Klaytn’s Future Looks Promising Amid El Salvador’s Ratification of BTC

A few days ago, El Salvador ratified BTC thus becoming the first country in the world to accept BTC as a legal tender. The decision that has been passed in the National Congress with almost 80% of votes in favor sets a precedent for other nations to integrate Bitcoin transactions in their legal apparatus.

A look on El Salvador

El Salvador is the smallest country in South America with a GDP of around 5 billion USD, which places it among the South American countries with a better quality of life. This is mainly due to the influx of capital that is entering the country through people that have been working abroad sending money back to their relatives in El Salvador. However, this economic pattern keeps El Salvador susceptible to poverty especially as the USD keeps depreciating over time.

Consequently, the President’s Nayib Bukele decision to legally adopt BTC could be the economic incentive that the country needs to shield itself from the consequences of a depreciating USD, as BTC has had an overall growth since its creation, and it’s not directly pegged to the USD.

Why does it matter?

With El Salvador being a trendsetter in making this decision, other countries with similar economies will start considering this decision as well. Already, countries like India have started to reconsider their position on cryptocurrencies and it’s been said in the news for quite some time that states such as China, Mexico, or Canada are working on launching their own cryptocurrencies. For the latter mentioned, the idea of adhering to a decentralized cryptocurrency might prove way more appealing for many crypto traders, as well as many regular citizens, therefore speeding up the mass adoption.

At large, this news is not only beneficial for Bitcoin, but for other cryptocurrencies as well. To this end, Klaytn has strong arguments for being a good candidate for mass adoption, as it can deliver to BTC promises for the economy, and much more.

Concerns and How Klaytn Addresses Them

Although the news of BTC has been received with great enthusiasm by many people, there are still many individuals who disfavor this decision on several grounds:

  1. Concerns on the Environment

As BTC is built on a Proof of Work (PoW) chain, it is known that the energy to run the system is significant, as it requires much computational power to function 24/7, thus greatly contributing to the energy consumption. In turn, the president of El Salvador spoke about potentially harnessing the volcano’s power to run these servers. That could be a great solution for El Salvador, however, each country would have to think outside the box and find different solutions according to their geography, regulations, and economic possibilities.

Klaytn addresses these issues through its PoS mechanism which requires much less computational power to run and eliminates the need to build specially-designed mining structures to seamlessly allow the system to work.

2. Concerns around User’s Engagement

Although the crypto space has gained much popularity, the Market Cap of those who have invested in either BTC or other cryptocurrencies is significantly lower than the Market Cap of those engaged in other forms of traditional investment, meaning that the number of those who find the technology very complicated is still significant.

Klaytn addresses this issue by having created a seamless ecosystem that puts at the user’s disposal, seamless tools, and platforms to either build or trade crypto.

3. Concerns over Compliance

With the BTC adoption, some people of El Salvador started fearing this decision’s repercussions over El Salvador’s relation to the Central Bank, and also whether this decision would open a gateway for illicit transactions in the country.

For the latter mentioned, by being in compliance with the national law, BTC adds another level of protection to its decentralized system which allows anybody to track their money. For Klaytn, this means that legal backing would add to its already existing benefits.

Secondly, Klaytn stands out by being fully compliant with the Korean National law thus eliminating the issue of noncompliance with the Central Bank.

All being said, we are highly optimistic prospects of Klaytn’s journey to mass adoption due to its broad use case and its impressive adoption among the Korean public, being the backbone infrastructure for enterprises willing to leverage the benefits of the crypto space, thus making KLAY adoption possible worldwide.

Please check out our media channels:

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Reddit: https://www.reddit.com/r/klaytn/

Webpage: https://klaytn.oas.asia

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© Klaytn Foundation 2022. All rights reserved.
© Klaytn Foundation 2022. All rights reserved.