Cryptocurrency: Market trend or the future of Finance?

Over the past year you have probably heard a lot of buzz surrounding the world of cryptocurrency. Cryptocurrency is essentially a form of payment that can be exchanged online for goods and services. Cryptocurrencies operate using a technology called blockchain, which is a decentralized form of recording and managing transactions that is spread across many computers. One of the main advantages of using blockchain to manage cryptocurrency transactions is to increase security of these transactions. Cryptocurrencies are also increasingly being used as a speculative investment in addition to purchasing goods and services. While over 10,000 cryptocurrencies are traded publicly, the most valuable and most famous is Bitcoin. Bitcoin first rose to prominence in December 2017 when its value skyrocketed to almost $20,000, before falling down to $3200 just a year later. This extreme price volatility among bitcoin and other cryptocurrency has prompted debate among investors and analysts over whether bitcoin is a legitimate currency and the future of finance as we know it, or just another speculative investment.

Critics of bitcoin and other cryptocurrencies point to its volatility and extreme …

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El Salvador Becomes First Country to make Bitcoin Legal Currency

El Salvador has become the first country to adopt bitcoin as legal tender. Officials in the Salvadoran congress voted in a “supermajority” of 62 out of 84 votes. This fulfills president Nayib Bukele’s promise to make bitcoin legal tender alongside the US dollar. 

 

“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads. Furthermore, the law enables prices to be shown in bitcoin. Taxes can now be paid in bitcoin, and exchanges in bitcoin are exempt from capital gains tax. The government will also be partnering with digital wallet firm Strike to provide an easy and simple to use financial framework based around the cryptocurrency. Jack Mallers, founder of strike, claims that adopting bitcoin could help countries like El Salvador avoid some of the pitfalls of traditional fiat currency, such as excessive hyperinflation, that developing economies are sometimes prone to. 

 

This decision is unprecedented, as no country has yet …

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