The Cuban Population Benefits from the Regulation of Bitcoin

Alexander Salazar
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The Cuban Population Benefits from the Regulation of Bitcoin

Making a payment is no longer a problem for many Cubans who now can use Bitcoin. Beyond local regulation and how Bitcoin can simplify the life of Cubans, the concern turns to KYC.

Cryptocurrency adoption is growing in Cuba, where at least 100,000 people now use Bitcoin (BTC) and other crypto assets. They are discovering the benefits crypto assets offer amid the sanctions imposed by the United States.

The inhabitants welcomed the news that the Central Bank of Cuba (BCC) is legalizing cryptocurrency service providers. Many applaud the law granting licenses to companies wishing to conduct activities related to crypto assets.

Economist Pavel Vidal stated the central bank is creating a crypto-friendly legal framework as they consider it can benefit the country. Pavel is a researcher at the University of Havana and a specialist at the Central Bank of Cuba.

Since October, businesses have accepted cryptocurrencies as payment for their goods and services. El Café Havana, a restaurant in the capital of Cuba, receives Bitcoin and Ether (ETH). Nelson Rodriguez, the owner, said that he likes Bitcoin because of its philosophy.

Bitcoin is gaining popularity in a country without access to other international payment systems like PayPal, Revolut, and Zelle. They cannot use other forms of credit or debit either due to sanctions hindering the development of commercial and economic relations.

Cuban bitcoiner Erich García commented that making a payment is a headache, but Bitcoin can solve that problem. Things seem to be changing for the better now that the regulation of cryptocurrencies is underway.

Bitcoin Represents the Financial Sovereignty of Cuba

Many might interpret what happens in Cuba as a script written by bitcoiner and developer Matt Odell. In June 2021, he said that people could face oppression if regulators put the financial sovereignty that Bitcoin grants in their hands.

At that time, Cuban businessman Boaz Sobrado stated that it would be a miracle for Bitcoin adoption to gain momentum. The problem was that there was no official legal way to access the networks.

However, the adoption of cryptocurrencies is gathering momentum mainly through the mobile Internet access provided to Cubans since 2019.

Bitcoin Regulation Is Good, but the Concern Is about KYC

Cubans are adopting cryptocurrencies as they allow transferring money directly between two parties with no need for a bank.

In 2019, the Caribbean country started to study the use of cryptocurrencies as part of measures to boost its economy. At the time, they were already amid an economic crisis and the increase in US sanctions.

One of the nations that can benefit the most from sending remittances with Bitcoin is precisely Cuba. Calculations by economist Steve Hanke indicate it has the highest average in the region for transferring money to other countries.

In 2021, Cuba spent between 6.60% and 10.53% on fees when sending and receiving remittances. They can reduce that amount significantly by transferring money with BTC.

Bitcoin could make the life of Cubans easier through the local regulation that is underway. However, the Know Your Customer (KYC) procedures required by the Financial Action Task Force (FATF) should concern them.

Matt Odell has warned people who own Bitcoin about the importance of understanding the mechanisms to preserve their privacy. If they end up filling out a KYC form, they should be aware that they need to improve their privacy footprint.

By Alexander Salazar

The Bitcoin Mining Council Considers that US Congresspeople Criticizing Bitcoin Lack Education

Alexander Salazar
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The Bitcoin Mining Council Considers that US Congresspeople Criticizing Bitcoin Lack Education

According to US politicians, the PoS consensus is better than PoW because it consumes less power and is less polluting. The Bitcoin Mining Council proves that the politicians base their calculations and arguments on prejudice, not facts.

The Bitcoin Mining Council (BMC) recently rejected the arguments made by several US politicians against the activity. The consortium of companies supporting the industry explained that the congresspeople who criticize it need education.

Michael Saylor, Mike Novogratz, Jack Dorsey, and other leaders in the Bitcoin (BTC) ecosystem comprise the Council. They recently criticized the request for greater regulation on the industry by 23 US congresspeople to the Environmental Protection Agency (EPA).

The politicians stated that Bitcoin mining harms the environment and poisons the water in the communities. BMC representatives consider that those claims are misperceptions already discredited by the industry in the past.

