How a small village in El Salvador spurred the historic Bitcoin bill

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While Bitcoin is one of the most widely-used cryptocurrencies in the world, it is often overlooked. In fact, the village of El Salvador, El Hormiguero, has become a worldwide symbol of Bitcoin’s potential. The community’s dedication to the digital currency is rooted in the village’s past; in the 1950s, the area was devastated by poverty and the loss of its coffee market. As a result, the people of El Hormiguero – most of whom were farmers – decided to diversify and raise money by selling coffee. The coffee itself was used to purchase currency to send to the rest of the country, and the profits that the farmers made were used to buy more coffee. It was a system that worked,

The village of Molano in El Salvador is a small community of roughly 700 people that is home to a beautiful church that has been a Christmas tourist attraction for decades. Bitcoin enthusiasts have long considered the town to be the birthplace of digital currency, with the village’s mayor, Rene Emilio Pacheco Villatoro, being the first person to hold the title of “Bitcoin Mayor” in the world.

Although El Salvador is famous for its massive waves, little is known about the village of Paja Blanca which played a pivotal role in the adoption of Bitcoin by the country.. Read more about when was bitcoin at its lowest and let us know what you think.

Last week, El Salvador’s Congress passed a law legalizing bitcoin. The leading cryptocurrency is now on par with the country’s official currency, the US dollar. This means that all Salvadoran merchants are required by law to accept it as payment. If the crypto community saw this news as confirmation that the trend is turning against centralized authorities, there is only one problem. Bitcoin, with its painfully slow throughput of 5 transactions per second, is a terrible payment system. Yet, as Nicholas Bertey, co-founder and CEO of Galoy Money, noted, bitcoin is already being used as a payment system, even in the most unlikely places, thanks to the Lightning Network.

Bitcoin plus Lightning Network = scalable payments

The Lightning network is a tier 2, or off-chain network, built on top of bitcoin. This allows individuals to conduct transactions without having to record each transaction in the mainchain locally. This has several economies of scale, such as lower costs and microtransactions, and a useful degree of privacy in a payment scenario, for example. B. hide the balance of the portfolio from the other parties. According to Berthey, he bought some basics with Lightning Network during his 2020 trip to El Zonte, the southern coastal region of El Salvador known as a surfing mecca. I spent time in El Zonta, El Salvador, in the late 2020s. It is a village of 3,000 inhabitants. I was so excited when I arrived, I rushed to the first teeendu I could find to buy something from @lightning. I bought $4 worth of milk, eggs and vegetables. Source: @nicholasburtey on Twitter.com How a small village in El Salvador spurred the historic Bitcoin bill He added that initiatives like Bitcoin Beach mean Bitcoin is accepted throughout El Zonte and payments are instantaneous. But he acknowledged that not all traders support the cryptocurrency revolution. Burtay has spent the past two years trying to convince these stores to accept bitcoin on a 1:1 basis. Most Salvadorans do not have a bank account, and local businesses cannot open a merchant account to accept card payments. Bitcoin Beach is a project to create a Bitcoin ecosystem on the coast of El Salvador, bypassing the old financial system.

Lightning net is not an ideal solution

While some see the Lightning network as Bitcoin’s best chance at scalability, the network is not without its critics. An analysis of the Lightning network by computer scientists Yona Harris and Aviv Zohar revealed a security vulnerability that could potentially cause money to be lost. The pair pointed out that the slow settlement times for bitcoin, combined with the ability for attackers to exploit the connection between the main chain and the Lightning network, were problematic. The resulting high volume of transactions on the blockchain will not allow all debts to be settled correctly, and attackers could get away with stealing some of the funds. Additionally, crypto purists note that the Lightning Network will eventually evolve into centralized nodes. This is a natural consequence of the concentration of depositaries and the liquidity that the network serves. Without a doubt, the legal status of bitcoin in El Salvador is a major coup for the cryptocurrency community. But perhaps tinkering with old technology to meet the high demands of the payment system is not the most effective solution. Especially when you consider that there are many special payment coins.

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As you probably know by now, the Senate just passed a historic piece of legislation that will make the US the first major nation to recognize Bitcoin as legal currency. The Senate passed the bill by a margin of 88-1. All the opposition came from one senator, who claimed that Bitcoin was not “real money” and therefore not worth treating the same as actual U.S. dollars.. Read more about bitcoin price in 2015 and let us know what you think.

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Emilia James
By Emilia James

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