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The Country, El Salvador Legally Accepting Bitcoin as its Currency

Why is Nayib Bukele in the news?

The President of El Salvador country is Mr. Nayib Bukele. He said that Bitcoin will be considered as legal tender. He is sending the bill to the parliament to make it national currency. The Party named New Ideas Party enjoys a super majority in the legislature of El Salvador. Hence there is a strong likelihood that the bill will pass and bitcoin will be the national currency. It is a small country in Central America. The capital of El Salvador is San Salvador which is also the most populous city in it. The country shares a boundary with Guatemala in the southern and Honduras in the eastern.

Why is it needed? Let's have a look in detail

Bukele bitcoin

As the president will send the bill to parliament and if the bill approves then Salvador will become the first country with bitcoin as a national currency. It will be the first to adopt a virtual currency. There are three nations Panama, Ecuador, and El Salvador which have dollarized economy.

President says that for the short term it will create more employments and help provide financial inclusion to thousands of people who are outside the formal economy.

What does the tweet say?

President also tweeted about this big decision saying that Bitcoin has a market capitalization of $680 billion dollars. If we invest in it, it will further help the country’s GDP growth.

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Cryptocurrency Daily News

Bitcoin crashes on Elon Musk U-turn citing energy consumption

Cryptocurrency fans have counted Tesla boss, Elon Musk as among their championships. Bitcoin, cryptocurrency investors have risen more in this pandemic. In his recent tweet, he said, “it is high time there was a carbon tax!”. If we look at the decision from the environmental point of view, this may be the best decision. But on the other hand, this has created a huge mess in the stock market.

Tesla proposed purchasing a vehicle through bitcoin currency recently. And now we see a tweet about the carbon emission which is increasing due to bitcoin mining. He suspended vehicle purchases using Bitcoin. He has also mentioned that we are concerned about the environment. For Bitcoin mining and transactions, fossil fuels are used especially coal, and it has the worst emissions of any fuel. Due to this change in the stock market cryptocurrency’s value gone down 15% to a two-and-a-half-month low.

Bitcoin and Energy consumption

Bitcoin Power Consumption

Obtaining bitcoin is an energy-intensive endeavor. The chart shows the evolution of power usage, rising constantly from the year 2016 and increasing sharply in 2020.

On an annualized basis, it hit its current level of 149 terawatt-hours, an all-time high. The data if we compare to Google’s entire energy usage of 12.2 TWh, and approximately 200 TWh used by all data centers in the world. One more interesting fact is that if Bitcoin were a country, it would use around the same amount of electricity a year to mine as Switzerland does in total.

According to the IEA prediction, the situation could worsen, if miners used the most energy-intensive equipment, their consumption could rise to 500 TWh.

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