They Mistake Bitcoin Mining Farms with Power Generation Plants

The politicians claimed that Bitcoin mining farms pollute communities and contribute to greenhouse gases. The BMC said that the congresspeople are mistaking data processing centers with electricity generating plants, where the contamination occurs.

They also argued that mining farms do not emit CO2 beyond the heat machines generate, which ventilation systems dissipate and control. They contrasted this with other industries, which they said pollute the environment.

On the contrary, the BMC defended that many miners employ renewable energy for their operations. A study by the Council indicates the industry uses about 58.4% of sustainable energy, moving away from fossil fuel sources.

They Say that a Bitcoin Transaction Could Power a House

The BMC also rejected the claim that a Bitcoin transaction consumes enough energy to power an American house for a month.

The Council stated that this is patently and demonstrably false since it would not require more energy than a tweet or a Google search. They recalled that the issuance of Bitcoin through mining is decreasing, as 90% of the total supply is already in circulation.

They also mentioned the Lightning Network, the micropayment layer of Bitcoin that mirrors how the payment systems work. In addition, the BMC clarified that an increase in Bitcoin payments would not necessarily imply a proportional rise in energy consumption.

They Believe that the PoS Consensus Is Superior to PoW

According to the congresspeople, the Proof-of-Stake (PoS) consensus is better than PoW because it consumes less power. Furthermore, they qualify it as a cryptocurrency mining technology, which the BMC considers unfeasible

The Council clarified that PoS is not a technology but a technique for determining authority over a distributed blockchain without achieving decentralized distribution.

The BMC explained that the PoS consensus mechanism has a limited history and that the founders of an association control it. In addition, they point out that it has failure points and doubt that it can effectively govern a global and apolitical monetary system.

The US Environmental Protection Agency now has both views on the Bitcoin mining industry. It remains to see whether the state centralization will follow the arguments of the politicians or study the case in depth.

By Alexander Salazar

Some Tips to Teach the Elderly about How to Use Bitcoin

Alexander Salazar
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0
Some Tips to Teach the Elderly about How to Use Bitcoin

It is advisable to tell them that Bitcoin can help solve the problem with the total control by banks over money. It is also convenient to relate the use of Bitcoin with the technology that they already know.

Many elderly find it hard to learn about Bitcoin due to the technological generation gap. That causes resistance in them, as they do not understand it or believe it is impossible to use. However, the truth is that everyone can use the pioneering cryptocurrency regardless of age.

Many of them cannot even take screenshots on their cell phones or create an Instagram account. That situation worsens with digital financial services, as they usually manage their money physically. They make bank transactions, withdraw bills from ATMs, and pay for products and services with cards.

Bitcoin Could Benefit their Economy

The best way to approach them is to present them with the problem that Bitcoin can solve. It is good to tell them that central banks issue inorganic money, increasing inflation and reducing purchasing power and saving capacity.

It would also be helpful to talk to them about the total control by banks over their funds. A bank declared bankrupt would be enough for them to realize how little people control their capital.

Among the basic principles, they must understand that each block issues the same amount of Bitcoin every 10 minutes. They must also know that the number of coins reduces by half every 210,000 blocks. In addition, a finite supply of 21 million coins prevents inflationary schemes, double spending, and transaction censorship.

Self-Custody Allows Having Control over Money

Self-custody will allow the elderly to control their money, which implies great responsibility. They need to have a good backup of their seeds, and a key to recover their wallet on other devices. Otherwise, they will never be able to access their funds, as no third party can help them recover them.

At that point emerges the need to take responsibility for something they have delegated for decades. That would not be entirely pleasant, more for fear of making a mistake than for any other reason.

Those who prefer the help of a specialized entity still have options in the market with third-party custody. Of course, that is not the right way to use Bitcoin, even having a balance in their wallet. However, some will prefer the alleged security of having someone to blame for any inconvenience.

Anyone Who Can Use WhatsApp Can Use Bitcoin

The next step would be to take the elderly to the current technology that makes them feel more confident. For example, it is an excellent idea to relate Bitcoin with the uses of WhatsApp or PayPal.

The most advisable is to present them with the things about BTC they can compare with the apps they already know. Once their attention is on that, they need to go into the complex aspects but without overwhelming technical information.

