Thursday, May 16, 2013

Bitcoin Exchange in Gaza

Background: The Difficulties of Trade in Gaza

The entire export industry of Gaza is virtually dead due to the trade restrictions unilaterally imposed by Israel. The markets that Gaza used to export to (Israel, Westbank and East Jerusalem) are completely blocked by Israeli sanctions. Only a limited set of goods can be exported to Europe, such as flowers, strawberries, furniture, but logistical hurdles and high production as well as logistical costs make it impossible to compete on those markets. Everybody hopes for relief by exporting virtual goods like software, IT services, data entry, call centers, that can more easily get across borders through wire. Palestinian companies like ASAL and Unit One are pioneering in these markets.

But what if your clients abroad are struggling to pay for their services, given that all international transactions are processed by Swift, located in United States, which is blocking virtually any transaction to Gaza?

Bitcoin: A Currency Without a Central Bank

The great advantage of Bitcoin (or Litecoin) currencies is that they travel just as easy as data across any computer network. The amount of money in circulation is limited by mathematics rather than by a central bank (Which these days, under fear of inflation of most global currencies, people might feel more trustworthy). In order to have Bitcoins being used in the Palestinian economy in Gaza, you will need an infrastructure of Bitcoin exchanges, that could change the Bitcoins earned back into Dollars, Shekels, or Egyptian Pounds.

How to Establish the Exchange in Gaza

Well I leave that question to those who have more local experience in Gaza. You might want to work together with banks, you might need to consider governmental intervention from Gaza or Israel, etc.

On the more technical level, you could register your local Bitcoin exchange office under one of the following Websites, and follow the other examples of Bitcoin exchanges in other countries: