Venezuela Banks block Over 75 Crypto-Related Accounts

Yes, the government can change the law and define something as illegal. They have control over a lot of things. Crypto gives power back to the people and anyone can build his assets outside of the existing financial system.

Every country's economy is different. Sometimes we face problems that are created by the decision-makers. For example, the Feb is focusing more to put inflation down. They raise the interest rate and the economy keeps crashing. Printing more dollars has these adverse effects that we are facing now.

True. But does anyone actually believe countries will give up control of their own currencies? I think fiat will still and always will rule the money world with alternatives being secondary. So all of the influences will remain regardless.

I just don't believe governments will give up control. Ever. Nor do I necessarily believe it is a good idea, especially when we think about how much it could limit national security. If you are fighting a war, for example, you need to have a mechanism to access money.

Convert entirely to BCH, for example, and now you earn BCH at the same rate that the economy would have allowed you to earn before you adopted it, and you will have to spend more of it to get the same goods because inflation will still be happening based on the economy.

Spending more will not work with BCH. If the merchants were to charge too high prices in BCH for the goods, no one would pay them again because there wouldn't be enough BCH for them. In a market economy, everything is regulated by supply and demand. Since the supply of BCH is limited, merchants cannot raise the BCH prices of their goods.

Since the supply of BCH is limited, merchants cannot raise the BCH prices of their goods.

There is probably something I am missing in this equation. But a producer still has to recapture the cost to develop, make, package, and distribute its product. And of course the end seller has costs to recapture as well.

A producer or seller can only pay someone so much for the work they do, and they can only sell an item for what they paid to get it to market (with a little profit as well). So, the cost of the goods cannot be sold if the producer or seller will take a loss, nor can the producer or seller stay in business. So, the producer or seller goes under and everyone loses their job and the buyer has nothing to buy but has plenty of BCH and this works?

Like I said, I may be missing something here. It is a confusing scenario. But it works outside of everything I understand about the basics of economics in your scenario, and maybe I am inappropriately conflating the two?

So far as I can tell, no matter what currency is used, supply and demand will always be a factor and it will always impact a price as well as a wage.

Not enough workers? Wages go up. Not enough oranges? Oranges will cost more.

Granted, Venezuela's problems are due to socialism and mismanaged currency. No doubt. But their economy is also impacted by their lack of producing things of value to bolster it (oil notwithstanding). Regardless if it is a bolivar or a BCH satoshi they are using, if there is no product or service or an underlying economy to support something, I am not understanding how someone is ahead by having BCH if the currency is not the only factor determining the price of goods and the amount of wages paid?

Like I said, I may be missing something here. It is a confusing scenario. But it works outside of everything I understand about the basics of economics in your scenario, and maybe I am inappropriately conflating the two?

No, you haven't missed anything. In our current system, a deflationary currency is a poison. It would suffocate the economy. But our system, which is based on growth and inflation, cannot work indefinitely, simply because the earth and resources are finite. Bitcoin Cash is not the currency for today, it is the currency for the day after tomorrow.

This is very much a money problem. Inflation can occur because governments, or more precisely central banks (Fed in US), are able to create infinite money. They set an interest rate at which commercial banks can borrow money from central banks indefinitely. The commercial banks lend the money to companies and private customers. The funniest thing is that they are allowed to lend more than they have borrowed. This way there is a lot of money on the market, which leads to inflation. The central banks try to set interest rates so that inflation stays low, but in countries like Venezuela they can't control it and hyperinflation happens.

With BCH, inflation would not be possible because the money supply is limited. On the contrary, there would be deflation. But our economic system is not prepared for deflation because it comes with unemployment and economic downturn. But I suspect that we will still see a system change to a deflationary system without recession.

Our economy is built on debt and credit. Your USD notes are debt notes. They are debts of other people and companies.

Yeah, that I get. That all makes sense from my understanding of economics. I am still confused how a currency changes that? I am also not sure a limited supply of currency solves the problem. Part of the reason we got away from the gold standard, for example, is because it did not provide enough money.

At the same time, any centralized, regulated currency is still backed by GDP if not gold. But I also recognize that without a limit to the amount of supply, all currencies are for all intents and purposes, "manipulated."

If nothing else, it is a very interesting and thought provoking discussion.

At the same time, any centralized, regulated currency is still backed by GDP if not gold.

The centralised currency is not backed by anything. It is a big misconception of many people that it is. I once wrote an article about it.

https://read.cash/@Telesfor/what-is-the-difference-between-bitcoin-cash-and-fiat-currency-like-usd-or-php-58da4ab5

GDP is only the amount of economic output generated within a year, it has nothing to do with the money supply. I will give you an example.

Imagine a small country with two people living in it. One pays the other $36500 per year for his work and the worker pays $36500 to the other for food and rent. The employer pays the worker $100 a day. And the worker also pays for food and rent daily too. In this country we have the GDP of $36500 but the money supply is only $100.

I would only argue that GDP is not the monetary value of the currency or money itself. It is the monetary value of all of the finished goods and services within a country's borders at any given period of time.

In other words, GDP, or gross domestic product, is every single piece of clothing, food, car, gallon of gas, water in a delivery pipe, current of electricity, and so on and so forth that is sellable.

GDP is simply a measure of the total value of every single thing avaialble that someone with money can buy if they have money to pay for it, and that any seller can sell to any willing or able buyer.

Maybe we are talking about the same thing? lol

I do not disagree GDP has nothing to do with the money supply. But I also submit that how much money anyone gets or has also has nothing to do with GDP. Money is simply the means by which we can create a transaction that has apparent value that we put finished products to use with.

I would only argue that GDP is not the monetary value of the currency or money itself. It is the monetary value of all of the finished goods and services within a country's borders at any given period of time.

In other words, GDP, or gross domestic product, is every single piece of clothing, food, car, gallon of gas, water in a delivery pipe, current of electricity, and so on and so forth that is sellable.

Not quite. It is not what is sellable, but what was produced and sold within one year.

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

The value of a company, for example, is not counted in GDP. Only what the company has produced and sold in that year is counted as GDP. A company is also sellable.

GDP says nothing about the country's monetary value, only about its economic performance.

Then we agree, because I am aware the value of a company is not included. It is only finished goods and services. :)

But not goods and services that are currently for sale, but goods and services that have been produced and sold within a year.

The government will do its best to have a monopoly over the financial system. But cryptocurrency makes a difference. The government comes up with bans, high taxes and CBDC to retain its power and control.