According to the World Bank, almost half of the world’s population does not use their bank accounts. Many millions of people have no access to banking services. These factors are partially responsible for poverty. Cryptocurrencies can solve these issues and increase access to financial services. Moreover, it can also eliminate corruption and make the financial sector more transparent.
Cryptocurrency’s Potential in the War against Poverty
Blockchain technology is the main backbone of most cryptocurrencies. Many are automatically using Blockchain technology for Bitcoins and other digital currencies. This is because many people want a good alternative to fiat currency. However, volatility remains a major problem.
Cutting Transaction Hassles and Costs
Cryptocurrency can help improve the access to financial services. It may increase transparency and reduce corruption. It can increase transparency and minimize expenses related to it. Cryptocurrencies play an important role in microfinancing too and reduce poverty. It is a proven fact that poverty levels in many countries have come down due to microfinancing.
In most developed countries, the immigrant population comes from poor developing countries. Many of them pay an exorbitant amount to transfer money to their families. Currently, most use agencies like Western Union and MoneyGram. Cryptocurrency can solve this problem by providing a cheaper option to transfer money.
How Can Cryptocurrencies Reduce Corruption?
Blockchain technology can increase transparency levels. It is a fact that widespread corruption is the root cause of poverty in many countries. Cryptocurrencies can eliminate the need for central intermediaries. This can instead reduce corruption and save unnecessary expenses.
Universal Basic Income and Cryptocurrency
Artificial Intelligence may make many jobs in the world redundant. This may lead to widespread unemployment in the service sector. According to many experts, Universal Basic Income can prevent people from becoming poor.
Cryptocurrency can be of great help to offer Universal Basic Income(UBI). Many famous individuals like Mark Zuckerberg and Yanis Varoufakis support the role of cryptocurrency in this scheme. The US Presidential candidate Andrew Yang wants to make UBI through cryptos.
Cryptocurrency can Provide Financial Opportunities
Poverty is a complicated problem in the world. However, many people are poor only because they do not have enough financial opportunities. Blockchain technology can resolve this problem by giving equal opportunities. It can promote both entrepreneurial opportunities and financial inclusion. This can make many people self-sufficient and independent.
In some countries, women are poorer because they do not have enough financial opportunities. The traditional banking system also does not bother about them. Cryptocurrency can change these things for good. This is because it can offer financial access to all without any form of discrimination.
Protection against Inflation
Hyperinflation increases poverty levels in many countries. This is because it decreases the value of money. For example, many governments only print excessive money and make it less valuable. This leads to people working harder than before but having less money. Inflation also increases the value of commodities.
People as a result cannot afford to buy. Cryptocurrencies like Bitcoin have the potential to resolve this lingering issue. Since it does not have any central authority, its supply is always finite. So, it can protect people’s money against inflation. Therefore, resisting inflation can lessen poverty too.
Around the world, capital flow is not uniform. Some regions have more capital flow than others. It is a fact that more capital flows reduce poverty. However, governments restrict capital flow by framing various laws and regulations.
Cryptocurrency can bypass these restrictions because of decentralization. It can increase capital flows. because the supply of cryptocurrencies depends on the users. That is because the supply of cryptocurrencies is always going to be finite. Governments and politicians have almost no role in it.
The Bottom Line
Cryptocurrency can reduce poverty and lead to prosperity. It is an undeniable fact that cryptocurrency will become the future currency. The rising popularity is already an indication of that. It has the potential to offer more employment opportunities. It can help individuals to get better access to capital. Financial inclusion for weaker sections is another major advantage of digital currencies. People can come out of poverty and resist inflation by adopting cryptocurrencies.
Also Read– KPMG’s Report Highlights The Crypto Industry’s Positive Trajectory: Says Raj Chowdhury
FAQs
Cryptocurrency can help improve the access to financial services. It may increase transparency and reduce corruption. It can increase transparency and minimize expenses related to it. Cryptocurrencies play an important role in microfinancing too and reduce poverty.
How would cryptocurrency help reduce poverty? ›
Crypto can help combat extreme poverty by creating wealth that is donated to fund high impact interventions, and by building new systems to help drive financial inclusion and alleviate poverty.
Can blockchain help poverty? ›
Block chain technology, due to its characteristics of non-tamper and real-time traceability, plays a positive and important role in optimizing targeted poverty alleviation, improving the transparency of fund use, and strengthening the overall arrangement ability of government departments.
What are the negative impacts of cryptocurrency in the society? ›
Cryptocurrency claims to be anonymous transactions, but they are pseudonymous, meaning they leave a digital trail that the Federal Bureau of Investigation can decode. So, there's a possibility of interference from federal or government authorities to track the financial transactions of normal people.
Does cryptocurrency solve any problems? ›
Inflation Hedge: Preserving Value
Fiat currencies are susceptible to inflation, eroding the purchasing power of money over time. Cryptocurrencies, particularly Bitcoin, are often hailed as a hedge against inflation.
What do you think is the biggest benefit of cryptocurrency? ›
The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure. The disadvantages of cryptocurrencies include their price volatility, high energy consumption for mining activities, and use in criminal activities.
How can cryptocurrency help the economy? ›
Financial Inclusion: Cryptocurrencies can provide financial services to the unbanked and underbanked populations worldwide. This increased access to financial tools and services can promote economic participation and growth in underserved regions.
What is the main problem with cryptocurrency? ›
If the value goes down, there's no guarantee that it will rise again. Nothing about cryptocurrencies makes them a foolproof investment. Just like with any investment opportunity, there are no guarantees. No one can guarantee you'll make money off your investment.
Does cryptocurrency benefit society? ›
Both experts agreed that many of the economic challenges that society face can be solved by the use of cryptocurrencies. The seminar also touched on the other potential benefits that using cryptocurrencies could have, most notably the removal of a third party when making transactions.
Can poor people use Bitcoin? ›
The unbanked can access cryptocurrency as long as they have a crypto wallet, all without opening a bank account. Those wishing to participate in microfinancing (microloans and micro-investments) do not need documentation since blockchain technology makes everything freely accessible.
Bitcoin will not replace currency but instead offer people more choices as to which currency they can use to trade and store value and its technology will change how we conduct payments, banking and other financial transactions.
How is crypto better than money? ›
Safety and security
But printed cash can be counterfeited. Cryptocurrencies can be stored two ways: self-custody or third-party custody. If providing your own custody, you are fully responsible for keeping your crypto safe.
How does crypto solve real world problems? ›
It can dramatically improve asset tracking, assignment & connections. So helps companies enhance the efficiency of supply chains due to its superior security features and transaction transparency. This could be used to track every product's supply chain, ensuring greater transparency and security at all stages.
How cryptocurrency could help tackle global income inequality? ›
For some, especially in the US, the barriers created by institutional racism over the years make it difficult for some to find resources in banking products or services. For the Global South, cryptocurrencies can help address economic inequality by providing greater financial access.
How can cryptocurrency help government? ›
Governments and public sector organizations leverage blockchain technology to move away from siloed and inefficient centralized systems. Current systems are inherently insecure and costly, while blockchain networks offer more secure, agile, and cost-effective structures.
How crypto can save the world? ›
Act as a Stable Alternative to Unstable Currencies
The currencies of some countries are unstable, suffering from inflation and other issues. Cryptocurrencies, which are decentralized and accessible across most of the world, could serve as a safer alternative in those cases.
How does cryptocurrency reduce corruption? ›
Because the blockchain is a public ledger of all cryptocurrency transactions, it is searchable and can be used to track all transactions. The lack of anonymity and the tight traceability makes corruption more difficult, unlike with traditional money.