It is also helpful to read these articles alongside them and clarify any arising doubts. The best way to teach them is to see the subject from their perspective.

By Alexander Salazar

Tesla Invests in Bitcoin Because of Its Potential as an Investment and Liquid Alternative to Cash

Alexander Salazar
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0
Tesla Invests in Bitcoin Because of Its Potential as an Investment and Liquid Alternative to Cash

In its latest report, Tesla suggested that they see Bitcoin as an alternative currency in the future. The electric car company has been saving Bitcoin for over a year and has not bought another cryptocurrency.

The American electric car company belonging to Elon Musk provided further details on why it invests in Bitcoin (BTC). They also reported their latest movements in the cryptocurrency after making a multi-million dollar purchase in early 2021.

Tesla stated that they believe in the long-term potential of crypto assets as an investment and liquid alternative to cash. That indicates that they not only see them as a strategy to increase their funds but also as currencies to replace the US dollar.

For that reason, Tesla has been holding Bitcoin in its reserves for more than one year. The Buy Bitcoin Worldwide explorer positions it as the second company with the most funds in the cryptocurrency, following MicroStrategy. It shows that Tesla has 42,902 BTC, the figure they reported at the end of the first quarter of 2022.

Tesla Warns about Security Gaps in Bitcoin and Its Unclear Regulation

According to applicable accounting standards, Tesla stated that crypto assets are intangible and with an indefinite lifespan. They said that because they consider their long-term adoption by investors, consumers and companies to be unpredictable. They added it lacks a physical form, depends on technology for its creation, existence, and transactional validation, and is decentralized.

From the company, they commented on factors that pose risks to cryptocurrencies, like not having centralized issuers or government agencies. They think that this makes those intangible assets subject to security breaches, cyberattacks, human error, or computer failure. They argue that those aspects may result in the loss or destruction of the private keys needed to access them.

Given that context, they assured that they would take careful measures but could lose their Bitcoin partially or totally if they cannot combat those threats. They said that this would also affect their financial condition and operating results. Besides, they stressed that regulations on digital assets are unclear and may change in the future, raising concerns about their holdings.

They also explained they would take action if they suffered losses for having part of their reserves in Bitcoin. However, they have not yet bought more BTC or sold their holdings, confirming that they have not had negative results.

Tesla Has Saved Bitcoin for over a Year

Although the Bitcoin price dropped in the first quarter of 2022, Tesla stated they had suffered no losses on their holdings. When they bought the cryptocurrency in January 2021, it was worth less than today. At that time, the value of BTC went from USD 29,000 to USD 34,000, but it is now at around USD 38,200.

The electric car company said that the volatility in the price of cryptocurrencies could negatively affect their profitability. However, they believe that crypto assets allow improving long-term returns due to the potential they see in them.

They showed that Bitcoin is the only crypto asset they have held in their reserves. That is striking, given the enthusiasm of its CEO, Elon Musk, about Dogecoin (DOGE), an altcoin worth less than USD 1.

By Alexander Salazar

Bitcoin is Part of the Strategy to Accelerate the Economic Development of Uzbekistan

Alexander Salazar
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0
Bitcoin is Part of the Strategy to Accelerate the Economic Development of Uzbekistan

Participating startups will receive exemptions from tax obligations through a regulatory sandbox. The authorities will regard unlicensed mining farms as illegal and not allow them to operate on Uzbek territory.

Uzbek President Shavkat Mirziyoyev recently signed a new decree to expand the regulatory framework for cryptocurrencies in that Central Asian country. It aims to develop digital technologies further, create favorable conditions for startups, and improve the legislation for developing the crypto asset industry.

The National Agency for Prospective Projects (NAPP) will be responsible for controlling the cryptocurrency industry in the country by presidential order. That agency now has the task of implementing the state policy on the crypto asset economy and will ensure the protection of user rights.

The decree states that citizens and companies will be able to buy, sell and exchange cryptocurrencies through regulated service providers from January 1st, 2023.

According to the presidential order, crypto exchanges, Bitcoin mining pools, and other providers will have to register as local companies. They will also have to obtain mining licenses or certificates issued by the government agency to operate in the country.

The authorities will regard Bitcoin mining farms as illegal if they have no permission to operate on Uzbek territory. Meanwhile, the permitted digital mining companies will pay a higher electricity rate during peak consumption hours.

