EspañolI met Franco Amati at the intersection of Marcelo T. de Alvear and Reconquista street, in the heart of downtown Buenos Aires. Amati is a libertarian geek and an early bitcoin adopter in Argentina. He is also the co-founder of the Buenos Aires Bitcoin Space, a meeting point for cryptocurrency supporters and an open collaborative space for the bitcoin community.
Amati gave me a tour of the facilities: a three-story building with a terrace that even comes equipped with a grill. He showed me the offices, some still under construction, and a room that will be used for meetings, training sessions, and conferences.
We finally arrived at BitPay’s Latin America offices and sat on the couch to begin the interview. Rodolfo Andragnes and Alberto Vega, also members of the company, looked excited to join us in our chat.
When did you start with the project?
Amati: We started in 2013 with informal meetups at a bar. That’s where the idea to do something else to spread the use of bitcoin emerged.
Andragnes: Similar things were said back when the internet first got going.
How would you define bitcoin?
Andragnes: Bitcoin is a technology used to transfer value without regard to distance. The technology allows for value transfers in less than three seconds, at virtually no cost.
Bitcoin is the transaction network and also the good being transferred. It has a market value in every country in the world.
Bitcoin adds two qualities that traditional currencies lack: it’s programmable (I can send bitcoins to someone, and from there to another person in a predetermined amount of time), and it’s also traceable, a concept that didn’t exist until today. It redefines the parameters of what it is to be good currency.
And the risks?
Vega: Companies like ours, we offer services to precisely avoid exposure to bitcoin’s volatility. We help people to receive payments in bitcoin, but the money is deposited in the local currency of the company.
The growth in services now accepting bitcoin is really unbelievable. There are even solutions now to counter hackers targeting virtual wallets. You can achieve complete security over the system.
Amati: Volatility is bitcoin’s worst enemy, so I’d like to offer some clarification. On the one hand, people who use bitcoin as an exchange tool are not affected by volatility. To someone like this it doesn’t matter if bitcoin is worth US$1 or US$1,000, because this person only holds it temporarily, maybe a couple hours. For example, one could buy bitcoins in Spain, then transfer them to Argentina, where they are quickly sold.
On the other hand, volatility affects investors. The investor is aware of the risk attached to the opportunity.
As the number of temporary users grow, the value will increase, because more people will be using it. We need more than just investors to increase the value.
Another issue dealing with volatility is the uncertainty around bitcoin.With this currency, we are novices. The first time that an exchange platform went bankrupt (MtGox) it significantly impacted the price. People were shocked, but that’s because it was the first time. If it happens again, it won’t be as bad, because it’s clear it was an isolated case.
Andragnes: The risks related to bitcoin, these boogeymen, will disappear as time goes by.
Where do you see bitcoin in the next ten years?
Andragnes: I don’t think it will replace all the currencies in the world. It’s going to be just another alternative to store and transfer value.
Vega: Today, it is already a big step forward for payment systems globally. If you notice, the payment systems we use today are all actually very old. The credit card, for example, was invented in the 1950s. Since then, the only innovation has been to change the magnetic strip and a new security code.
Andragnes: Notice the receipt you’re given to sign after the transaction is archaic.
There will come a time, for example, when any grandmother will place a card over the counter and make a payment without understanding the technology behind it. It’s the same whether the payment is made in bitcoins or not. What is important is that thanks to bitcoin we can leave paper behind and make secure transactions.
It’s like the quote by Henry Ford: “If I had asked people what they wanted, they would have said faster horses?”
Andragnes: Yes, it’s something very similar.
Who is part of Buenos Aires Bitcoin Space?
Amati: Bitcoin Space is two things. It’s a space available to organize, hold conferences and bitcoin community meetings, and for people who wants to learn about bitcoin. If you see our billboard on the street, you can come to get information about this.
On the other hand, it works as a co-working space for entrepreneurs. This is how we fund the conferences and training sessions.
Is there anything similar in other parts of the world?
Andragnes: Yes, there are some similar places in at least eight or nine countries, but we are the first in Latin America.
How can you explain the growth of bitcoin in Argentina?
Andragnes: Argentina has suffered through various economic crises, and is a society that is accustomed to depositing its savings in US dollars.
Amati: Sure, our country has a history of economic difficulties. People are used to saving in assets other than their own currency and to distrust the banking system. It’s different if you live in a country with a two percent annual inflation rate than to live in one with over 30 percent.
