Significance Of Blockchain Adoption On Weak Economy: Elsalvador’s Mistakes

in LeoFinance4 months ago

This content presents how blockchain adoption can strengthen weak economy. There are two concepts been stated here which are blockchain and weak economy.

I shall define these terms and their meaning.

What is a blockchain

A blockchain is a decentralized digital financial management system hosted on a network that supports peered transactions.

Examples of blockchains are;

Bitcoin blockchain hosted on the bitcoin network.

Screenshot_20220516-010354_1.jpg

Ethereum blockchain hosted on the ethereum network.

Screenshot_20220517-043903_1.jpg

Having known a brief about blockchain,
Let’s consider the type of finance transacted on blockchains.

They are called cryptocurrencies. Crypto currencies are been transacted on blockchain across a peer to per network.

What is cryptocurrency?

Crypto currencies are legal tender inform of a digital asset. When they gain wide recognition, accepted and regulated in a weak economy it tends to improve in its value. It is of advantage to a weak economy.

What is a weak economy

A weak economy is an economy that imposes tax heavily on citizen when it doesn't generate revenue. I don’t need to mention countries who are in this situation now but its obvious. Crypto can help strengthen a weak economy in different ways.

Centering The Discussion Around Elsalvador's Economy And The Mistakes

Recently did the the president of Elsalvador, Nayib Bukele made a plan to adopt bitcoin as a legal tender in banks and stores.

Screenshot_20220818-195554_1.jpgSource

Screenshot_20220818-195405_1.jpgSource

But when bitcoin had a general dip, it made the country revenue decrease by a bigger percentage.

The president failed to make the citizens be educated about what cryptocurrencies are all about.

However according to statistics from futurism.com, It indicates that 8 out of 10 of the population had little or no confidence in it whilst 9 0ut of 10 did not know bitcoin.

Just as it’s important to introduce the concept of block chain and how relevant it will be if adopted and regulated in a weak economy in this content, the president should have done so first before accepting bitcoin generally because people will have confidence in it and know about it.

But Just three days ago, the president's team tweeted on his plans to deliver an educational project where he will talk about the future of decentralization which is a good move.

Screenshot_20220818-184928_1.jpgSource

Secondly, the president made a big mistake in betting the entire economy on bitcoin alone. Other assets should be widely accepted to and whilst part of the revenue goes into physical development projects.

Significance of Blockchain on Weak Economy

As Blockchain assets are widely accepted and regulated, they gain value. Imcreament in this value for profits can help some weak economy to pay of thier debts, In Nigeria some states are owing thier workers over six month salary.
When you consider the government hatred for Crypto and how it loves going to burrow, you can actually predict the future of such economy.

Requirements Before Crypto Is Adopted In An Economy

It is required that the following be put in place before accepting crypto as a legal tender in an economy.

Proper education of citizens

If citizens are properly educated about the concept of blockchain they will want to key also into it. This makes crypto gains wide recognition an increase in value.

Decision Analysis

It is not right to channel all the economical finance to bet for crypto at least some certain parts should be dedicated for physical development too.

Conclusion
If block chain is adopted in country having challenges in their economy, it could help to improve the standard of the economy for good if proper education and decision are carried out.

Thanks for reading.

Reference link
https://www.google.com/amp/s/futurism.com/el-salvador-bitcoin-economy%3famp