How Bitcoin Improves Financial Access And Inclusion

[Hydrogen]

Bitcoin is, for many, the first opportunity to store wealth in a safe and secure manner, without outside manipulation.

El Salvador’s decision to use bitcoin as legal tender in their country was recently celebrated by bitcoin HODLers around the world. Yet the International Monetary Fund (IMF) quickly expressed concerns about the legality of doing so. Was this simply a matter of traditional financial institutions guarding their fiat turf from bitcoin, a digital asset they don’t understand? How can bitcoin and its blockchain technology facilitate financial inclusion and benefit 1.7 billion unbanked people throughout the world?

While the pandemic greatly accelerated the digitization of assets as stores of value, it also hampered the ability of traditional regulatory and legal bureaucracies to match the pace of bitcoin’s rapid evolution into the premier digital asset of choice. Understandably, those in control of the legacy banking system have cause for concern, since Bitcoin’s decentralized ledger exists outside the control of the traditional international financial system. Computer code runs to validate peer-to-peer trustless relationships that extinguish the need for a bank’s existence. Bitcoin is a digital asset that is more nimble and better designed to meet the needs of unbanked people than the old institutions that failed them. While many of us will use traditional banks in the foreseeable future, Bitcoin has undeniable societal benefits that increase financial inclusion.

First, bitcoin is useful for remittances and can act as a quasi bank for the unbanked. Reducing both transaction fees and times vastly improves cross-border payments. Instead of using a money transfer company, a worker in New York might use a service that transfers U.S. dollars into bitcoin and enables a family member in a receiving country to “withdraw” bitcoin, USD, or a local currency. Because anyone can use the blockchain there's no need to send payments through a bank or money transfer service. In general, remittances are cheaper and faster with bitcoin than traditional options.

In countries with a weak banking infrastructure, a person can download and use a bitcoin digital wallet using their computer or cell phone. Each public key represents a safer way for users to send and receive bitcoin for day-to-day transaction of goods and services and to pay others. It can also serve as a store of value against local inflation and their country’s currency devaluation. In this way, Bitcoin can serve as an informal banking infrastructure of its own, beyond being used simply as a remittance system.

This is important in areas that have little or no access to formal financial systems because of traditional banks minimizing their exposure there due to illicit activities that have limited or forced out local law enforcement. Bitcoin fixes this by providing a secure, convenient way to access financial markets. To be sure, bad actors create a national security concern for the United States. They can and do prey on vulnerable populations to hide the financial transfers of criminal networks. However, the benefits of opening up access to global markets for over 1.7 billion unbanked individuals is worth managing the risks by increased vigilance and monitoring of the blockchain.

Delivering on the power of bitcoin goes beyond its store of value as a digital asset. The technology of the Bitcoin blockchain can assist sustainable development through a set of services such as smart contracts for crop insurance, the digitization of supply chains and micro-scale international commerce. As the use of the Lightning Network and Stacks 2.0 becomes more prevalent, people will find innovative ways to provide more inclusive access to economic opportunities in global markets.

While there are infrastructure issues such as internet access and electricity that must be addressed along the way, resistance to organizational change by entrenched, old power structures must be constructively handled with laser focus. Both traditional fiat institutions and widespread bitcoin digital asset usage can co-exist and succeed where outdated models of past economic policy failed. It’s time for international banking systems to adjust to a future where they can “walk their talk” of financial inclusion rather than serve financial privilege. We can harness the pure energy of Bitcoin in a culturally appropriate way to help others achieve a transformative future, while avoiding the mistakes of the past.

https://bitcoinmagazine.com/culture/how-bitcoin-improves-financial-access-and-inclusion

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If diversity is important. We should support a greater diversity of currencies and digital assets. Multiassetism. Is that even a word. Would diversity of assets fall under a typical diversification heading.

Bitcoin catering to and improving the lives of a claimed 1.7 billion unbanked demographic sounds impressive. It could mean crypto carries a potential to help the average person living in poverty more than all of the charities in the world combined.

