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Bitcoin: an alternative currency of the digital world


10th Aug 2020 Managing your Money

Bitcoin: an alternative currency of the digital world

The worse the economy, the better for bitcoin. The most famous virtual currency is an object of desire, especially in countries in crisis. You have to watch out for online thieves

The collapse of the Venezuelan economy today has various consequences.  The federal money, the bolivar, has become completely worthless due to hyperinflation. This year, prices in Venezuela are expected to increase by 1,600%! Dollars can only be bought illegally, on the black market, at a prohibitive rate anyway. No wonder many Venezuelans are trying to purchase bitcoins on the Internet.

Some go a step further. Through special software, they try to earn bitcoins by sharing the computing power of their computers with the system that supports the cryptocurrency. They take advantage of the fact that although socialist Venezuela is going through a gigantic crisis, electricity is still very cheap there. So their computers can work all the time. In turn, Venezuelan police are increasingly arresting such people, accusing them of ... stealing electricity. This is a severe crime in a country where energy may and may not cost much, but its outdated and inefficient distribution network is plagued by constant outages.

Test of strength

The phenomenon of bitcoin in Venezuela shows what it has become today - an emergency exit from all kinds of crises, financial restrictions and official blockades. Of the project was, hiding under the pseudonym Satoszi Nakamoto. He should be especially grateful to the inhabitants of those countries where the standard banking and financial system is not functioning correctly.

Bitcoin is especially prevalent in fragile states or countries where currency fluctuations occur. For example, in Nigeria, where people exchange their savings for bitcoins due to the collapse of the local currency exchange rate. Or in India, where the popular 500 and 1000 rupee banknotes have been unexpectedly withdrawn from circulation. Then the interest in bitcoin as an alternative to local money immediately grew. When the fate of Greece in the euro zone was at stake two years ago, and only small amounts could be withdrawn from local ATMs, some Greeks also saw hope for saving their savings in the popular cryptocurrency. Get more detail here at bitqt BQ

It is no accident that bitcoin grows in importance when people lose trust in corrupt local authorities. Bitcoin does not have any central bank or any administrative supervision. He is not subject to anyone, and he works only on the Internet. It is called virtual currency or cryptocurrency because for security, all transactions are of course, encrypted. No one prints bitcoin banknotes or mint coins with that name. Nobody will be able to fully control Bitcoin because transactions support millions of computers scattered around the world. Therefore, no government, even the most powerful, can simply ban the trade in bitcoins, because to this end it would have to shut down the entire Internet. And even for Americans, it would be technically difficult, not to mention destructive for the world.

This does not mean, however, that all bitcoins are just watching you indifferently. A vital power test is taking place in China. Bitcoin also became popular there, and behind its success were also statutory restrictions in the Chinese economy. The Chinese are still not able to freely trade with foreign countries, and transfers from China to other countries are under strict supervision. The Chinese authorities are actively afraid of the uncontrolled flight of capital. However, intelligent Chinese have found a way around these barriers. They started buying bitcoins and keeping savings in them or exchanging them for other currencies. So recently, the Chinese government launched a counterattack. He tries to control the local exchanges where bitcoins are bought for yuan. He hopes that this will discourage Chinese entrepreneurs from moving money out of the country.

Chinese bitcoin career, for which this country is much more critical today than Europe or the United States, has consequences also for Polish companies. - Our entrepreneurs often use bitcoin when trading with Chinese partners - says Dr Krzysztof Piech, founder of the Blockchain Technology Center at the Lazarski University in Warsaw. - It is an excellent alternative to traditional international transfers.

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