Tag: Georgia

Bitcoin For Georgia: How To Use Bitcoin As A Nation!

by Bitcoin Magazine

Georgia is just one of many developing countries which would benefit from the adoption of Bitcoin.

“The effects from major countries’ policies will hit emerging countries economically and financially.” -Jack Mallers (CEO Strike)

“Bitcoin is perfect money for the internet. It is instant, it is safe, it is free. Bitcoin is the internet of money. At its core, Bitcoin is a great technology that will change the world forever.” – Andreas Antonopoulos (Author)

“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.” – Sani Musa (Senator from Nigeria)

“Bitcoin is the first network in the history of the world that is engineered to host a synthetic safe haven long duration asset. It is a thermodynamic sound network for storing, channeling monetary energy over time with no power loss. It is the critical engineered technology of the decade, maybe of the century.” – Michael Saylor (CEO MicroStrategy)

“Central Banks are increasingly taking actions that may cause harm to the economic stability of developing countries and emerging markets. That in order to mitigate the negative impact from central banks, it becomes necessary to authorize the circulation of Bitcoin with the supply that cannot be controlled by any central bank and is only altered in accord with objective and calculable criteria.” – Nayib Bukele (President of El Salvador)


Bitcoin Fixes Important Problems For Developing And Emerging Markets

(Source: Jack Mallers – improved by the author):

  • Bitcoin has a fixed supply that is not dependent on demand; it´s super saleable across time and space.

  • Bitcoin has a monetary policy enforced by a distributed network, so that the network is the most secure in the world.

  • There is a predictable issuance; you can determine exactly how many bitcoin there are and how many bitcoin will be created.

  • Bitcoin is open, global, permissionless; it works the same everywhere and Bitcoin is for everybody.

  • Bitcoin improves remittance for the residents; the final (international) settlement of bitcoin is faster than in fiat.

  • There are lower transaction fees than in the classic financial system; from microtransactions up to millions of dollars — anyone can send anything almost for free.

  • Bitcoin improves financial inclusivity; banking the unbanked.

  • Creates technological progress; any country can immediately get to the same level of technological development and financial infrastructure as more developed countries.

The Lightning Network, which is built on top of the Bitcoin network and is a further development of the payment function, is a great technology because money is nothing more than a technology. You can send money with the Lightning Network from any point in the world to any other point in the world instantaneously, securely and for minimal fees — sometimes less than a cent — or for practically no fees at all.

“Bitcoin itself is a physical asset. So, there’s no sense of credit, there’s no sense of balance sheet flow; you’re not borrowing money from anybody. The actual physical value is travelling in real time. It’s going to take a second for physical value to move and it’s going to cost us nothing. That in itself is a massive step forward for money as a technology. By the way, there’s no counterparty risk and no reversals. It is the only instrument that can achieve global cash finality instantly and at no cost.” – Jack Mallers

Lightning Network has the following features:

  • Instant settlement and no dependence on foreign banks

  • The network is owned by the community. It operates by simple mathematical rules that everyone who uses the network agrees upon.

  • No intermediaries

  • No fees

  • Fast transactions in real time

  • Digital transactions that require only a smartphone with internet access

What does this all mean for a developing country like Georgia? A country with 3.8 million inhabitants who have an average age of 38 years old. The unemployment rate is about13%. 50 to 70% of the workforce is self-employed. The country is bordered by Russia in the North, Turkey and Armenia in the South, and Azerbaijan in the East. Georgia is sparsely populated. More than a quarter of the population lives in the capital region around Tbilisi. Other large cities include Batumi, Kutaisi and Rustavi (20% of Georgia is still occupied by Russia).

  1. Banking the unbanked: According to World Bank, about 40% of all Georgians did not have a bank account as of 2017. In 2019 Georgia had 3.8 million inhabitants. So of those, about 1.4 million are without a bank account. With a smartphone, these people could immediately participate in international and domestic payments using bitcoin. If the country gave away cell phones with a hot wallet to those without a bank account, it would cost just $105 million (in United States dollars), providing the entire population with the safest and hardest means of payment ever invented.

