I'm genuinely surprised it took so long to happen.
Many countries (China, Russia, Iran, etc...) have a giant incentive to escape SWIFT and US-centric control over value transfer.
IIRC, there has been effort by China an Russia to circumvent the petro-dollar jail. Why re-invent the wheel, when a system already exists for doing just that?
Or maybe nation states know something that everyone else doesn't wrt the actual robustness of crypto against state-sponsored attacks.
> Many countries (China, Russia, Iran, etc...) have a giant incentive to escape SWIFT and US-centric control over value transfer.
While this is true, they also are petrified of something they themselves don't have authority over. I don't think the hesitance is surprising, these are governments that are obsessed with controlling most aspects of their citizens lives.
Yeah, I hear you, but there's a built-in contradiction in there: if you want to trade with other countries, this whole "state-controlled" business doesn't work too well.
The US are only in this controlling situation because of a historical accident (WWII).
If they hope to establish non US-controlled ways of exchanging value, I suspect they'll have to relinquish some amount of control, unless - of course - China becomes much more preponderant both economically and militarily.
Bitcoin and permission-less currencies are bad news for countries like Russia and Iran. These countries can already transact through designated individuals and off-shore companies. Crypto still need an off-on ramp to traditional finance.
On the other hand, these nation states would use cryto if they were technical and knowledgeable enough of the intricacies of such market. Venezuela already launched its own crypto-currency (the Petrodollar) which was a complete flop. You'd think that a nation state with all its resources, people, sovereignty and army would be able to make a cryptocurrency (probably an Ethereum fork) work. Well, it's simple: They can't.
Most countries today rely on a system they barely understand how it works. They collect taxes, print money and try to export/import stuff. The whole system is glued together by a nation that somehow appeared before, during or shortly after the second world war. Their answer to instability in markets is almost always restrictions (either in money transfers, or blocking imports, or arbitrarily confiscating wealth).
These systems have barely evolved especially in less developed countries, and even in first class countries are still quite archaic. It doesn't help that these system do not have knowledgeable people about these technologies who could help shape policy, recognize trends or act.
The only reason these countries still have semi-functioning finances is that a large portion of the population never heard, or have the technical capabilities to deal with crypto. The newer generation is going to force a re-draw of nation states and probably bankrupt some governments in the process (it's already starting to happen).
Many countries (China, Russia, Iran, etc...) have a giant incentive to escape SWIFT and US-centric control over value transfer.
Well, the good news on that front is that most international money transfers use the IBAN system rather than swift, and IBAN is run by a consortium of EU banks.
Edit; I think your parent comment is confusing concepts. IBAN is international bank account number. You enter an Iban as the target address for your swift transfer. I wasn't aware of a different system that also uses IBAN ... is there one?
> Due to the high price of electricity and gas for the extraction of cryptocurrencies in Iran, the result of changing this decree will be the reduction of bitcoin production in Iran, because no miner is interested in providing his bitcoin to the government,” Omid Alavi, a CEO of an approved bitcoin mining farm in Iran, told Bitcoin Magazine at the time.
So it‘s more like "Iran nationalizes Bitcoin mines“?
I don't think it'll ever happen. The global banking system has and will enjoy a favored legitimacy status with governments that they would have to willingly give up. Even though Crypto is decentralized, it's the tributaries into the classic financial system that give it it's value and if governments start putting up blockades, it's value and use will plummet. They just need a good reason to and I can't think of a better one than an oppressive pariah state like NK or Iran circumventing sanctions with it.
Pariah state... Oh you mean because it's the one that had a foreign power overthrow its democratically elected leader, replacing them with a despot...
...right yeah I getcha... their desire to bypass the financial system put in place by that very same foreign power must have absolutely no moral standing whatsover, especially since their democracy was ruined.
'Extended meaning "social outcast" is attested by 1819.' ... I think we can agree that Iran fits that description, no matter your take on the events of 1979 and thereafter
I don't think labelling Iran a 'pariah state' is helpful. It was the United States that unilaterally withdrew from the 2015 Iranian nuclear deal, that tacitly accepts Israel's repeated assassination of Iranian scientists, and that launched a catastrophic invasion of its neighbour on a lie. Not to mention, during the Cold War, that it assisted Saddam's war of aggression against Iran, shot down an Irania commercial airliner, and overthrew Iran's democratically elected government and imposed a pliant autocratic in its stead.
Which isn't to say this absolves Iran of its oppression of internal opposition or funding of terrorists. But there is no Manichean opposition, and the United States' belligerence has tended to strengthen the conservative hardliners inside of Iran, at the expense of those who want to normalise relations and shift the balance of power in the country's theocratic-democratic structure towards the latter.
There is a technical argument for it. Iran has been savagely bullied by the States for many years and the rest of the world is largely playing along because ... well better Iran than them. So in that sense, Iran is a pariah.
But it is grossly unfair, anyone who enthusiastically supports as-implemented US Middle Eastern policy is worse than irredeemable. If Bitcoin pushes back against that policy then I'll shelve what doubts I have about crypto because it would be helping in one of the world's real problems.
The Iran of today is a pariah state. The leader of the Iranian Basij volunteer force, made the declaration that “Wiping Israel off the map is not up for negotiation.” and this has become the de facto policy of its leadership. The central question here is why does Iran need nuclear arms capability at all? If they backed off on their aggressiveness, who would be a threat to them? Iraq was in the 80s, but now certainly not the Israelis or Arabs. Iran has massive hydrocarbon resources to finance any level of wealth desired. They don’t need economic aid, but they choose to behave as a pariah in their neighborhood, and are sanctioned by most of the rest of the world. So yes calling them a 'pariah state' is 100% absolutely accurate and helpful because I think it’s just a matter of time before their relatively young population wakes up realizes it and throws the bums out. As their maniacal leadership keeps squirming to get around the sanctions; they keep screwing their population, which is highly educated, and realize they are suffering for the sins of the theocratic leadership. I really think the best outcome for this is an internal uprising, before the Israelis - and their new Arab friends - decide to take care of the problem.
