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Goodbye cell – Hello Bitcoin

June 6, 2020

In the midst of a seemingly endless crisis, Venezuelans woke up with bad news this Friday, June 5. Although we have the “hard leather” of so much “stick”, There is always bad news in this Caribbean country.

On this occasion, the US bank Wells Fargo informed its customers with bank accounts in Venezuela The cell usage option will be suspended from June 26th. Despite the fact that it was only a bank, many are already worried that the days of the cell will be counted in the Venezuelan market.

But, Why should a US bank’s decision affect Venezuelans? Who is this cell and why is it so popular in a country like Venezuela? Can anyone explain to foreigners why Venezuelans make such a fuss about it?

Understand the role of cells in a nation like Venezuela

Goodbye cell – Hello BitcoinGoodbye cell – Hello Bitcoin

Venezuela is now the front page of almost all economically relevant media. Unfortunately, we are not popular for good things, but we do what is NOT to be done. With the highest inflation in the world, a minimum wage that is among the lowest (or not the lowest) in the world, and an ever-increasing poverty rate, we are the economic “shame”. The former economic power was reduced to a nation of emigrants.

In the midst of this social, political and economic vortex, the bolívar, the Venezuelan national currency, was one of the most overwhelmed. It was re-expressed and changed from “Bolívar Fuerte” to “Bolívar Soberano” in 2018 to control its pace of inflation, but it didn’t work. The value of the bolívar is diluted like water today.

Given this continued devaluation of the local currency, dollarization has increased in the middle of the Venezuelan spectrum. Although the dollar was “illegal” traffic and use until recently, it grew in Venezuela until the government itself had to lift the bans. There was no point in continuing to ban something that was literally done by everyone.

However, Venezuelan dollarization was not easy. With stumbling and difficulties We have found that running a foreign currency economy is not as easy as it seems, especially if that currency is from a country with which you do not have the best diplomatic relations and with which you have imposed sanctions.

In addition, the previous oil power, into which huge sums of money flowed through the sale of oil, no longer existed. Dollarization without a dollar. Another dichotomy for our wild economic history. As we would say in Venezuela, we definitely don’t give a foot with the ball.

Without dollars from the Venezuelan state, de facto dollarization remained in the hands of Venezuelans. Savings, transfers, and cash from the borders came into the economy to carry out operations in dollars.

In addition to cash, an option for money transfer between American bank accounts was introduced, the now popular cell.

Cell, developed by Early Warning Services, is a payment service that integrates various US banks and enables its customers to make interbank transfers instantly and without paying commission. In theory, it’s designed to be used between trustworthy people and for small and non-recurring transfers … But we didn’t use it that way in Venezuela.

In this Caribbean country, we started using cell left and right. Still lifes, clothing stores, bars and clubs use (and misuse) the instant payment method for all customers. Trustworthy people? What’s this? Not recurring payments? About 40 payments a day and we’re fine.

There is little data available to measure the effects of cell in Venezuela in numbers, although the existing ones are very striking. A study by Econoanalitica, a Venezuelan research company, on home economics came to the conclusion 11.90% of buy and sell transactions in Venezuela are made through this platform. A sign that the platform was not used as a “transmission method between friends” but as another payment method.

How can cells be so popular in such a destroyed nation?

The vision that many foreigners (and even locals) have from Venezuela is surely that we are a kind of Mad Max.

Without gasoline, without water, without electricity and without a dispute over resources. And now, the truth is that if we’re partly like that, but like everything, we’re a land of halves.

While there are very poor people in this country, there are people with opportunities (and people who are also looking for opportunities). In the United States, there are people with an internet connection, a smartphone, and a bank account who are connected to cellular service.

That these people with financial opportunities are minorities? Obviously they are, but they exist and move money in the Venezuelan economy. However, They cannot flee from Venezuelan reality and blows like on Friday remind them that their “bubble” can explode.

Bitcoin as an alternative to cells

Venezuela is a recognized point in the crypto community worldwide. We were introduced as the promised “Dash Nation”, the best use case for Bitcoin and the ability to bankrupt the non-banks. However, it was all the epithets and adjectives that gave us foreigners who do not know the local reality.

With reports that give us the slowest internet in the region, energy problems that are overwhelming almost the entire country, and such a precarious economic situation that the poorest can’t think about “bitcoins” but about the flour packages they should buy Today to reach food, living conditions in Venezuela are not giving in to thinking about the massive adoption that many dream of.

But what if Bitcoin can solve other problems? We are already clear that Bitcoin will neither solve the Zulia state’s electricity problems nor feed families in Petare. Despite the fanaticism that some may express, we are talking about Bitcoin, not Jesus Christ.

Even if, Can’t Bitcoin solve cell users’ problems? Is it easier to transfer with cell than with Bitcoin? Many may mistakenly think that cell is a more agile and easier to use system than Bitcoin, but of course they don’t think about everything that someone needs to do to perform a cell transfer.

First, they must have a bank account in the United States. Let’s compare the trip to the USA, carry all the necessary documents and open a bank account by downloading a Bitcoin wallet. Now let’s see which is easier.

Second point A minimum balance is required for the US bank account to keep your account active. On average, it’s about $ 1,500 that American banking institutions charge for it. Bitcoin requires that you have ZERO dollars to have your account.

The third point in favor of Bitcoin against cell is the first It has no censorship. He won’t send you an email at dawn notifying you that you won’t be able to use it after June 26th. It won’t tell you that as a Venezuelan you have no way to use it. Your transaction will not be blocked because it is classified as “suspicious”. Bitcoin doesn’t discriminate against you.

And I can continue to present Bitcoin’s advantages over centralized systems, but I would make the article very long and I think the message needs to be clear in order for it to be understood.

Now, How did you propose to use Bitcoin in a destroyed, devoid of infrastructure and deteriorated country? Just like cell was used.

Just as Cell captured 11.90% of all buy and sell transactions in Venezuela, Bitcoin can do this and only requires a smartphone, an internet connection and a person with purchasing power. The same thing that Cell needed to become a popular form of payment in the country.

I don’t mean that Bitcoin will now be the cell replacement and will be used for more than 10% of Venezuela’s commercial operations. We are not here to raise false expectations. But what I’m saying is that Bitcoin can be that replacement for everything and the precarious conditions we have in our country.