How Cryptocurrencies Can Help Bank the Unbanked

The distributed networks that Bitcoin relies on provide a financial infrastructure which is always online and accessible.

It is often suggested that cryptocurrencies have huge potential for bringing modern financial services to areas and people who have been overwhelmingly neglected by traditional forms of banking. There are large developing markets with rapidly growing internet infrastructures, which remain relatively untouched by existing banking models; some estimates last year suggest that up to 75% of sub-Saharan adults are yet to have a bank account. The exceptionally low cost of transferring money using Bitcoin and other cryptocurrencies could be extremely beneficial to the new generation of tech-savvy young adults living in developing markets, who have grown well accustomed to using smart phones and the internet, yet remain unbanked.

The distributed networks that Bitcoin and alternative cryptocurrencies rely on provide a financial infrastructure which is always online and accessible. Users who are unbanked or underbanked can find an easy way to transfer money internationally and make purchases both online and in person with Bitcoin. This brings with it the potential for other financial services which could have massive potential benefits; for example crowdfunding and investment with Bitcoin has the potential to fund the future of innovation and entrepreneurship in developing global markets.

The cryptocurrency and Bitcoin space is incredibly exciting and innovation comes regularly. Recent developments such as Bitcoin debit cards can provide a straightforward, affordable way to make VISA card payments using the cryptocurrency. The fees involved are usually minimal, particularly in comparison to leading payment processors like Stripe. The growing Bitcoin infrastructure, with products such as debits cards emerging and exchanges now servicing most of the global community, is poised to make a huge impact on the unbanked. Provided they can access and use the currency for important transactions, it becomes a useful asset; the potential for this is arguably more significant in countries with failing financial infrastructures and a weak local currency. The value of Bitcoin as a real currency is often underappreciated, particularly by those of us with relatively comfortable access to traditional financial services; it has merely been treated as a speculative asset by many for too long. However, the cryptocurrency could have huge implications for communities all around the world who have been neglected by modern finance for too long.

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The potential for grassroots, bottom-up investment using cryptocurrencies could greatly empower individuals and companies who have been failed by traditional banking. Small enterprises can remain unbanked in many countries around the world; unable to access the comforts of cheap credit, let alone dream of interest payments on savings, in such a situation one small unexpected problem can be the end of a business! Bitcoin and other cryptocurrencies could provide an easy platform for micro-investments, providing small businesses around the world with access to cheap credit, which can be used in order to fund growth and remain strong in a competitive global market.

The flexibility of cryptocurrencies is a result of the power being returned to the users; the blockchain public ledger for Bitcoin is entirely decentralised, anyone with a Bitcoin wallet capable of signing transactions can broadcast it to the network. The future of finance in many nations could be dominated by Bitcoin and cryptocurrencies, provided the currency services which are most useful to individuals are readily available and merchants are happy to accept the currency. This can be encouraged by the state, but ultimately its greater chance of adoption is through the rapid propagation from one individual to another. Particularly with Bitcoin, a glowing referral from a friend can be a great encouragement to new users.

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