June 15, 2021 | AtoZ Markets – Since its inception in 2009, Bitcoin has (almost) single-handedly revolutionized how we look at currencies. This trailblazer was the catalyst that for the first time saw the possibility of a currency that extended beyond coins and banknotes that we could hold in our hands. Nonetheless, the crypto asset was initially a very niche area that was largely the remit of technology enthusiasts. It was initially met with scepticism from the public and financial institutions alike.
Fast forward to 2021 and the situation could not be more different. Let us have a look at the latest major Bitcoin-related event and what it means for the crypto sphere.
The El Salvador Scenario
The land of volcanoes or “the thumb of America”, as it is sometimes affectionately called, does not feature regularly in the international spotlight. However, this unassuming central American country has recently taken the world by storm by announcing that it will be accepting Bitcoin as legal tender. This move makes El Salvador the first country to officially recognize a cryptocurrency and give it the same legal status as a fiat currency.
In real terms, it means that Salvadorans can now buy goods and services with Bitcoin, and service providers have to accept the currency just like they would accept the dollar. While the concept is still in its infancy, the country’s President is already thinking long-term with plans to use the country’s geothermal energy to ensure that the mining of the coin is 100% clean, sustainable, and energy-efficient.
Is Bitcoin the Future?
Bitcoin’s core concept has always been the possibility of having a transaction system that is not dependant on a central governing authority nor the requirement of fees and mark-ups. In recent years, and particularly during the peak of the pandemic, more and more individuals began to see the advantage of a currency that is not dependants on inflationary fluctuations. However, it did not stop there. Some of the world’s largest multinationals and financial institutions have declared their interest in the coin.
However, despite the gathering momentum for all-things Bitcoin, El Salvador plans still present an unprecedented plot twist. The country utilizes the U.S. dollar as its currency which means that shocks to the US economy can send ripple waves to its economy. Bitcoin presents an alternative pathway that could make the country less dependent on the movements in the US.
Could this be a blueprint for other countries to follow? Does this mean that this is just the beginning of increased Bitcoin adoption? It is not possible to provide answers to these questions at this point. However, El Salvador will provide the first real-life case study of widespread Bitcoin utilization in everyday life.
While it is too early to say what the current scenario means for the future of Bitcoin and the crypto world, it is safe to say that digital will increasingly become an important currency avenue that cannot be ignored as more time passes.
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