The global financial crisis of 2008 shook the world's confidence in the old monetary system. This mistrust is part of what has fueled the recent rise of bitcoin, an independent digital currency, in transactions that circumvent government control and banks, which people inside and outside a country use. to do business. However, looking at the example of El Salvador granting Bitcoin legal tender and Russia showing similar signs, the role of government in the crypto market increases significantly. If you want to invest in Bitcoin, you must read about Bitcoin rising again or not.
SummaryCryptocurrencies have better potentialCryptocurrencies' potential for great benefitsCrypto works as a hedge against inflationProtect yourself against cryptocurrenciesGovernments can use cryptocurrency for future technologiesSecurity and safety standardsCryptocurrencies use safer and more secure machineryGovernments are increasingly turning to bitcoin because it is largely immune to corruption by anyone who might want to privatize its supply or inflate its value to make a profit. Bitcoin also offers governments a way out of economic turmoil that they cannot control because they do not own it:Bitcoin is managed by a decentralized network. There are different reasons for the growing support of cryptocurrencies like Bitcoin from government and financial authorities. Some points to understand this trend are detailed here.
Some governments are turning to bitcoin because it has value. Governments cannot inflate the currency to make it more attractive to people, and bitcoin is much more inflation resistant than local currency. This means that the value of the currency will increase without any artificial measures from the government. In countries with extreme inflation like Venezuela, citizens love Bitcoin. Investors appreciate its potential and anticipate it to hedge against inflation.
Bitcoin has also caught the eye of countries with high public debt and a minimum wage that is not high enough to live on, as wages do not rise much faster than inflation. Thanks to the enormous potential of the decentralized system, a handful of companies and entrepreneurs could make a lot of money, especially as bitcoin grows and its value increases.
Government fiat currency has no value. The country's financial administration has therefore decided to make bitcoin legal tender as an alternative to gold and other means of commerce. This means that from now on, people can use bitcoin as currency if they want to do business without having to worry about paying taxes with it. In addition, it protects government finances and makes people buy it with better value in the future.
Governments are taking action against digital currencies because they are dangerous. Bitcoin is used in the cloud more than anything else, which means hackers can use it to steal data or information, such as targeting individuals' financial accounts. It also helps them to create fake identities to commit other crimes such as burglary, drug trafficking or terrorism which vanish with cryptocurrency transactions from their bank account or credit cards.
Several governments now see bitcoin as an alternative to current banking systems. By using cryptocurrency, they can provide their citizens with the technologies of tomorrow. So, in this way, governments have started to appreciate and consider the potential benefits of cryptocurrency like Bitcoin. This is therefore the best approach for governments to adopt as soon as possible.
Cryptocurrencies are not entirely anonymous as people think. It includes a string of letters and numbers in a cryptographic system. It is more difficult for hackers to gain access to the system than if they had access to the traditional banking system. For a hacker, stealing information by stealing cryptocurrencies cannot work because he has an advanced security system that makes it impossible to hack effectively. Cryptocurrencies have become much safer with the recent hack against South Korean exchanges.
People who have used traditional currencies for many years find that it is necessary to go through certain banks to carry out any transaction. However, in the case of cryptocurrency, no one can interfere with transactions between people or companies because they are entirely virtual.
