41% of the population trusts Bitcoin

41% of the population trusts Bitcoin

By bit.team

A study conducted by the crowdsourcing platform Premise, with the participation of 11,000 people from 76 countries, showed that forty-one percent of respondents lost confidence in the traditional financial system. And not just lost, but chose an alternative to it – Bitcoin.

You should know that 4 out of 10 people in the world do not have a bank account. According to some estimates, 500,000 people are in this situation in France alone. And this is a highly developed European country.

At the same time, an estimated of 1.7 billion people within the same world population not covered by banking services own mobile phones. Thus, 60% of people who are not covered by banking services own a cell phone, on which a digital wallet can be installed..

In addition, a large number of applications for digital wallets allow you to make payments in Bitcoin. Thanks to this, some find a solution that replaces the presence of a bank account. Moreover, it allows you to make dematerialized and international payments. These solutions are less expensive in terms of operating costs, and much less burdensome from an administrative point of view.

For the part of the population that has remained outside the banking system, this is a revival.

Like gold, Bitcoin is increasingly becoming a safe haven. This “digital gold” shares an important factor with the precious metal: its scarcity.

Like Bitcoin, the bowels of our planet contain only a certain and limited amount of yellow metal. Bitcoin is limited to 21 million units. Currently, a little less than 19 million BTC has already been mined and is in circulation. Out of this number of BTC in circulation, 3 or 4 million coins are lost forever.

Suffice it to say that soon 15 million Bitcoins available to 8 billion people will soon become a very large and expensive rarity.

Limiting the number of units gives them the status of a deflationary currency. In short, it is the complete opposite of an inflationary paper currency, the amount of which is by definition unlimited. A phenomenon that we have all witnessed in recent months. Various stimulus packages in Europe or the United States, where astronomical amounts of fresh dollars have been thrown into the economy.

Inflation is a loss of the purchasing power of a currency.

From this point of view, no state currency can compete with bitcoin. Just look at the statistics Coinmarketrate.com to see that the value of the latter has only grown since its creation. For comparison, since 1785, the US dollar has lost an average of 3% per year.

Bitcoin is Storming the Banking System

There is an opinion that Bitcoin and cryptocurrencies pose a threat to the banking system. This is well known to various financial organizations. They are trying to respond in order not to fall into the tsunami of decentralized finance (DeFi), and their ecosystem of direct financial services, which according to Coinmarketrate.com, have a total capitalization of more than 20 billion US dollars.

In the traditional financial system, banks are depositories of funds and guarantee exchange. Thanks to DeFi, two users can perform transactions directly, via blockchain and smart contracts. Therefore, you can borrow money, lend it to perform all operations of classical finance. In short, to get all the benefits of DeFi without the many disadvantages, costs, controls or blocking associated with bank loans.

Banks are struggling to retain their customers. Indeed, it is difficult to put a product with a yield of 1.5% in competition with cryptocurrencies. Some organizations understand this well. Today, they do not hesitate to offer investment products, the total basket of which includes Bitcoins and other crypto assets. This strategy is aimed at increasing the interest rate, but, above all, at retaining customers.

Loss of control over small States

Some small states, such as El Salvador, see the advantage of institutionalizing Bitcoin and giving it the status of a legal tender. However, this is not the case in other countries. On the contrary, they see it as an escape from capital. Thus, they were transferred to an ecosystem inaccessible to them because they are decentralized and not controlled by central banks.

In the case of El Salvador, the only local and legal currency so far has been the dollar. The currency that the country is trying to get rid of. These changes have a strong impact on the United States, where analysts predict a loss of dollar strength. The United States, using the example of this state, has weakened its monetary control, which will soon happen all over the world.

If at least some case began to be observed at the national level in favor of Bitcoin, we would see a gradual weakening of the monetary power of the largest countries, and their grip over small states.

All reasons to keep optimistic

Thus, the research conducted by Premise explains to us that people are becoming more and more aware that Bitcoin is a solution to combat impoverishment, protect against inflation, invest in future value and facilitate access to consumption.

Fiat currencies have supported humanity for hundreds of years, but the current system is far from the origins of our financial independence. Various crises, liberalism, the Bretton Woods Agreements… many events have upset the economic balance. Now, in the face of a weakened system, cryptocurrencies seem to be the best solution for those who understand economics. Only those who do not understand this have not yet decided.

El Salvador will create the world’s first “Bitcoin City”

Through its president, Naib Bukele, Salvador decided to launch a project aimed at creating a “bitcoin city” in the country. If he saw the light, he would undoubtedly be the first of his kind.

For several months, Salvador has been an open-air Bitcoin lab. Indeed, since September 2021, the country has adopted Bitcoin as the official currency (in addition to the US dollar). And now the creation of a “bitcoin city” is the latest announcement from El Salvador, which is not trivial at all.

On Sunday, November 21, 2021, Salvadoran President Nayib Bukele announced that his government would issue $1 million in bonds. The announcement was made as part of the Labitcong event, a conference on military-technical cooperation.

What is the goal? The government will spend this money on the development of its project to create a “Bitcoin city”. At this preliminary stage, a lot of things will be filtered out, but the idea of Naib Bukele is to create a city in which the only tax would be VAT. This tax will be used to finance the obligations and services of the future city, such as, for example, garbage collection.

In addition, the city will achieve carbon neutrality due to energy generated mainly from geothermal energy. Finally, we also learned that the city will be located in the east of the country, in the La Union area.

Speaking about the city itself, Bukele imagines it as a circular city with an airport, shopping malls and a central square, which will look like a Bitcoin symbol from above.

“Invest in this project and earn as much money as you want. It will be a completely ecological city that will function and be powered by a volcano,” the President of El Salvador said.

Partnership with Blockstream and Bitfinex for the Bitcoin City project

Actually, what is this project based on? We will note two main partnerships: Blockstream and Bitfinex.

Blockstream will manage the issue of the bonds (dubbed the “volcanic bond”). Blockstream is a company providing Bitcoin services. The bonds will be tokenized on its blockchain. In particular, half of the bonds (approximately $500,000) will be used to buy Bitcoins. The other part will be used to finance the construction of bitcoin mining and energy structures.

“We have been negotiating with El Salvador for several months, and we have put a lot of effort into developing and modeling bonds. We believe that this bond offer will be attractive to a wide range of investors: from cryptocurrency investors, to investors looking for income, and to HODLers and ordinary people. We believe that this bond can accelerate hyperbitcoinization, and create a new financial system based on the BTC”, – said Samson Mou, Blockstream security manager

Thus, any investor in the world will be able to participate in this financing and receive dividends. The bonds will be blocked for 5 years, after which the government will resell Bitcoins and pay additional dividends to these holders. Bitfinex will be the exchange that will take over the bond trading.