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Can Bitcoin Help People Escape Poverty?
Is there a way for Bitcoin to help people escape poverty? If we use Bitcoin to create a new financial system, can it lead to a more just and fair society?
Bitcoin is approaching its tenth anniversary, having survived numerous doomsday predictions. It has grown into a recognized medium of asset transfer and is even recognized as a legal payment method in some countries, such as Japan.
Why is the existing system collapsing?
The existing financial system relies on large financial institutions that provide financial services, including banks, insurance companies, credit card companies, real estate firms, and remittance companies.
While these businesses have been around for a long time, their accessibility has been an issue. According to the World Bank, nearly two billion people still lack access to a bank account, and the payment systems created by modern financial institutions often lag behind the times.
Using cash in this system involves withdrawing from a bank account for payments and depositing through bank tellers or ATMs, incurring additional fees to maintain this system's operation.
The solution is digitization
Digitization and modern technology, such as smartphones, offer many advantages. The World Bank's research manuscript titled "2014 Global Findex Database, Measuring the Global Financial Inclusion" mentions, "For both payers and payees, there are many potential advantages in shifting from cash to digital payments. It can improve the efficiency of payment behavior, accelerate payment speed, and reduce the cost of receiving and disbursing funds."
This report further notes that digital payments increase transparency during transactions, lower the risk of personal data exposure, and allow funds to enter the formal financial system directly, bypassing third-party financial institutions.
Money as the financial system itself
Bitcoin and other cryptocurrencies offer many advantages. First, they are digital, eliminating the need to handle cash, and we no longer require vaults, armored vehicles, or other expensive facilities to manage cash.
Second, some cryptocurrencies have built-in smart contract features, allowing people to conduct transactions securely without the need for intermediaries.
The MIT Technology Review recently quoted Joichi Ito, director of the MIT Media Lab, regarding Bitcoin: "Whether you're looking for investment opportunities in the market or your pension can't keep up with the market, you have to deal with intermediaries who can't represent you. Bitcoin creates a fairer competitive environment, hoping to reduce the complexity of the financial system."
Rescuing people from poverty
Before digital currencies become mainstream, there are still regulatory challenges to overcome, but many countries are increasingly hopeful about incorporating Bitcoin into their financial systems.
Digital currencies are open and transparent, providing a public transaction ledger. Cash provides anonymity to drug dealers, corrupt officials, and others who exploit the poor, while public digital currencies can help the poor break free from the shackles of cash.
Additionally, digital currencies allow people in remote areas to transact without the need to travel to densely populated areas. Conversely, it reduces the need for financial institutions to establish infrastructure and deploy personnel in remote areas.
From any perspective, the emergence and use of digital currencies significantly improve the lives of the poor. |
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Post time 28-10-2023 05:58:25