Venezuelan Economist Keeps His Funds in Bitcoin, Converting to Fiat When Necessary

  • Venezuelan economist and resident explains how he pays for everyday items using bitcoins.
  • He converts his cryptocurrency (a litlte at a time to avoid detection from government) into local currency to pay for daily purchases.

Carlos Hernández, a Venezuelan citizen and economist, recently revealed that he “keeps all [his] money in bitcoin.” Hernández explained that he does not own any Bolivars, Venezuela’s official fiat currency - as it reportedly suffered from a daily inflation rate of 3.5 percent and an annual inflation rate of 1.7 million percent (during 2018).

Hernández mentioned in his detailed opinion piece (published in the New York Times on February 23) that he doesn’t “have a bank account abroad, and with Venezuela’s currency controls, there’s no easy way for [him] to use a conventional foreign currency like American dollars.”

$6.9 Million Worth Of Bitcoins Traded In A Week

He added that before purchasing milk or any other item, he goes through the various listings on peer-to-peer (P2P) digital asset exchange, LocalBitcoins. When Hernández finds a good rate for his bitcoins, he accepts the offer and then exchanges his cryptocurrency for Bolivars via a wire transfer, using a bank that both him and the buyer transact with.

Hernández noted in his post that the local market for bitcoins “broke a record” on April 17, 2018 as it skyrocketed to $1 million worth of total trading in only 24 hours. Moreover, the South American nation of Venezuela is currently ranked second (worldwide) in terms of total trading volume recorded on LocalBitcoins. During the week ending on February 16, 2019, Venezuela’s residents traded approximately $6.9 million through LocalBitcoins alone, according to data from Coin Dance.

Commenting on the BTC trading activity, Hernández wrote:

That’s saying something for a country in its fifth year of a recession, whose economy contracted by some 18 percent in 2018.

He added that he does not convert “too many” bitcoins at one time - as Venezuela’s government closely monitors transactions in Bolivars. Any amount over $50 that is sent or received could be “automatically frozen” by the country’s authorities, Hernández noted.

"No Evidence" Of Petro Being Used, First Bitcoin ATM Arrives

With the help of bitcoin, Hernández says he is able to cover his household’s expenses. Notably, the Venezuelan economist revealed that his father is a government employee at a printing press and only earns the equivalent of $6 per month in salary. Meanwhile, his brother managed to “escape” Venezuela last year with the help of cryptocurrencies, Hernández wrote.

As CryptoGlobe reported in late August 2018, an extensive four-month-long investigation by Reuters found that there was “no evidence” of the nation’s controversial Petro cryptocurrency being used anywhere. Local residents told the reporting agency that the Petro was not being used for local or international transactions. While Venezuelans may not trust their government or its cryptocurrency, the first ever Bitcoin ATM (BTM) recently arrived in the country. Venezuela’s citizens have also been using other cryptocurrencies such as dash - in order to pay for everyday goods and services.

Max Keiser: Bitcoin Dominates Altcoins in Cryptocurrency Debate

  • Keiser Report host Max Keiser claims that bitcoin continues to dominate altcoins and provide more investor security.
  • Keiser predicted bitcoin's market dominance and hash rate to reach 99 percent within the next five years. 

Max Keiser, host of the Keiser Report, claims that bitcoin has no cryptocurrency rivals and that most altcoins fail to live up to the standard set by BTC. 

Speaking in an appearance on London Real, Keiser dismissed the possibility of a new crypto-asset emerging and eating into bitcoin’s market dominance. 

He said, 

There’s no coin out there that can do what Bitcoin doesn’t do already or will be able to do shortly. What you’re buying with Bitcoin is security.

Keiser continued, arguing that hard forks of bitcoin such as bitcoin cash and SV lack security compared to the original BTC.

The avid bitcoin supporter also referred to several altcoins as being “pure exit scams,” intentionally designed to manipulate investors. 

He explained, 

They have huge ‘pre-mines’ that the founders are selling or dumping and making a lot of money. A lot of people are losing money, and they have no use case. So like a Ripple or an Ether, even, is an exit scam. It’s to be avoided. Those are the top coins.

Keiser predicted that bitcoin’s market share and hash power, sitting at 65% and 85% respectively, will continue to rise relative to the market. He claimed that within five years bitcoin will account for 99% of all cryptocurrency hashing power and market capitalization. 

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