How Bitcoin in El Salvador Could Help End the cycle of poverty

Bitcoin and other cryptocurrencies have been the subject of discussion. There is a lot of debate about the advantages and disadvantages of this type of digital currency. As El Salvador adopts Bitcoin as legal tender in September 2021, the debates about cryptocurrency are more frequent. While it will require time to fully demonstrate its effects, Bitcoin presents a possible solution to poverty around the world.

El Salvador Adopts Bitcoin as a National Currency

In September 2021, El Salvador adopted bitcoin as legal tender. El Salvador is the first nation in the world to adopt this method and has had an uncertain beginning. El Salvador has had to deal with numerous technological problems and also a drop in the cryptocurrency market. People are also wary of transactions between dollars as well as the small amounts of cryptocurrency.

The rollout continues, as major chain restaurants in Salvador, such as McDonald’s as well as Starbucks have started accepting bitcoin via phones. Furthermore, the Salvadoran government has begun rolling out a network consisting of 200 Chivo ATMs to ease the transition of consumers to Bitcoin. On the 1st of October 2021, El Salvador started testing and installing new mining equipment that draws the power of the eruption of a volcano.

If President Nayib Bikele, who devised the concept of adopting Bitcoin, is successful in the implementation, it’s likely that the move will benefit the poor Salvadoran economy. Officials from the government of El Salvador claim that the adoption of Bitcoin will improve the accessibility of services, expand the options for payment and boost the level of financial innovation. If it is successful, other countries might follow suit and adopt cryptocurrency too and increase the potential of Bitcoin to alleviate poverty across the globe.

Preventing Inflation

South America has a history of hyperinflation, as is evident by Venezuela, where banknotes are more valuable because they are novelty items than cash. In contrast to wealthy Westerners, those from countries in the developing world are not able to enjoy the benefits of a greater quantity of money. Their savings are insufficient to be spent, and the vast majority are not able to earn interest in order to safeguard the savings they have. Forbes said in its report that “70% of El Salvadorians are unbanked.”

Bitcoin is unique due to its limited supply. There will never be more than 21 million Bitcoins according to Forbes. The demand for Bitcoin rises its value. The finite nature of Bitcoin helps to prevent inflation and thus in reducing the global burden of poverty.

Reducing Discrimination

Contrary to the majority of national currencies, central authorities are unable to control Bitcoin, since Bitcoin is entirely based on the blockchain. There are no transaction costs and will allow poorer people from developing countries to improve their returns and invest with no additional fees. The cryptocurrency system allows the poorest individuals to make investments they can control. In preventing outside interference in investing, cryptocurrency provides an equitable playing field between those who are wealthy and those who are less fortunate.

Bitcoin is a cryptocurrency that operates outside the current system, which means that it does not have any central authorities. Because governments and banks aren’t able to interfere in bitcoin transactions, individuals are not discriminated against when using the currency.

Prevention of Corruption

It is also extremely secure and is difficult to steal which also reduces corruption. One problem with aid from foreign sources is that it’s difficult to make sure that it is placed within the reach of the people who require it. As an example, a substantial part of the $150 billion of aid that has been provided by the U.S. to Afghanistan in the past decade was stolen from those in the Afghan ruling elite. Furthermore, corrupt governments using aid to themselves is an issue that is particularly prevalent in many African countries. Utilizing Bitcoin and its capability to stop corruption is a great way to in reducing this problem.

Bitcoin Donations

GiveCrypto is a non-profit organization that allows individuals to give and transfer cryptocurrency to those who are in need. They currently take Bitcoin along with a variety of other cryptocurrencies. GiveCrypto can “send cryptocurrency directly” and immediately to anyone, even those who do not have banks accounts. This is particularly helpful for those who live in countries such as Zimbabwe and Venezuela in which hyperinflation and the failure of national banking infrastructures are the biggest problems.

GiveCrypto is in the beginning stages of its growth. It is currently testing and looking for the most effective methods to assist people using cryptocurrency. The company is working with Coinbase the cryptocurrency platform that has greater than 70 million registered users. They are currently developing global programs that seek to help people achieve financial independence through cryptocurrency. The use of cryptocurrency instead of credit can ensure privacy as well as data security and could offer tax advantages.

Bitcoin, as well as the realm of cryptocurrency, remains a highly debated subject as the world is fascinated by the potential of cryptocurrency. For those and nations that are struggling financially, cryptocurrencies may be an option. But it’s pretty much like betting on Due to its capacity to stop corruption, stop discrimination and stop the rise of inflation Bitcoin is a viable option to have a huge impact on poverty around the world.

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