In anticipation of the Venezuelan demonetisation of the 100 Bolivar note, there has been an increase in adoption of Bitcoin in Venezuela. Venezuela has the highest inflation rates in the world, and Venezuelans are increasingly depending on Bitcoin to buy basic necessities and pay workers, according to a report in The Guardian. Foreign exchange transactions are under strict control in Venezuela, but Bitcoin occupies a legal grey area.
Bitcoin has several features that makes it an attractive investment in times of economic turmoil. The transactions do not require a third party authentication, the blockchain and the network itself keeps a public record of all transactions. The cryptocurrency is safe from the control of governments or banking systems around the world. Users can transact with a computer or a mobile device, and the transactions are instantaneous.
Bitcoin is accepted the world over and can be used from within a country to order goods from abroad. Users in Venezuela have been purchasing goods from neighbouring Colombia, either getting it from visiting friends or getting them delivered. The Bitcoin can also be used to purchase items from the United States, even though foreign exchange transactions are strictly controlled, Bitcoin acts as a surrogate. Bitcoin is considered a safe haven in times of economic instability.
Although Bitcoin do see rise and falls in value, the cryptocurrency can at times offer more long term stability than comparatively more volatile real world currency. The increase of adoption in Venezuela is just the latest instance where the population of a country saw an increase in use in Bitcoin because of economic disruptions. Venezuela saw a sevenfold increase in Bitcoin usage. The volatile Chinese stock market has pushed Bitcoin to a three year high. The demonetisation of high value currency notes in India saw an increase in volumes of Bitcoin trading. As the US stock markets plunged due to an imminent Trump victory, Bitcoin value soared, according to a report in The Next Web.
In India, Unocoin is a handy mobile wallet to track Bitcoin pricing, convert to and from Indian currency, and periodically invest in Bitcoin. The value of Bitcoin is derived from what people are willing to pay for it. If another competing, better cryptocurrency sees widespread adoption, then Bitcoin is going to lose its value. For now though, Bitcoin seems to be surging, and growing strong as a cryptocurrency.