Earth is a diverse place. Different countries have vastly different economies from each other, which reflects on the difference in the livelihood of populations all across the globe. While some countries are experiencing a better and better quality of life others are falling behind. However, this does not mean that developing countries cannot catch up to the leading economies by utilizing modern technology and integrating it into their economies.
Advantages of Cryptocurrencies
Some of the bigger countries with already working and operating leading industries have a hard time switching around and adjusting to the fast-paced development of information technology. One of the biggest challenges has become the incorporation of cryptocurrencies into the already existent economies of scale. This is where developing countries have a lead. While internet penetration may still be an issue for a lot of comparatively low developed world, countries like South Africa have shown that the cleaner the slate, the easier it is to come up with something new and unique.
With the latest rebranding of the Financial Services Board (FSB) into the Financial Sector Conduct Authority (FSCA) the country saw a huge improvement in the crypto trading business. The surge of brokerage companies, which are in direct competition to their European counterparts and holding a clear advantage over the much bigger economy just by utilizing the fast-paced, flexible economy as well as comfortable geolocation (being in relatively same time-zone) has given them the ability to offer the same quality services and better bonuses than their European counterparts.
India, for example, was recently removed from the US’s “developing countries” list but as their economy is still far from being fully operational, with millions of people still living in poverty, the country found its niche in crypto after some controversies. India started implementing cryptocurrency regulations to ease trading and managing the said currencies thereby freeing parts of their economy.
The most recurring theme for third world countries “adapting” cryptocurrencies is the sprouting of hundreds of Bitcoin run casinos, and India was no exception. The moment the law passed that cryptocurrencies could be sold and bought legally, dozens of new casino games in India were refurbished to meet crypto needs in states that allowed gambling in the first place. But, the biggest difference that India has with other third world countries in terms of crypto adoption is that these crypto casinos focus on the local market rather than the international one. Crypto casinos based in third world countries try every means to access an “illegal” market that houses potential high rollers, thus making it a subject of controversy on a political spectrum.
Due to internet penetration rising, with over 560 million people having access, the cryptocurrency market is becoming more and more popular. As regulations become relaxed, people who have gathered their capital trading will also be given the ability for the less restricted usage as they can utilize the money in the casino industry and possibly even transfer it into different real-world equivalents thereby gaining an edge over other first world countries.
One of the biggest problems all over the developing world is corruption. India is no exception to this. With countries not having any ways to track the fund transfers, bribes are somewhat of a normal occurrence. The International Monetary Fund estimates that through corruption and under the table money exchanges as much as $1.5 to $2 trillion is being utilized, which is 2% of the global GDP. Cryptocurrencies and blockchain can put a stop to this scourge though.
It is important to note that all of the cryptocurrency transactions are more or less transparent. Bitcoin transfers, for example, are normally identifiable through public keys. However, other cryptocurrencies like Ether utilize the Ethereum network, which uses a smart contract technology and thus makes the transfers even less anonymous in nature. Apart from this, these tracking mechanisms are already in existence for everyone to use so no governmental funds need to be spent on creating some kind of a new method as they can just allocate the cryptocurrency on the network to those involved in the project. One such country to use this technology to fight corruption is Brazil, where a state-run tech firm Serpro has put this exact system in place in Amazon to fight against fraud in the Brazillian outdated land titling system.
The utilization of cryptocurrencies is technically banking without a bank. It is worth noting that around 40% of the adults around the world do not have bank accounts. The number can grow to a whopping 70% in countries like Myanmar where only 3 in 10 people, of the population of 53 million, have bank accounts. This may be caused by a variety of reasons starting from living too far away from the bank to not having enough assets or necessary documentation.
What cryptocurrency and blockchain do for these people is banking without banks. This means that people only need to have access to the internet to have some kind of an account where they can build up savings, have credit, receive loans, or using which they can pay for goods and services online as well as make investments. These in turn will help reduce poverty.
There are already some Ethereum based projects, which are giving unbanked individuals a digital identity. OmiseGo is one such example, which still is in the early development stage, however, the people behind the project are trying to create a platform that will be accessible and scalable and will give the ability to make transactions across eWallets.
Countries with huge economic sanctions or self-destructive governments like Venezuela usually have either huge inflation or next to worthless currencies. Yes, we are looking at you, Bolivar, with the inflation so huge that a cup of coffee cost 373,000% more in March 2019 than it used to a year prior. Cryptocurrencies in such countries are seeing more and more users with Bitcoin, in particular, being popularized all over the country.
Keeping all of this in mind, it is not surprising that Bitcoin usage has surged in Venezuela with people still trying to mine it for whatever it is worth for. In 2018 the amount of money it could bring in was around $530, which may not seem much but considering the monthly wages in Venezuela are currently in single digits and the petroleum costs $0.02 with allowance and $0.5 per liter if you want to buy more than 120 liters a month, that amount of money is a godsent.
It is also worth noting that the Venezuelan government tried launching its own currency called the Petro, however, it was so centralized and tied into Venezuela’s oil prices that technically speaking it was not even a cryptocurrency at all. Universally pegged all across the globe with the New York Times labeling it as “nonexistent, nontraded, cryptocurrency.”
In conclusion, it is very apparent that cryptocurrencies and blockchain can bring a lot more to the table than initially suspected. More so when it comes to developing countries with economic flexibility to quickly adapt and implement new policies as well as easily modernize their economies. One of the biggest issues being corruption in under-developed parts of the world which cryptocurrencies fight the best against since the transactions are always out in the open for everyone to see.