In the last couple of years, cryptocurrencies have become one of the most popular investment opportunities for the millennial generation.
You can buy bitcoin with credit card almost anywhere in the world and crypto ATMs are popping out of the ground everywhere. Additionally, the number of commerces where you can use cryptos to purchase goods and services is increasing every day.
And while this might be true in most developed countries, some parts of the world seem to be lagging behind. However, the recent COVID19 crisis, together with destructive monetary policies in developing countries has made people increasingly interested in using Bitcoin and other cryptocurrencies daily.
They have become a solid alternative to pay for food and bills instead of their local, rapidly devaluating currencies.
In this article, we explore some of the basics behind Bitcoin and its importance in developing countries. We will also analyze Bitcoin’s global adoption and try to predict where cryptocurrencies can become the next big thing.
What is Bitcoin?
Bitcoin is the original cryptocurrency that was created by Satoshi Nakamoto and released to the public in 2009. This decentralized public ledger of transactions allows users to transfer value in the form of Bitcoins between two peers, without the interference of a third party.
One important aspect of this cryptocurrency is the manner in which new coins are created. Unlike traditional money, where governments can print bills as they see fit, Bitcoin is created through a mathematical process called “mining”.
Hence, the issuing of new coins cannot be controlled by central banks or governments but follows a predictable set of rules.
Furthermore, Bitcoin provides true ownership to its users. Every Bitcoin holder that is in possession of their private keys is the only proprietor of those coins. No one can revoke or deny access to the payment network as it’s entirely permissionless.
Why is Bitcoin important in developing countries?
The aforementioned unique characteristics bring a great number of advantages to developing country citizens. Below is an overview of the most important ones:
*Bitcoin preserves value – bitcoin has a capped maximum supply of 21 million coins that will ever be created. So, scenarios where governments print infinite amounts of money and cause mass inflation can be entirely avoided.
*Bitcoin banks the unbanked – developing countries often struggle with poor banking infrastructure services. Bitcoin allows for financial inclusion for anyone with as much as an internet connection.
*Bitcoin reduces fraud – all transactions on the network are transparent and irreversible. With the addition of bitcoin being impossible to counterfeit, it becomes the best choice for people to use as a daily currency.
Due to these features, the bitcoin price chart continues to grow each and every month, as we are actively chasing new all-time highs.
What countries adopted Bitcoin massively and why?
Venezuela is a great example where the aforementioned advantages were key to the adoption of cryptocurrencies as a means of payment and storing value. The economic instability, hyperinflation, and the bolivar value dangerously approaching zero have made the population very fond of cryptocurrencies.
That being said, Ukraine still leads the world in crypto adoption. With the unstable economy, political unrest, and the absence of a local stock market, the population massively turned towards crypto as a means of payment and investing opportunity.
Where can we see Bitcoin become popular in the following years?
The next big adoption milestone for cryptocurrencies could come from the entire African continent. While some countries such as South Africa are already riding the crypto train, even more countries are pushing toward crypto adoption, trying to avoid trading in local currencies.
Nigeria is a prime example, as people are increasingly pulling their funds out of untrustworthy banks and putting them into crypto. The recent devaluation of the naira also pushed investors to look for new ways on how to store the value of their hard-earned money.
More countries such as Zimbabwe and the Republic of Congo are facing similar destructive monetary policies that could trigger the increased adoption of cryptocurrencies.
A more surprising entry on our list is Japan. As a developed country, one might think that cryptocurrency adoption is common there, however, this is not the case. With the coronavirus crisis pushing the economic capabilities of the country to its limits, it would come as no surprise to see investors turning massively to Bitcoin. The main reasons would be securely storing value and better profit opportunities than the weakening Nikkei stock exchange.
Developing countries are using Bitcoin as a haven from corrupted government monetary policies and escaping quickly devaluating local currencies. On the other hand, cryptocurrencies have become more and more popular in developed countries thanks to their increasing value. And while it’s not something that happens overnight, it’s clear that mass adoption has already begun in different parts of the world. We are bound to see this trend accelerate in the upcoming years.