El Salvador has become the first country to adopt
Bitcoin as an official currency.
Nayib Bukele - the nation’s meme-loving, laser-eye donning millennial president - claims embracing Bitcoin will “generate jobs and help provide financial inclusion to thousands”, especially those who don’t have access to banks, and those want to send remittances to El Salvador from abroad.
According to the new law:
- Citizens will be able to use Bitcoin to do everything from paying taxes to buying goods and services.
- People who launch Bitcoin-related ventures will be offered permanent residency.
- USD will stick around as the country’s accounting and “reference currency”
Using Bitcoin to stitch together the national and international economy is a pretty forward-thinking move, but one that’s ultimately needled with concerns.
Concern #1: Bitcoin might not have a meaningful impact on El Salvador’s lower class, many of whom won’t have access to the tech required to use it.
per the University of Cambridge
, El Salvador isn’t exactly a Bitcoin-mining hub. But this could change soon:
- During a live (and impromptu) conversation on Twitter Spaces, Bukele announced an idea that occurred to him in realtime: using El Salvador’s volcanoes as a renewable source of geothermal energy to provide cheap electricity for mining.
Concern #3: Bitcoin isn’t regulated, leaving a grey area for money laundering, tax evasion and other underhand deals to flourish.
Concern #4: the price of Bitcoin is wildly volatile.
Putting these concerns temporarily aside, El Salvador’s Bitcoin bill is a pivotal experiment in proving whether crypto can be a viable alternative to fiat.
THE OTHER (MORE INTERESTING) TAKEAWAY
To paraphrase Aubrey Strobel
, by jumping on Twitter Spaces unannounced to muse over the power of crypto and volcanoes in front of 20,000 people, President Bukele perfectly captured the crypto-social media zeitgeist defining the cultural shift of our age.
We’re increasingly drawn to tech and platforms that decentralize power and information.
Crypto and social media are both striking examples of this: crypto cuts out banks and monetary authorities; Twitter cuts out newsrooms and press agencies.
With the trend of opening up walled gardens burgeoning across sectors, the question of our time seems to be: Do we really need an intermediary for this?
The answer, more often than not, is no.