Recently, Bitcoin has undergone a resurgence where its value jumped considerably as compared to the previous year. There is more excitement in people about the volatility that currency has experienced after all the tools have enhanced its features and functionality. Bitcoin has once again gained prominence and has taken centre stage. Here in this article, we will take a closer tool at the impact that bitcoin has on financial markets globally and learn whether it has the real potential to help developing countries with their economic growth. You can learn more about bitcoin and blockchain and can even start trading bitcoin through bitcoin trading app.
Cryptocurrencies and the Developing Countries
Some people consider bitcoin as the only cryptocurrency that exists in the crypto market, but bitcoin isn’t alone in the unexploited cryptocurrency market in developing countries. In reality, there are thousands of cryptocurrencies that exist in the crypto world that got a foothold in other countries of the world. Undoubtedly, bitcoin is a global currency or brand, and it has the potential to benefit the financial market globally where it is implemented.
Why should Bitcoin be more adopted in Developing Countries?
Bitcoin has entered the mainstream, and it has gained a large user base in already developed countries like the UK and the US. The fiat currencies hold a strong value in the EU, US and UK, and therefore, bitcoin is developed as a strong, robust currency that can stay strong compared to fiat currencies. The citizens of the UK, US and EU, are more likely to view bitcoin as a second currency, and they won’t prefer bitcoin as a go-to currency like Euro, British Pound and US Dollar are already very strong.
The citizens have a stable currency to make transfers and payments instantly. If we pay closer attention to bitcoin, bitcoin is not stable compared to US Dollar and Euro and isn’t easy to transact, which is why the developing countries aren’t wholeheartedly accepting bitcoins. Instead, in developed countries, citizens treat bitcoin as a good investment opportunity and innovation currency compared to other competitors.
What about Developing Countries? Are you impressed with Bitcoin?
If you consider the issues mentioned above, you’ll know the reasons why bitcoin has struggled a lot in gaining attention and declaration as a functional currency in developed countries. The developed countries are already way ahead of bitcoin and are digital and follow the cash-less systems, which bitcoin might not provide these countries. At the same time, the concept of developing countries is quite different as they are already struggling with the economy. The financial landscape of developing countries is entirely different.
The fiat currencies of developing countries are very weak that it has almost no value of it and gets highly influenced with even slightest change in the economy that is caused due to inflation. This is the reason why the developing countries of the world have to rely on first-world currencies to make transactions possible. The major issue that developing countries are facing that they already accept multiple currencies to carry out daily transactions. In the end, the shopkeepers or people in business are left with those multiple currencies required to be converted into those currencies that they prefer to make transactions in. This gets expensive for shopkeepers and also hinders their growth, and creates a perplexing dynamic.
What are the challenges that bitcoin face in developing countries?
Some of the challenges that bitcoin face in struggling countries include:
Bitcoin transactions are slow as all the transactions are recorded in blockchain ledger by miners by solving the highly complex mathematical algorithms. This is a major demerit of the bitcoin network and the users who pay an extra transaction fee to prioritize their transactions only that their transaction completed on time.
The transaction fee charged by bitcoin miners on the blockchain is high and continues to rise even more. With every transaction that crypto user need to make, it contributes to the higher transaction cost. Scalability is a major issue in Bitcoin.
One and only competitor of bitcoin in developing countries is XRP, as its price is less than bitcoin, and it has already gained huge exposure in developing countries.