Bitcoin and other cryptocurrencies shouldn’t be legal tender in any country. The market is too brittle and a Bitcoin crash could destroy people’s livelihoods.
Cryptocurrencies are a form of digital token or coins that exist on a distributed and decentralized ledger called a blockchain, according to Investopedia.
By accepting Bitcoin as legal tender, a country forces business owners from mom-and-pop shops to large corporations to accept Bitcoin as currency.
This month, El Salvador became the first country to adopt Bitcoin as a form of official currency. The law was passed June 8, according to El Salvador’s Legislative Assembly.
El Salvador’s President Nayib Bukele hopes the implementation will help families receive money from their families abroad, which accounts for one fifth of the country's gross domestic product, according to a Sept. 10 New Scientist article.
New Scientist is a global weekly science and technology publication, according to its website.
Many Salvadoran citizens don’t have bank accounts and when they receive money from abroad it comes with high transfer costs, according to the same article.
President Bukele believes Bitcoin can solve this problem by allowing citizens to store Bitcoin in a digital wallet.
However, not even Salvadorans want Bitcoin to be legal tender and most don't even know what cryptocurrency is, according to a Sept. 3 BBC article.
While it's groundbreaking to accept a cryptocurrency as legal tender, conducting experimental currency changes like these in a country that is already impoverished is outright ridiculous.
Bitcoin is an investment, where prices rise and drop based on events or demand.
In other words, it's a risk.
Bitcoin should be something you put your savings into and let sit in your digital wallet as your assets increase, not as everyday currency.
Bitcoin is volatile, with multiple factors contributing to its fluctuating value including its use in illegal activity, government regulation and bad press, according to a June 16 Investopedia article.
While Bitcoin has increased in value over the years, big drops in prices could lead families to lose thousands of dollars in investments.
This month alone, the value of one Bitcoin had a high of $52,000 and a low of $42,000, according to a Cryptonator webpage.
A $10,000 difference is huge, especially when it’s affecting currency throughout a whole country.
Cryptonator is an all-in-one Bitcoin wallet which supports multiple cryptocurrencies including Bitcoin, Litecoin, Ethereum and others, according to its website.
Let me give some examples of why Bitcoin being a main form of currency is bad.
What if a big drop occurred right before a college tuition payment?
Imagine if San Jose State’s tuition was originally $7,000, but because of a Bitcoin value drop it ends up being $10,000 when it’s time to pay.
What if someone pays a day earlier when the market is high and ends up paying less? It would cause the whole process of paying for tuition to become a cat-and-mouse game.
The Bitcoin market is just too unstable and unreliable for people to put their trust into it as a viable currency.
President Bukele’s digital wallet plan didn’t even work because he had to help his people connect to their accounts over Twitter, according to a June 14 The Next Web (TNW) article.
TNW informs and connects people who love technology through media, events and tech hubs, according to its website.
If people are struggling to get access to Bitcoin, how can a government expect its people to navigate and protect that currency?
Scammers can easily ruin someone’s life if they get access to their digital wallet because Bitcoin can be hard to track once stolen, according to a June 6 MSN article.
Bitcoin does not require any personal information and cannot be confiscated by law enforcement unless there is a court order, according to the same article.
If the Salvadoran government wants to implement Bitcoin as a currency, it needs to think of a way to protect its citizens from fraud.
In June, $3.6 billion worth of Bitcoin was stolen from the South African crypto-investment company Africrypt when the founders disappeared, according to a June 24 Fortune article.
Fortune is a global media organization that helps readers learn and participate in business, according to its website.
If such an event happened to El Salvador’s digital-wallet server, families who rely on payments from abroad would be financially devastated with no way to get their money back.
President Bukele’s move to make Bitcoin a legal tender is dangerous and unreliable.
The Salvadoran government shouldn’t change its currency and other countries shouldn’t consider a change, but stick to cold hard cash.
Hopefully, Bukele will see the error of his ways and take the lead in following different steps to fix his nation's economy.
