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It is the purpose of this article to draw attention to Bitcoin's already significance to Pakistan's macroeconomic future. To clarify, Bitcoin refers to both the decentralized digital property with a combined market capitalization of $900 billion and going to grow, and also the blockchain-powered monetary channel that allows peer-to-peer people to trade without the need for a trusted third party to facilitate the payment. Before we move on with our guide, please register yourself on the Blockchain and learn the basics of Ethereum investing in getting you started.
Even though we are very optimistic about bitcoin as an asset class over the long run, we will not be providing any price predictions in our comments. During this research, we will not be doing a technical examination of blockchain technology. Furthermore, delving too far into a price and technical debate would divert our attention from the primary message: why should Pakistan embrace bitcoin now?
The use of cryptocurrencies has begun to gain traction in the nation as a whole. Early this year, the government of Khyber Pakhtunkhwa announced intentions to construct experimental cryptocurrency mining farms as part of its economic development strategy. A committee has been established at the federal level to look into cryptocurrency regulation and policy. These are encouraging advances. However, there is still much work to be done, and there is only a short window of time to do so before the clock runs out.
Pakistan may reap a variety of benefits from the Bitcoin ecosystem in a variety of ways. According to our experts, Bitcoin is outperforming conventional investments in the following months and years. We suggest that the State Bank of Pakistan begin converting up to 5 percent of its sovereign gold holdings (about $180 million) into bitcoin before the price of bitcoin reaches a level beyond the country's affordability barrier.
With the use of the internet and a smartphone, the ordinary Pakistani investor has the chance to invest in the world's best-performing asset during the last decade. As a result of these unrivaled returns, wealth will spread across the investment community. It recommends that a fully regulated national cryptocurrency exchange be established, including incentives to encourage domestic participation. A bitcoin exchange-traded fund (ETF) that trades on the Pakistan Stock Exchange will be an attractive investment for local stock market investors looking for a diverse portfolio of holdings.
Blockchain and brilliant contract software engineers are on their way to becoming highly sought-after assets in the cryptocurrency industry's new decade. Remote employment is rapidly becoming the new normal in the post-COVID-19 era. The government's investment in talent development and the establishment of a foundational cryptocurrency infrastructure will be repaid to the economy in the form of budding entrepreneurs, developers, and product managers, among other things.
First and foremost, the recent decrease in the network's hash rate makes it economically advantageous to commence mining operations as soon as possible. Following that, the closure of Chinese miners has resulted in an influx of secondhand mining equipment onto the market, which has resulted in significantly lower costs. Finally, Pakistan currently has an excess of electric generating capacity in comparison to the demand for electricity. If bitcoin prices continue to increase at the pace we anticipate them, the federal government will have another channel to earn enormous income.
On the other hand, international payment remittance continues to be a time-consuming procedure characterized by high costs and long settlement delays. In this regard, the cryptocurrency Bitcoin's monetary network offers a complete answer. In particular, the Layer 2 protocol (Lighting Network) of Bitcoin allows for the transmission of micropayments on a real-time basis with the lowest possible costs. We recommend that the government committee in charge of cryptocurrencies allow fintech companies such as Strike to come in and learn about the advantages of this solution. Pakistan should begin working on a smooth connection between Raast and the Bitcoin ecosystem as soon as possible.
There are dangers associated with the Bitcoin ecosystem. As previously stated, the Financial Action Task Force has urged the government to strengthen its oversight and regulation of the cryptocurrency sector. All high-level cryptocurrency talks must include participation from these critical stakeholders, as a matter of course.
Current State of The Ecosystem of Cryptocurrency in Pakistan
The era of cryptocurrency growth is here. Because of the unparalleled price volatility in this asset class, along with a low barrier to entry, it has become a breeding ground for a large number of risk-takers who are ready to try their hand at day trading or short-term trading. In particular, the on-chain retail value transferred statistic, individual bitcoin users, places Pakistan among the top-10 countries globally. Pakistan's grassroots revolution is highlighted by this rating, reflecting the increasing number of Pakistanis becoming involved in the bitcoin ecosystem.
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