The country will grant tax exemptions to participating startups through a new regulatory sandbox the NAPP will establish to supervise cryptocurrency projects. Likewise, they will be free from paying other obligations such as customs payments for imported hardware and software.

Bitcoin Is Part of the Economic and Digital Transformation Agenda

The Uzbek government sees Bitcoin regulation as part of its strategy to accelerate socio-economic development and improve the life quality of the population. They focus on becoming a leading country in creating a favorable environment for introducing innovative digital solutions.

With some variants, the current legislation takes up the regulatory decree issued by the country in 2018. In December 2019, the authorities banned buying Bitcoin and other crypto assets through the existing crypto exchanges. However, they allowed those trading platforms to sell their cryptocurrency holdings.

The government created a national pool of miners where affiliates benefited from lower electricity rates. Uzbekistan also launched a licensed exchange, where miners had to sell their cryptocurrencies.

President Mirziyoyev currently has the task of creating favorable conditions for developing the private sector. He is also responsible for implementing measures to accelerate privatization and drive the economy.

In that sense, he recently signed the decree New Development Strategy of Uzbekistan for 2022-2026. He aims to achieve stable economic growth, increase economic competitiveness and reduce the participation of the State in the economy.

That presidential decree contains many turning points in many sectors and areas. Those changes will directly contribute to economic growth and investment attraction, favoring the cryptocurrency industry.

By Alexander Salazar

A Global Recession Could Set Off Alarms in the Bitcoin Market within Two Years

Alexander Salazar
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0
A Global Recession Could Set Off Alarms in the Bitcoin Market within Two Years

The high inflation rate and low unemployment in the United States suggest that there will be a global recession. An economist says that Russia is a historical mistake and that China may cause further economic problems.

Various experts predict that the current global context could cause a recession in the coming two years. The decreasing commercial and industrial activity would create different economic problems like lower wages and higher prices. That could also affect the market of stocks and cryptocurrencies like Bitcoin (BTC).

Larry Summers and Alex Domash argue that a recession is likely when a high inflation rate and a low unemployment rate coexist. The economists say that the United States is currently undergoing that situation, which may impact the world as they have businesses on different continents.

They estimate a recession always occurs in the United States when inflation is above 5% and unemployment below 4%. Data from TradingEconomics indicates that inflation is at 8.5% and unemployment is just 3.9%, two all-time levels. That situation leads them to believe that the probability of a recession in two years is close to 70%.

Market analyst flix1 also predicted that there would be a recession in 2023 or 2024. An indicator nearing zero compares the US Treasury bond within ten to two years. Whenever it is negative, a recession occurs within the next 12 to 18 months, like in 1980, 1982, 1990, 2001, 2008, and 2020.

A Spanish Economist Estimates the US Recession Will Spread to Europe

Spanish economist Juan Ramón Rallo wonders whether the analysis of the United States applies to Europe. He considers this is one of the best moments for European labor markets but not at the level of the US. He also believes the economy has not rebounded in the old continent as much as in the North American country.

That leads him to think of doubts about whether European inflation is due to internal overheating or the importation of inflation caused by others. However, the Spanish specialist considers that the dilemma does not significantly modify the risks of recession in Europe and worldwide.

In addition, Rallo comments that the global economic landscape could become resistant to economic growth. That situation would arise if the United States entered a recession, added to the measures of China and the war in Ukraine.

Russia and China Are under Scrutiny for Fueling a Global Crisis

The recent measures by China against COVID-19 and the war between Russia and Ukraine raise the possibility of a global economic crisis. Those issues put the general supply chain and the market at stake, directly impacting the trade of products and services in those countries. For example, it affects the price of assets like Bitcoin, stocks, and commodities.

In that regard, market specialist Bill Blain considers that the lockdown strategies of China pose consequences and implications. These moving markets have the same force as the Russian invasion of Ukraine did in February. Blain said the closure of China would lead to having to rely on the West for all consumables, materials, and products.

In that context, the price of Bitcoin has remained relatively stable due to the buying and holding strength of traders. That leads some analysts to think that investors view the cryptocurrency as a hedge against inflation and a possible global economic crisis.

By Alexander Salazar

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