Polavieja considers that volatility prevents Bitcoin from becoming a threat to fiat currencies. The specialists reflected on the adoption of the pioneering cryptocurrency in El Salvador.
The potential role of Bitcoin against States as people know them is one of the most heated discussions about bitcoin. The decentralized cryptocurrency and its network have changed the concept of money thanks to its independence from third parties.
The current conditions recently led economist Juan Ramón Rallo and computer engineer Manuel Polavieja to question that possibility.
The renowned Spanish analyst believes that the price of Bitcoin is very volatile right now, which could hardly be a threat to fiat money.
In that regard, they mentioned Libra, the stablecoin that Facebook released, which faced much regulatory resistance until they scrapped the original idea.
Polavieja commented that the primary difference between Tether (USDT) and Libra is that the former is a bank. Rallo recalled that the objective of Libra was to be a unit of account whose backing consisted of a basket of other currencies.
The computer scientist considers that Bitcoin would seriously threaten fiat currencies and States if it were a stablecoin. He said that people reacted against Facebook when it wanted to create its stablecoin as it was not entirely decentralized.
States Try to Control Bitcoin Through Tight Tax Regulations
The two Spanish Bitcoin analysts reflected on the potential for a 51% attack if States decide to join against the pioneering cryptocurrency. In that context, they would seek to control more than half of the mining power and reorganize the network.
However, Polavieja thinks that is an overrated risk since such an attack would not destroy Bitcoin. He explained that it would only disturb the operation of the network and would be too expensive.
The computer expert considers it much cheaper for a state to forbid or tax Bitcoin. In that regard, the specialist argued that the tax issue would force the network to pay too high costs.
The Experts Believe El Salvador Forces People to Accept Bitcoin
Rallo wondered whether it is contradictory for a State to adopt Bitcoin, which in theory can put institutions in check. He referred to the entry into force of the Bitcoin Law in El Salvador, which allows the cryptocurrency as legal tender.
Polavieja views it as positive that a State promotes or facilitates using Bitcoin, which he does not believe is the Salvadoran case. He thinks El Salvador is forcing citizens to accept the cryptocurrency, as it should be their own choice.
The computer scientist sees El Salvador as an experiment in which they intend to use Bitcoin as a means of payment. However, he considers that the use of the cryptocurrency is generating rejection among Salvadorans.
He said that he agrees with a State not taxing Bitcoin and making it easier for people to use it. However, he said that each person should use it of their own free will.
By Alexander Salazar
