On today’s episode of the Wiser Roundtable Podcast, Casey is joined by Robert Swarthout to talk about all things digital currency. Robert is a serial tech entrepreneur and has a passion for researching and understanding digital currencies. If you are new to digital currency or missed our prior podcast with Robert, click here. Casey and Robert discuss the new changes to Bitcoin and the Taproot upgrade, Tesla buying Bitcoin, El Salvador and Bitcoin, Central Bank Digital Currency (CBDC), and reaction to Bitcoin trading.
Casey begins the podcast by making note that it was recorded on July 1, 2021 and Bitcoin was at about $33,000.
Bitcoin Taproot Upgrade
Bitcoin will be going through the Taproot upgrade in late 2021. This upgrade was approved and widely agreed upon in the Bitcoin community. It will improve transaction privacy and efficiency. The biggest piece of the update will be bringing smart contracts to the Bitcoin blockchain. Smart contracts are contracts in code form that execute when something happens.
Tesla Buying Bitcoin
Tesla bought $1.5 billion in Bitcoin, which drove the price up significantly, and announced they would accept Bitcoin as a payment when purchasing a car. Tesla then reversed their decision and decided not to allow Bitcoin transactions due to its energy consumption. The emotions of a billionaire tweeting are affecting Bitcoin more than it should.
El Salvador and Bitcoin
In June 2021, El Salvador named Bitcoin as an option for legal tender in their country. It cannot be required, but it must be accepted. The average person in El Salvador makes $7,000/year or $19/day. The average Bitcoin transaction is $5-$10/day. It does not seem fair for people in El Salvador to use Bitcoin, based off their average income.
Central Bank Digital Currency
Domestically, there is not a great need for a Central Bank Digital Currency (CBDC). However, there are 56 countries researching, testing, and implementing a CBDC. There are starting to be two types, a commercial CBDC and retail CBDC. Many believe having a CBDC will take away the privacy we have with physical dollars.
Reaction to Bitcoin Trading
Many companies are still waiting to hold assets in Bitcoin, because the regulation around it is still unclear. As of July 1, 2021, 4,000 financial institutions in Germany are now allowed to hold up to 20% of assets in digital currencies. The narrative around digital currency is ever-changing.
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