Without applying effort, already we can see there are positive angles to bitcoin and crypto which our media neglects to cover. Without venturing into bitcoin being one of few inflation protected assets which are accessible to lower income brackets.

Isn't it strange how emerging trends and technologies which elevate our standard of living are discouraged, attacked and crashed by special interests. While technologies and trends that have the opposite effect are endorsed at high levels. Some pride themselves on believing crypto to be unsafe. But with endorsement trends at high levels falling against the self interests of many. Perhaps there will be no safer ground to be found.

[Darker45]

Diversity should always be encouraged and celebrated. The more diversity there is, the better. We are not living in a vacuum. No single system fits us all. People are caught in different circumstances. They belong to different social and economic status. Banks may be good but certainly not to all people. Not to mention that it has its limits and that it could only reach a certain category of the population. Fiat may be good as well, but it could only offer so much. 

This is the reason why I'm disappointed of the kind of stance the international financial and monetary agencies are taking in the face of a developing country trying to look for alternatives for the benefit of its own people. They're adopting the you are either with us or against us position which is definitely inconsistent with the goal of financial inclusion, poverty alleviation, financial stability, and so on.

[davis196]

Everything mentioned in the article about the positive features of Bitcoin is great,BUT.
How can a poor person buy Bitcoins,if he/she doesn't have enough money?
The fees for buying BTC are very high and KYC is mandatory.
Do poor people have computers and internet,in order to buy and use Bitcoins?
What if they buy BTC and use centralized crypto exchanges and centralized BTC wallets?
Is this true financial security?"Be your own bank"?
What if they get scammed and lose their BTC?

[Kakmakr]

In my experience, more people now are trading with Crypto currencies .... something that previously needed professional traders and specialized training to do or this was done through a Broker. So Crypto currencies has opened up a world of opportunities for "newbie" traders to cut their teeth and to sharpen their trading skills.

You also do not have to pay a Broker to trade on your behalf, so you put more profit back into your pockets by doing this yourself. Several "newbies" has made a fortune by buying new Alt coins low and selling them high.       (Power to more People)

This also created new job opportunities and something that can be done online in times where people have to work from home due to Covid Lockdowns.

[paxmao]

The concept of a bank for the unbanked is immensely powerful. People in developed countries are not really aware of the problem that millions of people around the world have because no bank will even give them the most modest account. You can see the list here.

Some of these like Morroco, Vietnam, Phillipines, ... have milliions of unbanked people, many times more than 50% of the population. Some names on the list are more surprising such as EU countries like Bulgaria, Romania, Greece, Poland...

These millions of people have to pay in cash or use other equivalents. Bitcoin and crypto in general are an excellent tool to solve this. However, please notice

However, the transactions of the unbanked tend to be quite small, so that needs to be addressed in terms of costs

[Sterbens]

see the impact of using Bitcoin in creating jobs and has helped provide financial inclusion to hundreds if not thousands of people currently trapped by the prolonged pandemic. Isn't this already an economic growth outside the formal economy?

then, Bitcoin has helped speed up the rate of delivery from one country to another without intermediaries. when the dollar as the official currency of the country, almost 75% dominate the unbanked. and Bitcoin will address that financial inclusion. In addition, cryptocurrencies can facilitate faster, more effective and efficient transfers that run into billions of dollars every year.

[oHnK]

True, diversity should be supported even in financial assets. We always shout that diversity should not be banned in life, such as the legalization of LGBTQ which is even considered taboo in some countries but the majority of the world's people support it even though it is clear that the presence of this diversity can threaten the human population regardless of whether I support or not. Returning to the initial topic that BTC exists as a diversity and the result of human creative work that provides solutions to many problems, one of which is people who are unbanked due to poverty, etc. However, because of its existence that threatens the financial system that has created a large gap between the rich and the poor due to inflation and banking manipulation, this has become a controversy among centralized economists. They voiced that BTC does not have an underlying asset even though they do not look in the mirror the money that is currently used is only guaranteed by the country's central bank. Whereas real examples of why fiat is currently not much better than BTC exist in several countries such as Venezuela, where fiat is no longer valuable even though the central bank guarantees it. Talking about diversity is very unfair in the financial system.

