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Are you wondering whether Bitcoin could help in addressing the income inequality problem? If yes, here’s how Bitcoin could do this.
Many people wonder how Bitcoin and blockchain fit the current equation, with income inequality increasing every year. Some experts argue that digital currencies like Bitcoin can potentially bridge the gap in global wealth. Since 2017, developing countries in Latin America, Southeast Asia, and Sub-Saharan Africa have had access to Bitcoin and blockchain technology.
Charity organizations are also using Bitcoin to send funds to vulnerable community members. Such organizations focus on assisting individuals in accessing loans and building credit without opening bank accounts. Upon receiving Bitcoins, such individuals use platforms like The News Spy to convert them into U.S dollars or local currencies that they can use to acquire resources like food and clean water.
Bitcoin and Wealth Gap
Bitcoin has a mysterious nature that has caused misperceptions in terms of its use. Some people in the mainstream have relegated Bitcoin to the gamers and hackers realm. But this cryptocurrency’s history has shown a different purpose.
Satoshi Nakamoto created Bitcoin to bridge the wealth gap globally. That’s why Satoshi registered the domain name for this virtual currency online during the 2008’s Great Recession. After that, the purported and mysterious Bitcoin creator released a statement to explain that Bitcoin as an electronic fund transfer method was for fighting centralized currency manipulation.
However, wealth inequality remains a drastic challenge, with many in middle and lower-income classes finding Bitcoin challenging to own. In the U.S, inequality hit a record-high point, with the Census showing a shrinking middle class.
While the global economy faces substantial pressures, Bitcoin’s growing popularity could return this virtual currency to its intended use. Thus, people could eventually use Bitcoin to fight income inequality.
How Bitcoin Is Strengthening the Middle Class
One thing that makes Bitcoin unique is functioning on a different network. Blockchain, the technology behind Bitcoin, makes it more transparent than the traditional financial system. Essentially, blockchain creates a database where the Bitcoin network records every transaction.
Thus, blockchain serves as a record of the cryptocurrencies that people exchange on the system. When two parties trade Bitcoin, blockchain records the transaction in a public ledger accessible to every user. And this is a share, independent, and encrypted database.
Experts have expressed their views, saying that humans can leverage Bitcoin in alleviating income inequality. Financial experts note that elites and governments can create inflation to amass wealth. And this explains the wealth inequality the world has experienced over the years. Bitcoin can solve this problem because asset owners can opt-out of the fiat system by purchasing this virtual currency.
A primary economic problem for most people is the lack of adequate assets like stocks and real estate properties. Lacking investment money and living from one paycheck to another is a setback for the middle and poor people. Blockchain technology presents more opportunities for acquiring assets. The real estate market, for instance, now accepts Bitcoin. An investor can own a part of a property even if they can’t afford it entirely. And this business model helps in distributing wealth while widening the investor demographic.
Final Thoughts
Bitcoin can enable the middle class to avoid the consequences of the decisions of governments and central banks that lead to issues like inflation. Additionally, this demographic can use the opportunities that blockchain technology presents to acquire properties. Even when people can’t access banking services, this virtual currency enables them to invest in properties. Sectors like real estate now accept Bitcoin. Thus, people in the middle class can now invest in such economic sectors even if they can’t invest in the entire property. All these could play a significant role in addressing income inequality the world over.
