Bitcoin’s Greek Connection

Early last week, bitcoin’s price price crossed the $250 mark after hovering at around $225 to $227 for the past couple of weeks. This is good news for the bitcoin community as we haven’t seen this trend for quite a while. Contrary to what others are saying that bitcoin is dead, there obviously is more life onto it and is in fact showing good signs of improvement. But have you ever asked yourself what could have caused this abrupt increase? We’ll round up some interesting facts that could have contributed to bitcoin’s increasing demand.

For anybody who has closely monitored the economy of countries worldwide, most noticeable is Greece’s economic woe. Since 2008, its economy has slowed down and has still not recovered until today. In fact, its economic status now is even worse than before. Thinking that the problem may already be out of hand, Greek politicians sought assistance from the International Monetary Fund, European Central Bank and European countries forming the Troika. Greece received a large amount of 110 billion EUR, but not without a bailout agreement. The Troika required Greece to create structural reforms, execute austerity measures, and privatize government assets. However, the economic turnaround that Greece has been waiting for didn’t come into place. The austerity measures caused more trouble than good, thus causing discontentment among its citizens. The worsening state of Greece’s economy drew speculations that it will have to exit the Euro zone as it’s already unable to pay its loans. Along with that, it is suggested that it adopts another currency to meet its loan obligations. Right now, Greece is left with two valuable assets to choose from —- gold and bitcoin.

A lot of people turned into bitcoin —- an act of faith that likewise demonstrates the public’s increasing acceptance of digital currency. One question now that requires one big answer is on whether Greece is ready to adopt bitcoin as a national currency.

CNBC contributor Brian Kelly suggests that Greece monetizes its publicly-owned assets, so that it can pay its loan obligations. It’s a smart move that Greek politicians may have to consider, most especially that reduction of government pensions and increased taxes are not going to do any good for the country’s weary citizens.  Moreover, Kelly recommends the creation of a digital currency with reference to the bitcoin technology. He said that the government can invest some of its assets in a trust and then come up with a blockchain method that can be supported by this trust.

Greek Finance Minister Yanis Varoufakis, on the other hand, has recommended the Future Tax Coin which is somewhat the same as to what Kelly has suggested. The plan here is to pay their debts using the proceeds they get from selling this Future Tax Coin, also taking into account the principles of bitcoin technology. Varoufakis is confident that bitcoin technology can be a suitable weapon against deflation and can be used profitably in the Euro zone.

On whether it’s going to be the right solution, only time can tell. Until then, Greece has to brace itself and hope for the best to happen.

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