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Cryptocurrencies: a solution to the Covid-19 pandemic?

Cryptocurrencies reduce contact with cash and avoid visits to banks.

Its use as a currency for exchanging goods or services The strongest economies have also become a solution to the Covid-19 pandemic. The strongest economies, too, have have resorted to digital currency or Bitcoin. to face the situation with greater liquidity and as an investment method.

In several countries around the world, the cryptocurrency market has increased during the pandemic. In an article in El Universal, it was indicated that in the last week of April 2020, around US$4.16 million in bitcoin was traded in Venezuela alone, according to figures handled by tracking platforms. 

The data evidences the investment preference, in these timesThe main reason for this behavior is the fear of losing the value of their finances due to the crisis and the devaluation of the dollar. One of the reasons why this behavior has taken off is the fear of losing the value of their finances due to the crisis and devaluation. Cryptocurrencies despite being volatile maintain a trend more upward than downward during the pandemic and possibly in the next 12 months, according to estimates by experts in the area.

This behavior has been reflected in other economies such as Argentina, Russia and Iran. In addition, the use of technology that supports cryptocurrencies is of great value in these times considering that people are afraid to interact directly with cash and that in many places physical access to banking institutions is still very limited.

What are the most effective cryptocurrencies during the pandemic?

  1. Bitcoin: The most popular and conceived in 2008. It is at the top of the list with a price band between $9,000 and $11,000. 
  2. Elron: It is a public blockchain created to provide high performance in a decentralized network.Its technical foundation is based on the scaling method called Adaptive State Fragment.
  3. FielCoin: It uses blockchain technology to create a decentralized file storage service. It is backed by venture capitalists and led by a team with extensive knowledge of the technology behind it.
  4. Synthetix Network: It allows the creation of synthetic virtual assets under the backing of a blockchain, which could track the value of other assets.
  5. Matic Network: It was created to solve the congestion on the blockchain. It allows to scale up to a high number of sidechains for computation, outside the main chain.

Basically it is a coin that is not perceptible by human senses. and is used to exchange goods and services exclusively through electronic channels. It also proposes an efficient, reliable and easy to exchange monetary system that does not generate inflation, since the network itself is responsible for issuing Bitcoins in a decentralized manner, based on real demand.

The purpose of Bitcoin is to employ a value exchange system based on an electronic currency.without the intervention of government agencies. These characteristics allowed it to be of great use in 2009 in the face of the collapse and global crisis that the financial sector was experiencing at that time. Through the cryptocurrency, users could send and receive money among themselves, without needing the mediation of an intermediary.

Another reported benefit of this monetary order is that its verification is subject to to a computational power capable of solving highly complex IT problems and allowing the certification of transactions without violating the system.

Thus, it can be seen that the use of cryptocurrencies is an important alternative for those countries with less developed and susceptible economies. However, both the positive and negative aspects should be kept in mind, avoiding incurring in illegal practices such as money laundering, money laundering and.