Big Macs in Caracas and Prawns in Lagos are 50% cheaper with Bitcoin.
This was published in Bitcoinist.
How the Use of Bitcoin Saves on the Cost of Travelling in Venezuela and Nigeria.
Attention travellers and digital nomads visiting Nigeria and Venezuela. Both these countries has capital controls on their economies and black markets for hard currency. (Particularly USD and Euros.)
For example, in Nigeria, if you withdraw money at the ATM you get 320 Nigerian Naira per Dollar. But if you sell Dollars on the Black Market you get 500 Naira per Dollar.
Getting the better rate makes your travelling to those countries a lot cheaper.
Economist Big Mac Index for Bitcoiners
Here is how it affects the price of a Big Mac in Lagos:
You have three choices:
- Be a muggins and pay for everything with Naira from the bank ATM which is paid out at the official FX rate. Why pay $2.99 for a Big Mac when it can cost you $1.90 if you use a bit of initiative and show some love for the coin?
- Take a large stack of cash Dollars with you to Lagos. Good luck with that! And what are you going to do when (not if) that cash gets stolen from you, most likely on the taxi journey to your hotel in the city from the Airport?
- Buy Bitcoin before you travel and sell Bitcoin in small sums during your travels. This explains how you do that on the LocalBitcoins exchange.
King Prawns in Lagos
The benefits of using Bitcoin when travelling to countries with distressed economies is not restricted to eating unhealthy food at McDonalds. (But great for a hangover.)
Ocean Basket is a lovely seafood restaurant with branches all over Africa.
Beautiful seafood. Look at the Menu at Ocean Basket, Lagos, Nigeria.
Eat the whole menu, and Bitcoiners pay $112.46, non-Bitcoiners pay $176.87.
Many people might not wish to travel to Nigeria or Venezuela. (Or Egypt or Iran where there are also Black Markets for hard currency you can access with Bitcoin). But bear in mind that the arguments laid out here apply to any economy with FX controls. And as sure as night follows day there will be more economies behaving that way in the future. The canary in the coalmine is rapid depreciation of the local currency against the USD. Black markets usually develop as the authorities impose artificial controls on the official FX rate to stem the decline in the value of their currency. So these are the canaries: