El Salvador made history (and headlines) after becoming the first nation to endorse and approve the world’s most popular cryptocurrency, Bitcoin, as a legal tender. The move makes Bitcoin acceptable for transactions within the Central American country alongside the U.S dollar, which has been serving as the paper currency since 2001. This comes after the so-called “Bitcoin Law” came into force after passing legislation in June of 2021. El Salvador’s government announced that it had purchased 400 Bitcoin in 2 tranches of 200 each and plans to get more in the future.

The move to adopt Bitcoin has been justified by the government’s need to boost financial inclusion in the country. It is estimated that 70% of El Salvadorans do not have access to financial services and the government believes that Bitcoin can help close the gap. The Bank of America has outlined a few benefits that they believe will result from El Salvador’s bitcoin adoption. These include promotion of financial digitization, streamlining remittances as well as opening the country to digital currency miners. However, not all agree that the move is a step in the right direction.

Amongst the detractors of the scheme are the International Monetary Fund and the World Bank, each having warned El Salvador about the risks of Bitcoin’s use as legal tender. The World Bank has been irked by what it described as “environmental and transparency shortcomings” with bitcoin, while the IMF cited “economic and legal concerns” in relation to the move.

Other than the push back from these international bodies, there has been some internal opposition to the adoption of Bitcoin. Citizens had held protests over Bitcoin’s adoption in August and about 67.9% of respondents in a poll said they disagreed with the government’s decision to adopt crypto. The results of the poll showed that 8 in 10 people had little confidence in the use of bitcoin as the currency.

In spite of the criticism, El Salvador’s government is moving forward and has reportedly installed 200 Bitcoin ATMs across the country. And in response to the World Bank’s environmental concerns, El Salvador’s president, Nayib Bukele, has said the country plans to power mining activities using renewable energy from the country’s volcanoes. In order to incentivize the use of Bitcoin in the country, any citizen who signs up for the country’s “Chivo” wallet will get 30$ worth of bitcoin.

All in all, the adoption of a cryptocurrency by a sovereign nation is seen as a testing ground for many, as this is a use case Bitcoin has never experienced in its 12-year history. Countries such as Brazil and Panama seem to be watching the move to draw insights on whether to follow suit.

The above question is being asked a lot due to the surge and drop of bitcoin over the past months – so aspiring investors are curious about whether the coin remains a lucrative investment. Bitcoin is the world’s most treasured and appreciated digital currency in terms of its worth in the open market and this fascinates a vast scale of investors. While there have been ups and downs, Bitcoin still poses to be a good investment. 

When compared to various cryptocurrencies, Bitcoin has been proven to have innumerable benefits; 

Diversification

Diversifying your crypto portfolio is very important and investing in bitcoin, amongst others, can help you do just that. Several foundations and pension funds have added bitcoin to their portfolio over the years. Investment strategists have gone on to say that adding bitcoin to your portfolio may improve returns without notably increasing volatility. 

Working Capital and Cash Flow 

Bitcoin has shown to be a financial strong suit in terms of liquidity. At inexpensive prices, you can quickly swap Bitcoin for fiat currency or gold. The level of cash flow is often dependent on how many users, or in this case investors, a platform has. The liquidity of cryptocurrencies is likely to skyrocket if adoption rises and more people invest in Bitcoin as a viable means of exchange. 

Basic Trading And Operations 

More often than not, investing in stocks or company shares would require a license for the former and a visit to a broker for the latter. However, with Bitcoin, trading is made easy. Buying and selling Bitcoin is made easy and you can store them in your wallet with little to no hassle. Trading in Bitcoin is also instantaneous. 

Digitalized Storage And Repository

Due to the upgrade of technology, cryptocurrencies are not subject to the traditional form of investment and storage like banks. Instead, the data is stored in a peer-to-peer network of nodes and duplicated across the world. 

Digital Gold 

Owing to its limited accessibility, Bitcoin is referred to, by many, as the “digital gold”. Like with gold, which has to be extracted from the earth, Bitcoin has to be “mined” through the use of computer software and thus, cannot be produced at the snap of fingers. Bitcoin has been said to have features akin to gold, silver and the likes. 

Brand New Opportunities 

The fact that Bitcoin is still current in the world of cryptocurrencies brings room for fresh opportunities. Its newness poses a high price alteration and volatility, which may lead to vast profits if invested properly. 

Bitcoin has always been a smart expenditure. The rate at which individuals adopt the coin is proof that it is still a good investment. Bitcoins will help in diversifying your portfolio, it will help in simple and stress-free trading, it will help in electronic and digital storage, amongst many others. Bitcoin as a long-term investment is feasible because the supply is fixed. It goes without saying that Bitcoin has the potential to become a global currency.

Bitcoin is big in the crypto world and for good reason. It’s the first real world application of blockchain tech, has been around the longest, and has received the most trust and attention. As a result, it is more valuable than every other cryptocurrency out there. This is evident with Biitcoin’s market cap of $874 billion, compared to the next contender, Ether, whose market cap is $378 billion. Therefore, it’s not misguided to choose to judge the health of the crypto market using Bitcoin as a yardstick, just as one could, in certain cases, ascertain the health of the global economy by analysing the US Dollar.

Given that there are anywhere from 4000 to 10,000 cryptocurrencies right now (depending on who you ask), it’s obvious that Bitcoin isn’t the only cryptocurrency out there. Some of the others are quite popular, others more obscure and are all collectively known by the term, “altcoin”, which is a portmanteau of the words alternative and coin, hence, alternative coin. While Bitcoin is arguably more mainstream and has become near synonymous with the concept of blockchain and cryptocurrencies, these numerous other cryptocurrencies also are pulling a substantial amount of weight in the crypto market especially for entry level investors who are seeking to reap opportunities in the market.

Certain altcoins were created following the transactional nature of Bitcoin. In fact, one would say some are in principle, copies of Bitcoin. A good example is Litecoin (Market Cap – $11.183 Billion), which strongly mirrors Bitcoin infrastructure, save for a few differences such as speed. Other altcoins like smart contract platform, Ethereum, are more platform-based. Ether is second only to bitcoin in market share. In recent times, a very popular cryptocurrency has been Dogecoin and one can say it got to where it is for some of the wrong reasons. Dogecoin was originally created as a joke and as a parody of digital currencies. Yet, the coin has ironically become a force to be reckoned with.

These are, of course, some of the more popular ones. Certain crypto projects have been built for very specific purposes, such as Titcoin, a cryptocurrency focused on the adult industry or Auroracoin, an intended replacement for Iceland’s fiat currency, the Icelandic krona, although it has not been without its challenges. Another peculiar crypto project, BitClout. Launched in 2021, it is also a social media platform similar to Twitter. And while many cryptocurrencies spring up often by claiming to be better than the preceding coins, a successful cryptocurrency is much more than the strength of its infrastructure. In extreme cases, certain cryptocurrencies turned out to be less of cryptocurrencies and more of Ponzi schemes. A good example would be OneCoin which shut down in 2016 and has been alleged to have raked in about $4 billion worldwide.

Under the face of the Bitcoin market, there’s essentially a plethora of activities going on in the world of crypto. As cryptocurrencies gain wider acceptance, these “altcoins” will play significant roles in democratization of wealth and fostering financial inclusion.