[bitgolden]

If diversity is important. We should support a greater diversity of currencies and digital assets. Multiassetism. Is that even a word. Would diversity of assets fall under a typical diversification heading.

Bitcoin catering to and improving the lives of a claimed 1.7 billion unbanked demographic sounds impressive. It could mean crypto carries a potential to help the average person living in poverty more than all of the charities in the world combined.

Without applying effort, already we can see there are positive angles to bitcoin and crypto which our media neglects to cover. Without venturing into bitcoin being one of few inflation protected assets which are accessible to lower income brackets.

Isn't it strange how emerging trends and technologies which elevate our standard of living are discouraged, attacked and crashed by special interests. While technologies and trends that have the opposite effect are endorsed at high levels. Some pride themselves on believing crypto to be unsafe. But with endorsement trends at high levels falling against the self interests of many. Perhaps there will be no safer ground to be found.

Sort of? https://www.investopedia.com/terms/m/multiasset_class.asp  Here is what a multi asset fund is, it is basically a diversified fund that you make in order to earn some profits, it is not really a common thing all and doesn't cover what you mean 100% but it is close enough that the word is something similar, just no "ism" in the end.

Diversification has been less and less in the world because there are less and less amount of money we have, because of banks and the economical failures of our nations we are not people who can put our money aside a lot, we barely have anything and to divide that into few pieces would mean it would be barely anything left. Like my dad had a summer house as an investment years ago, it became so expensive that he sold it instead of keep renting it to vacationers, he had foreign currencies a lot, and he had gold as well, he never owned crypto as you might imagine. Those type of investments were possible 20-30 years ago, now it is not that easy to save up that much.

[acquafredda]

snip

Thank you very interesting, especially because seeing the data shows how much the propaganda about inclusion bandied about by traditional finance is fake and extremely harmful. The data is disorienting and if Bitcoin with LN could close even only 30-40% of that gap I think a silent revolution in the financial economy could really happen.
Let's hope so!

[vv181]

Here is the thing. Without discrediting the maximum potency that Bitcoin could give, I think Bitcoin here is seen as a magic sprinkle thing to solve humanity's problems.

~snip
Bitcoin catering to and improving the lives of a claimed 1.7 billion unbanked demographic sounds impressive. It could mean crypto carries a potential to help the average person living in poverty more than all of the charities in the world combined.

Without applying effort, already we can see there are positive angles to bitcoin and crypto which our media neglects to cover. Without venturing into bitcoin being one of few inflation protected assets which are accessible to lower income brackets.
~snip

~snip
These millions of people have to pay in cash or use other equivalents. Bitcoin and crypto in general are an excellent tool to solve this.
~snip

Bitcoin might help but it won't be as a direct causation. As the cited article and report¹ suggest, poverty is one of the few reasons for the unbanked. Let alone they minimizing inflation or paying something with cash, they are all struggling to earn money. Not to mention the whole UI/UX cryptocurrencies ecosystem is still the problem we need to solve.

And god I'm talking too far that I bring up the usability of the ecosystem. Let's not skip about the infrastructure and etc, there are still a lot of complex problems that won't be solved as simply as by using Bitcoin.

After all, I don't doubt the Bitcoin or cryptocurrency potency. But let's not skip about the basic steps to solve the humanity problems. One thing worth mentioning is I read that some NGOs are already maximizing blockchain to improve humanitarian aid. And it is indeed beneficial. (https://www.mercycorps.org/sites/default/files/2020-11/The-Next-Generation-Humanitarian-Distributed-Platform-v3.pdf)

~snip
They are also more likely to be poor—and to stay poor too.
~snip~
But financial exclusion is costly not only for those directly affected: it impedes nations’ economic growth and development.~snip~ All variables aside, the unbanked present strikingly similar traits at every latitude and longitude: they are low income and less educated, they often lack the identification and documentation requirements to open a bank account, they tend to live in rural areas far from bank branches. In many nations, they belong to ethnic or religious minorities; in all of them, they are overwhelmingly women.

