Topic: Bitcoin perspective in poor countries (Read 1214 times)

This is a great post very excited to see this and read peoples perspectives.  


I am a strong believer that cryptocurrencies can assist in the redistribution of wealth from those who have to those who have not. Through careful planning and a well thought out strategy during these initial adoption periods of cryptocurrencies we can ensure that the focus is on removing inequality and not just maximizing investments the benefits. The right decisions now could "CHANGE THE WORLD". This is why I took on a role as CEO of the Non Profit Organization Against Hunger.

The mission is to reduce poverty and malnutrition by enabling communities to receive donations directly in cryptocurrencies. There are significant benefits for everyone involved. By introducing cryptocurrencies into a community, you are not just allowing the people who receive the donations to pay for nutritious meals you are also kickstarting an economy.

The result is we now have a source of income using a deflationary currency that increases in value over time and is backed by external investors in the currency. This provides value for the people who receive the donation and also across the entire supply chain.  From farmers who grow the crops, to the people who ship the harvest and the merchants who sell the food to the consumers.

The introduction of cryptocurrencies will provide an environment for growth that I believe will reduce financial disparities and assist communities in their mission to become self sufficient.

If you want to volunteer to help out send me a note [email protected]

The whole idea is to avoid transmitting dollars (or any other national currency) across international borders.

There would be no problem if BTC was considered an international currency! So you don't need to change currency.
I know, it's too fanciful!

The wealth of a country is usually determined by it's IQ on a bell curve.  Bitcoin can't fix stupid.

I wouldn't say cheapest more like only.  Fees using mpesa range from 3% to 11%+ (above the cost of phone and cellular plan).

Should be (ignoring all of the USD taxation/regulation laws), the problem is once it gets there, converting it to the local currency. USD is easily convertible (with fees) to PHP, but there is no BTC-> PHP conversion service I can think of. So it'd have to be converted BTC -> USD -> PHP.

Thinking in an utopian perspective, this means that if i want transfer money with a remittance service (for example US -> Philippines) must be carried via USD, so if i want to transfer BTC is the same. Right?

The biggest problem with going the remittance route is that (at least in the US -> Philippines route that my cousins go about) the value needs to be done via USD for taxation/documentation purposes. I definitely agree that there is potential using Bitcoins, but there are some significant regulation hurdles that would need to be overcome. And I don't think the costing for that type of infrastructure is as high as a priority. That and the constant price swings of BTC. Sure all fiat also goes through price swings, but when you have to go through two compounded possible price swings, there could definitely be huge issues.

I suggest you look up "remittance" as there's a massive market there and bitcoin is perfect for it. As mentioned above M-Pesa is already making big steps forward in introducing it to Africa. I think one of the driving ideas behind creating bitcoin was to reach exactly those poor people and help to lift them up to the level of everyone else by giving them financial freedom because most of them cannot afford a bank account.

Good luck with your research 

Bitcoin doesn't really need very much infrastructure. A transaction is very small. In many developing countries still almost everyone has a mobile phone.

The fact that these are often not smartphones is a bit of a stumbling block.

The biggest advantage is the speed, ease, low transaction costs of sending money to other virtually.

But the biggest drawback that overtakes any of the convenience is the fact that most poor countries transact locally using cash. And because a lot of people don't have personal banking accounts, converting their BTC to fiat is very cost-prohibitive and possibly impossible.

Sure this issue can be solved if stores would accept BTC as payment, but considering that general infrastructure is poor in those regions, I don't think developing infrastructure for Bitcoins is a priority.

[Admittedly, people could transact using paper wallets filled with varying amounts, but that's basically using cash except with an increased risk/cost [private keys, needing to make paper wallets, and of course, the ever changing price of BTC when pair to fiat].

The problem, i think, is that the Bitcoin is related to the local currency and undergoes the exchange rate. For example, i have 1BTC, alone has no value, but compared to the dollar or euro or other currency takes value! The utopian idea is to consider Bitcoin as real currency that can be used without having to change currency.

That is exactly what is happening already but then without bitcoins (and without needing a bank account.)

For example the company "M Lhuillier" in the Philippines. They have like 1500-2000 branches in the Philippines (lot of islands ) Lot of people work in big cities like Manila or Cebu. Then they would get cash and give it to "M Lhuillier" branch in these cities and send it to their family. Their family picks the money up in a local branch. The fees are between 0.8% up till 7% depending on the amount. There are also alternative companies doing the same like Cebuana.

Also there are mobile money platforms like "Globe GCASH" and "Smart money" to transfer money from a phone no to another phone no by using text messages. Then you can change it to local currency in a lot of stores all over the country.



So I am wondering what the advantage of bitcoin in this story would be. "the infrastructure to convert the bitcoin to local currency" would still cost money.. like if a store is able to exchange this, they would want a %. Also people probably don't want to send 1 bitcoin worth $600 and then the family gets $550 for it the next day.

Agreed its cheapest way to send money for them.

Bear in mind that a lot of the time these societies are actually more willing to accept virtual currency.

For example, M-Pesa usage in Africa is more widespread than traditional bank accounts, so people are already accustomed to using their mobile phone to settle bills ins tores and transfer money between individuals.

http://www.bbc.co.uk/news/business-11793290

M-Pesa works on really old phones, unlike a bitcoin wallet, but you can see the potential.

So letting people send money to their family in small villages, that can be done with bitcoin even on a mobile phone. Then you'd need the infrastructure to convert the bitcoin to local currency. Maybe through ATMs or new platforms (similar to paypal?) that will let you buy using bitcoin like a debit card, or withdraw cash... without needing a bank account.

Maybe this podcast will give you some ideas:
http://www.coinsiderthis.com/media/shows/coinsiderthis-00000014.mp3
(from www.coinsiderthis.com - there are also some other resources on that site that can give you some more info)

Besides all these "positive arguments for bitcoin", I would like to add:

These people don't have the luxury to have a "bitcoin saving account". In the end they just want their local currency to buy their basic needs like food. There are a lot of younger people working in a few big cities, they send money to their family in the smaller villages. However on both sides they would want the local currency and no bitcoins, so I do not see the advantage of including bitcoins.

Of course if the stores in these smaller villages would accept bitcoin, it could be interesting. But that might take a while or might never happen.

Please prove me wrong tho I would love to work on a project that will benefit people in poor/developing countries by using bitcoin.


edit: with "these people" I am referring to the average person in these countries. Obviously not everyone is poor and there are enough people who are saving money in these countries too. Also there are obviously people who like new technologies etc and def already bitcoin owners too. I was just referring to the average person with my perspective.

It's programmable money, so there are definitely a lot of opportunities that will benefit people in poor/developing countries. We just need ideas and the platforms to be developed

Micro payments w/o fees
Mobile payments w/o fees --no smartphone or internet, just cellular connection
Kickstarter-like IPOs on any sized business
Banking for the poor regardless of how little money they have
Ability to accept funds from anywhere in the world

Just off the top of my head

The above plus…

Poorer countries often don't have very well developed banking infrastructure leading to a larger proportion of the population not having a bank account, or finding it difficult to access their bank account. With bitcoin they can do transactions as long as they have the most basic Internet access.

Poorer countries are more likely to have an unstable traditional economy where incredible inflation can take place. Bitcoin is a safe store of value that is immune to inflation.