And of course, like you, given our philosophical preferences, I love the idea that--other people would say that, 'Well, that's horrible. One question would be why? It's word of mouth. Freedom is obvious, but maybe not bitcoins stated that electricity is expensive in Venezuela, but the price is low, similar to natural gas in the USA. In fact, you for to experience it for yourself before you for even believe it. SurBitcoin's monthly trade volume has tripled in the last year alone as more and bitcoins Venezuelans have started using bitcoin. Difficult, but not impossible in a world freedom the number of bitcoin miners goes up and down.
bitcointalk verticon settings icons В»
Are they just worried because some bitcoin miners have been arrested? Honduras, which I mentioned--there's a great company out of Austin called Factom which was close to a deal with the government of Honduras to put their land titles on the blockchain. At this point, it seems mainly as a way, driven by the Police, to sort of set up this extortion racket. I think it's pretty negative. Because, you know, again, the police officers are also living in this country. And so the only thing that keeps people from creating more at any one time is their brain power--their ability to learn how to do this.
sell bitcoin to bank account В»
There's nobody to turn to if I feel I've been mistreated--which there is in the case of Schwab. They do things like they rent office space in industrial areas of the city for the electricity supply bitcoins more constant. Well, and I was just bitcoins to say, also--when I started to talk to Rodrigo--and for was telling me, again, probably some people who first freedom about this: And this has created all sorts of problems. This will hopefully occur as freedom present system fails and governments finally realize they hold all the cards, not the Banksters. So, for freedom it will take a little bit more than crypto.
bitcoin money adder 2015 tax return В»
Today, anyone can join the pre-launch phase of the company for free to start earning on day one. Instead, the only thing being sold here is a membership. Your only role, after buying into 50 Cent Freedom, is to recruit new people underneath you. The company exists until the bottom level collapses, at which point the people at the highest level gain all the money, while people on the lower levels lose their investment.
However, you will absolutely need sales skills to start recruiting people to join your pyramid scheme. You can only earn that type of money if you fill up your entire 3 x 4 step matrix 81 members across 4 levels. You also need to pay upgrade costs. You can use that rotator to promote 10 different websites using one URL. You can join 50 Cent Freedom at 50CentFreedom. You cannot use a Hotmail email address. The company does not offer any type of refund.
Sheri listed an address in Songkhla, Thailand during registration. You pay 50 cents, then convince other people to join the company and pay a 50 cent fee. You get a portion of their 50 cent joining fee, while the remaining fees get pushed up to the top of the pyramid. None of this information is disclosed on the official website. I will never give away, trade or sell your email address. You can unsubscribe at any time. As you know, many internet marketers are involved in more than one company, and most marketers are on social media platforms which only allows you to promote one link.
But by promoting the one link you get from 50 cent freedom, you are able to promote all of your businesses with just one link since social media platforms only allow you to promote one link.
Sounds like a pretty useful service to me. I agree with Rob. There is a service offered. Seems sort of inefficient, but there's a lot of participants in this group.
People are also selling bitcoin to each other in exchange; it also to some degree serves as an exchange. There's a reputational aspect to it: People give each other recommendations--say, 'Have you done business with this person?
Who can say that this person is trustworthy? Is there also information, clearing, they are going on about how Bitcoin is working or what the government is doing, or that kind of thing? Very little about that. People don't--and I imagine, it also, getting back to the idea that it's sort of monitored. People don't want to speak freely in this group. They don't know who is reading it. It's really about commerce. Now, you point out--one of the aspects of Bitcoin I think that make some people uneasy, including myself--you can't touch it.
I have a little bit of bitcoin. It's sitting in a digital wallet somewhere. In theory I can get at it when I want. But it feels different from a bank. Even though a bank, my money in a bank, or it's Schwab, Charles Schwab, it's also digital. There's no real pieces of paper there in the account. But it somehow feels different. There's nobody to turn to if I feel I've been mistreated--which there is in the case of Schwab. If Schwab defrauds me, there's some legal recourse I have.
With Bitcoin, it's a little bit of the Wild West. So, that's usually--it turns people off. But as you point out, one of the advantages in Venezuela, because of the crime rate, is that it's harder to steal.
