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Will Bitcoin Ever Become A Means Of Payment On The Global Scale?

When El Salvador revealed its intention to become the first country to properly adopt Bitcoin as legal tender, many people in the industry started wondering if other jurisdictions across the world would follow this example. Personally, I find the notion somewhat questionable.

The need for efficient inter-state commerce and financial transactions has been growing in the past years. So having a technologically advanced solution like Bitcoin may give El Salvador an edge it needs to strengthen its economy. That much is true. However, it does not mean that the situation will be the same somewhere else. 

El Salvador’s case is rather unique due to the fact that it had no national currency since the beginning of 2000s, instead utilising the US dollar for transactions. Adopting Bitcoin would not come with the need to redefine the country’s whole financial infrastructure, seeing as how El Salvador is already used to relying on an external, non-national currency for crucial financial operations.

However, there is also Bitcoin’s own nature that needs to be considered. One of its major advantages lies in being used as a store of value - it is, after all, often referred to as a digital equivalent of gold. And much like gold does not make for a convenient payment method in everyday life, Bitcoin was also unlikely ever meant for something like that. It may become more usable as a means of large international money transfers in the future, but retail trade is doubtful to become a fulfilling avenue for it.

There is also the fact that, according to El Salvador's President Nayib Bukele, the use of Bitcoin will be optional. Which leads to the question of whether the country’s residents would even bother to adopt it en masse. While it is true that we are seeing a growing interest towards cryptocurrencies, many people still don’t know how to approach them. So it is hard to picture the masses suddenly adopting Bitcoin as a payment method – changes like these require time to successfully take place.

At most, I can say that if we want to see BTC and other cryptocurrencies stand in the same line as traditional financial assets, it is necessary to continuously educate people on their benefits. As their understanding and trust towards the novel assets grow, we are bound to see new interesting developments in this field.

 

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