You heard it here first folks. You can now buy a Big Mac with Bitcoin in El Salvador. The real question is, can Bitcoin fix the ice cream machine?
McDondalds, Starbucks, and Pizza Hut have begun accepting Bitcoin in El Salvador after President Nayib Bukele put the “Bitcoin Law” into effect on September 7th.
This law cements El Salvador as the first nation to adopt the cryptocurrency as legal tender. This means that businesses have to accept Bitcoin alongside the U.S. dollar.
Why Is Bitcoin Being Accepted?
An excerpt from News Scientist perfectly encapsulates the reasoning behind El Salvador’s adoption of Bitcoin:
“In El Salvador, citizens sending money (USD) home from abroad account for up to a fifth of the country’s GDP, but they have to pay high transaction costs, and 70 percent of people have no bank account. Bitcoin enables quick, cheap payments across borders, and doesn’t require banks.”
In order to conduct transactions with Bitcoin such as buying a meal from McDonalds, all one has to do is scan a QR code via OpenNode, a payment processor for Bitcoin payments and payouts.
The El Salvadoran government is also rolling out an app called Chivo, where citizens can exchange dollars for bitcoin at special ATMs.
The low transfer fees when dealing with Bitcoin in comparison to cash gives citizens the opportunity to have a currency that “answers exclusively to free-market criteria.”
In other words, it gives them control. Every Salvadoran has been gifted $30 in Bitcoin and can now shop or pay their taxes with it. Though it is not a life-changing amount of money, this is a huge step towards stepping away from the centralized monetary system that is the US dollar.
Currently, Bitcoin’s value is tied to its convertability to the US dollar. However, the end goal is for it to become the basis for a unified world currency.
But What Is Bitcoin & How Does It Actually Work?
Bitcoin is magic internet money 🙂
Kidding. Bitcoin is a technology, and currency is the first application. Bitcoin is what money would look like if we invented it today instead of thousands of years ago.
It was created as a way for people to send money over the internet. This digital currency was intended to provide an alternative payment system that would operate free of central control but otherwise be used just like traditional currencies. There is no central authority (i.e. banks) controlling its supply, distribution, or existence.
Though Bitcoin is decentralized, Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network.
Credit: Pxfuel
Bitcoin was first introduced in 2009 by a person under the pseudonym Satoshi Nakomoto. Though their identity is still unknown, Satoshi sent the first-ever Bitcoin transaction in 2009 to Hal Finney. Satoshi ended their involvement with Bitcoin in 2010.
Bitcoin is referred to as “digital gold” due to its scarcity: Satoshi put a hard limit on the amount of Bitcoin that can be produced. That number is 21 million.
The act of producing Bitcoin is called “mining,” a process in which “very sophisticated computers solve extremely complex computational math problems.” As a reward for solving the problems, bitcoin miners receive some Bitcoin for solving problems correctly, which incentivizes mining it.
All in all, Bitcoin has all the properties of gold (it is scarce and fungible) and fiat money (it is easy to transport and transfer). Most importantly, no one can have an influence over the money and transactions you send or receive.
Final Thoughts (Is Bitcoin The Future?)
El Salvador’s “Bitcoin Law” is a great first step towards taking power away from banks and giving power to the people in the form of a decentralized currency.
However, the anonymity of Bitcoin’s creator and the ongoing development of its technology lead me to believe that it may be a while before Bitcoin gets widespread adoption as a currency.
Nonetheless, it’s interesting to know that if I ever go to El Salvador, I can get a Big Mac for 0.000088 Bitcoin.
Read More: Canadian Basketball League to Offer Salaries in Bitcoin
