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Do you know that the world could use Bitcoin to alleviate poverty and corruption? Find out how this could work.
While Bitcoin has experienced a meteoric rise in its popularity, some people are still skeptical about its capabilities. Microsoft has partnered with KPMG to develop services via a cloud-based platform. And this has caused a debate regarding the current, puzzling opportunities that blockchain, the technology behind Bitcoin, may present in the future.
Before Bitcoin’s arrival, most people relied on traditional money transfer systems like PayPal, Western Union, and MasterCard to send and receive money. These systems deduct money from the accounts of the person sending money and then add it to the recipient’s account. And these systems keep records of all transactions.
People can spend digital money twice without intermediaries. That’s because digital cash is a computer file if there’s no intermediary. That means it compares to a word document or any other computer file. A person can send $100 to a recipient by attaching the money file to their email.
However, this doesn’t remove the file they attached in their email from their computer. Thus, the sender will have a copy of the same money file on their computer, and they can send the same to another person. Computer scientists call this double-spending.
Having a third party to keep a record of all transactions solves this problem. And this blockchain record is known as a ledger. With Bitcoin, you don’t need a third party to maintain this record. That’s because Bitcoin uses the blockchain to keep a distributed, public ledger. The Bitcoin network checks every new transaction against this blockchain to ensure that a user has not previously spent the Bitcoins. Thus, this technology eliminates the double-spending problem.
Acquiring Bitcoin
A question that many people might ask at this point is about acquiring the Bitcoins that people spend. Well, getting Bitcoins compares to purchasing a traditional currency. Websites like Immediate Profit allow individuals to buy Bitcoin using fiat money. What’s more, you can sell your Bitcoin to get fiat money on these platforms.
An open market determines the dollar value of this cryptocurrency. Each crypto exchange charges varying fees, and Bitcoin price can slightly vary from one platform to another. The ease of acquiring Bitcoin has prompted many people to invest in it. And this has led to the meteoric rise in cryptocurrency’s popularity. Nevertheless, some people have doubts about its ability to alleviate corruption and poverty.
Bitcoin as a Poverty Alleviation Tool
Bitcoin is among the most misunderstood yet essential innovations of the century. Some experts argue that Bitcoin could be the best money that humans have seen since civilization. The value of this cryptocurrency is primarily the ability to transfer it free of charge, without intermediaries, and in real-time. Thus, this cryptocurrency gives up to 2.5 million people without bank accounts some hope because it’s an affordable payment system. Essentially, Bitcoin charges less than 1%, which is way lower than the cost of transferring fiat money.
Bitcoin as a Corruption Alleviation Tool
Corruption is a severe economic and financial problem, especially in developing countries. One of the primary challenges for anti-corruption agencies is proving that money or assets changed ownership. And Bitcoin can help when it comes to providing that somebody sent funds to another person. That’s because blockchain technology creates a public ledger that other users can access anytime, anywhere.
What’s more, a person can’t deny Bitcoin transfer or ownership in a court of law. Essentially, Bitcoin uses blockchain technology to enhance transparency. Due to this transparency, some charity organizations are sending funds via the blockchain to ensure accountability.
The Bottom Line
Bitcoin and blockchain present disruptive inventions that could help alleviate corruption and poverty, especially in the developing world. However, how this turns out is a matter of time, considering the slow adoption of Bitcoin in most parts of the world.
