In this post, we are going to share What can bitcoin do for the poor?
Despite Bitcoin being an asset class, this digital currency can also be of benefit to the poor in a lot of ways.
Satoshi Nakamoto launched Bitcoin in 2009 to respond to the 2008 financial crisis. Since then, it’s become the world’s leading and most popular cryptocurrency.
Also, people considered this virtual currency a financial instrument for helping the rich because well-established businesses and global corporations were the early Bitcoin investors.
Later, countries like El Salvador legalized these virtual money operations in their country. Here on the Bitcoin Code platform, you will learn what this electronic currency can do for the poor.
What Can Bitcoin Do For the Poor?
There are many ways:
Bitcoin is an entirely decentralized cryptocurrency. As a result, no central authority like banks or governments controls Bitcoin operations.
Instead, this virtual currency has an inbuilt infrastructure known as the blockchain that runs Bitcoin operations. More so, the absence of Bitcoin intermediaries helps lower transaction fees.
Therefore, this virtual currency helps the poor by increasing their savings and access to capital. Fiat currency transactions involve a lot of intermediaries.
Thus, the extra costs people save when transacting with this electronic currency can go to their investments.
In other words, this virtual currency allows everyone to invest in it and gives its users the ability to control their investments.
As a result of this virtual currency being completely decentralized, nobody has the power to discourage someone from investing.
Corruption is very adamant, especially with conventional currency. The government can disburse funds to its people through its officials, which will not get to the people.
However, it is not relatively easy to steal this electronic money as it is easy to steal fiat cash. As a result, this virtual money helps fight corruption, a significant problem in developing countries.
Some developing countries have borrowed loans that end up in the hands of the ruling class. On the other hand, with this virtual money, donors can ensure financial aid and help get to the right people.
Hedge Against Inflation
Fiat currency is subject to inflation, resulting in poor people suffering from hyperinflation in their countries. The governments of developing countries can print a lot of money, making fiat currency less valuable.
As a result of inflation, the value of commodities in these developing countries continues to increase. Moreover, poor people’s small amount of money in their banks loses value.
On the contrary, this digital currency does not have a central authority that regulates its operations. This virtual currency has a limited supply where only 21 million Bitcoins will ever be available.
Consequently, this virtual currency’s limited supply increases demand which translates to an increase in the value of this electronic currency.
Ultimately, the limited supply of this virtual money helps prevent inflation. Poor people will benefit from Bitcoin as it stops inflation, limiting poverty across the globe.
Better Capital Flow
Most governments in developing countries implement laws and regulations restricting the flow of capital in and out of their geographical borders. As a result, people in developing countries lack adequate capital access.
On the other hand, this virtual currency does not have such regulations since it is entirely decentralized. Therefore, such governments cannot restrict the poor in their countries from accessing the much-needed capital.
In the end, the government and politicians cannot use this electronic money for political gains because its supply depends on the underlying protocol.
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Conclusion: What Can Bitcoin Do For the Poor?
Some people believe Bitcoin is the future of money because it has many advantages compared to fiat currency.
As a result, adopting Bitcoin in developing countries could benefit the poor.