Bitcoin Effectiveness In The Third World Countries
While many might immediately associate Bitcoin trading with high tech societies in the West and East Asia, there’s much to be said about the world at large. Among developing nations with growing amounts of cryptocurrency speculators, those with hyperinflated economies prove to be intriguing case studies indeed. If we take Venezuela, for example, we can see that Bitcoin operates effectively as a parallel currency for a country in a deep, deep political and economic crisis.
It gives the opportunity to thousands, maybe millions of locals to find an anchor of relative economic stability, along with the ability to sustain livelihoods or make transactions. For some, it’s the exclusive means to secure food for their families. And for those looking to trade in goods overseas, it bypasses centralized structures of financial control and gives a greater margin of freedom and wiggle room. We can also see developments in various regions of Africa. In the east, local entrepreneurs have created systems that allow for cross-border Bitcoin trading – one such initiative is BitPesa.
Crypto has become especially popular in South Africa, while in Nigeria there’s a push (particularly from activists and local merchants) to use parallel currencies as a way of introducing democracy into the economy itself. A lack of faith in government-backed currency has only fueled these sentiments. In particular, the collapse of the official financial system in Zimbabwe is very much an example of this. In the wake left by an unstable economy, Bitcoin has become a compelling alternative, one that doesn’t have the same government oversight (or control) as conventional money.
Users of startups like BitFinance, created by Zimbabwean Verengai Mabika, often use the system as a mechanism to create savings that bypass the regular banking system. And given that it was the loss of savings during a period of hyperinflation in 2008, this is more than understandable. With case studies like these, more and more attention is being turned to a demographic increasingly becoming known as the ‘unbanked’. These people don’t have open bank accounts, more often than not due to living at great distance from any branch, but all the same require money and transaction services.
Crypto entrepreneurs and startups like MicroMoney seek to use Bitcoin trading (or any other stable digital currency, for that matter) as a way of addressing these issues and empowering people to take more financial control of their lives. And perhaps their stories are just as significant in the greater picture alongside developments in hubs such as in Silicon Valley or Singapore.
