What is Bitcoin and why is El Salvador accepting it?

Even though cryptocurrencies have existed for some years now, they are only now taking on great importance and part of the financial market. Many people use them to invest digital money that possibly increases in value over time.
There are many types of digital currencies but currently, bitcoin is the one that has the most value among all. But what is Bitcoin?

Bitcoin is a digital currency that can be used like any other currency if it is used to exchange goods and services, to buy or make a transfer. It is a currency that has the condition of being virtual.

Its symbol is ฿ and its abbreviation is BTC. On September 7, 2021, El Salvador became the first country to accept bitcoin as a legal currency.

Although Bitcoin is a term that we hear more than ever today, the truth is that its origin dates back to 2008. Satoshi Nakamoto published an article under the title ‘Bitcoin: An electronic cash system among equals’, in which he details how it is generated by bitcoins and what are their advantages.

A year later, in 2009, the first open-source Bitcoin client appeared.

It is considered the first digital currency on the market.

According to the information that exists throughout history, Nakamoto is the pseudonym of the person or group of people behind this concept, although to this day his identity is not known.

The functionality of this system is simple, each new user must choose a purse or wallet, which you can get on the official bitcoin website, and which will then be installed on your computer or mobile device of your choice.

Each wallet has a special key that is created with cryptography algorithms that are used to make digital signatures and that verify the identity of the user.

Once this is done, a bitcoin address is created, it should be noted that as many as needed can be created; then you can send your address to other users so that they can pay you or transfer bitcoins or you to them.

Bitcoin is a free software plan that is based on the famous P2P technology.

These transfers are verified through a public record, called a blockchain, which shows all the transactions that are made. Blockchain is the one in charge or is the one that ensures that a user owns the amount they are supposed to spend.

Finally, the mining process is in charge of transmitting and confirming the transactions made.

To get an emergency credit you must:

1. Define what you need this type of credit for.
2. Be clear about your ability to pay, this will allow you to determine the amount you are going to request.
3. Investigate the options available in the financial market, use the personal loan comparator and find the one that best suits your needs.
4. Make the request and submit the requirements demanded by the selected entity.

Using Bitcoin’s network allows you to have different benefits, such as:

• • You can send and receive the amount of money you want, to and from anywhere in the world.
  • The payments have very low rates, which allows you to send large sums of money for a small fee.

• • Protects customers’ data.

These perks make cryptocurrencies attractive to all kinds of people who want to have their money in their own hands, without the interference of any financial institution.

Of course, like any other financial instrument, it has its flaws. For example:

• • Volatility, your money can be worth double or half in no time.

• • The number of businesses that use and accept it as a means of payment is very small, but this number is increasing as time goes by.

• • Bitcoin software is still under development, a feature that reduces its accessibility to the public.

The new law states that companies must accept bitcoin as a form of payment, and the government will allow people to pay their taxes with it as well. The exchange rate to the dollar will be set by the market, and exchanges of dollars to bitcoin will not be subject to capital gains tax.

The law was approved by an absolute majority, with 62 of the 84 deputies giving their yes.

President Nayib Bukele said the new law will make it easier for Salvadorans living abroad to send remittances to their relatives in the country.

Last year, about $ 6 billion in remittances entered the Salvadoran economy, representing almost a quarter of the country’s gross domestic product. About 70% of Salvadorans lack access to traditional banking and other financial services, the president said.

The president hopes that sending remittances will also be cheaper.

Last year, the average commission was 3% per transaction. The elimination of this commission would mean an additional 180 million dollars for Salvadorans.

The country has used the US dollar as its main currency since 2001. At the time, the government was trying to stabilize and prop up an economy that was ravaged by a bloody 12-year civil war that ended in 1992.

“The Colón was the only legal tender in El Salvador until January 1, 2001, when the dollarization process was completed through the Monetary Integration Law. Although the Colón is still a legal tender, the US dollar was quickly adopted as the main legal tender ”, explained the former ambassador of El Salvador in India Ariel Andrade in an article in which he explained the intra history of this movement.

Undoubtedly the new digital currencies are taking a lot of power worldwide, but it is important to remember not to trust them because they do not have good supervision or control, so it can be very easy to fall into the hands of scammers.

In short, they are a great opportunity to invest money, but in the same way you can lose it. It is a bet on the economy.