terra entered a death spiral last month, they lost nearly all of it. “I invested in a stablecoin that today is worth $0.08,” one woman in Buenos Aires told Rest of World. “I feel sickened and helpless.” [“Crypto Crash Dashes Dreams In Latin America,” Alex Kantrowitz, Big Technology]
Quite disheartening. Will any of the crypto-community ride to the rescue of those discovering the risks of the cryptocurrency world the hard way?
I doubt it.
But …
If there’s a saving grace in the current meltdown, it’s that cryptocurrency proponents in Latin America haven’t yet convinced a critical mass of people to join them. So the crash has spared many. In Ecuador — where the switch to the dollar worked out well enough after the initial pain — it’s currently illegal to buy goods with Bitcoin, though you can buy Bitcoin as an investment. In El Salvador, where Bitcoin is legal tender, most people still don’t use it for transactions. “People don’t ask to pay with it,” said Nelson Rauda Zablah, an El Salvadorian journalist at El Faro. “There’s a lot of micro speculation going on there.”
Speculation in currency isn’t unknown, but when it’s the only thing happening, it suggests a real failure to meet the putative function.
