Doug Specht, Senior Lecturer and Director of Teaching and Learning in the School of Media and Communication, discusses in his article for Geographical the adoption of bitcoin as legal tender in El Salvador.
In the article, he explains how El Salvador's President, Nayib Bukele, eyes Bitcoin to renew the country’s economic independence, but the economic and environmental impacts might not add up.
He states that: “If the economic reasons for Bitcoin adoption are questionable, it might still be seen as a politically astute move. Talk of smoothing remittances will win over overseas voters. It will also be seen as a step towards further independence from the US, a policy that can win votes on both the political left and right. El Salvador might have been economically better off if it had adopted a cryptocurrency that was more stable, but these, being linked one to one to the US dollar, would have been much less of a political statement.”
Regarding the environmental impact of Bitcoin, he added: “The digital mining of Bitcoin… is hugely power intensive, using dozens of terawatts of electricity per year – more than all of the electricity used in a year by countries such as the Netherlands. And with a large amount of Bitcoin mining taking place where electricity is the cheapest, the environmental impact is huge.”
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