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Can Cryptocurrency Truly Alleviate Poverty or Is It False Hope?


cryptocurrency

Cryptocurrency can play a huge part in alleviating world poverty.

Since the inception of Bitcoin in 2009, the concept of digital currencies and blockchain has turned the world upside down. The industry has been generating a buzz around its potentiality to shake up the entire economic and financial landscapes of the world market. As cryptocurrency is making headlines with its massive success and profit-generating capabilities, on the other hand, global economists have started realizing that cryptocurrency and blockchain can play a huge role in eradicating global poverty, while accelerating the growth of economic development. Major cryptocurrencies like Bitcoin, Ethereum, and others have the capability of enabling social and economic growth throughout the world, including developing countries, by offering easier access to capital and financial services.

Cryptocurrencies, Bitcoin, in particular, have a high utilitarian value outside the market and have slowly started to impact the traditional financial systems. But the mining hazards accompanying certain cryptos have made several investors opt out of the market or choose more sustainable options. Over the past decade, there has been explosive growth in the research and development of blockchain technologies, with a special focus on DeFi. DeFi can facilitate the entire financial ecosystem without the interference of traditional centralized intermediaries like banks and government financial ecosystems. With the help of DeFi, money can be transferred in a cost-effective manner, access to capital will be broad, the supply chains will be secured and verified, along with several other uses. This will greatly benefit the unbanked individuals in the world by providing them with a way to access capital and save money efficiently.

 

The State of the World Poverty

Over the past 2 years, the Covid-19 pandemic has struck the world in a deplorable manner, resulting in reversing years of development and progress. It has led to a widespread increase in poverty and joblessness among global individuals. According to reports, around 88 to 115 million people have been pushed towards poverty. A majority of these individuals belong from the Sub-Saharan and South Asian countries, where the poverty rates go much high.

Global welfare organizations are embarking upon new initiatives to recover from the losses and get back on track with the sustainable development goals. The organizations are facilitating to transform the society’s relationship with nature, dismantling years of discrimination, and improper legal frameworks of human rights that create disadvantages for these individuals pushing them even forward towards poverty. But all these efforts come under centralized regulations, which might take years of procedures and court cases. Whereas blockchain and cryptocurrency do not require any centralized regulations and can provide access to financial services easily and instantly.

 

Alleviating Poverty with Cryptocurrency and Blockchain

Cryptocurrencies have many benefits that can shape the lives of these individuals. Since cryptos are based on blockchain technology, it is not controlled by any central authority or bank. It lacks the need for hefty transaction fees or other simultaneous costs for transactions. This feature of digital currencies creates an opportunity for people in developing countries to purchase currency without any transactions, increase ROI, and trade without fees.

Crypto coins can be sent immediately to people in crisis situations. Sometimes, corruption in centralized financial institutions prevents large amounts of aids from reaching the end receivers. But using cryptos can ensure that resources and financial aids reach the end recipients on time in various volatile situations.

Adding a supplementary financial infrastructure, which can act as a means to send coins to the right people, and a platform to cash out coins in exchange for goods will be an assuring step for these individuals.

 

Final Words

Cryptocurrencies have the potential to balance out the state of the global economy. It can create an even field, where everyone will have access to banking and financial services, most importantly access to money. Experts believe that it is not just a hoax, and if applied properly Bitcoin and other major cryptocurrencies can help eradicate poverty and elevate their living standards.

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