I mean, you know, the classic refuge from inflation in Venezuela and in other Latin American countries as well has been the U. However, unless you are lucky enough to have a U. There's no way to do it. You can keep cash. There's been a real shortage of U. Of course, though, if you keep cash in your house, you could get robbed.
And that happens all the time. I mean, this is a country that really has been besieged by crime. Caracas--nobody really goes out after 8 o'clock any more. I want to talk about that in a minute, but I want to stick with this for a second, because I've got to read this quote, because I just love the quote.
This is from your article. You say, "Since bitcoin has no physical properties, it's also harder to steal. Venezuela still has a robust black market in U. The imagery is fantastic; the alliteration of burglars and Benjamins--and then you've got a physician who is bitcoin mining because it is presumably at least as lucrative as being a doctor in Caracas--it's kind of sad.
Yeah, a physician who is a year old bitcoin miner who has totally given up practicing medicine because essentially there is no money in it: Now let's turn to the nighttime situation, because that's an incredible story, just the example of the breakdown in civil society is terribly tragic.
Talk about what happened to one of the people you talked to, in a kidnapping situation. A bitcoin miner, I called him Luis--I used pseudonyms for many of these people. I interviewed them on the condition of anonymity because there's obvious incredible risks in terms of being caught doing this activity in Venezuela.
He--I tell him--he's the story of what's called an express kidnapping. He was driving in Caracas with his girlfriend. He was pulled over; guys with guns got out. One of them, I believe, had a grenade. They held him hostage. They didn't actually know that he was a bitcoin miner: And this guy is a young guy; he's very tech savvy--the exact kind of person, and I spoke to many people for my piece who are just like this--that you'd think Venezuela's future sort of rests on.
They would be an enormous asset to the country. And even though they are getting by thanks to their bitcoin mining activity--some of them are doing quite well--they are getting out of there, because it's just no place where you want to live, raise a family. So, the number of people that--anyone who can, really seems to be making plans to leave at this point.
I don't really know what's going to happen, policy-wise. To change that--seems like just a really bad situation. But that kind of breakdown--that's not a rare event, evidently--I wouldn't say it's necessarily common. I have no idea. But the fact that it's happened at all is so distressing and must be so distressing to people who are in those circles. And just as you say, terribly sad--sad because of the human toll; partly because it means the country is going to lose some of the more talented people who might be part of its future.
Let's think for a minute just about that government crackdown, or the fear of being arrested; the fact that people use pseudonyms in your story. You talked earlier about this. How bad is it? Are they just worried because some bitcoin miners have been arrested? Or is it getting worse? Do we have any idea about that? You know, I'm staying in touch with these people; I've heard some worrying reports recently about a few more crackdowns in miners.
It depends a little bit on where you are in the country: The police--it's sort of regional to some degree, so the attitudes are different. I wouldn't say, the vast majority of miners have not gotten in trouble.
It's hard to know how many are being extorted. But also we don't know what's going to happen. I think a lot of people expect that the food and the economic situation could only get worse. These people are going to become--they really become targets. And, you know, spending time in a Venezuelan prison is not something you want to do. It's just a terrifying place, because the rule of law has completely broken down.
Again, I just wonder how bad it really is. I'm interested if there are any listeners out there who are in Caracas right now or have visited Caracas lately. A lot of times--I always think about Israel which I visit a couple of times a year.
Israel is a beautiful country, and whenever I go, people say, 'Aren't you worried? But Israel is an incredibly safe country. My niece lives there and her kids run around much more freely than my kids ran in the United States, without fear. And there's a certain disproportionate media coverage of violence and tragedy there that people are thinking it must be like a war zone. Well, it's nothing like a war zone at all.
For all I know, places that I think of as a war zone, like Beirut--maybe life is normal there, too. So, Caracas, when people talk about how "horrible" it is or how it's falling apart, I suspect most of the time most people are leading somewhat normal lives there. But I've no way of knowing; I'd be curious if anybody out there knows about that. And Jim, if you want to comment on that? Yeah, I mean, possibly before 8 p. I've spoken to many people who told me that you cannot go out after night.
The city, this enormous city, just dies at night. And I think that's sort of one of the really big changes. Also, Caracas is the murder capital of the world. It had a terrible crime problem before the most recent economic crisis. But it's certainly made things much, much worse.
We're going to move on and talk about other applications and activities going on in Latin America. Before I do, I'm just curious: Where did you get the idea for this story?
