Most people in the developed world who’ve heard of bitcoin tend to view it, to steal a phrase from Wired, as a solution in need of a problem. After all, those in America, the United Kingdom, and much of Europe don’t have any trouble saving money, sending money to friends and family, or purchasing items online, so why participate in this new cryptocurrency economy? While there are some people who do, they’re typically thought of as eccentrics, or as those using this currency to pay for illegal acts.
In other parts of the world, parts that lack the financial infrastructure found in developed nations, though, this particular form of digital currency has a lot of potential.
Why Developing Nations Will Benefit From Bitcoin
In America, banks are everywhere. There are national banks, local banks, and a dozen different online services people can use to bank digitally if that’s their preference. However, in the developing world that is not the case. For example, take a country like Nigeria, where only 36 percent of the population had access to traditional banking as of 2016. In a situation like that, it’s extremely difficult to save money. Sending money, especially sending money across national borders, becomes a nearly Herculean task.
That is where cryptocurrency comes into the picture.
Because these alternative currencies are not centralized in any one nation, their value is something that can be universally accessed by people all over the world. It provides a level playing field, which allows countries usually kept at a disadvantage to enjoy the same kind of benefits industrialized nations with more robust economies are used to.
Bitcoin is also becoming a way for investment to happen in these countries. From microloans to digital banking services, the economy (particularly in more rural areas) is feeling the change brought on by the adoption of these digital currencies. Options that were once only available in more urban areas can now be accessed by bigger swaths of the population. This leads to additional development, and to growth in ways that we’re only used to seeing in the industrialized world.
A Short-Term Gain?
While cryptocurrencies can energize the economy in the short-term, they may not be the preferred long-term solution for nations who find themselves shedding their “developing” status as a result of using these digital currencies. Once the infrastructure is in place, and the population is used to having access to the kinds of services enjoyed by more industrialized nations, it’s possible that cryptocurrency will fall out of favor. It is, in many ways, a stepping stone. But it is a necessary stepping stone in order to bridge the gap between where countries are, and where many of them want to be.