Unbanked – The Global Economy Is Missing 2 Billion People
Roughly 2 billion people are not part of the global economy because they are unbanked. The article discusses this issue and observes how blockchain technology can help bridge the gap.
by Blaise Mathai
The global economy is missing roughly two billion people. Where are they?
The world is in a constant state of political and economic turmoil. Trust in governments has declined drastically, and with it, the stability of national currencies. Hyperinflation in countries such as Venezuela and Zimbabwe have hit communities hard. This, combined with high fees and insurmountable barriers to entry have rendered many without access to a bank account. So whether by choice or by inability, roughly two billion of the world’s population are unbanked.
The unbanked aren’t necessarily impoverished. Opening a bank account can be cumbersome and time-consuming. Providing the correct documents, paperwork, and taking time out of one’s day to do so is impractical or impossible for many. Not to mention, many people lack sufficient education. Not everyone has been taught to read, write, do math, and understand how banks work. This creates a barrier to entry which bars many from participating.
To make matters worse, local economies are being overshadowed by globalization. Farmers, laborers, and people trying to provide a better future for their families have been closed off from the global economy. They’re trapped in a system of over inflation, currency devaluation, and political instability. With no access to the bank accounts and credit cards that we take for granted, they have no way to tap into this global wealth.
Every day around the world, millions of people are buying and selling goods online. Food, knowledge, software, electronics, games, music, videos, are all being bought and sold online. The global economy is expanding rapidly due to increased online commerce, and the price to entry just keeps getting lower. The unbanked, however, are unable to participate, but there is a solution.
Blockchain technology provides a unique opportunity for the unbanked to participate in the growing world of online commerce and cashless transactions. While it’s easy for people in the US to deal with the systems we already have in place, people in 3rd world countries are being cut off, and are turning to blockchain technology for a solution.
Blockchains such as Bitcoin now allow the unbanked to take charge of their money. The only thing needed to receive and transact with bitcoin is a set of private and public keys that anyone can generate for free. Anyone can setup a bitcoin wallet at no cost, and begin sending and receiving bitcoin. At bitaddress.org, it takes under a minute to generate a new private and public key set for a bitcoin wallet, and absolutely no personal information is needed.
When sending money online through a service with a central authority, such as Moneygram or PayPal, location matters, native currency matters, and who you are matters. It’s extremely exclusive, and the unbanked can’t participate.
Options for transferring money typically cost upwards of $10 and take days to transfer. Standing at a stark contrast to this system, bitcoin is cheap, nearly instant, and requires no personal information. That’s great because some people don’t have the government issued identifiers necessary to be a part of the traditional banking system. This means merchants that operate with thin profit margins, so thin they can’t accept the fees that come with debit or credit cards, can now do business online.
Blockchains open up a variety of options for transacting online, no matter what the product. An example of this is in the consulting field. Experty, an upcoming consulting app, allows people to share their knowledge in return for payment over the blockchain.
This entire system is completely open to anyone that wishes to participate. Knowledge isn’t the only thing for sale; property can also be bought and sold on the blockchain through services such as Atlant, the upcoming Real Estate blockchain platform.
These are just a few examples of the blockchain’s scope. It enables access to a global market, and with that, financial freedom.
Blockchain technology holds the key for many to join a growing online economic system. As the world moves away from brick and mortar stores, it doesn’t have to leave the unbanked behind.
Traditional payments options that we may take for granted aren’t available for many in 3rd world countries, so blockchains are moving in to connect the 2 billion unbanked with the rest of the world.
** This article is written by Blaise Mathai from Experty.io, which is a decentralized Skype-like calling platform that allows experts to sell their time seamlessly using cryptocurrencies.