Everything related to Bitcoin has been becoming a developing story from the latest past.
Developed in 2008 by Japanese hacker Satoshi Nakamoto, Bitcoin was the world’s first decentralized digital currency and could be sent without the need of a middleman. The omission of the intermediary force drastically lowers the cost, worries, and limitations associated with a conventional bank account.
Since then, it has garnered praise, criticism and everything in between for its ability to facilitate fast and low cost peer-to-peer transactions, while at the same time having a damaging association with criminal activities: over the past few years, scandals such as the Silk Road website have emerged, in which the cryptocurrency was used to purchase guns and drugs, and the disappearance of nearly £250m on the MtGox exchange in Japan.
This decentralized currency is bringing a revolutionary change in the operations of financial institutions, funds transfer and are also securely removing the need for a middleman as a guarantor between two parties.
Bitcoin, being the most utilized cryptocurrency contains the potential of expanding international trade, commerce, fund transfer and can prove to be extremely beneficial for the developing countries.
Because of its growing popularity, the currency bitcoin is facing major price fluctuations against USD while posing a considerable threat to the developed countries.
Due to the same reason, that is its price swing against USD, forex brokers are offering this currency to traders too and in the wake of the same events, some of the best forex trading platforms are also introducing bitcoin supporting algos in their systems too.
Considering the amount of attention and benefits Bitcoin is giving to the inhabitants of the world, we in this article are going to look at other aspects that make it a game changer for the developing countries.
Cheaper than the bank transfer.
All Banks around the world are considered money making machines for the charges they take for their services. In the age of technology, when everything is rolling too fast and is present on the internet, there is no room for the hassle of a long time taking transaction processes.
The old conventional ideas like those of banking also do not have any novelty left about them. People find it easy to use the Vostro Nostro accounts than getting funds transferred from home for the amount of money the transaction costs them.
In the midst of all these troubles, bitcoin can easily be used for the purpose of fund transfer at a very cheap rate.
Rising of bitcoin popularity has helped developing countries. As it’s a known fact that most of the big banks like JP Morgan are headquartered in the superpowers of the world, the rules and laws relating to the banking sector have always been imposing in nature for its customers.
These banks have also been seen showing resistance towards the growing popularity of the cryptocurrency and telling the developing countries to halt relying on its usage.
But the advantages of this crypto-currency is offering are definitely bigger than those provided by a conventional bank. It’s easy for developing countries to escape the despotic behavior of international banks with the use of bitcoin, trade better and transfer money at an affordable cost.
When with the usage of bitcoin, states choose to do trading, they can avail it at a cheaper price and save a chunk of their economy.
It’s a known fact that majority of the workers in the developed countries are migrants of developing states. Every year, a major chunk of balance, that is up to $ 500 billion sent from the developed countries by migrants in the name of remittances to third world countries. The amount of $500 billion is higher than the total sum of foreign direct investment.
The average cost that an individual has to bear to send money home is around 6-10% for $200, which reduces the actual amount of the sent money to a significant low.
It’s a common sentiment that when an individual migrates from an underdeveloped or developing country to a developed one, he earns money in the foreign currency but tends to convert every single penny into the home currency before making even a small transaction.
Virtual money like bitcoin not just reduces the cost of transfer for the migrants but also lets them send money home directly without getting fussed by the use of several channels in between.
In the traditional setup, companies like the Western Union or international banks charge an enormous amount in the name of the remittance transfer, bitcoin along with blockchain can keep this money secure and transferable without any delay and at a cheaper cost.
Moreover, reduction in the cost of transfer can actually add a solid amount of money as remittance to the economies of developing countries. This can also serve as an incentive for the migrants serving abroad that use the illegal means to send money to save the tax and transfer cost.
Charities for Developing Countries.
Most of the biggest NGOs in the world originate from the developed countries while they are housed in the developing countries of the world. These NGOs receive funds from around the world but dispatch the money to different developing countries using banks or other sources like the Western Union.
Bitcoin can serve a great purpose in saving a good amount of money for these NGOs that need to save every bit of a penny that is given to them as a promise and trust from the people.
Although this money is considered non-profit and has no deduction of service charges when transferred locally, the transfer from one state to another through the means of banks or exchanges let them lose a fair share of money to the transfer fee.
This action refrains the developing countries from thriving despite a high rate of money being transferred to them at every instance.
The use of bitcoin to transfer charities from one state to another can be made more transparent and traceable with blockchain technology. Big NGOs can make it a service point and fund collection tactic to tell that the charity that has been sent by people is securely and safely transferred to the deserving.
The developing countries can receive funds within minutes without any hindrance when in need. Many a time it happens that a country gets affected by catastrophe and falls terribly in need of funds, bitcoin and blockchain can help countries receive money in time through bitcoin and blockchain.
It’s very unfortunate that all the developments in the world lately have been made to serve only the privileged class and neglect the underprivileged. For the first time in decades, there is introduced a technology that is defined by the developed countries and needs to be adopted by the developing ones.
As listed above, bitcoins if used by these industries, can revolutionize and drastically change the fate of developing countries.