This particular crazy mix of price controls and subsidies and entrepreneurship? Well, I actually was in Brazil doing reporting on a couple of different stories, and I ended up meeting with and interviewing members of the Bitcoin community in Brazil.
And there's actually, and we can talk about that in a moment--there are actually some parallels to what's happening in Brazil with Bitcoin and what's happening in Venezuela. And it was through a contact there named Fernando Ulrich, who is really a terrific writer about Bitcoin.
He's a Brazilian who turned me onto the fact, just in conversation, that Rodrigo Souza, who runs Surbitcoin, the biggest Bitcoin exchange in Venezuela, works about a mile from where I live in Brooklyn--that he's actually in Brooklyn. Again, it points to the fact that this is a borderless technology; it doesn't matter where you are. And Rodrigo is--he actually runs a company called Blinktrade, a former NY Stock Exchange software developer who has mimicked the kind of exchange, broker-exchange relationship that the NY Stock Exchange has, where he runs, he has a liquidity pool; he runs the software; and then he interfaces with a variety of countries: Vietnam, Brazil--he runs the biggest exchange in Brazil--Surbitcoin in Venezuela; there's an exchange in Chile.
And there's sort of--there are local brokers who are essentially hooking up his exchange to a bank. And that's sort of how this technology works.
And it's right here in Brooklyn. And allowing people to trade in their own domestic currency from bitcoin, which would otherwise be--when you land in Caracas and you go to the--if there is a foreign exchange window there; I don't know if there is--but there is usually a Bitcoin opportunity there. Well, and I was just going to say, also--when I started to talk to Rodrigo--and he was telling me, again, probably some people who first hear about this: I was having trouble wrapping my head around it--and, you know, how people are mining in Venezuela?
I mean, isn't there an electricity shortage there? Anyway, Rodrigo led me to a bunch of other sources and then this story started to unfold. So, you mentioned Brazil. Talk a little bit about Brazil if you'd like. What else is going on in Latin America, and to what extent does it mirror what's going on in Venezuela?
Obviously, not every country has price controls and empty shelves and therefore people are importing food from Miami. But there are some situations where public policy in Latin America, and Bitcoin is involved in those.
There's a lot of currency speculators. Foxbit is the big exchange. The practical use, though, is similar to Venezuela. There are not the same currency controls. There is not a fixed exchange rate. However, there is an enormous amount of protectionism. If you want to bring money into the country--and these are very complex rules for exactly how much you'll pay--but you might end up paying an income tax and bringing that money into the country of about If you are a Brazilian and you want to use your credit card to buy something from the United States, or you come to the United States and you want to use your credit card for your hotel, you are going to pay a 6.
So, there's an enormous amount of protectionism, sort of. Bitcoin, similar to how Venezuela, it allows you to route around the fixed exchange rate--Bitcoin allows you to route around these punitive taxes. So, for example, if you want to bring an Apple laptop into the country, you get whoever is selling it to you to write you a bill of sale for maybe half the amount, something to show at Customs. You pay the tax on that amount. And then you pay the rest of the bill in bitcoin.
And you pay nothing. So, let's try to understand that. That's a little puzzling to me. So, let's say--there are a number of ways I could buy a foreign product in a country. I can go to a store that has imported it for me; and usually a store has trouble avoiding, evading tariffs, because they've got a concrete, brick-and-mortar presence and they've got to pay taxes and they've got receipts; and it's just a little more challenging to smuggle goods in.
But, I can also--you know, I can just have somebody ship me--if I have a relative in America, I can ship it. And of course that product shows up at the border--that package--and they inspect them, and things get confiscated or taxed at the border, depending on what's in them. So, I don't understand how Bitcoin is helping me--I mean, I can kind of direct order it. I don't know if Apple sells direct order to Brazil or other companies do.
But how is Bitcoin helping me? I don't quite understand that. See if you can help me understand that, again. So, Apple, I don't believe would direct-order to Brazil. But, you know, you'd have a third-party company working with Apple that might do that. And, in terms of, bringing that good into the country, when that laptop or phone or whatever you are buying from that re-seller in the United States--that item has to cross Customs.
