By: Shengyi Chen
Bitcoin is a worldwide cryptocurrency invented in 2009. Unlike government issued currency, it is independent of government agencies or corporations. Bitcoins operates in a decentralized fashion, and it solely relies on algorithms. All transactions are processed and verified anonymously through the internet with no intermediaries. The aforementioned features have attracted nearly 5.8 million users in a relatively short span of time (Frankenfield).
In the United States, we take the convenience of banking services for granted, but this is not the case for those living in developing countries. In these regions, banks are not concerned with financial inclusion, and banking services are charged with significant premiums (Fioramonti). Bitcoin is considered a game changer for those individuals who does not have access to banks. It allows any user to bypass the “middlemen,” giving them more control over their money, resulting in a steep adoption rate in developing countries. Statistics show that the number of Bitcoins users in developing countries alone accounts for 30% of users, and in the past year, the number of Bitcoin users in Africa has doubled (Andrea).
In these developing countries, the unsteady financial system has made Bitcoin a more appealing alternative currency. Many developing countries are experiencing violent inflation, resulting in the severe devaluing of a currency (Metz). Unlike traditional currency, Bitcoin is disinflationary, eliminating the possibility of monetary inflation and rendering both users and businesses resistant to unnecessary economic losses.
Rudimentary banking services coupled with rampant transactions fees render traditional banking unappealing, while increasing the appeal of Bitcoin. Since transactions of Bitcoin takes place without an intermediary, transactions fees are obsolete, which increases the profit that business gains. By using Bitcoin, the money used in these transaction fees are instead provided to the company rather than taken by the credit card issuer such as Visa or MasterCard.
Andrea. “Bitcoin Is More Popular in the Developing World than You Think.” Bitwala. N.p., 12 Apr. 2017. Web.
Fioramonti, Lorenzo. “Bitcoin Is Already Playing a Key Role in the Unsteady Financial Systems of Some Developing Markets.” Quartz Africa. Quartz Media Inc, 04 July 2017. Web.
Frankenfield, Jake. “Bitcoin.” Investopedia. N.p., 25 Jun. 2019. Web.
Metz, Cade. “Why Bitcoin Will Thrive First in the Developing World.” Wired. Conde Nast, 02 Feb 2016. Web.