Over the past few months, we have seen several countries enter the Bitcoin era in their own way. While we are not yet at a point where countries buy Bitcoin with their treasure reserves, we do see many nations allocating part of their energy reserves to Bitcoin mining.
A noteworthy mention comes from Iran which had to power up the nation with mazut for a short while, as the regular energy shortages blamed on Bitcoin mining had a severe effect on the nation.
But what is the long-term view for countries that choose to invest in a crypto future? In this article, we take a look at both the countries that take the initiative and the things we can expect from them in the future.
Countries that bank on Bitcoin
At the moment of this writing, there are several countries that already use their energy reserves for Bitcoin mining. More specifically, over the past two years, we have seen Venezuela, North Korea, Russia, Pakistan, Iran, and Argentina, while there are rumors that the Chinese government holds close ties with large mining pools.
The rather intriguing thing is that several of these countries have imposed a banking ban on Bitcoin even before the government-sponsored mining practices have started to take place. This is true for (at least) Pakistan and Iran. Nevertheless, the adoption curve within these countries continues to increase, as individuals continue hoarding Bitcoin to protect themselves from their governments.
What will happen to the first nation-adopters?
Apart from countries that choose to mine Bitcoin, we are also seeing other countries and states showing support for the crypto industry. Noteworthy are the mentions of Estonia, which has placed a large mural of Bitcoin on the center of Tallinn, Malta, which is known as the cryptocurrency capital of Europe, and Miami, the mayor of which is considering a 1% treasury reserve allocation in Bitcoin
These first countries that are willing to take the risk and embrace cryptocurrencies as a technology that can improve their country will eventually be rewarded accordingly. As the global economy continues to crumble and the price of Bitcoin continues to increase, we will see a massive shift in power and monetary value, going to those who manage to escape the rapid increase in the inflation rate of all FIAT currencies.
We will also see many tech companies and entrepreneurs moving to these locations, as remote work is now more accepted on a global scale. With a crypto-powered economy, early individual adopters will most likely make use of their coins to build new businesses and offer jobs to the local population, something that will further improve the economy on a nationwide level.
Overall, while cryptocurrencies are still highly speculative and questionable there are many upsides for the corporations and countries that are willing to take the small risks involved with the process. After all, it is riskier, at this point, to not hold any Bitcoin, that to hold some of it.
How long will it take before we get there?
At the moment there is still a lot of uncertainty and hesitation from powerful first-world countries when it comes to fully accept Bitcoin and the industry as a whole. Some might say that they are afraid of what they don’t understand. Other’s say it is the fault of those in a place of power – they are too incentivized to ignore (or fight it). Noteworthy is the comment of Janet Yellen, head of US treasury, who mentioned in one of her latest interviews that global regulation of cryptocurrencies is necessary.
Knowing this, we can assume that governmental participation in Bitcoin will either take a very long time to become a reality (the pessimistic viewpoint) or will happen whenever we see a collapse of the US dollar (which will eventually happen, sooner or later). Eventually, however, like institutions, governments would also need to allocate part of their treasury reserves in Bitcoin.
Whether we are talking about rich or poor countries, it is becoming increasingly obvious that Bitcoin and a digital, decentralized, publicly accessible financial system is going to be part of our future. There is still much to be done, but there is literally no one that can stop the trend from growing in popularity.
The best thing you can do right now, regardless of your financial situation, is to welcome this new technological revolution. Many are still unaware of its potential and, if you are reading this, you most likely have at least a basic understanding of what it’s capable of. So make sure you do your own research, and invest responsibly.