El Salvador made the cryptocurrency legal tender, along side the US dollar, becoming the first country to put the token on a world stage. The Bitcoin Law was passed by the Legislative Assembly of El Salvador on 8 June 2021, giving the cryptocurrency bitcoin the status of legal tender within El Salvador after 7 September 2021.
3 Things to know about Bitcoin
What is Bitcoin? To make this answer simple, we’ll need to transport you back in time, to an arcade. In a classic arcade, you need to buy tokens to play the games. Each token is converted, from dollars, at a set conversion rate. Then, you buy the game time. Cryptocurrency is sort of like going to an arcade, only you can use the tokens (outside the arcade) to buy, or pay for, anything.
Bitcoin is the first digital currency created that uses a peer-to-peer ledger network called a blockchain to move money around the internet. It was developed as an alternative to the centralized fiat system, like the US dollar or the UK pound, to give people more freedom and privacy in the movement of money.
Even though Bitcoins intention was to provide privacy, it is not 100% anonymous. As money is moved from one wallet address to another wallet address, all transactions are viewable in a public blockchain, but no specific verifiable information other than the amount and a string of numbers and letters representing the users wallet are ever seen.
Who created Bitcoin? Bitcoin was first mentioned in its white paper from 2008. The author of the white paper and creator of the token is a still unknown figure or group of people known has Satoshi Nakamoto. The white paper can be found here: https://bitcoin.org/bitcoin.pdf.
Over the years, a number of candidates have stepped forward or have been speculated as being Satoshi Nakamoto, but none of these people have been able to prove themselves to be the mysterious inventor. One key test would be to move some of the Bitcoins from the Genesis block, the block containing the first transactions and home of the earliest coins, but no one has been able to move any of these coins. Although, in May of 2020, some of the earliest minted Bitcoins from February 2009 where moved by an unknown person to another wallet located at the popular exchange Coinbase. So, the mystery endures.
How many Bitcoins are there? As of 2021, there are currently over 18 million Bitcoins that have been minted, and the maximum number of Bitcoins that will ever be minted will be 21 million. Every day there are around 900 Bitcoins minted by miners that are awarded these tokens for solving complex math problems that are attached to each transaction. When a miners computer rig solves the math problem they are rewarded and the transaction is confirmed on the network. This system was created to protect the transaction and create incentives for building out the network.
Once all Bitcoins are minted, miners will no longer receive newly minted coins, and they will charge fees for confirming transactions. It is predicted that when all the Bitcoins are minted, the price will stabilize, because Bitcoin is currently a volatile token, with wide spikes and dips.
What happens when a whole country adopts Bitcoin?
When El Salvador was looking at the future money, Bitcoin was seen as an opportunity to help cut the expensive cost of moving fiat money around its country and the globe, and also as a way of building for a future that is quickly arriving, the arriving age of the cryptocurrency.
After Salvadoran president Nayib Bukele announced that the country would adopt bitcoin as an official currency, there was a great deal of skepticism.
There was violent opposition in some cases, vandalism at one of the “Chivo” ATM (the word means “good” in local dialect) machines that Salvadorans can use to exchange bitcoin for U.S. dollars.
However the support far outweighs the protest of the new Bitcoin Law.
So far 3 million people have downloaded the Chivo bitcoin wallet, according to Bukele, which is roughly 46 percent of the country. In 2017 – only 29 percent of Salvadorans had bank accounts, according to a story on Forbes.
It appears that Salvadorians are converting USD to BTC and holding the Bitcoin. This is good news for Bitcoin holders abroad.