I don't think anyone disagrees that pariah states and criminals use the internet, but I don't see that touted as a good thing particularly often either... presumably because there are actual use cases for using the internet outside of these 2, and hence the use by pariah states and criminals is seen as an acceptable drawback of the technology.
It’s funny how quick countries are labeled pariah states. Seems like they are always countries which the US and/or Israel disagree with. In the end it’s all propaganda, so I wonder why would individuals on the internet partake?
Not every article or comment needs a long winded disclaimer on how they feel about a topic just so they don't get cancelled. I know thats a foreign concept to some people.
It can only use bitcoin "that has been mined by officially sanctioned miners to pay for imports"
Seems pretty easy to sanction Iran, just ban the use of those same coins. I am assuming "sanctioned" means mined by Iranians.
This also gets in the way of the fungibility argument that is supposed to be in Bitcoins advantage.
This brought up a though for me. Are PoS cryptocurrencies halal? Would it be considered gambling or the rewards from staking riba? I'm not a muslim but I would like to understand,
44 comments
[ 3.7 ms ] story [ 97.4 ms ] threadMany countries (China, Russia, Iran, etc...) have a giant incentive to escape SWIFT and US-centric control over value transfer.
IIRC, there has been effort by China an Russia to circumvent the petro-dollar jail. Why re-invent the wheel, when a system already exists for doing just that?
Or maybe nation states know something that everyone else doesn't wrt the actual robustness of crypto against state-sponsored attacks.
While this is true, they also are petrified of something they themselves don't have authority over. I don't think the hesitance is surprising, these are governments that are obsessed with controlling most aspects of their citizens lives.
They don't even want to use that system. They want to create yet another that is state-controlled.
The US are only in this controlling situation because of a historical accident (WWII).
If they hope to establish non US-controlled ways of exchanging value, I suspect they'll have to relinquish some amount of control, unless - of course - China becomes much more preponderant both economically and militarily.
On the other hand, these nation states would use cryto if they were technical and knowledgeable enough of the intricacies of such market. Venezuela already launched its own crypto-currency (the Petrodollar) which was a complete flop. You'd think that a nation state with all its resources, people, sovereignty and army would be able to make a cryptocurrency (probably an Ethereum fork) work. Well, it's simple: They can't.
Most countries today rely on a system they barely understand how it works. They collect taxes, print money and try to export/import stuff. The whole system is glued together by a nation that somehow appeared before, during or shortly after the second world war. Their answer to instability in markets is almost always restrictions (either in money transfers, or blocking imports, or arbitrarily confiscating wealth).
These systems have barely evolved especially in less developed countries, and even in first class countries are still quite archaic. It doesn't help that these system do not have knowledgeable people about these technologies who could help shape policy, recognize trends or act.
The only reason these countries still have semi-functioning finances is that a large portion of the population never heard, or have the technical capabilities to deal with crypto. The newer generation is going to force a re-draw of nation states and probably bankrupt some governments in the process (it's already starting to happen).
Well, the good news on that front is that most international money transfers use the IBAN system rather than swift, and IBAN is run by a consortium of EU banks.
Source?
And while it may be the case by number of transactions, I'd be very surprised if that was true by volume.
Edit; I think your parent comment is confusing concepts. IBAN is international bank account number. You enter an Iban as the target address for your swift transfer. I wasn't aware of a different system that also uses IBAN ... is there one?
When you wire money from e.g. Europe to the US, they don't speak IBAN, you have to specify US-centric bank account designations.
So it‘s more like "Iran nationalizes Bitcoin mines“?
Right now in the US adoption is happening on the city/state level and expanding outwards, this is not a fluke.
Not if they find an exchange - say in China - willing to exchange that coin for local currency and let them purchase goods with said local currency.
Not as hard as you might believe, especially at a sovereign nation level.
...right yeah I getcha... their desire to bypass the financial system put in place by that very same foreign power must have absolutely no moral standing whatsover, especially since their democracy was ruined.
Which isn't to say this absolves Iran of its oppression of internal opposition or funding of terrorists. But there is no Manichean opposition, and the United States' belligerence has tended to strengthen the conservative hardliners inside of Iran, at the expense of those who want to normalise relations and shift the balance of power in the country's theocratic-democratic structure towards the latter.
I mean that's what TV tells you every day of the week.
And when it's not enough, politicians at the highest level do the same thing.
How dare you make things complicated!
/s
But it is grossly unfair, anyone who enthusiastically supports as-implemented US Middle Eastern policy is worse than irredeemable. If Bitcoin pushes back against that policy then I'll shelve what doubts I have about crypto because it would be helping in one of the world's real problems.
edit: werd
Not every article or comment needs a long winded disclaimer on how they feel about a topic just so they don't get cancelled. I know thats a foreign concept to some people.
Seems pretty easy for Iran to unsanction itself, just remove the "official miner" requirement.
Nope.
Excerpt from genesis [1]:
[1] https://en.bitcoin.it/wiki/Genesis_blockThe value of the coins mined in Iran is directly tied to the current spot price of Bitcoin.
Isn't in the USA's interest now to ban the exchange of Proof of Work coins in the USA? Which will subsequently crash the price and weaken Iran.