Economy

Latin America Treads Carefully Into Bitcoin Storm

Bitcoin has had its ups and downs, in both value and public trust. But some recent deals in Latin America offer signs that the online currency may be here to stay.

Latin America Treads Carefully Into Bitcoin Storm
Damián Kantor
BUENOS AIRES — Latin American networking site Taringa! reported last month that it had struck a deal with Xapo, a "bitcoin wallet" service, that allows users to be paid in the Internet currency for goods and services. While the deal was valued at no more than $750,000, it has sparked a new round of debate over bitcoin's true nature. Some have warned that the new form of digital currency is entirely speculative and legally invalid, while others see it as the world's the most "trustworthy" and stable monetary unit.
Taringa! aims to use bitcoin to pay users generating advertising revenue with their "quality content," says Hernán Botbol, a co-founder of Taringa!, which has about 75 million monthly users. How much content can qualify as "quality," and how many people are ready to pay for it, is itself an open question.
But the deal comes as bitcoin is itself facing fundamental questions about its viability. It is "more a curiosity than a practical thing," says the economist Pedro H. Rabasa of Empiria, a consulting firm. Yet its scarce use does not remove risks of volatility. Between late 2013 and February 2014, its value soared from $100 to $1,000, before dropping to $625. Today it is worth around $240, amid constant oscillations.
Miguel Boggiano, CEO of Carta Financiera, an investment firm, says on average there are some 200,000 transactions a day worth around $50 million. "Clearly this is no threat," he says to the stability of the world economy. Still, several countries (China, Estonia, Lithuania and Indonesia, among others) have issued warnings on bitcoin's lack of legal backing. Russia has banned its use outright.
The founders consider the alarms unjustified. They agree the "crypto-currency" is volatile, but insist that it will eventually stabilize. Its volatility comes with being a "new currency," says Boggiano. "In 1992 connecting to the Internet was also difficult, and bitcoin is steadily rising. In five to 10 years' time, it will be worth between $500,000 and one million U.S. dollars."
Online bank to bitcoin
Before launching the bitcoin wallet service Xapo, Wenceslao Casares was involved most famously in Patagon, a putative online bank created in the 1990s. In 2000, Casares and his Patagon partner Constancio Larguía sold 75% of their online firm to Spain's Santander banking group, for $476 million. Much of that money disappeared when the firm crashed. Casares lives in California today, and two years ago founded Xapo, which some have dubbed a bitcoin "vault."
Bitcoin was born in 2009. Its promoters says it is an inviolable technology or code that does not need, or have, the backing of a government, which is cited as an advantage. For others, that is the risk. The currency is traded on specific websites. In February 2014, the Mt. Gox site, which operated in Japan, suddenly blocked fund withdrawals by users before going bankrupt. Its owners were taken to court.
The idea of bitcoin "is good," says Boggiano, though he notes that it remains difficult to get enough people to use it in payments. "I am not saying it is nonsense, just that it's early to say whether or not it will finally be accepted."
In Argentina, Ripio.com is one platform where bitcoins can be traded. Its founder, Sebastián Serrano, says the website has 20 operations a day on average, and 1,000 registered users. He tells us he is certain "it is the money of the future," observing that already 100 businesses in the country accept it for payments. Yet his website cautions users: "Buying and selling bitcoins entails risks. Please use your best judgment."
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Green

Ecological Angst In India, A Mining Dumpsite As Neighbor

Local villagers in western India have been forced to live with a mining waste site on the edge of town. What happens when you wake up one day and the giant mound of industrial waste has imploded?

The mining dumpsite is situated just outside of the Badi village in the coastal state of Gujarat

Sukanya Shantha

BADI — Last week, when the men and women from the Bharwad community in this small village in western India stepped out for their daily work to herd livestock, they were greeted with a strange sight.

The 20-meter-high small hill that had formed at the open-cast mining dumpsite had suddenly sunk. Unsure of the reason behind the sudden caving-in, they immediately informed other villagers. In no time, word had traveled far, even drawing the attention of environment specialists and activists from outside town.

This mining dumpsite situated less than 500 meters outside of the Badi village in the coastal state of Gujarat has been a matter of serious concern ever since the Gujarat Power Corporation Limited began lignite mining work here in early 2017. The power plant is run by the Power Gujarat State Electricity Corporation Limited, which was previously known as the Bhavnagar Energy Company Ltd.

Vasudev Gohil, a 43-year-old resident of Badi village says that though the dumping site is technically situated outside the village, locals must pass the area on a daily basis.


"We are constantly on tenterhooks and looking for danger signs," he says. Indeed, their state of alert is how the sudden change in the shape of the dumpsite was noticed in the first place.

Can you trust environmental officials?

