Argentina's Dollar Account Freeze

Guillermo Rauch shares a story about Argentina's economic crisis that shaped his views on Bitcoin and financial systems.

"The concrete memory that had everyone in Argentina stressed out was when we had like three presidents in three days. One president had almost rage quit because there was an economic and financial meltdown around 2001-2002. The next guy comes in, the vice president becomes president, and he's like 'Cool, I'll try to fix it.' Two weeks in, he's out too.

Then someone comes in, I think the third guy, who goes on national TV. They interrupt all ongoing channels, and the president addresses the financial turmoil saying, 'Look, there's a lot of noise about how your dollar savings will get lost and might get converted into pesos at a non-beneficial rate. Do not worry Argentinians,' and this is on national TV fully synchronized across every screen in the country, 'Do not worry, your dollars are safe. If you deposited dollars, you will receive dollars. If you deposited Argentinian pesos, you will receive Argentinian pesos.'

Literally a week later, it didn't happen. The dollars got converted into pesos, and then the currency lost its value. Basically, your money was stolen from you. The banks were in cahoots with the government to make these transactions happen.

When people joke about Bitcoin being just a database we could replace with Postgres for more throughput, I take it personally. What we had in Argentina was Postgres, or maybe worse, maybe Excel, and the government literally did go in and in the currency column said 'select all convert.'

I have the concrete memory of my dad screaming at the screen saying 'These people are so corrupt!' Then all these protests happened with people who had large dollar savings. It was terrible because in Argentina, if you're rich, that's frowned upon. The culture was configured to believe you probably got rich by screwing someone over. So it was hard to empathize with these protests of people outside banks protesting that their savings got stolen, because the media would manipulate it like, 'Are you going to empathize with that rich guy? Poor him, complaining about his huge dollar savings.'

That added insult to injury - there was no empathy for people losing their money. So Bitcoin seems so obvious in this context - we need a globally distributed database that is immutable with extreme security guarantees, because this is your life, what you might leave for your kids, everything you've worked your entire life for. You cannot trust any given actor - not the government, not the banks. You need cryptographic certainty. You can only trust math and the universe."