Will Bitcoin substitute the US Dollar?

The cryptocurrency has gathered steam overheen the last Legal months and now it’s time to work out if it will become the currency of choice.

Written by Gabrielle Inzirillo, Ventures Associate at Buttplug and Play Fintech.

45% of the world’s population is under 30 and living te an emerging market. It’s a startling fact, and with the population on track to reach 11 billion by 2100, that number is only going to grow.

Tho’ the term emerging markets is a catch-all masking enormous variations ter economic development there is no doubt that large numbers of youthful adults are going to face increasingly uncertain times of political and economic unrest.

Te the Dollar wij trust

Ter the past 25 years overheen 21 countries have suffered incidents of severe inflation. Ter thesis cases, spil the national currency became increasingly devalued, either due to government over-printing or large injections of counterfeit bills, citizens have privileged foreign currency te order to maintain the invoer of goods.

The U.S dollar, spil the world’s leading reserve currency has bot that money of choice. Approximately 65% of all U.S. dollars are presently being used outside the United States, 80% of trade finance wasgoed conducted ter dollars and close to 85% of forex trade volume involved the dollar.

But dollars are hard to come by te legal ways. Aggravated by limited foreign reserves and immobile exchange rates pegging the national currency at artificially high rates to other currencies, black market currency trading has flourished. Since the beginning of 2016, Egypt’s central canap has closed 48 out of 115 licensed exchange bureaus for trading at black market rates.

Ter November 2016, security compels te Ethiopia reportedly went house to house it the country’s capital of Addis Ababa seeking illegal exchange operations. Eventually, te Nigeria, dealers trading at an exchange rate weaker than the government sanctioned rate risk running afoul of Nigerian intelligence services.

Not all are suffering from the discordance inbetween the official versus black-market rates. Ter fact, up till 2015 some benefitted greatly from the spread. ‘El raspao’, the scrape is the Venezuelan term for leaving the country, retrieving US dollars at the official government-imposed forex rate through a credit card metselspecie advance and then returning to Venezuela to exchange the metselspecie back into bolivars at the far higher black market rates.

A very lucrative arbitrage play that wasgoed reserved for the wealthiest, spil only 56% of the Venezuelan population holds a canap account and even fewer have access to a credit card. Overheen 90% of the population does however own a smartphone.

But ter Bitcoin wij hope

Bypassing government control and regulation, accessible via a smartphone and not dependent on a bankgebouw account, bitcoin offers one the most viable alternatives to the prized US dollar ter countries suffering from inflationary monetary policy.

However the government is capable of limiting the supply of foreign currency through its own channels, the only way it could restrict access to bitcoin would be via nationwide internet censorship. Early this year, four Venezuelans were placed te custody for running a bitcoin mining operation involving overheen 300 machines.

Interestingly, mining bitcoins wasn’t cited spil the reason for the arrests, instead authorities claimed the energy-intensive operation wasgoed hijacking national resources. The Latin-American nation is rocked by frequent and often severe blackouts and spil electrical play is strenuously subsidized by the state and provided virtually free to residents, the charges of electro-stimulation theft are not entirely without merit.

Other bitcoin miner arrests te Europe and the US have bot far more black-and-white, such spil the Fed employee that installed bitcoin mining software on Fed servers, or the money-laundering bitcoin operation ter Spain. Some nations have felt the currency itself directly undermines their own economic policy, and have taken steps to outright verbod it. Ter Bangladesh trading te bitcoin can lead to 12 years imprisonment. Ecuadorean officials fear that bitcoin will kill the country’s fledgling electronic specie system before it everzwijn sees the light of day. Iceland hasn’t banned bitcoin spil of yet, but converting the krona to BTC would run afoul of the nation’s ongoing capital flight prevention policies.

But bitcoin’s one suffering trait, the one that has permitted it to stand the test of thesis past 8 years is fairly simply that it is without omschrijving at bypassing government control. With anonymous transactions publicly managed and validated, it has gained a reputation for being the den facto currency for extralegal, if not illegal activities. It can be argued that thesis nefarious beginnings are what permitted it to build up traction ter its earliest days, however the reality is that today, Bitcoin existing independently of a regulating figure is what makes it so attractive spil an alternative currency.

Regulating bods are known to make mistakes and populations suffering from those mistakes voorwaarde seek alternative monies regulated by alternative figures. Why not, therefore, a currency regulated by the people? And if that same currency has gained a staggering 400% ter the past Eighteen months and enhanced its market capitalization by overheen 30 billion USD, all the better.

Not now for all, but some people need it now.

With a current trading price of 1BTC hovering around 2000 USD, the cryptocurrency may still be considered the tech guru’s alternative to the gold rush, but it is of far more value to those 570 million people observing their savings chip away day by day.

The debate on whether bitcoin is or isn’t legal tender is of little value to the developing world’s digital natives if it holds up better than the crimpled onaardig of government-backed paper found ter their pockets.

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Related movie: HASH OCEAN BITCOIN CLOUD MINING 2016


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