Rethinking Money- How Bitcoin Could Help Developing Countries

Bitcoin is changing the way we view and think about money. When COVID-19 forced many governments to adopt stringent lockdown policies, many businesses turned to digital currency. More people started using Bitcoin to pay for goods and services. On the other hand, many companies started accepting Bitcoin payments. Trading crypto has never been this easy with online trading platform crypto trader

Understanding Bitcoin

Bitcoin is digital money. It is money that only exists virtually. You cannot hold Bitcoin in your hands or deposit it in a bank. That is the primary difference with conventional fiat money. While you can keep and deposit traditional fiat currency in the bank, you can only have and use Bitcoin virtually.

Bitcoin is also a decentralized currency. The government acts as an intermediary through the central bank and other commercial banks with the traditional fiat money. The government can decide to increase the number of dollars in circulation by printing more. Bitcoin does not have such central authorities or control. No government or bank controls Bitcoin as it uses blockchain technology.

Bitcoin is also a digital asset for trading. Like people trade in stock, bonds, and gold, Bitcoin provides investors with a new way to invest. Trading Bitcoin is not rocket science.

Benefits of Bitcoin on Developing Countries

One of the reasons for developing countries increasingly adopting Bitcoin is because of the potential benefits that it offers. The potential benefits of Bitcoin vary from providing an alternative payment alternative to enabling faster, safer, and cheaper transactions.

Dealing With Inflation 

Bitcoin can help developing countries deal with the problem of inflation. Inflation is a common problem affecting these countries. Inflation implies a general increase in prices. With high inflation rates, many people in developing countries are unable to buy even the most basic items like food and pay for healthcare.

Developing countries can use Bitcoin effectively to stave off rapidly rising inflation. Since local economic or political dynamics do not affect the price of Bitcoin as much as they affect local currencies, it means that Bitcoin can be an excellent alternative to local currency. And this has happened in Venezuela and other developing countries suffering inflation.

Increasing Financial Inclusion

Many people and businesses in developing countries do not have bank accounts. And this makes accessing financial services and benefits like capital and loans almost impossible. Bitcoin provides a great solution to this problem because of its nature and structure.

Bitcoin is easy to use. Anyone with a mobile phone or access to the internet can use Bitcoin. There are not several requirements, such as having certain documents to use Bitcoin. The case is different for traditional banks, where you need proper documentation and other necessities to open a bank account. And this makes Bitcoin the perfect solution to low financial inclusivity.

Dealing With Corruption

Many developing countries suffer from corruption which siphons a lot of money and resources from public coffers. One reason for corruption thriving is the lack of transparency. For example, many people don’t know about government contracts and cannot track them. With Bitcoin, there is more transparency in transactions.

Blockchain technology makes it easy for anyone, including anti-corruption agencies, to trace all transactions. If the government allocates some money for roads, relevant authorities can track it to detect any misappropriation or corruption activities.

Conclusion

Bitcoin could help developing countries in many ways. It could solve inflation and low financial inclusivity issues. Also, Bitcoin could enhance transparency in countries with ridiculous corruption levels. Thus, this cryptocurrency has great potential in these economies.