As the world economy still stumbles along in the fallout from the banking crisis, people are still falling victim to the instability of the economic system with seemingly no way out. The situation in Greece that resulted in account holders not having access to their own money, not being allowed to transfer it anywhere, and even restricted to 60 Euros a day withdrawal, highlights the insecure position we face.
However, in Greece and now in similarly-situated Brazil, Bitcoin has blossomed and appears poised to offer an alternative that is beyond the control of government, providing account holders a way to regain control over their own money.
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As the problems in Greece mounted, the government placed more and more restrictions on the Greek people regarding banking access to their own money. Each step exposed the fragility of the system itself, and the powerless position in which it places people once such decisions are made. This exposure of the dangers and weakness of the financial system has led to a marked rise in Bitcoin adoption, and that trend is now being repeated in another country going through fiscal turmoil.
Brazil is currently experiencing near 10% inflation rates, severe levels of unemployment that continue to rise, and a recession that will likely match the worst the country has ever experienced. Again, the worry of capital flight has seen financial regulations tightened to prevent people moving their own money to wherever they want. As with Greece, while these events play out there has been a marked increase in Bitcoin trading, up 120% month on month. Some have suggested that this is merely a coincidence, but is it?
The evidence suggests that there is more than just coincidence behind this trend. Business use of the currency, both in terms of accepting it as payment and using it to move money, is also rising rapidly - again mirroring the events in Greece. Some may wonder why, but the lower rates for international transfers and lack of legislation restricting the movement of the money is likely a driving force for many new Bitcoin users.
As financial controls imposed by governments on citizens’ money become more draconian, and the public at large see just how easy it is to lose access to their own funds without any recourse, the benefits of digital currencies become more relevant to the public. While there is still a long way to go for digital currencies to gain widespread acceptance, there also appears to be no end in sight for the instability currently plaguing the mainstream financial world. And as that instability shows every sign of worsening, digital currencies are likely to become an increasingly attractive alternative to the status quo.