We all need to stop seeing only the dark side of encryption

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In 2021, Bitcoin Become the mainstream. Wall Street has set its sights on the world of cryptocurrency, and hot investors such as hedge fund investor Paul Tudor Jones (Paul Tudor Jones) are in a leading position; economist Start with calling cryptocurrency “Useless” in 2018 Arguing that it belongs to most of the portfolio; technology company CEO Jack Dorsey and Elon Musk fought fiercely over the advantages of Bitcoin at a conference held by an asset management company. Popular opinion is a bit lagging: many people still think that cryptocurrency is a huge global get rich quick program. Others simply view the whole thing as a speculative-driven fashion at best and criminal activity at worst. But in the hustle and bustle, enthusiasm and hype, we may lose the most important story: cryptocurrency is changing the way of life in developing countries.

Take Cuba as an example. The country’s Internet penetration rate has risen from less than 40% in 2015 to 70% to 80% today. Like most people, Cubans want to buy and sell things online-but unlike most people, they cannot buy anything online with a debit or credit card. Due to US sanctions, ordinary Cubans find themselves cut off from the global financial system: they cannot start subscribing to Spotify, purchase domain names, or use cards to pay for web hosting services. This means that if Cubans want to participate in online commerce, especially online commerce with another country, they must use cryptocurrency. Where there is a need, there is a solution. Cubans found a solution, such as Bitrefill, a website that sells Spotify and other company gift cards for cryptocurrency. Data from Bitrefill in June 2021 shows that on the basis of adjusting the population, the number of people using cryptocurrency to buy digital products in Cuba (such as Cubacel mobile phone recharge) is four times the number of people who buy similar products in the United States.Encryption technology has penetrated the country to the point that the Cuban Communist Party is a conservative Marxist institution and is not known for its technical proficiency. It has instructed the Central Bank of Cuba Regulate the use of cryptocurrencies And study how to use them to help the government avoid US sanctions. Paradoxically, there are rumors that US State Department officials are studying how to use cryptocurrency to establish a remittance network to bypass the huge taxes levied by the Cuban government.

Although Cuba’s adoption of cryptocurrency is a bottom-up phenomenon, in El Salvador Bitcoin has been declared as legal tender Proposed by the country’s controversial President Nayib Bukele. President Bukele claimed that government-sponsored Bitcoin wallets already have more users than the entire El Salvador banking system, which may bring a lifeline to thousands of people without bank accounts. These Bitcoin wallets operate in part on the Lightning Network, a system that allows cheaper and faster cryptocurrency transactions. You can now pay instantly with Bitcoin at every McDonald’s and Starbucks in El Salvador, which certainly sounds futuristic and exciting. Despite this, Bukele is still accused of recklessly turning the country into a safe haven for entrepreneurs with a large number of bitcoins and even outright criminals, and opinion polls consistently show that most Salvadorans are worried about paying wages with unstable bitcoins. . Whether Bukele’s encryption strategy will go down in history as a modernist’s masterpiece or the dictator’s stupidity remains to be seen.

Further south of Venezuela, Bitcoin is slowly becoming an integral part of the economy. Due to currency controls, Venezuelan banks have no connection with the rest of the world, so Bitcoin is used to transfer value in and out of the country through a peer-to-peer market, and people can easily convert Bitcoin into cash. A natural experiment in 2019 proved the impact of these markets, when during the massive blackout in Venezuela, Bitcoin transactions across Latin America fell sharply. Today, the peer-to-peer crypto market has been widely regarded as an important part of the Venezuelan foreign exchange market.

But the real leader of bitcoin transactions is not Latin America, but sub-Saharan Africa. UsefulTulips, a website that tracks global peer-to-peer bitcoin transactions, now reports that sub-Saharan Africa’s transaction volume is currently comparable to North America’s, and will soon surpass them. The observed transaction volume is approximately US$20 million per day, but the actual number may be several times higher. In countries such as Nigeria, where the government has implemented strict capital controls, it is almost impossible to transfer value across borders. It is no surprise that Africans are increasingly using cryptocurrencies for international transactions.

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