Bitcoin has created an interesting solution for problematic economies. Because it allows seamless extraction of wealth out of a bank account and into the cloud, Argentinians have been ramping up usage of the cryptocurrency in an effort to stem the effects of their worsening economy and their choice to go BTC is actually moving the market slightly.
Even as BTC penetration in other countries remains flat or down, Argentina’s portion of Bitcoin downloads has risen from 1% of the whole to 3% and interest in the currency is at an all time high. According to The Genesis Block, the country’s first Bitcoin meetup group started in 2008 with eight members and is now up in the 400 member range.
The post goes into the economic details of the move towards Bitcoin but in short, the Argentinian government fined a group of economists for recalculating inflation to much higher levels than the official party line. In addition, dollars are being used as an alternative currency thanks to a weak peso and the potential for capital controls like those happening in Cyprus. Argentinians just want to get their money out of banks and, to that end, they’re trusting variable BTCs over their own currency.
In all financial reporting there is always a bit of if-then conjecture. However, the rise in interest in Bitcoin in this part of the world connects to some real world political choices. It’s a fascinating example of how the currency is taking on a life of its own and, more importantly, becoming a viable investment alternative.