Bitcoin has become a lifeline for the growing user base in the Palestinian Gaza Strip and a small part of the territory occupied by Palestine in the west of the Jordan River.
Ahmed Ismail, the financial analyst of Gaza, estimated that at least 20 informal exchanges offer the service of cryptocurrency transactions to local users, including monero trading
and dash trading
. Ismail was helping 30 customers for overseas investments by bitcoin, such as stocks, because there are no another alternatives to invest in local.
Mohammed, a currency trader in Gaza, told CoinDesk that in the past four years, he has helped 50 families to buy an average of $500 worth of bitcoin per person per month in order to remit money to the country or to shop online.
While cryptocurrency is booming, although Palestine is not the only country in the world that remains politically and economically isolated, it is unique in terms of the drivers and constraints of certain markets.
For example, Palestinians will not face hyperinflation, but such hyperinflation will promote Venezuelans, Iranians and Turks to provide a limited supply of digital currency, because they do not have their own currency, but use a stable foreign currency. However, another core feature of the public blockchain network that particularly attracts Palestine is reviewing resistance.
Anyone can try point-to-point bitcoin trading
. Once the transaction is paid, it cannot be vetoed by the middleman. For Palestinian consumers who are restricted to enter the global economy during the ongoing conflict with Israel, it seems to solve a real problem. Even Western supporters have closed their bank accounts by sending money to the Palestinians. However, electronic currency trading does not play a significant role in frequent power outages, and even traditional banks sometimes have difficulty trading with the outside world.
Although sending or receiving bitcoin may be frictionless, there are no uphill and downhill slopes in the Palestine. Palestinians cannot use Israeli Shekels, US dollars or Jordanian dinars for online cryptocurrency exchanges because they have not cooperated with local banks. Therefore, they must rely on dealers as a liquidity gateway, which increases friction.
A Palestinian technical worker told CoinDesk that when she tried to cash in bitcoin currency
from a remote employer, she could not get a fair legal price from a dealer in Gaza because the price of cryptocurrency soared.
Therefore, Saifdean Ammous, author of Bitcoin Standard
, is skeptical of any claim that the cryptocurrency currently provides a solution to the Palestinian economic woes.
In addition, the Palestinian community has been centering around local trust networks and physical assets such as cash because of the urgent daily demands caused by high unemployment and high poverty rates. According to World Bank estimates, 21% of Palestinians live below the poverty line and earn less than $5.50 a day. In this case, market volatility and non-current assets can be used primarily for cross-border transactions, but not for daily transactions.