How people in Argentina use Bitcoin-backed Stablecoins to escape their Government overreach.


 

  My home country Argentina is going through a rough time politically and economically. Although this is not new (when I was young, there was a 1:1 conversion between Pesos and Dollars which is now over 100:1), it is getting closer and closer to the breaking point.
The Economy Minister quit as the problems seem to deepen with no real end in sight. As the faith in the currency gets diminished, and everyone tries to find refuge in the dollar, the conversion rate spirals out of control. In order to prevent further debasement, the government is opting for strict measures preventing its citizens from escaping their clutches. Adding absurd taxes and criterias to determine who and how much they can convert at any given time.

 

This is nothing more than another example of why monetary policies cannot be left in the hands of a few who are not thinking about what is best for the many. Cutting off the opportunities of their own people to escape the ever-increasing depreciation of their savings is cruel indeed.

Bitcoin offers a true way out of this dilemma, a decentralised, uncensorable and unstoppable open economy that knows no borders and anyone can opt into. The problem for most people in emerging countries like Argentina is the short-term volatility one must endure when holding this incredible asset.

Stablecoins were created exactly for this purpose, allowing users to peg their savings to the dollar, even against the wishes of their own rulers. No matter how many regulations exist to prevent the adoption of this technology, even if all the exchanges get shut down, peer to peer markets will always exist. And DEFI platforms are proliferating precisely because there is a need for them.

The problem so far has been that stablecoins existed only on a different landscape than Bitcoin (the most decentralised network in the world), mainly in Ethereum, which were themselves backed by US dollars. This makes people uneasy, since those funds could be seized at any moment, and the problems of centralisation cannot be completely removed from the game.

Here is where innovation steps in. Using a Bitcoin layer 2 called RootStock (RSK), which allows for smart contract deployment on the most robust asset of all (BTC). A team born in Argentina created a Decentralised Finance platform named “Money on Chain” (MOC for short). They developed the first stablecoin backed entirely by Bitcoin, which means it is truly unstoppable, the “Dollar on Chain” (DOC).

The RootStock protocol itself is merged mined by the Bitcoin Miners, and thus is by far the most secure blockchain for this kind of application. The MOC platform leverages this and gives people in need a token they can trust and actually use to improve their lives, escape the shackles imposed by governments and transact freely and safely.

We are seeing big adoption happening in Latin America and Africa, where this technology is needed the most. While most actors in the crypto space are speculating on which meme coin will pump next, there are real innovations being deployed to help real people with real problems.

The platform has been running successfully for a number of years, having been launched in 2019. It has gone through bear markets and severe drops in the bitcoin price, their stable coin however, has never lost its peg.

This is because of the genius in the design. As all the collateral is Bitcoin, it needs to have extra collateral at all times, so that even in the worst dip, it would never be underwater. The extra collateral comes from investors, they “absorb” the volatility of the DOC holders, granting them the stability they seek, and in exchange they get many benefits and incentives. They get to earn a small yield which comes from the fees paid to the platform, and when Bitcoin price rises, they stand to win the most in the long term.

It is precisely the game between these two actors that allow the system to function without a fault even in the worst of market conditions. Both players benefit from the existence of the other, and together create something more powerful than the mere sum of its parts. I am honestly blown away by how well the system works, and how resilient it has proven to be time and time again.

Something like this could only be created on RootStock, as it is the single best way to deploy Smart Contracts on Bitcoin. We need more technologies like this, seeking to empower the people in the worst conditions. Imagine how much the world could benefit, if suddenly all of Latin America and Africa could break free from the economic issues that have plagued them for decades. Imagine all that human potential unleashed, the creativity and innovation that would then follow.

Not only would they be much richer, all of us would. Once we start understanding what Bitcoin really is, a GLOBAL financial system. We can begin to comprehend that we are all one tribe, and we need everyone to be working for the betterment of it. I think we are in the dawning of a new age, and while I don’t expect the transition to be clean and without pain, I am hopeful for what is to come.

Open source protocols like Bitcoin and RootStock, coupled with decentralised platforms like Money on Chain, are a sign of what is to come. I can’t wait.

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The Art of Tomas
The Art of Tomas

Learning about Bitcoin/Blockchain/Crypto and sharing what I find.


Poems and thoughts
Poems and thoughts

I sometimes like to rhyme when I think, when the pen hits the sand, Where thoughts and soul combine, It is silly I know, but sillier would then be, to hear the siren song, and wilfully blind, refuse to answer the muses call. so here you can search and here you shall find wanderers of time and space collected all in on small place the feeling I once had the writings of mad creative man you might call it scribbles others might call it Art for me it's little more than an exercise to let my mind run wild.

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