El Salvador — first country in the world where Bitcoin become the second official currency.
Hey there! Today we want to talk about the legalization of Bitcoin in the world. One of the last big news was Salvador as the first country in the world where Bitcoin become the second official currency.
New rules will take effect in 60 days. Previous 20 years USD was the only official currency in Salvador.
This change means that every business will accept payments in bitcoin for their goods and services, except cases when this case no have technical possibility to process transactions.
Now, one of the main complaints about Bitcoin is the impact of the cryptocurrency mining process on the growth of energy consumption and, as a result, on the environment. At the moment, 121.3 TWh of electricity is consumed per year for mining and transactions with bitcoin, which is comparable to the annual energy consumption of countries such as Ukraine, Sweden, and Malaysia. This is reported by the BBC regarding the study of the Bitcoin electricity consumption index by the University of Cambridge.
“If Bitcoin were a state, it would be included in the top 30 largest consumers of electricity in the world,” the study says.
But the initiative of El Salvador avoids additional environmental pollution. The president wrote on Twitter about his intention to use the capacity of the state-owned energy company LaGeo, which “extracts” electricity from geothermal sources.
In other words, the country will receive 100% environmentally friendly Bitcoin without additional pollution of the atmosphere, land, and water. According to the president, the company’s engineers have already created a new geothermal well that generates about 95 megawatts of energy. The entire mining will be tied to the newly created infrastructure.
We are sure, this decision is very good and important for the future of Salvador. For now, the economics of Salvador mostly depend on money transactions from the outer world, from Salvadorians who living in other countries. There are around 2 million people like this, and yearly they send around 2 billion dollars back to Salvador which is Salvador’s 20% GDP. So approve BTC as an official currency means that transfers back to home will be much easier and faster for the biggest part of Salvador citizens.
Also, a lot of the biggest world banks are discussing the possibility of creating their cryptocurrencies. For example, in April Bank of England said that they start the RnD of digital currency which will have all features that already have bank deposits and fiat currencies.
All this confirms once again that our project is moving in the right direction. Now more and more people are beginning to be interested in cryptocurrency, but for many, it is very difficult to understand how it works. That’s why we are creating Cryptoenter. We will help people use cryptocurrency in everyday matters, such as buying groceries or transferring money to their families. In a couple of clicks, the Cryptoenter client will be able to perform any actions with the cryptocurrency without any difficulties.
A couple of days ago, in our telegram chat, we invited users to ask questions to our CEO Pavel Lvov on this topic.
What do you think about the adoption of Bitcoin as the official currency in El Salvador?
I think this is positive news. Now more and more people are beginning to be interested in cryptocurrency and this is a big step for bitcoin and altcoins to stop being something unusual and quickly take root in everyday life. Also, it will have a good effect on our project, as we are focused on the financial market. We want to combine two areas: the world of fiat currencies and cryptocurrencies, and such news once again shows that we are moving in the right direction.
How soon will other countries follow the example of El Salvador?
It is difficult to make any predictions. Now the general trend is that cryptocurrency is more and more penetrating our everyday life, now you can buy an apartment or a car using BTC. This trend will continue and I believe that soon, more and more countries will look for solutions to work with cryptocurrency at the legislative level.
What possible pros and cons for the global economy do you see if bitcoin is adopted as the official currency around the world?
I doubt BTC will be accepted as the official currency on par with the dollar around the world. Of course, BTC will soon be adopted in many countries of the world, but there will always be conservative countries that will see this as a threat to their economies. As for the pros, I believe that blockchain as a technology will greatly change our world. Blockchain technology is replacing a large number of people in government agencies involved in document verification. Blockchain will replace the concept of digital signature: it will remove fake websites, virus programs, fake news, online piracy. The blockchain is capable of confirming the authorship of the material. In the blockchain, everything is decentralized, network participants are equal to each other and can transfer data directly. Everything is reliable and transparent. There is no possibility of data substitution and hacker attacks since special encrypted keys are used. You can check the traversed path for any transaction since any block is available for public viewing. Also, a big plus is the universality of the blockchain, because it can be applied in different areas (financial sector, law, real estate, etc.)
Will cryptocurrency be regulated to legalize it and how will this affect the market?
First of all, you need to understand that regulation is not only prohibitive but also permissive. There is a stereotype in people’s minds that regulation is tantamount to prohibition and total control. In my opinion, for the introduction of cryptocurrency into our ordinary life, regulation by the state is necessary and this will only have a positive effect on it. As for the possible market situation, I believe that the regulation of cryptocurrency will lead to an increase in the number of people interested in cryptocurrency. Accordingly, the interest in the crypt will only grow, so I think that, of course, bitcoin and altcoins will grow in value.
Why is this news important for Cryptoenter? And how will Cryptoenter be linked to the future fate of the cryptocurrency world as a whole?
Our project is aimed at the banking sector and such news has a positive effect on us. They show that people are already ready to interact with cryptocurrency in everyday life. This is exactly why we are creating Cryptoenter. With the help of our technological solution, ordinary people will be able to use cryptocurrency as easily as they used fiat currencies now, because transactions in our system occur instantly, unlike the Bitcoin network. Thanks to us, it will be possible to do such mundane things as buying groceries in the store or buying a car. At the same time, I want you to understand that our project is not just a cryptocurrency exchanger that can conduct fast transactions. Cryptoenter is an infrastructure through which anyone can create their token and attract investments at the banking level. In simple words, now any legal entity or individual will be able to create their tokens and conduct an advertising campaign for their project through the bank. You do not have to waste time creating advertising integrations and attracting investments, the bank will do all this for you. And Cryptoenter will act as a technological solution with the help of which all this will be possible to implement. Thanks to this, each bank user becomes a potential investor in your project. You receive money for the implementation of the project, and the investor receives your tokens, which, if the project is successful, will grow in price.