Though Nick Szabo, the cryptographer and digital currency researcher who many believe to be the real identity behind Satoshi Nakamoto, is not the only person who says Bitcoin can be a salvo for Greece’s financial meltdown, he definitely is the one who know what it means. It is expected that coming from him, the view will receive deep reactions from various experts.
Nonetheless, he published a new research in a blog post exploring how Bitcoin may help Greece avoid an ultimate financial meltdown and argued that Bitcoin’s main advantage is its potential use case as an international borderless payment method for investments and assets overseas, and to “substitute for cash or other substitute currencies in a money-starved environment.”
Moreover, as the ongoing financial crisis in Greece is becoming more aggravated and the country’s accumulated debt has surpassed 175% of the nation’s GDP, Nick Szabo suggests that Bitcoin is the solution. Szabo explains that the Greek government has spent 75% more than the GDP generated with its economy.
Elaborating about his thesis that Bitcoin could help Greece, he says that though it will not help the Greeks from withdrawing money out of their frozen bank accounts, to avoid the current capital controls environment, they will have to prevent themselves from using “Greek-based-fiat-Bitcoin” exchange “to futilely try to tap into their frozen bank accounts.”
In his official blog, he says:
To have value as a medium of exchange, Bitcoin must be taken up by a community of people who already frequently trade with each other, and who have a strong need to use it in these trades. It is especially important to market to the links in the cycle that have the strongest negotiating leverage with the others (in the case of […] the Greek store scrip cycle, the store and its larger suppliers).
Bitcoin Could Help with the Emergence of Cross-Border Commerce Issues
Nick Szabo believes that Bitcoin could also help with the emergence of cross-border commerce issues i.e. exporters and freelancers can introduce the digital currency to the country, to avoid its payments from being locked up in frozen bank accounts which cannot be withdrawn or simply cannot be used.
Nonetheless, he also believes that Bitcoin could be used by importers pay for goods instead of other electronic payment platforms like PayPal and credit cards, since the accounts are frozen and cannot be transferred abroad.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org