Those who deposited bitcoins, will receive bitcoins?*
Andragnes: (Laughing) Yes. It would be impossible not to do it.
Which celebrities do you know that use and support bitcoin?
So, can I pay my ticket to space with bitcoins?
Andragnes: Yes. If you ask, almost everything can be done with bitcoin.
Vega: Given the advantages of bitcoin, a lot of business are joining. We’ve had big investments come in already. Every year there is a record-breaking number of payments with bitcoin.
Has bitcoin come to stay?
Amati: Yes, totally. Bitcoin and other cryptocurrencies. Bitcoin has an edge with respect to the traditional systems, so it will continue to exist until something better replaces it.
Andragnes: If we understand this from a global point of view, bitcoin’s acceptance is practically unanimous.
Amati: There are only three countries where bitcoin is forbidden. It’s true that Mastercard and Visa are forbidden in many more countries than bitcoin — the countries with trade embargoes.
When will Buenos Aires Bitcoin Space open?
Amati: By September, for sure.
*Editor’s note: former President of Argentina Eudardo Duhalde famously said, “Those who deposited dollars, will receive dollars.” Weeks later, he froze all savings accounts in dollars and converted the balance to local pesos at an unfavorable rate.
EspañolOn Friday, Venezuelan President Nicolás Maduro announced that he will give the famous comunas preferential dollar access to import consumer goods and technology. Maduro clarified that the reported 737 comunas — Marxist community-living organizations — will have currency-exchange access at the Sicad I rate, just over 10 bolívares per US dollar. It was only a matter of hours, though, before the Venezuelan opposition spoke out against Maduro's latest policy. Project Venezuela Congressman Carlos Berrizbeitia, called the new measures "irresponsible" and "demagogic." The country is suffering from a profound economic crisis, he says, and these types of policies will only lead to the waste of more resources. Maduro defended the comunas’ currency access, in exchange for bolívares, saying that preferential dollars should be "in the hands of the people, as they belong to Venezuelans, and they have the right to participate in the country's development." In Venezuela, a state-run price-control system has existed for many years, leaving in the hands of the government a monopoly on currency exchange. A dollar will cost you 6.3 Bs. if you are a government entity, or if you can persuade the currency administrators (Cencoex, formerly Cadivi) that you intend to import vital goods such as food or medicine. Then there’s the Sicad I rate and the new Sicad II process, which opened at a whopping 50 Bs. per dollar. In addition, there is a fourth exchange rate in effect: the black market. However, that will cost you around 80 Bs. per dollar, which has elevated inflation to sky-high levels. This reality has been impossible to hide, as the price controls have backfired and exacerbated the nation's inflation and shortages. Economist Alejandro Guerrero says Maduro "can offer dollars, but in reality, it won't work because there are no resources. It is pure demagoguery, to pretend there is money where there isn't. There is no food, no medicines; people must stand in line for hours to purchase anything." What about Corruption? "If with an established, supposedly protected structure, that used to be Cadivi under former Minister Jorge Giordani, more than $20 million was stolen, we don't even want to know what will happen with the comunas that have no previous control or experience with currency exchanges," said Berrizbeitia. Giordani was the longtime architect of the government's rigid system of price caps and currency controls that have tightly restricted access to dollars, since the measures were implemented in 2003. This system, however, has impeded foreign investment and private sector purchases, and distorted the economy. We spoke with William Requejo, who has been living in Catia, Venezuela, for years and works as director of the Neighbors Association for Citizen Participation. "This is painful to watch," he says, "because it will only increase corruption." "Comunas were never meant to handle money. Social work has nothing to do with preferential dollars.… So far, 92 percent of the comunas haven't been held accountable. If 100 Bs. goes to the comunas, how do we know whether originally they were actually supposed to be given 1,000 Bs.? What happened to the rest of the money?" he explains. When asked whether the government follows through with and records the projects they propose for the comunas, he said "if the government's projects are not carried out at the national level, imagine at the local level." "How much money has the government said they invested in health, and education? We see pictures and banners of the president inaugurating new hospitals and schools," but Requejo claims it is all for propaganda purposes. Kiomara Escovino, president of the Neighbors Association in Prados del Este, agrees: "this is used as a 'hook' of money to convince people to join the comunas and to justify the government's actions." Comunas, promoted by the late President Chávez since 2006, are the foundation of his "21st Century" socialist revolution. President Maduro has commissioned Alejandro Fleming, president of the Foreign Commercial Center (Concoex), to meet with the comunas’ council today to discuss their participation.