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Another Region Recognizes Bitcoin As A Currency—Próspera In Honduras, Latin America
Próspera, a pioneering private city on Honduras’ Roatán island, marks a significant milestone by adopting Bitcoin as a unit of account.
This historic decision by the Próspera Zone for Employment and Economic Development (ZEDE) on January 5th 2024, allows the tracking of goods and services’ market value in Bitcoin within the city.
The initiative underscores a commitment to financial and monetary freedom, enabling individuals and companies in the zone to conduct transactions, maintain accounts, and manage taxes in their chosen currency.
Jorge Colindres, Próspera’s technical secretary, emphasizes the zone’s belief in the fundamental rights to financial and monetary freedom.
This move positions Próspera alongside other Latin American regions that have welcomed Bitcoin, notably following El Salvador’s lead, which in September 2022 became the first country to declare Bitcoin legal tender.
The trend continues with Mexico’s senator Indira Khempis advocating for pro-Bitcoin legislation, signaling a growing acceptance of cryptocurrencies in the region.
Despite Honduras’ cautious approach to cryptocurrency adoption, ranking 22nd in Chainalysis’ 2023 Crypto Adoption report and with a projected digital asset market penetration of less than 2% in 2024, Próspera’s ZEDE stands out.
ZEDEs, with their unique administrative, economic, and legal frameworks akin to those of global hubs like Singapore, Dubai, and Hong Kong, offer a competitive edge.
Próspera’s ZEDE, in particular, has attracted over $100 million in investments and generated more than 3,000 jobs in three years, showcasing its economic vitality.
Próspera ZEDE’s journey began in May 2020, spearheaded by Erick Brimen, and took a significant leap in April 2022 by making Bitcoin legal tender.
This bold step not only highlights the zone’s innovative governance model but also sets a precedent for the integration of digital currencies in mainstream economic systems, potentially transforming how transactions and financial operations are conducted on a broader scale. Read more here.
How Would Zucoin Transactions Benefit Regions Like Hondura’s Próspera?
The recent development in Próspera, a private city in Honduras, has set a groundbreaking precedent in the financial world by recognizing Bitcoin as a unit of account.
This strategic move underscores the growing role of cryptocurrencies in global economic frameworks.
Crypto is being accepted and integrated into mainstream systems with every passing month.
While Bitcoin itself is too slow to transact with as a currency, as mining settlement times can take up to an hour, residents will likely use a third-party processor that will group and temporarily hold transactions.
This approach forms a kind of “layer 2” network.
For example, this is what both exchanges and many banks do, giving the appearance of a faster payment settlement speed.
The downside of this is that you are now depending on an often centralized organization to manage your transaction on your behalf.
It lends itself to all kinds of tracking, personal data selling and potentially censorship.
Not to mention, it goes against the whole point of crypto technologies in the first place.
A cryptocurrency needs to directly have this kind of fast, in-person settlement speed, so that layer 2’s aren’t needed.
Zucoin’s underlying technology, Splitchain, aims to provide a scalable and efficient solution to blockchain’s key issues such as transaction speed, cost, data consumption and energy efficiency.
In blockchains, every piece of data is stored, for every single transaction, on the public chain, since the very beginning.
Every interaction, every minor movement.
In the original forum posts from Bitcoin’s creator Satoshi Nakamoto, this sounded fine and achievable.
In practice, it’s slow, expensive and highly inefficient.
It leads to an increasingly high barrier to entry, where only the bigger players can afford to keep the network going.
What started off as reasonably decentralized, is now becoming increasingly centralized.
Splitchain addresses the challenge of maintaining comprehensive transaction histories in a unique and innovative way, setting it apart from traditional blockchain models like that of Bitcoin.
It is designed as a layered architecture that separates transaction processing from historical record-keeping.
This separation allows for efficient and scalable transaction processing while maintaining the integrity and accessibility of historical data.
The public ledger itself remains extremely lightweight by keeping only the data that peers need to verify transactions amongst themselves.
Hence, Splitchain’s network is a caching network.
It’s fundamentally different from blockchains, as there are no blocks and no full histories on-chain.
Each caching node on the Splitchain network can choose to opt-in to logging anything that crosses its path.
It’s like placing a stone in a river.
This is great for compliance and regulations, as it means users can choose to configure their own Splitchain nodes that best suit their local region’s regulations.
Splitchain walks a balanced line with a system that is progressing towards more decentralization, while also balancing compliance requirements.
Zucoin’s principles resonate with those highlighted by Próspera’s technical secretary, Jorge Colindres.
By offering a platform that supports simple transaction settlements and provides users with control over their digital assets, Zucoin embodies the spirit of autonomy and innovation that Próspera seeks to promote.
It’s great to see crypto becoming accepted in more regions around the globe.
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All the best,
—Rob
MyZucoins
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.