  2. Protection against inflation: In June 2021 Georgia broke a 10-year record high, charting an annual inflation rate of 9.9%. Bitcoin is the hardest asset in the world with a stock-to-flow ratio (the underlying value is, on the one hand, the available quantity of an asset, i.e. all units of a currency, and the quantity of Bitcoin that is added to this stock every year. Finally, the ratio of the two values, stock and flow, describes the total amount of time it would take to reach the total stock at the current rate) of about 57.

  3. Becoming more independent from large nations: For example, the EU is investing a lot of money in Georgia. This week the EU offers €3.9 billion to help Georgia improve connectivity. Georgia is very dependent on foreign investment (the net international investment position (IIP) of Georgia amounted to -$22.8 billion, accounting for -142.1 percent of the last four quarters’ Gross Domestic Product). Investing in Bitcoin and waiting for it to increase in value would provide an alternative to relying on foreign investments.

  4. Improve remittances: Approximately 13% of Georgia’s GDP is made up of foreign remittances. Thus, according to the World Bank, many Georgians received money from abroad or sent money abroad in 2019. If we take 5% transaction fees (which is moderate) on a volume of $2.5 billion in Georgia, then that is $125 million in fees paid by Georgian citizens to foreign financial service providers in order to participate in international payments. This $125 million in fees can be expressed in working time of the population. The average monthly wage is about $450 in U.S. dollars. So, the population of Georgia together has to work 277,777 months to pay the transaction fees for the “modern” payment system. With Lightning, these remittances could be made almost free of charge, and in real time.

  5. Improve Gross Domestic Product: Using Bitcoin for foreign transactions would increase the GDP of Georgia (about $18 billion) by about 0.5%-0.7% for free. In addition, bitcoin-friendly laws would attract investment from abroad. The market capitalization of bitcoin is currently about $700 billion. Assuming that a Bitcoin standard in Georgia leads to investments of about only 0.1% of Bitcoin’s market capitalization (mining companies, exchanges, payment companies, investment funds, infrastructure for Bitcoin, and more), that would be about $700 million in new investments in Georgia. This would also allow the Georgian state to collect more taxes. But just the lower foreign remittance fees plus more investments would increase Georgia’s GDP by about 4.4%.

  6. Reduce merchant fees: Instead of using foreign payment service providers, such as Visa or Mastercard, one could use the comparable service on the Bitcoin network, i.e., the Lightning Network. Approximately 1.5-2.5% is charged for each transaction made by customers in Georgian businesses. Not to be neglected, expensive technology has to be acquired in order to use credit cards. What’s more, bitcoin offers an instant settlement with no chargebacks or anything like that. The startup costs for technology are also eliminated because all that is needed is a smartphone with internet access.

  7. Digital IDs, or a legal proof of identity: Digital IDs should be designed from the beginning to provide better privacy, security, and control. In Georgia, for example, about 6% of the population have no ID — which is also one reason why many people don’t have access to the banking system. Bitcoin fixes this. With Bitcoin it doesn’t matter what country’s passport a person possesses, or even if they have a passport at all – or any other form of ID. It also doesn´t matter what nationality or ethnicity one is. Anybody can connect to this network. Why not just give every citizen a public address in the blockchain using Microsoft’s Project ION, for example? Bitcoin’s decentralized, secure, proven technology is already in existence.

  8. Using mining as a country: Georgia’s domestic energy production is very advanced. Most of the energy needs are met with cheap and sustainable hydro energy. Bitcoin mining is a very effective incentive system. The cheaper the electricity, the more profitable the mining efforts. Since renewable energy is the cheapest of all energy sources, there is an incentive to expand renewable energy. For example, one could connect mining operations to hydroelectric power plants and use the profit to continue investing in the infrastructure. “According to estimates, currently only about 25% of Georgia’s potential is exploited. Therefore, there is a lot of untapped potential, mostly from hydro resources, but also from wind, solar, geothermal and biomass sources as well.” – investingeorgia.org

  9. Get investments from all over the world: “The relative cheapness of labor (compared with the EU), the simplified business registration system and relatively low tax burden (again, compared with the EU) may prove to be stimulating factors in the creation of new jobs in the national economy of Georgia” – Vladimer Papava from the Ivane Javakhishvili Tbilisi State University. 

