The El Salvador legislative assembly passed the bill of adopting Bitcoin as a legal currency on 9 June, which will come into effect in 90 days once the bitcoin-US dollar set their exchange rate in the market. Although bitcoin was legal' to use in El Salvador, its acceptance was voluntary.
President Niyab Bukele, who pushed the Bitcoin law, shared this news via his Twitter handle soon after the law been passed with a supermajority.
He tweets. "if 1% of bitcoin is invested in El Salvador that would increase our GDP by 25%," he said.
The backing of Virtual currency largely depends upon a complex mathematical puzzle thus called "Cryptocurrency" which requires a lot of processing power and a distributed global ledger called "Blockchain" which records all the transactions. No central bank acquires the accountability of its value set by people who are trading Bitcoin.
After a decision address in the capital, San Salvador, reactions were mixed, with some excitement that the new currency could increase prosperity and financial options others were skeptical, source Reuters.
KEY POINTS OF BITCOIN LAW
FEAR OF ENVIRONMENTAL DEGRADATION DUE TO CRYPTO MINING
Due to vast carbon emission, electricity consumption & exploitation of fossil fuel during mining saw large disparage by an ecologist worldwide. Recently, Tesla CEO Elon mask suspended vehicle purchase by Bitcoin also showed his concern towards the environment for using natural resourcesespecially, coal one of the worst excretion of carbon during crypto mining.
According to the Cambridge Bitcoin Electricity consumption index, Bitcoin mining consumes about 105 terawatt-hours of electricity/ per year. That is more than the whole power supply of the Philippines annually, the university estimates.
Such revelations have started debates globally over the concern of high environmental costs during Bitcoin mining.
But some companies find a clean and cheaper way to mine cryptocurrency. Forbes reported that a company called Northern Bitcoin set up their data center in a Norwegian metal mine and uses hydroelectricity and wind power to run its computers, using cold water from a nearby river to cool the machines. Similarly, El Salvador has found a way that leads to zero carbon emission, they claimed.
EL SALVADORE USE OF VOLCANO TO MAKE MONEY
Coincidentally, the Central American country has 20 Active volcanoes that will be utilized in making carbon-free Geothermal Energy. Nearly 25 percent of electricity is produced by using volcanic heat in El Salvador, while the rest 65 percent of Geothermal Energy is still untapped.
Hence with the help of volcanic blazing heat and underground water generating a hefty amount of water vapor that spins the turbine and produces electricity and allegedly causes no harm to any flora and fauna.
The operation and development of the Geothermal power plant lie in the hand of states owned company LaGeo that turn the country's unused geothermal energy to the Bitcoin mining use.
If; the El Salvador crypto model is successful in the upcoming years. The country will prove that the other sovereign nation can consider their store of value and medium of exchange.
El Salvador with neighbor Ecuador and Panama are a 'Dollarized Economy'. The country uses the US dollar since 2001 as a means of exchanging goods and services which simplifies it has no fiat money of its own. Hence- No fear of Devaluation of their currency.
El Salvador is a Central American country bordering the Pacific Ocean. With a population of over 64 lakh people who mostly live abroad. The country has a large chunk of remittance contribution to its GDP.
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