Will Bitcoin Save Greece from it’s Economy’s Problems?
What is the Greek Crisis?
I can’t walk five minutes in New York City without hearing someone mention the Greek Crisis, and the possibility of the “Grexit” from the Euro. All this news about the Greek Crisis is driving the Cryptocrooks crazy. As the Greek Crisis is taking over the news, so is Bitcoin. As the cryptocurrency moves horizontal, this increased stability has encouraged a better response from the media. It has also resulted in Greeks picking up the cryptocurrency amid bank closures and cash withdrawal limits. But what caused the Greek Crisis, and how can Bitcoin assist in alleviating the results of it?
No one thing caused the Greek Crisis
The Greek Crisis didn’t happen over night. It has been building since the introduction of the Euro in 2000, and the introduction of Greece into the Euro Zone, and their utilization of the Euro. This New York Times article summarizes the Greek Crisis extensively. The Greek Crisis cannot be explained by a single reason. it was the culmination of several experimental economic theories being tested, and failing. The most important theories being tested are:
Euro Zone Difficulties
“The creation of the Euro… binds 19 nations into a single currency zone watched over by the European Central Bank but leaves budget and tax policy in the hands of each country, an arrangement that some economists believe was doomed from the start.”
this is what triggered the 2008 crisis in USA. Greece keeps borrowing money in hopes that it can assist them in recovering their economy. Although it has helped, in a sense. Overalll, it hasn’t. Greece will probably not leave the Euro Zone, unless other countries follow through with forcing them out. But Greece isn’t the only European experiencing economic difficulties, so is Spain, Italy, Portugal; just to name a few.
Bailouts and the Bond Market
Bailouts aren’t always successful in the long run, but in short-term, it can provide a much needed adrenaline to an economy. This could prevent a meltdown, but it didn’t in Greece. Pensions are unwilling to change, and elected officials are between rock and a hard place. IMF and Euro Zone bailout packages have supplied Greece with more and more money. Without the money to pay them back, they’re stuck in a limbo.
This has caused a backfire when investors began to pull out bonds bought from Greece. This prevented Greece from printing more money encouraging banks to freeze funds when money is allocated where it’s needed most, social services.
How Bitcoin can Help the Greek Crisis
Bitcoin Balances cannot go Negative
Immunity from Bank Runs
Can Bitcoin really do anything to help the Greek Crisis?
The economic crisis in Greece has turned some attention to Bitcoin again… Citing the Greek crisis, Coinbase waived fees last week for customers buying Bitcoin with euros.
At the time of writing, the Bitcoin network was experiencing issues with assimilating network nodes to the latest software due to Greek purchases and software updates. This caused a slowdown in the network, and with the halving of bitcoin rapidly approaching, along with the debate of blockchain solutions heating up, it is likely this will happen again. But with each test of the cryptocurrency, Bitcoin grows stronger, and therefore it’s effect on global economies.