  10. Georgia is a country with the lowest electricity costs in the world. The price of electricity is 0.058 in U.S. dollars per KWh for households, and 0.053 in U.S. dollars for businesses – which includes all components of the electricity bill such as the cost of power, distribution and taxes. Georgia is ranked 12th in the world in the Index of Economic Freedom. With a progressive Bitcoin policy, these advantages could be used to attract global investment.

  11. Strengthen the local banking system: For being such a small country, there are a lot of banks in Georgia (Silk Road Bank, VTB Bank, terabank, BasisBank, TBC Bank, Bank of Georgia, Halyk Bank, ProCreditBank and CartuBank). Central Bank Digital Currencies (CBDC) are a threat to the traditional banking system. Money is already almost completely digitized. Cash still plays an important role in Georgia,but digital payments are growing rapidly here, too. Bitcoin can be for traditional local banks what CBDCs are supposed to be for central banks. Banks could gain new customers, participate more in international payments and probably generate more revenue if they embrace Bitcoin and the underlying technology. They could develop exchanges, wallets, or financial instruments for Bitcoin.

  12. And many more!

This was just a summary from the 37-page report “Bitcoin for Governments.” I like the country Georgia and the people. The nature here is beautiful, the food delicious, the wine tasty, and the culture fascinating. But you can probably substitute Georgia with any one of many developing countries worldwide, which would all likewise benefit from Bitcoin adoption.

Bitcoin would help so many countries that are forgotten by big nations. Emerging nations like Georgia can become ascendant countries and overtake the West if they move faster on key enabling technologies like Bitcoin. For me, the most exciting aspect of the Bitcoin network is financial inclusion and economic empowerment for developing markets. Bitcoin is not about rich countries getting richer. It’s about closing the gap and turning emerging markets into developed markets.

Thank you!

About the Author:

My name is Max Mittelstaedt and I am a Business Psychologist from Germany. When I was looking for a new challenge, I came across Bitcoin. I was immediately fascinated and fell right into the “rabbit hole.”I am convinced that Bitcoin will bring us a better world and can help individuals, businesses and governments. Thanks to Ralph, Jeremy and the Bitcoiners from Wernigerode for the support.

For updates on Georgia and my attempt to make Bitcoin more popular here, follow me on Twitter.

This is a guest post by Max Mittelstaedt. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

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Walking on sunshine: Top crypto summer vacation destinations in 2021

by Cointelegraph

Even though the ongoing coronavirus pandemic has yet to fully recede, an increasing number of countries are beginning to open up their borders to tourists once again. Furthermore, with large-scale vaccination drives taking place all over the world, it appears as though by the time summer rolls around again, it will become possible for many individuals to travel to certain holiday destinations once again.

In fact, according to the president of the European Commission, Ursula von der Leyen, American tourists will be able to pay a visit to their favorite European Union countries during summer 2021, given that they are able to fulfill the EU’s vaccination requirements.

In this regard, it should be pointed out that according to a tracker made available by the United States Centers for Disease Control and Prevention, over 35% of all American citizens have already been fully vaccinated, while 46% have received at least one shot.

Lastly, these vaccination numbers seem to be growing at a rapid rate, thereby hinting at the possibility that by the onset of June, a vast majority of the U.S. population — which includes many cryptocurrency enthusiasts — will be able to travel abroad.

It’s time to pack your bags

Though the last year and a half have been quite a rough ride for pretty much everyone across the planet, there is no denying that the crypto industry has recently been on the receiving end of some insanely bullish market action, especially over the course of the last six to twelve months.

To put things into perspective, since the start of 2021 alone, the total market capitalization of the digital asset sector has risen from approximately $780 billion to $2.4 trillion, exhibiting insane growth of over 200%. As a result, many crypto investors have seen their portfolios increase manyfold, giving them access to spare capital that they can use to take a much-deserved break.

So, here is an outline of some of the top destinations that crypto HODLers can visit to unwind. The list takes into account factors such as the ease of visa procuration, internet accessibility and low COVID-19 infection rates.

The Bahamas

The picturesque island nation of the Bahamas has been a go-to holiday destination for many Americans and Canadians for decades now, thanks in large part to its proximity to the Americas. In fact, around 92% of all tourists visiting the West Indian nation are from either North or South America.

