Bitcoin for Troubled Economies, the Venezuela Example

Bitcoin has emerged as a savior for many in dire situations. The decentralized nature of Bitcoin, combined with its ease of use and secure nature makes it an ideal alternative for those in troubled economies or cut off from the traditional financial system. The economic condition of Venezuela and Bitcoin’s increasing adoption in the country has presented itself as a case study for mainstream and fringe economists alike.

The mere mention of Bitcoin evokes mixed response among seasoned economists. There are those who swear by the revolutionary cryptocurrency and others who try their best to put down the digital currency’s success, even calling it a giant pyramid scheme in the process. But the ground realities in Venezuela, as reported by various news media outlets presents Bitcoin in a favorable light while conveying that the governments are not always right.

Venezuela currently has the highest inflation rate in the world. According to reports, the country’s inflation rate is expected to hit 1600%, turning the country’s fiat currency — Bolivar into worthless pieces of paper. The increasing prices, rising poverty, and falling Bolivar have left the supermarket and pharmacy shelves devoid of essential commodities and medicines respectively. In such a situation, Venezuelans are attempting to move away from the diseased Bolivar to much stable alternative — Bitcoin.

The increased adoption of Bitcoin in the country has led to a surge in cryptocurrency exchange volumes on the country’s Bitcoin platforms. Also, there are reports of good samaritans offering Bitcoin contributions to cash-strapped Venezuelans. People in the country are trying to meet their needs by ordering essential goods and medicines from international online shopping platforms, paying with either Bitcoin or gift cards/prepaid cards bought with Bitcoin.

Bitcoin has presented itself as a boon to those without bank accounts, as all they need is a working internet connection and a bitcoin wallet software installed on their smartphones or computers. Also, the decentralized nature of Bitcoin saves it from government’s bad decisions, like printing excess currency and others.

The universal nature of Bitcoin offers equal opportunities to everyone. Anyone, anywhere in the world can use the cryptocurrency for their day-to-day transactions. This very feature is now keeping thousands of Venezuelans alive.

It is not just the case of Venezuela. The cryptocurrency has already proven its capabilities in the African continent by making financial services accessible to the unbanked and underbanked. The Bitpesa service has already offered a far more efficient method for remittance and cross-border B2B payments than those available through mainstream banking and financial institutions.

Considering all these factors, Bitcoin deserves appreciation from people and authorities from across the world. The cryptocurrency may turn out to be the tool needed to solve world hunger and bring peace on earth.

Ref: Forbes | Image: NewsBTC