This is an opinion editorial by Ray Youssef, CEO of Paxful and co-founder of the Built With Bitcoin Foundation.
Global wealth inequality is growing around the world. With inflation, conflict and the pandemic forcing many into extreme poverty, the top 1% are amassing more power than ever before. capturing almost 20 times more global wealth than the bottom 50%. And rising inflation is adding more fuel to the fire, with the U.S figures rising to 9.1%. While we’re all feeling its effects, many say lower-income households are feeling it the most, with tight budgets being hit by rising rent, gas and general living costs. While bitcoin is not a silver bullet, it is a solid solution to minimize the wealth gap and open the door to financial inclusion where fiat has failed.
Global remittances are one of the most vital sources of income for emerging markets, but there are few money transfer companies that comply with local regulations. This forces people to use companies that charge higher fees and puts less money in the pockets of people who need it most. Bitcoin solves this, providing a better alternative to the way people send money with lower fees, faster speed and access for the unbanked. In El Salvador, where bitcoin is legal tender, it is estimated that money service providers will lose $400 million annually in commissions for remittances. People around the world use the Bitcoin network to send money abroad peer-to-peer, without having to pay third-party fees to send money to family. Takes Angela Cunha, for example, a Paxful user in Brazil. Angela moves bitcoins there from her family in the US and with bitcoins, she is able to transact quickly and avoid costly remittance fees.
The role of wealth in politics has also become an important issue, as the powerful few control many of the decisions that affect our financial well-being. For example, when a country decides to devalue or demonetize a currency, as we have seen in countries like China, Venezuela and Zimbabwe, this can put an entire population into poverty in a matter of weeks or days. The devaluation of a nation’s currency not only hurts the country’s citizens, but has a ripple effect around the world, sending markets crashing or forcing many into recession. For people affected by hyperinflation, bitcoin functions as a store of value. With only 21 million bitcoins that can be mined, it is a solid alternative for those looking to preserve wealth.
Narrowing down to Africa, income inequality is widespread across the continent. Recent reports show that more than half of the world the most unequal countries are in sub-Saharan Africa. Driving the wealth gap are three main areas: education, finance and land, which many do not have access to. This is why we are committed to increasing education on the continent through campus visits, events and the opening of the PaxNaija Education Center in Nigeria. We have seen from our work on the ground that Africans are enterprising, intelligent and resourceful – given the right tools, they can adapt to anything thrown at them.
If you want to help lift more people out of poverty, they need access to sound money, and there’s nothing more sound in my mind than bitcoin. While many still focus on bitcoin as a speculative asset, especially during the recent price drop, it is important that we stay focused on the real day-to-day use cases of bitcoin. Bitcoin can provide financial freedom and be a source of opportunity for those seeking a way out of centralized systems and corrupt governments. To achieve financial equality, we all need to start looking at bitcoin through a new lens. This is just the beginning, my friends, we are only scratching the surface, and with bitcoin, I believe that despite the current outlook, the next decade will bring even greater change for the better.
This is a guest post by Ray Youssef. The opinions expressed are entirely my own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.