As things stand, the Bahamas has a relatively low number of active COVID-19 cases. Furthermore, because the country already boasts of an infrastructural framework that is tailor-made for Westerners — i.e., high-speed internet and premium living locales — the Bahamas stands to be the perfect getaway for many tourists this summer.

To enter, American passport holders can forgo testing — a requirement that is applicable for other visitors — if they are able to provide legitimate proof of vaccination. That said, before flying, they are required to fill out a simple “Travel Health Visa” application that can be processed online.

Lastly, for crypto enthusiasts, it should be pointed out that the Bahamas was one of the first countries in the world to roll out its very own central bank digital currency, the Sand Dollar. In fact, it is the world’s first CBDC to go beyond a pilot phase and achieve an official launch. Moreover, regulators will be actively pushing to increase adoption of the CBDC this summer, so crypto participants traveling there could witness a historic event unfolding right before their eyes.

Cyprus

Situated in the Mediterranean Sea, Cyprus is another island nation that draws in millions of tourists annually. One of the main reasons that hordes of visitors flock to the country is its incredible weather, with both the summer and winter months remaining mildly warm and dry when compared with other parts of Europe.

Cyprus’ stance toward the crypto sector is quite friendly, despite the government recently warning its citizens against investing in Bitcoin (BTC). It is possible to convert various cryptocurrencies into local fiat via a number of exchanges that operate in the country, such as BitPanda and eToro, making it an ideal getaway for HODLers.

To enter, travelers simply need to share their vaccination documents with the Cypriot government via its “Flight Pass” tool. That being said, it should be pointed out that as per the Cypriot government’s recent guidelines, even vaccinated travelers may be asked to take random tests during their stay.

Greece

The southeastern European nation of Greece is one of the most popular tourist destinations in the world, attracting millions of people to its many islands across the Aegean and Ionian Seas.

This is, in large part, due to the country boasting of some of the most scenic beaches in Europe — like the black sand beaches of Santorini — as well as some of the most elite party resorts in the world, which are situated primarily in and around Mykonos.

Furthermore, since it is possible to buy/sell/convert a wide array of cryptocurrencies in Greece using established platforms such as Coinbase and eToro, crypto holders have even more incentives to pay a visit to the country.

In terms of traveling to the European nation, Greece has started opening its doors to American visitors who have gotten their recommended COVID-19 vaccine shots. However, it should be mentioned that in order to seamlessly enter the country, the second shot should have been administered at least two weeks prior to the trip. Travelers from all other nations are required to produce a COVID-19 negative test result upon arrival.

Georgia

Though many in the West may not be familiar with Georgia, as the nation is tightly wedged between Europe and Asia, the country boasts of a highly picturesque landscape and affords its travelers a high degree of safety. In fact, Tbilisi, Georgia’s capital, is consistently cited as one of the safest cities in the world.

For crypto enthusiasts in particular, Georgia is an excellent travel destination, as it provides digital-asset owners with seamless access to multiple crypto-fiat gateways. In addition, individuals in Georgia are exempt from income tax on any profits received from the sale of cryptocurrencies. Not only that, but any crypto-to-fiat transactions are not subject to value-added tax (VAT). This includes the lari, Georgia’s fiat currency.

To enter, travelers are required to furnish their COVID-19 vaccination records. Furthermore, U.S. residents who are not vaccinated are also allowed to enter, provided they have only traveled through certain nations and are carrying a negative test result with them.

Grenada

The tiny nation of Grenada is situated in the Caribbean and is the southernmost island in the Antilles archipelago. It offers unsoiled scenic landscapes and provides tourists with access to all of the amenities that they may be looking for in their ideal holiday destination.

The local crypto market is unregulated at the moment, and crypto enthusiasts can make use of many prominent exchanges such as Binance, CEX.IO and Coinmama to seamlessly switch between various cryptocurrencies and the Eastern Caribbean dollar — the national currency of Grenada — making shopping and payments a breeze.

Currently, the Grenadian government is allowing all vaccinated Americans to enter its borders. However, upon arrival, all entrants — even those who have been vaccinated — have to quarantine for 48 hours while officials conduct a COVID-19 test.