(Newswire.net — June 15, 2022) — As blockchain technology revolutionizes the way that people transact, work, play, and invest, some have speculated that there could be the potential for blockchain technology and cryptocurrencies to help resolve world poverty.
Many people assume that cryptocurrencies are only beneficial for trading and speculation; this couldn’t be further from the truth. Decentralized Finance, or DeFi, has quickly changed the way that people save and invest their money, and many companies have begun to find ways to reward their users and customers in cryptocurrencies.
So what are some ways that blockchain technology can help end world poverty and close the wealth gap?
Banking the unbanked
Worldwide, approximately one-third of the adult population is currently considered ‘unbanked’, or conducts all of their financial transactions without having a bank account. This means that most of their transactions are conducted either in cash or using payment processing applications. This problem is most common in regions with less economic opportunity, however, it is a global issue.
However, of those unbanked individuals, approximately ⅔ of them have access to a smartphone which can be used to access cryptocurrency wallets and exchanges. Regardless of nationality, economic status, or legal residency, cryptocurrencies can be used by anybody without discrimination.
By using cryptocurrencies, these unbanked individuals can access financial services that were not previously available to them. This includes things like peer-to-peer transactions, international payments, and even DeFi-based loan services.
Remittances
Remittances conducted using the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payments network often incur large fees and can take up to five business days for funds to clear and be deposited into the recipient’s bank account. This process can take even longer if multiple financial institutions are involved in settling the transaction.
The velocity of money, or how fast money is exchanged within an economy, is a vital indicator of economic health. When this metric is low, it can be an indicator of an economic downturn.
With cryptocurrencies, on the other hand, funds can be transacted across the globe in seconds. These transactions also cost substantially less than their traditional alternatives, and the blockchain network processes transactions around the clock. This means that cryptocurrencies have the potential to drastically increase the velocity of money worldwide.
Changes to how people work
Cryptocurrencies and blockchain technologies have begun to be implemented in nearly every industry sector, from real estate lending to the fine arts markets.
Digital ownership rights have been permanently disrupted due to the introduction of non-fungible tokens (NFT’s). non-fungible tokens rose to prominence by revolutionizing the art industry, as speculators poured money into JPEGs minted on the Ethereum blockchain.
Recently, the property rights to a physical home in Florida were minted and sold as an NFT on the blockchain. Now, with the rise in popularity of the metaverse and GameFi, there are many potential financial opportunities within the blockchain gaming space.
Many companies have also begun to offer payments in Bitcoin and other cryptocurrencies over the last few years. There are multiple job boards that specialize in listing job opportunities that pay out employees and contractors in cryptocurrencies.