A prominent technical specialist and former CIA agent has once again showed his support for Bitcoin by highlighting an important problem that the first cryptocurrency can easily fix – inflation.
Initially, Snowden reacted to a news piece about Lebanon devaluing its currency by 90% on Feb. 1. Snowden said that Bitcoin fixes that since, by its nature, the digital gold has a limited supply, which should limit its inflation and never cause a similar situation as happened with the Lebanese currency.
*whispers* bitcoin fixes this pic.twitter.com/wSxQgMnM9m
— Edward Snowden (@Snowden) January 31, 2023
However, some users and subscribers rushed to disagree with the security specialist, considering Bitcoin's performance in the last few years. Since 2021, the cryptocurrency has lost around 80% of its value, which does not really make it a perfect national currency.
As we all know, El Salvador previously tried to implement Bitcoin as the secondary currency in the country and digitize its economy in general. Unfortunately, the experiment did not go as planned since the country's holdings lost almost half of their value.
Despite that, Bitcoin does bring a lot of advantages when used as a national curreny, including decentralization, transparency and scalability. Transactions on the Bitcoin network are publicly recorded on a decentralized ledger, providing a level of transparency that is not possible with traditional currencies. Bitcoin allows for cheap and swift borderless transactions, meaning that it can be used to send and receive payments anywhere in the world, without third parties or the approval of governments.
However, Bitcoin's is highly volatile, fluctuating rapidly and unpredictably. This makes it difficult for businesses to accept and for individuals to use as a means of payment. But at the same time, as El Salvador's experience has shown, the current infrastructure of Bitcoin can handle the high volume of transactions required for it to function as a national currency.
While there are still challenges that need to be overcome, such as adoption and regulation, numerous experts, including Snowden believe that it can fix problems that traditional currencies have right now and even become a substitude in certain cases.
Alex Dovbnya
Denys Serhiichuk