El Salvador became the first country to make Bitcoin legal tender. But we must ask, what does this mean for the nation and why the move to Bitcoin?
President Bekele has suggested in the past that around 70% of El Salvador’s citizens do not have access to ‘Traditional Financial Services’ and ‘We must break the paradigms of the past’. The Adoption of Bitcoin in El Salvador is aimed to make it easier and quicker for people to send money peer to peer.
The telephone was invented 144 years ago, however third world countries only had access to telecommunications when they went mobile, from zero to mobile phones in ten years, and skipped the 100 years of landlines. The intention is the same in ‘banking the unbanked’. 92% of El Salvador has access to the use of a mobile phone and the internet – this 92% also has access to the use of Bitcoin for transactions.
The Bitcoin market, which for the economy, reaps many benefits such as higher paying jobs, foreign investment and investment into the community through project work funded by Bitcoin-based companies – a complete paradigm shift for El Salvadorans at all levels.
Understandably people are worried about the volatility, after all extreme ups and downs in price are synonymous with Bitcoin itself. Reducing the impact of this well-known volatility, Bitcoin is being used only as a ‘backend’ for the transactions.
100 dollars => 0.0021 BTC => $100 dollars
Sent, verified and confirmed within minutes.
Rather than the $100 going through a non – existent banking system, El Salvador is utilising the decentralised and globalised Bitcoin network to allow its citizens to send money peer to peer, safely, securely and anonymously.
We take for granted the ability to use online banking apps to send friends, family or businesses money. Not all people globally have this luxury.
Yes, there have been speedbumps and issues, but the invisible hand of Bitcoin has gifted the opportunity to over 6 million El Salvadorans to transact globally and peer to peer without reliance on local infrastructure. Regardless on your opinion on bitcoin, this should be something we can all celebrate.
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