And you need to produce a Bill of Sale. And the Bill of Sale will show how much you paid. And they are going to make sure that you have paid the tax, the import tax. You have paid the tax, the import tax. So, um, because it's a good, you can't pay for the item through Bitcoin, through this, by circumventing it. So you have to pay for part of it.
But then, with Bitcoin, what you can do is you can pay half of it. You can work out a deal with the reseller--and there are many Brazilians who are doing this sort of thing--work out a deal to make up a Bill of Sale for half the price. And then you are going to--it's tax evasion, essentially. Let me see if I can get this. So, I'm the reseller. So, the Customs' people see a computer. They go, 'Okay, that's reasonable.
And that's what's going on. Is that what's happening? And because you are going through a Bitcoin exchange--in the case of Brazil it's likely going to be Foxbit--it's not going through the banking system. It's not--same thing with just moving money into Brazil.
Where you might be hit depending on the amount, it's fairly complicated. But you might be hit with--if you want to, if you are a company and you want to pay some employees in Brazil, you might pay a Well, you can actually route all that money through a Bitcoin exchange; and then you are not working through a bank bureucracy, which is a sense is in partnership with the Brazilian government. So therefore you are circumventing that tax.
Now, you might say, 'Well, why doesn't the Brazilian--this is happening out in the open? Why doesn't the Brazilian government crack down on this and stop Foxbit from this use? You know, what--are they just making an exchange for other reasons. So that's hard to tell. They could shut down Foxbit entirely. They could do that. But again, Bitcoin--and this is one of the reasons I'm so optimistic about Bitcoin--it is at its core a peer-to-peer technology. And the technology around Bitcoin has been improving so rapidly that in the near future, these peer-to-peer transactions will be as convenient as working through one of these exchanges.
And when Bitcoin is truly peer-to-peer, as it was intended, if you go back to Satoshi Nakamoto's original paper, it is very, very difficult , virtually impossible for anyone to interfere with the movement of money. Um, and that is, um--that was--short of shutting down the Internet. But I'm curious how the--I'm thinking about that reseller.
They can't--do they advertize? How does that transaction, how does information about this opportunity happen? We'll both be better off. Because we won't have to pay the tariff. Well, for example, the company called Bit. One, which is moving money into Brazil to get around the tax--they are, I believe, using the Foxbit exchange.
What it is, is that there are some companies to facilitate this process. It's word of mouth. More people in the know are learning about it. And it's not--at this point, I think that big a phenomenon. It's really kind of--what interests me so much about it is what it points to.
And of course, like you, given our philosophical preferences, I love the idea that--other people would say that, 'Well, that's horrible. They are breaking the law. And shame on them. And the government should crack down on it. Well, I would also say to those people that, um, that there has been a black market in getting around these punitive tariffs already.
Bitcoin is a much safer way of doing it. Makes me think a little bit of Silk Road. You know, the Online Drug Bazaar. Which was ultimately shut down by the Feds. You know, it made selling drugs kind of safe and reliable online.
You take that away and you give it back to sort of a less predictable, more violent spear of--economy--you know, actors. Of course, my recent interview with Sam Quinones on Dreamland suggests it was some innovations in the deliveries of drugs that are less violent.
It's not that comforting, given what it seems to be leading to. But that's a different topic. Let's talk about the underlying technology of Bitcoin and some of the applications you've noticed in Latin America. Again, it's a fascinating example of an end-around an ineffective or corrupt government system. So, underlying Bitcoin is the Blockchain technology. Describe that, and talk about how people are using that, outside of Bitcoin. I think the easiest way to understand a blockchain is it's a database that nobody controls but everybody can trust.
It is--it is the--right, it so it sort of undergirds Bitcoin. It's basically the ledger. It's similar to the ledger that your bank would hold about when--when Jim Epstein pays Russ Roberts, you know, through a bank transfer, the bank transfer is updated. In the same way, the Bitcoin ledger lives on this database, call it a blockchain. And it has this ingenious architecture, which allows it to be distributed. So, um, there are copies of the blockchain on computers all over the world.
They are updated every 10 minutes with the most recent transactions. You can search any transaction. It can't--what is in the blockchain can't be changed. So, this, what, pretty soon after Bitcoin arrived on the scene, a lot of very smart people figured out that you could use this underlying this technology of the blockchain for all sorts of applications separate from exchanging currency. Um, and some of the most exciting applications are in a place like Latin America.
You know, what excites me most is actually this idea of putting Land Titles on the Blockchain. I live in New York City.
You can look up who paid what for what plot of land, and you can check out the history. It's not really a problem. Bitcoin doesn't solve any problems here so much. But then you take a country like Honduras, where--and I haven't done my own reporting, but I am told that land records were kept on dusty books in a government office.
You could have people come in and cross out a name and put a different name down. Very difficult to figure out who owns what. It's a complicated legal process. And many of your listeners might be aware of, there's a book called, The Mystery of Capital , by Hernando De Soto, where he talks about this problem in Peru, of insecure ownership of land. And how detrimental that is to an economy. The historian Sam Bass Warner once said that the most important thing that a government does is keep track of who owns what land.
And the fact of the matter is, is that outside of the United States the government has done a fairly poor job of doing that. And this has created all sorts of problems. So, the blockchain offers an opportunity to--you can, in a sense, upload the transactions when a piece of land is traded between to individuals to the blockchain.
There is some complexity there. The blockchain can't--you can't put all the information into a blockchain. But people have come up with ways of creating sort of digital representations of the information of when one person trades a piece of land with another. So, therefore, you could go onto a blockchain and see, make sure that nobody is coming in and falsifying a record. You can prove the integrity of a transaction.
And this has enormous implications. Honduras, which I mentioned--there's a great company out of Austin called Factom which was close to a deal with the government of Honduras to put their land titles on the blockchain.
The project has stalled. There is a project in the Republic of Georgia to put land records on the blockchain. So, you know, it's beginning to happen. There's growing interest in this, at least. There's also--I interviewed a Brazilian entrepreneur who has got a startup that attempts to put notary services on the blockchain.
Now, in the United States, notaries aren't really such a big deal. In Brazil, like a few other Latin American countries, every time you do any transaction, you've got to go to a notary, in person, and they are going to check your signature against a book they have of signatures.
It's a very arduous process. If your signature isn't in the store where you happen to be, that's problematic. My understanding is it's cartelized to some degree, the right to run one of these notaries has been handed down through generations; you can't break into this industry. There's just so much red tape that hurts the economy in Brazil. So, the idea there is if instead of checking a signature, you can upload a document, a representation of a document, to the blockchain.
You can then later take the document, check the blockchain, and prove that it's the same record. There's some--I'm trying to avoid some of the technical complexity here. But again, the basic idea is that this database that everyone shares can bring the trust that is missing and is crippling to a lot of these economies. Well, it's a really interesting example because in economics--well, in policy, we talk very casually about what we call property rights, as if they are straightforward.
There's private property--the right to own stuff. And usually what we mean by that is if the government comes along, it won't confiscate your stuff. You won't come home to find that your house has been turned--in the United States--into some house for a government official.
And of course we have eminent domain, which kind of a problem, an interference, with private property. It's seizure of property. At least there is the idea that you'll be compensated; it's not always done fairly, of course, and the outcomes are not always healthy. But we have basically what we would call private property in the United States. One more footnote--we have zoning and other things. But when I want to sell my property in the United States, it's pretty straightforward--we don't think of that as a problem.
The packages are routed to one of a handful of Miami-based courier services and then shipped to Venezuela, where they're delivered to the homes of people trapped in this starving nation. When the iPhone 6 went on sale in Brazil last year, the price was so absurdly high that it became became a punchline on late night talk shows.
The explanation for the high price is that the country charges an import tariff on foreign goods that runs as high as 60 percent. But again the government enforces this policy through the banking system.
Today, a growing number of Brazilians are getting around import tax by going around the banking system to purchase products like iPhones. This way the government simply has no way of tracking how much Brazilians are spending when buying goods from abroad.
Bitcoin is also an effective tool for avoiding taxes when moving investment capital into Brazil. The company helps clients get around a And circumventing protectionist tariffs isn't just for investors. Average Brazilians traveling abroad will find that they're atomically hit with a 6. Many have realized that if they use a bitcoin credit card from Xapo or Advcash , they can escape the tax altogether.
Starting a new business in Brazil takes about 14 times as long as it does in the United States. And in the Index of Economic Freedom , the country ranked a dismal nd. That database is known as the blockchain, and it's a computer file with a unique architecture that means that it can never be altered or tampered with.