Cryptocurrency markets

How will life change for Salvadorans after Bitcoin is adopted?

How will life change for Salvadorans after Bitcoin is adopted?
In a few days, El Salvador will adopt bitcoin as its official currency. The country is investing heavily in developing products for bitcoin storage and use by end users. The possibilities of this endeavor are enormous, though some people warn of its riskiness.
Bitcoin is a deflationary cryptocurrency, its blockchain is the oldest available, and most BTC is already mined. Given all this and especially the history of BTC's price since its inception in 2009, it is easy to see El Salvador's future in the form of a sudden increase in purchasing power compared to other countries' currencies.
How will life change for Salvadorans after Bitcoin is adopted?

How will life change for Salvadorans after Bitcoin is adopted?

This is realistic, especially considering how quickly most central banks are depreciating their currencies, while bitcoin supply is limited and new coins are being mined at a slowing rate. Salvadorans will find that they can buy more goods from abroad with this currency, and will realize that they live in a country with an import-rich consumer economy similar to that of the United States.The note confirms that the amount specified in it can be spent by the recipient who has a spending key that matches the payment key.
In addition to their increased purchasing power on the world stage, which will lead to imports in record amounts for the country, foreign investment and capital inflows will increase, and cryptocurrency businesses will start operating in bitcoin-friendly El Salvador. The population will enjoy using the latest, most reliable and useful financial products, taking advantage of all the innovations of the industry. The country could also open a bitcoin mining site using energy from local volcanoes.

On Thursday, however, Wall Street Journal writers warned that the move would put El Salvador's entire economy at risk. They cite a Salvadoran economist who points to the volatility of bitcoin's price:

"Adopting bitcoin as legal tender puts us on a 'roller coaster,'" said economist Carlos Acevedo, who served as governor of El Salvador's central bank from 2009 to 2013.

Yes, a roller coaster that we've been riding for a decade.

More importantly, the government is creating services for instant conversion to dollars, and El Salvador's President Nayib Buquele assured that no one will be obliged to accept bitcoin.

The authors of the publication also say that the fall in the price of bitcoin will cause a liquidity crisis for the country's central bank:

A quick switch to bitcoin risks wrecking El Salvador's $26 billion economy. The debt-ridden country's central bank could face having to spend hard-currency reserves to buy bitcoin if the value of crypto-assets plummets rapidly and consumers rush to the safe dollar.The main feature is that the cryptocurrency is anonymous because it uses a zero-disclosure design called Zero-knowledge proof. It allows the user to exchange data without revealing their identity. ZCASH tokens can be obtained through mining.
It's like the U.S. Congress buying up mortgage-backed securities to save banks from bankruptcy when they have already failed. Is bitcoin a riskier investment than the U.S. real estate market in 2006? That depends on what you consider a risk.

But mortgage-backed derivatives are massive investments waiting for payments to be made by people whose credit history indicates they are unreliable in terms of repayment.

Bitcoin is a mass investment in the expectation that the blockchain will place a new block every ten minutes and commit it to an immutable single distributed ledger.The main advantages include the fact that transactions are made with a small commission (0, 0001 Zec), addresses and transactions are private, there are encrypted fields for notes, you can use multisignature.
This has been the case since 2009, almost every ten minutes, like clockwork, with exponentially increasing computing power to keep the network up and running at all times.

But how will the lives of Salvadorans change once the country officially transitions to bitcoin, while others look on with timidity and trepidation? Just imagine a small, resource-rich country in the Middle East or Europe with a very wealthy population and an average wage in the upper percentile.Everything else will depend on many factors, including the actions of regulators, new legislative norms, community activity, the work of protocol developers. There may be some events which may either dramatically increase or decrease the price of the currency.

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