The most commonly cited barrier was lack of enough money. Nearly two-thirds of  adults  without  an  account  at  a  financial  institution  said  that  they  have  too  little  money  to  use  one,  and  roughly  one  in  five  cited  this  as  their  sole  reason   for for  not  having  one  (figure  2.11).  No  other  rea-son  was  cited  as  the  sole  barrier  by  more  than  5 percent

[Fortify]

If diversity is important. We should support a greater diversity of currencies and digital assets. Multiassetism. Is that even a word. Would diversity of assets fall under a typical diversification heading.

Bitcoin catering to and improving the lives of a claimed 1.7 billion unbanked demographic sounds impressive. It could mean crypto carries a potential to help the average person living in poverty more than all of the charities in the world combined.

Without applying effort, already we can see there are positive angles to bitcoin and crypto which our media neglects to cover. Without venturing into bitcoin being one of few inflation protected assets which are accessible to lower income brackets.

Isn't it strange how emerging trends and technologies which elevate our standard of living are discouraged, attacked and crashed by special interests. While technologies and trends that have the opposite effect are endorsed at high levels. Some pride themselves on believing crypto to be unsafe. But with endorsement trends at high levels falling against the self interests of many. Perhaps there will be no safer ground to be found.

What seems to be missed in all the hype and talk about holding multiple assets is how much of the world is actually in debt. Holding a single asset outside of debt, outside of a property, is often too much for most people because life can be such a struggle and pay is low. For those people who can afford to scrape together some form of savings they need to give extreme consideration to how they invest that money because it can take a long time to earn back. That is why the safest place for money is in productive companies and buying into index funds. Cryptocurrency should only make up 5-10% of any portfolio and when you add on exchange fees, that could be a while before it is even worth buying into it for the average person. Bitcoin actually has much less growth potential for an extremely high risk compared to some other crypto around.

[arallmuus]

Bitcoin catering to and improving the lives of a claimed 1.7 billion unbanked demographic sounds impressive. It could mean crypto carries a potential to help the average person living in poverty more than all of the charities in the world combined.

Im not sure if Im following this correctly but I think that most unbanked are probably because they are living their life in poverty and not because banks failed to meet their financial needs, this happens to alot of people especially in developing countries.

To be able to initiate a cryptocurrencies transaction, the least thing that you will need right now is a cellphone to download a crypto wallet in it. How do you expect those that lives their life in poverty to be able to afford those phones? I'd hate to say this but I personally think that cryptocurrencies are too advanced for people that have lives their life in poverty for years.

[Reid]

You hit it right. I can say I am one of those unbanked human beings that is now using Bitcoin as my means of keeping the money.
I don't care what other people will try to tell me about how safer it is when it's just in fiat kept in a bank.
I know how to deal with my own security. I could just keep my cash in my drawer and try not to burn my house and it's still the same thing as keeping it in a bank.
But, it's way different when it's Bitcoin. I feel more secured and I know why. I am the manager of it and I don't need the bank clerk to tell me I can only take out this amount for this month. That's BS, that's my money.

[Darker45]

Everything mentioned in the article about the positive features of Bitcoin is great,BUT.
How can a poor person buy Bitcoins,if he/she doesn't have enough money?
The fees for buying BTC are very high and KYC is mandatory.
Do poor people have computers and internet,in order to buy and use Bitcoins?
What if they buy BTC and use centralized crypto exchanges and centralized BTC wallets?
Is this true financial security?"Be your own bank"?
What if they get scammed and lose their BTC?

A poor person who doesn't have money won't have Bitcoin. It's as plain as that. But somewhere in El Salvador, a person who works will be receiving Bitcoin as payment.

