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7 Ways Bitcoin Helps The Global Poor With Currency Inflation, Government Restrictions And Surveillance

7 Ways Bitcoin Helps The Global Poor With Currency Inflation, Government Restrictions And Surveillance

7 Ways Bitcoin Helps The Global Poor With Currency Inflation, Government Restrictions And Surveillance. Image: Unsplash

Bitcoin, a little-known digital coin a decade ago, has grown to become the best performing investible asset in the world, but that is not the only way it has changed society.

The largely unregulated cryptocurrency has also offered a reprieve for some of the global poor seeking to escape the clutches of high inflation, money transfer restrictions and government surveillance.

These are some of the ways bitcoin helps the global poor.

Leapfrogging bank limits and charges

Bitcoin has helped traders in poor countries leapfrog bank limits and currency restrictions. In Nigeria, traders are turning to digital currencies to buy imported goods. This enables them make transactions way above the daily bank limit and high associated charges. These businesspeople say the cryptocurrency is helping make their businesses nimbler and more profitable.

Cross-border trade with bitcoin

Crypto has made it easier for the poor to engage in cross-border trade because it is always faster and cheaper than legacy payments. While this is still on a low scale due to some limitations, it offers a potential to disrupt international trade. Some Nigerians are already using bitcoin to trade internationally, and are finding it has benefits over legacy financial systems.

Escape from foreign exchange woes

Most global-south countries where the majority are poor, are net importers of goods. That leaves their domestic currencies exposed to significant depreciation due to external factors. Bitcoin offers people an opportunity to store their value and trade with ease in countries such as Zimbabwe, where years of hyperinflation obliterated the local currency and other hard currencies such as the dollar dried up in the foreign exchange market.

Beat inflation and strict financial controls

In Venezuela, cryptocurrency adoption has increased during the ongoing economic crisis with hyperinflation and increased government restrictions. Expats use bitcoin to send remittances back home, where locals convert it to bolivars to buy food and pay bills. Venezuelan businesses also use bitcoin as a medium to obtain foreign currencies such as the dollar that are in short supply.

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Bitcoin remittances by migrant workers

Migrant workers have found bitcoin to be a cheaper and faster way to send money back home. Transfer platforms such as BitPesa in Kenya have seen an increase in people in the diaspora sending bitcoins, which are then converted to local currencies using mobile money platforms.

Direct donations and fundraising

Donors and charities seeking to cut out the intermediary and reach their beneficiaries directly are turning to bitcoin and other cryptocurrencies. SOS Children’s Villages in Botswana launched a bitcoin appeal in 2014 that helped raise funds to refurbish the Serowe Youth Facility.

Benefiting from bitcoin mining pools

Mining virtual money is offering an income-making avenue for the poor. In Kenya, one miner said he left farming to venture into cryptocurrency mining. Some mining pools are looking at using solar energy to cut down on the high electricity cost of crypto mining.