Bitcoin in Lebanon: A Beacon of Hope Amid Economic Turmoil - GlobalBTCFest Lebanon Community Call

Introduction

• GlobalBitcoinFest interviews Bitcoiners from 50+ countries, learning about local experiences and stories

  • "I think it's really beautiful how Bitcoin also provides opportunities to people all over the world in all kinds of places."

• this is a Lebanon community call with 4 Lebanese Bitcoiners - Marco (@marco_bdl), Sooly (@Sooly_Kobayashi), Thomas (@Thomssmn) and Said (@the_nassar)

Lebanon’s Financial Crisis

Lebanon History

• 1956: banking secrecy act passed (1956) where no bank can share account information with any public/private authority

  • + draws foreign investments

  • - enables corruption

• political instability and economic decline evident since the 1980s

• widespread corruption

  • infrastructure / public services neglected despite enough funds

  • "The bridges that began construction three decades ago are still a work in progress”

• The Lebanese Civil War occurred between 1975 and 1990, and the same war leaders have been governing the country since

  • during that time, it moved 75% of its gold to the US to protect it

  • Lebanon holds ~287 metric tons of gold today ($18 billion - 2 years worth)

• 2019: The proposal to tax social media usage ($0.2 a day) was the tipping point, leading to widespread protests and the current economic crisis

Crisis

• the first Lebanese pound was printed in 1924 with a value of 0.18 grams of gold

  • in 2023, 199,800,000 pounds have a value of 0.18 grams

• Lebanon has a cash-based economy, with a focus on tourism, agriculture, and banking.

  • Agriculture suffers due to corruption and neglect of export

  • Tourism suffers due to lack of safety (economic instability, close to wars, etc.)

  • Banking is run by a Ponzi central bank

  • It is therefore mainly based on small businesses, the service industry, restaurants, and tourism

    • "Lebanon doesn't have any [productive sectors], and this is why the situation of Lebanon is much worse than any other country"

• The central bank was running a Ponzi scheme (relying on fresh borrowing to service its debt) - the country lost $180 billion in that

  • banks offered up to 15% interest rate to attract more people into the scheme

  • defaulted paying euro bonds, further impacting the credit score of the country and sending it into a downward spiral.

  • Lebanese people lost 98%+ of their wealth

    • the pound was pegged to the dollar for ~30 years at LL1,500

    • October 2019: it broke the peg from 1,500 to around 100,000 Liras

    • widespread poverty and social issues as a result

  • Central bank governor, ex-Merrill Lynch banker, was awarded the best banker in the world a year before the crisis

• Lebanon currently has two types of USD:

  • "Lollars" (lebanese dollar - frozen accounts in banks)

  • "fresh dollars" (more expensive and less practical)

Lebanese People

• Lebanese people have an independent, entrepreneurial spirit

  • their ancestors are the Phoenicians, who invented trade and commerce (plus the letters)

  • sovereign individuals, they’ve been taught that they can only count on themselves

    • "It's in our blood, the government doesn't offer you much.”

• "when you are in need, you become more creative and you come up with better solutions."

  • e.g In 2014, some Lebanese students mined Bitcoin on university computers to offset tuition increases

• The Lebanese diaspora is present across the world, with over 14 million Lebanese living outside Lebanon (2-3x the population)

  • Lebanese economy relies heavily on remittances from them

    • High fees for said remittances

• Lebanese citizens tend to invest in tangible assets like gold, land, real estate, and increasingly, Bitcoin

  • Many businesses are cash-only

• The Lebanese Bitcoiners have backgrounds in gold refining, civil engineering, international business engineering, and traditional finance

  • one of them found Bitcoin through gaming - Thndr Games’ Bitcoin Bounce, where you earn sats for playing

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Bitcoin in Lebanon

• p2p market is most used (cash-based society, electrical issues, bank crackdowns, etc)

  • they buy Bitcoin through “offices”, Binance/Kucoin p2p

    • Most brokers accept USD cash, and some accept Lebanese Lira with a 10% surcharge

  • high fees, trust issues, and centralization

    • Bitcoin du Liban’s p2p Telegram group helped reduce fees and decentralize

• USDT is more commonly accepted than Bitcoin by brokers due to lower fees

  • "You usually meet up and you wait till you have one or two confirmations - that's why people tend to go for USDT because it's much easier & much faster"

• Lightning Network adoption still low, possibly due to electricity issues

  • people call the blackouts worse than the civil war

• numerous scams - e.g a Binancesfund ponzi offered over 100% ROI, lasted six months - cost people $300 million

Bitcoin Education & Community

• Bitcoin du Liban: a platform aimed at educating Lebanese people about Bitcoin and creating a Bitcoin economy in Lebanon

  • Started in 2019, faced initial backlash but has since grown

    • it was hard to convince others to invest in it - and they later had significant losses during the financial crisis

  • "It's super clear to me that there's a booming bitcoin community absolutely taking off."

  • Said created a Bitcoin-themed escape room as a means to teach Bitcoin and its history

    • the story of a grandfather who bought 10,000 Bitcoins in 2011 and the quest to find his 24-word password.

    • Over 700 players have tried the game, helping them discover and learn about Bitcoin

    • Said is willing to share his Bitcoin escape room concept for free with anyone interested in creating a similar experience in other locations.

  • importance of raising awareness for Bitcoin and avoiding scams

    • "People are looking for any kind of profit, they're vulnerable . That's one of the reasons we have Bitcoin du Liban - to try our best to raise awareness and talk people out of it”

originally posted on https://2minutebitcoin.org and https://2minutebitcoin.org/podcasts/summaries/lebanon-bitcoin-community-global-bitcoin-fest

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• Word Count: 21361

• Length: 3 hours, 16 minutes

• Posted Date: March 30, 2023

• Episode - https://twitter.com/GlobalBTCFest/status/1641500173951176704