As the financial and economic crisis seems to grow worse and worse, some people are resorting to alternative means of keeping their savings safe from becoming usurped by capital control and the increasing devaluation of the Lebanese currency.
One of those alternatives measures is investing in what is called cryptocurrencies.
Cryptocurrencies are decentralized currencies that are found on the internet. The main advantage of this technology is that it’s not beholden to a single country’s laws and regulations. It offers users the ability to escape the limitations of the local economy.
Bitcoin is the most famous and prominent example, although there are other options such as Lithium and Ethereum.
One man named Maher, interviewed by Al-Jazeera, said that he is trying to move what is left of his savings by investing in Bitcoin. “Suddenly everything turns upside down and all the options are open,” he said.
Another Lebanese man, Mahmoud Dgheim, aged 29, has been trading Bitcoin since 2015 and he says that it gives him financial freedom.
“Right now, Lebanese are interested in escaping tight restrictions on cash withdrawals and transfers. They basically want financial freedom,” he pointed out and added: “If you want to go around the banking system, bitcoin is a solution.”
The way Bitcoin works is that it doesn’t require a central government or financial entity in order to function. It is rather done through peer-to-peer networking, which is then monitored by a global community of computers.
For a while now, people all over the world have been using Bitcoin and similar cryptocurrencies in their day-to-day lives, and they have been able to buy everything from hotel bookings, cars, laptops, and furniture.
However, it has not yet become widely adopted in Lebanon where there are restrictions from the Central Bank on buying Bitcoin using Lebanese credit cards.
The slow internet speeds and the state of electricity have also kept Lebanese people from being able to take advantage of the world of cryptocurrencies.
Seven Bitcoin traders in Lebanon have said to Al-Jazeera that, since November 2019, the number of people investing in Bitcoin has increased significantly, reaching a collective value of millions of dollars a month.
With that said, given the government’s lack of a comprehensive plan to deal with the financial and economic crisis, there is merit in having people taking the future into their own hands.
Cryptocurrencies may be one of the ways in which they’ll be able to do that.
There is only one glaring issue. The value of Bitcoin is extremely volatile and it is subject to sharp spikes and plummets in value.
In 2018, the currency lost half its value from when it reached almost $20,000 per coin to less than $10,000, according to The Verge. Moreover, Bitcoin is not cheap. As of the time of writing, 10 USD makes 0.0011 Bitcoin, aka 1 Bitcoin equals 9360.47 USD.
However, it is expected that cryptocurrency will become the universal currency in the future, uniting the financial world under one currency.
Like with any new radical change, especially when it comes to money, cryptocurrency faced fierce resistance and even defamation when it first came to life.
Similar reaction to when human societies were first introduced to paper money as a substitute for metal coins.