For someone visiting the place for the first time, the changes may not stand out. "But we have lived all our lives here, we know every little detail of this village. And when a 150-meter-long stretch cave-in by over 25-30 feet, the change can't be overlooked," Gohil adds.

This is not the first time that the dumpsite has worried local residents. Last November, a large part of the flattened part of the dumpsite had developed deep cracks and several flat areas had suddenly got elevated. While the officials had attributed this significant elevation to the high pressure of water in the upper strata of soil in the region, environment experts had pointed to seismic activities. The change is evident even today, nearly a year since it happened.

It could have sunk because of the rain.

After the recent incident, when the villagers raised an alarm and sent a written complaint to the regional Gujarat Pollution Control Board, an official visit to the site was arranged, along with the district administration and the mining department.

The regional pollution board officer Bhavnagar, A.G. Oza, insists the changes "aren't worrisome" and attributes it to the weather.

"The area received heavy rain this time. It is possible that the soil could have sunk in because of the rain," he tells The Wire. The Board, he says, along with the mining department, is now trying to assess if the caving-in had any impact on the ground surface.

"We visited the site as soon as a complaint was made. Samples have already been sent to the laboratory and we will have a clear idea only once the reports are made available," Oza adds.

Women from the Surkha village have to travel several kilometers to find potable water

Sukanya Shantha/The Wire

A questionable claim

That the dumpsite had sunk in was noticeable for at least three days between October 1 and 3, but Rohit Prajapati of an environmental watchdog group Paryavaran Suraksha Samiti, noted that it was not the first time.

"This is the third time in four years that something so strange is happening. It is a disaster in the making and the authorities ought to examine the root cause of the problem," Prajapati says, adding that the department has repeatedly failed to properly address the issue.

He also contests the GPCB's claim that excess rain could lead to something so drastic. "Then why was similar impact not seen on other dumping sites in the region? One cannot arrive at conclusions for geological changes without a deeper study of them," he says. "It can have deadly implications."

Living in pollution

The villagers have also accused the GPCB of overlooking their complaint of water pollution which has rendered a large part of the land, most importantly, the gauchar or grazing land, useless.

"In the absence of a wall or a barrier, the pollutant has freely mixed with the water bodies here and has slowly started polluting both our soil and water," complains 23- year-old Nikul Kantharia.

He says ever since the mining project took off in the region, he, like most other villagers has been forced to take his livestock farther away to graze. "Nothing grows on the grazing land anymore and the grass closer to the dumpsite makes our cattle ill," Kantharia claims.

The mining work should have been stopped long ago

Prajapati and Bharat Jambucha, a well-known environmental activist and proponent of organic farming from the region, both point to blatant violations of environmental laws in the execution of mining work, with at least 12 violations cited by local officials. "But nothing happened after that. Mining work has continued without any hassles," Jambucha says. Among some glaring violations include the absence of a boundary wall around the dumping site and proper disposal of mining effluents.

The mining work has also continued without a most basic requirement – effluent treatment plant and sewage treatment plant at the mining site, Prajapati points out. "The mining work should have been stopped long ago. And the company should have been levied a heavy fine. But no such thing happened," he adds.

In some villages, the groundwater level has depleted over the past few years and villagers attribute it to the mining project. Women from Surkha village travel several kilometers outside for potable water. "This is new. Until five years ago, we had some water in the village and did not have to lug water every day," says Shilaben Kantharia.

The mine has affected the landscape around the villages

Sukanya Shantha/The Wire

Resisting lignite mining

The lignite mining project has a long history of resistance. Agricultural land, along with grazing land were acquired from the cluster of 12 adjoining villages in the coastal Ghogha taluka between 1994 and 1997. The locals estimate that villagers here lost anything between 40-100% of their land to the project. "We were paid a standard Rs 40,000 per bigha," Narendra, a local photographer, says.

The money, Narendra says, felt decent in 1994 but for those who had been dependent on this land, the years to come proved very challenging. "Several villagers have now taken a small patch of land in the neighboring villages on lease and are cultivating cotton and groundnut there," Narendra says.

They were dependent on others' land for work.

Bharat Jambucha says things get further complicated for the communities which were historically landless. "Most families belonging to the Dalit or other marginalized populations in the region never owned any land. They were dependent on others' land for work. Once villagers lost their land to the project, the landless were pushed out of the village," he adds. His organization, Prakrutik Kheti Juth, has been at the forefront, fighting for the rights of the villages affected in the lignite mining project.

In 2017, when the mining project finally took off, villagers from across 12 villages protested. The demonstration was disrupted after police used force and beat many protesters. More than 350 of them were booked for rioting.

The villagers, however, did not give up. Protests and hunger strikes have continued from time to time. A few villagers even sent a letter to the President of India threatening that they would commit suicide if the government did not return their land.

"We let them have our land for over 20 years," says Gohil.

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