Roughly 2.5 billion adults in the world don’t have access to banks, which means somewhere in the order of 5 billion people belong to households that are cut off from a financial system that the rest of us take for granted. They can’t start savings accounts. They don’t have checking accounts. They can’t get credit cards. They live in places where banks don’t want to go, and because of this, they remain effectively walled off from the global economy. They are called the unbanked. But they are not unreachable, not by a long shot, and one of the biggest and most exciting prospects bitcoiners talk about is using their cryptocurrency to bring these billions of people roaring into the twenty-first century, Foreign Affairs points out.
The Caribbean is an area of the emerging-market world where a strong case can be made for locals to use bitcoin to get around a restrictive financial system.
Should women in developing countries use bitcoins?
Bitcoin is digital money you can send person-to-person via the net and without a third party. This means fees are much lower, accounts cannot be frozen, and there are no pre-requisites or limits to having a bank account.
Developing countries desperately need locally informed, well-financed giving. Strong local organisations create local leadership, grassroots power sources and more successful, sustainable solutions.
Bitcoin allows donors to give directly to organisations abroad, without needing a headquarters to vet and meter out donations. There are no chargebacks, and no fees go to PayPal or Visa. (PayPal charges 2.2%+$0.30 per transaction; credit card companies charge around 1.5-3% per transaction). The donation goes much further—directly to the local organisation and the good work they do, and 100% of the contribution is actually donated to the beneficiary. Plus, no-fee technology opens up charities to donors interested in giving smaller amounts of money.
Imagine life without a bank account. How would you start a business? What if you wanted to export products? What if you wanted to sell your paintings, handmade clothes, music or e-book online? How would you get paid? One-half of the world’s adult population does not have access to banking. If someone wants to create a digital product and sell it online, they can’t get paid. They’re effectively removed from the formal global economy, and they know it.
But what if they could get paid? Would it inspire them to create more and to tap into new markets? Could it bring them more wealth? It already is.
Further, without a bank account allowing for international wire transfers, most people use companies like Western Union to send money to their families abroad.
Some remittance corridors, such as from South Africa to Botswana, take average fees of around 23%, meaning the impact of BitPesa could be even higher.
Bitcoin is more than just a currency. Its underlying technology allows information to be recorded in secure, open and decentralised transactions. The blockchain and technologies built on top of it allow for the creation and registration of contract. The contracts are irreversible and can be self-executing, without the need (or opportunity) for human intervention.
Transactions are unalterable and public on the blockchain. The ability to permanently secure property, transactions and identities online is significant in countries lacking the rule of law. It won’t always guarantee enforcement, but it has the potential to.