The fees are high on-chain. Off-chain, it is not. Going back to El Salvador, even food carts and small stalls are offering their goods in Satoshis.

With a cheap smart phone and an affordable data package, I guess one could already make use of Bitcoin. And it is probably worth it.

The way the ordinary people in El Salvador adopt Bitcoin, they are not into deep technicalities with the technology. They seem to just embrace the features which suit them best. I bet a taco seller on the street doesn't even know how blockchain works or even what it is. But does it matter?

[acquafredda]

Everything mentioned in the article about the positive features of Bitcoin is great,BUT.
How can a poor person buy Bitcoins,if he/she doesn't have enough money?
The fees for buying BTC are very high and KYC is mandatory.
Do poor people have computers and internet,in order to buy and use Bitcoins?
What if they buy BTC and use centralized crypto exchanges and centralized BTC wallets?
Is this true financial security?"Be your own bank"?
What if they get scammed and lose their BTC?

A poor person who doesn't have money won't have Bitcoin. It's as plain as that. But somewhere in El Salvador, a person who works will be receiving Bitcoin as payment.

I believe will is the driving force behind everything in life. I agree with you, those who are poor cannot sit there and think about buying bitcoin but, if you will allow me, I would like to point out that investing in education might pay off in the long run. Even the child born in a poor family, with will, sacrifices and dedication could succeed thanks to a lot of studying to improve his life conditions.
I have been studying bitcoin in my spare time (mostly at night) and have been working in the industry since 2016. And I am certainly not a rich man's child.

[AicecreaME]

Everything mentioned in the article about the positive features of Bitcoin is great,BUT.
How can a poor person buy Bitcoins,if he/she doesn't have enough money?
The fees for buying BTC are very high and KYC is mandatory.
Do poor people have computers and internet,in order to buy and use Bitcoins?
What if they buy BTC and use centralized crypto exchanges and centralized BTC wallets?
Is this true financial security?"Be your own bank"?
What if they get scammed and lose their BTC?

I think what the post highlights is that bitcoin is more inclusive as a store of value, medium of exchange, and as an investment vehicle compared to other centralize organizations and investment form. Bitcoin just asks the bare minimum if you will compare it to its competitors. It is more inclusive because you don't have to have a huge amount of money in order to save and invest unlike that of banks that requires specific minimum deposit and maintaining balance on your account.

In bitcoin, you can buy little by little as long as you have spare money to spend. You don't have to save and invest big amount at once. Of course, in saving and investing money is really needed. It's left to them where they would get the money they will save and invest in btc. They could take part time jobs and keep some extra to put in bitcoin. And if they really don't have the means to provide for capital, they can join campaigns that offer salary in btc as their starting ground. They can use their smartphones if they don't have laptop yet. After all, smartphones can also do what computers can. If they don't have internet, they can use cellular data for the mean time. There are endless opportunities in btc. You just have to keep looking and be determined enough.

Regarding KYC and wallet platform, it would be a personal decision on where to put their funds. There are still exchangers that does not require KYC. If they are uncomfortable with the ones requiring KYC, they can always opt to use the platforms that doesn't require such. In terms of wallet, I think most wallets nowadays really require to know your personal information. You just have to pick whether you want custodian or non-custodian wallet. Check the pros and cons first to avoid regrets later on.

[Kong Hey Pakboy]

I believe will is the driving force behind everything in life. I agree with you, those who are poor cannot sit there and think about buying bitcoin but, if you will allow me, I would like to point out that investing in education might pay off in the long run. Even the child born in a poor family, with will, sacrifices and dedication could succeed thanks to a lot of studying to improve his life conditions.
I have been studying bitcoin in my spare time (mostly at night) and have been working in the industry since 2016. And I am certainly not a rich man's child.

I think it's more of a survival rather than will in my opinion, we do what we can do to survive. Probably will is an innate characteristic but it's not the biggest factor. I have no qualms with education but if the curriculum that is taught with the goal of making employees then what's the point, sure there are some that wants to do work like that.