Bitcoin benefits for inpoverishe and unbanked people in developing countries are analyzed.
Nowadays a lot of people use bitcoin as a cost-saving tool, political statement or because of their curiosity. At the same time, a small portion of users utilize bitcoin due to the socioeconomic and political circumstances.
Digital currency is still inaccessible for the unbanked and impoverished people living in developing countries.
Looking at the bitcoin’s features and how they can be applied in developing regions demonstrates that it should be enhanced before wide usage among the poor.
When banks or governments are restrictive, untrustworthy or unavailable, bitcoin is a good way of storing wealth.
Although some bitcoiners note that there is lack of social justice, sanctity of private property and rule of law are reliable in western countries, including USA. Most of people can’t fall asleep without knowing if their bank will be nationalized or their house will be seized by the government.
Bitcoin could be stored for the indefinite period free of transaction fees. Moreover, it cannot be devalued by monetary policies or expropriated by the state.
In 2012, a World Bank report stated that price, long distance to a bank and bureaucracy as the main reasons why over 2.5 billion of the world poor don’t have a bank account.
The only way to obtain bitcoins is to buy them with fiat currency. Still, in order to purchase them you need to have a bank account or you can send money internationally. A bank account means such bureaucratic hurdles as official identification and an ability to defer consumption.
It is also possible to receive bitcoin through mining, which requires a large amount of electricity and computer power. It is available for the wealthiest enthusiasts, while for citizens of the developing world mining diamonds or gold is easier.
Remittances are the main source of cash-flow for people in developing countries. Bitcoin is used for very low-cost transfers given the recipient will be able to convert them to fiat currency.
The majority of digital currency users have to convert their bitcoins to pay in places where cryptocurrency is not accepted.
In developing countries, street money changers may satisfy the demand. Still, currency speculation and money changing are illegal in many countries without a license. Bitcoin could be used in such countries due to the strict governmental rules.
In order to use virtual money you have to own either your computer or a third-party servicer (for example, a public computer) with an Internet.
Bitcoin is a perfect for micro-lending used by small-scale entrepreneurship and non-profit firms. It is a very cheap way of new entrepreneurs to accept payments.
If you have no way to get online that means you have no possibility to send or accept bitcoin. Additionally, if you have no bank account bitcoin is also not an effective solution.
Although there are a lot of positive characteristics, digital currencies are still inaccessible in the developing countries. In order to change this, it is necessary to develop realistic solutions that will enable more people to use bitcoin.
Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.