Recently, El Salvador announced the use of Bitcoin as legal tender, and some small countries that do not have a national currency and have been using pounds or dollars as legal tender have also expressed similar enthusiasm, which has caused a great shock in the society, especially for the cryptocurrency community.
In fact, these small countries, which do not have their own sovereign currencies, have been fantasizing about cryptocurrencies and trying to launch their own cryptocurrencies for several years. 2018 also saw Venezuela claiming to have launched a “petrocoin” using ethereum crypto technology, but this was not really realistic.
Bitcoin is a so-called decentralized “cryptocurrency” whose total amount and periodic increments are completely locked by the system and cannot be adjusted according to the changes in trading wealth, which is not only too inefficient, but more importantly, it fundamentally violates the logic and law of the development of money from physical money to credit money, and cannot become a real circulating It cannot be a real currency in circulation, and cannot subvert or replace the sovereign (legal) currency, but can only be a special virtual asset or virtual commodity.
It is clear that these countries lack the most basic knowledge of money (and of course they do not have their own sovereign currencies). Using a fully decentralized digital crypto asset such as Bitcoin as a legal tender would be a serious disruption to economic and social operations due to its own price fluctuations, with no means of regulation by the state (unlike using the currencies of major countries such as the British pound or the US dollar, where there is still a degree of regulation of their currencies by the monetary authorities), and it would only be self-defeating to do so.
To think that the prophecy of cryptocurrencies becoming legal tender has finally come true because El Salvador has announced Bitcoin as legal tender, and that this is a major historical moment for Bitcoin or cryptocurrencies, is like expecting too much from Venezuela’s “petrodollar”. There is no future in using crypto assets like bitcoin as legal tender!