Bitcoin and its underlying technology have won the trust and praise of some of the most notable figures in banking and finance.
For example, the head of Brazil’s central bank has nothing but good things to say about the technical characteristics of crypto.
According to the Director of the Central Bank of Brazil, Fabio Araujo, Bitcoin is a major “financial innovation” that has spawned vital new technologies and products.
Araujo highlighted the role of cryptocurrency in paving the way for the development of the Web3 concept and stimulating research and further studies on central bank digital currencies (CBDCs).
Smart Features of Bitcoin
At a recent event, the central bank chief also touched on the changing digital currency landscape, adding that one of his organization’s main goals is to add smart features to Bitcoin.
Araujo revealed that the country’s central bank started investigating the characteristics of cryptocurrencies more than a decade ago.
“In 2009, with the introduction of bitcoin and distributed database technology that is driving the development of Web3, we started to accelerate this process,” he said.
“The Bitcoin program provides the Proof-of-Work (PoW) solution, which is essential for Web3’s population-based services,” Araujo pointed out.
Web3 in simple terms
Web3 (sometimes called Web 3.0) is the third generation of web technologies. The Web, often referred to as the World Wide Web, is the base layer of the Internet, supporting a variety of website and application services.
In 2014, Polkadot creator and Ethereum co-founder Gavin Wood used the term “Web3” to refer to a “decentralized blockchain-based online ecosystem”.
The concept of Web3 gained momentum in 2021. Significant attention emerged at the end of 2021, mainly due to investments from bitcoin advocates and leading technologists and companies.
Meanwhile, Araujo ruled out using Bitcoin as a currency, noting the asset’s volatility as a significant downside. In this case, the central bank governor indicated that the CBDC is necessary because it eliminates the volatility scenario and works as a payment solution.
Despite the fact that the CBDC operates the technology that underpins cryptocurrencies, the CBDC is not a crypto asset, he said.
In the same way that Real does not compete with listed assets, CBDC is an expression of Real within the ecosystem in which cryptocurrencies operate, Araujo noted.
Brazilian Crypto Market Blossoms
The Brazilian Bitcoin market and the broader cryptocurrency sector are growing rapidly. It is expected that 10 million Brazilians currently own cryptocurrency.
Brazil’s second largest city, Rio de Janeiro, is actively participating in the global municipal race to attract Bitcoin.
In January this year, the city said that 1% of its cash would be held in cryptocurrency and that it was examining the possibility of granting tax breaks to individuals who paid in Bitcoin.
BTC total market cap at $460 billion on the daily chart | Source: TradingView.com Featured image from EF English Live, Chart from TradingView.com