Eventually the Pendulum Swings
Bitcoin in El Salvador
This September 7th, El Salvador becomes the first economy in the world to adopt Bitcoin as an legal tender. Bitcoin will not replace the national currency of the Central American country, but the goal is for the currencies to co-exist. This monetary experiment has several Pros and Cons. (read our previous article about it)
Bitcoin’s volatility can become a big problem since the currency can lose or gain value quickly pricing strategy in BTC has to be adjusted accordingly. There will be times when a product is paid with crypto, only to realize moments later that the currency has fluctuated to a point that the amount paid become ridiculous low or high respectively, affecting many businesses and/or clients.
The current Bitcoin network can support around 7 transactions per second (tps). Therefore, many transactions can take a long time to process. This delay will not allow the use of cryptocurrency in markets where speed is of the utmost importance; such as the purchase of gasoline, food, drinks and other low-cost goods where no one can wait more than 10 minutes for the payment to settled.
Transactions fees, can be an issue, specially when sending small bitcoin amounts. Fees can be very high at times when there are many pending transactions in the mempool.
Education in the space will be a factor, those who are not used to using technology for financial purposes, have not used crypto wallets to send, receive and store coins will be at a disadvantage in this new economy.
Today there is a lot of uncertainty and disagreement among the Salvadoran people for this decision, it will be a challenge for the government to avoid unrests that can complicate the adoption of Bitcoin.
El Salvador is at the forefront with this decision by being the first economy in the world to adopt Bitcoin as a legal tender. In that way, if the experiment works, they will be ahead of the rest of the world and also an example to follow.
The Salvadoran people will be forced to learn, understand, and master this technology and this will place them in a competitive advantage vs the rest of the world.
Jobs will be opened to accommodate the needs of this new adoption and these positions will have to be highly technical and innovative to meet the technological and economic needs of this new front. This will push the jobs market and the need for higher qualifications
The remittances market contributes more than 20% of the GDP of El Salvador. If the Bitcoin network is used to satisfy these remittances, a lot more capital can be brought up to El Salvador and this can push the economy.
The Salvadoran government will keep a considerable amount of Bitcoins as a national reserve. In the long term, this crypto tends to rise in value which can benefit the Central American nation in the mid-to-long run.
In summary, we believe that, although it will be a complicated transition, in the long term it has the potential to work out for the better for El Salvador in the political, educational, technological, and financial aspects. But only as long as the necessary measures are taken to control the impacts of currency volatility and social upheavals due to this decision. The Power of Cardano
It is Similar to Ethereum in that it wants to be a platform where developers can create smart contracts, but with greater capacity and speed. The founders of Cardano thought that Ethereum was not really designed for mass use, and the forks and splits experienced by the network has created disruptions resulting in irreversible problems. So they thought they could improve it by creating Cardano. Cardano uses the acronym ADA for its native token which value has risen more than 3,000% in the last 12 months, placing it in the # 3 position in the Crypto market only behind Bitcoin and Ethereum. Cardano uses Proof of Stake, which consumes much less power and the network chooses who creates the next block using a programmed system. The team is working on a version of Cardano where it is not necessary for everyone to store a full copy of the blockchain, allowing more people to use the network while being able to handle more transactions. This graph illustrates how Cardano solves many problems that Bitcoin and Ethereum have not been able to solve. Lower energy consumption thanks to its “Proof of Stake” consensus, lower cost per transaction, formal verification, NFTs support and many other features that are under development. It has a promising future and its advancements have motivated Ethereun and other protocols to improve and offer better services. Among these is Solana.
What is Solana Solana is a high-performance cryptocurrency blockchain that supports smart contracts and decentralized applications. It uses a special PoS consensus mechanism, called Proof-of-History, with time-stamped transactions to maximize efficiency. This allows Solana to process about 50,000 transactions per second (compared to 7 Bitcoin TPS and Ethereum's 16 TPS). Unlike other similar projects such as Polkadot and Ethereum 2.0, Solana is a single blockchain (layer 1) and does not delegate operations to other attached chains (layer 2). This comparison is impressive since it shows how Solana can solve 65 thousand transactions per second (65 TPS), but during tests in Solana's laboratories, the team has experimented with 400 thousand transactions per second without problems. The important thing here is that this blockchain can continue to scale and support the volume that a Blockchain like Ethereum supports. If this is possible, I think we will see a changing of the guard and this is how "Eventually the Pendulum Swings." "Audius," one of the most interesting audio applications on the blockchain has been built in Solana. This application has entered into a contract with Tik-Tok to feed this social application with music in a decentralized and democratic way. Solana already has several clients whose applications are successfully executed on this network. The challenge is to scale the network and ensure that transactions remain secure, democratic and at low cost. As we can see in this graph, Solana has tripled its value in the last 3 months. It has received more than $ 30 million from Andreessen Horowitz and other investor groups, thus positioning them on the right track to continue growing.
NFTs Market "Crypto vs. Wall Street "
The title of this month's “Fortune” magazine is: "Crypto vs. Wall Street", its cover shows the mascots of popular projects, such as Uniswap (the unicorn), Aave (ghost) and MetaMask (fox), in a large party with several influencers from the crypto world. The cover features an Alice in Wonderland-like image towering over the inherited financial system, dwarfing the silhouettes of banks, skyscrapers and the iconic stock market bull. It is an impressive and statement-making piece. The message? Cryptocurrencies are here, whether Wall Street is ready for it or not. Based on the ecstatic reception of the cover, the Fortune company will add 256 limited editions of the animated art from the artist “pplpleasr” who created this piece-as a non-fungible tokens or NFTs. The number is a nod to the 256 bits that make up the cryptographic keys associated with cryptocurrencies like Bitcoin and Ether. The NFTs will be sold at a fixed price of 1 Ether (ETH) each, rather than auctioned. The world of NFTs has exploded much more exponentially than expected. Fortune is not the only magazine that is launching NFTs. Many other publications are minting their covers and monetizing them. Dapper labs, the company that brought us Cryptokitties and NBAtopshot has now partnered with the WNBA to create NFTs for the professional women's basketball league as well as the UFC (Ultimate Fighting Championship). Marvel, film house and creator of the world's best-known superheroes, has revealed that Spider-Man will be its first official NFT. Several images of "Spider-Man" will be released as "non-fungible tokens" priced between $ 40 and $ 400. Soon we will see Captain America NFTs and Marvel characters like Steve Rogers and Sam Wilson among others. This is only the beginning, as Marvel announced that they will continue to market NFTs every month and have every intention of entering this market of already more than $ 2.5 billion dollars. The fever and madness of cryptopunks, whose current value exceeds a million dollars a piece, has expanded, and many other creators are launching projects with similar characteristics. The designer Pablo Stanley has created a collection of NTFs of robot droids whose body is made up of metal parts combining 170 characteristics that distinguish them and make each one of them unique. The collection has 10k copies that are already available in the market for a starting price of 0.05 ETH, but we have already seen several for sale for more than 2 ETH. Each Droid contains an animated GIF, PNG, and SVG image with rights to create and distribute its derivatives, which makes them more interesting. Interesting news and links: