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I’d like to tell you a story about Philip. Philip is a carpenter. He works out of his modest home in a dusty, rural village in Argentina, where chickens and goats freely roam in and out of his workshop. His wife lovingly brews his morning tea over a wood fire and serves it to him in his favourite tin cup.And yet, his beautifully crafted pieces can be found as far afield as New York, some 5,500 miles away. This wasn’t always the case though, as Philip is just one of the 2.5 billion unbanked individuals!
Imagine trying to open a bank account without any official identification, proof of income or business registration. You’re not going to get anywhere fast. And this is the reality for the unbanked billions. Constrained by socio-economic, political or geographical (and in some cases a combination of all) limitations these people are left financially inept with either non-existent, inaccessible or unaffordable traditional banking systems.
So how, in the absence of a bank account, does Philip run a thriving global business from his backyard? … He uses bitcoin.
People in impoverished countries may lack basic utilities such as sanitary drinking water or ablution facilities - but they own mobile phones! In fact, in many of these countries mobile phone penetration often exceeds 100% as they purchase several sim cards with special offers on free minutes or data, and bounce between numbers to stay connected.
This ready access to mobile phones means that they have the ability to, literally, bring banking into the palm of their hand. With no paperwork or administrative hoops, people like Philip can use their mobile phone to set up a bitcoin wallet within a matter of minutes. Coupled with the fact there are no setup fees or operating costs, they’re able to spend and receive bitcoin not only instantly, but affordably too.
Underprivileged countries are generally synonymous with political pressure or unrest, which can lead to isolation from global financial aid. As a result, governments enforce stringent monetary policies and capital controls on their citizens, which perpetuates poverty, as at the mercy of the government’s financial regulations.
Bitcoin, on the other hand, is decentralised. There’s no dictatorial, authoritative party to intercept or interfere with an individual’s personal finances. As such, bitcoin can’t be subjected to hyperinflation, transactions can’t be taxed, balances can’t be seized and wallets can’t be frozen. These are alluring qualities for those who have little faith or trust in their country’s currency and central authorities.
The traditional payment system makes it cumbersome, if not impossible, for individuals like Philip to offer his products, wares or services beyond his country’s borders. International orders equate to delayed remittance, while fiat currencies are exchanged and re-exchanged, at exorbitant handling fees that eat into precious profit margins and valuable income.
Bitcoin doesn’t care whether you’re in New York City, Shanghai or Timbuktu. It has no interest in how, where or why transactions are taking place. Its function is merely to ensure that, on instruction, bitcoin move from one digital wallet to the next. And it does so with no, or negligible, transaction fees.
For the billions of unbanked people on the planet, Bitcoin is a non-prohibitive means to become an active participant of the economy, both locally and abroad. By providing the mechanism to financially transact, easily and cost-effectively, Bitcoin serves as a catalyst to change in their lives. A change that frees them from the financial shackles of a centralised payment system, empowers entrepreneurship and helps establish roaring global businesses – all from humble headquarters of a sandy workshop in a remote town, where the visitors log book constitutes a few inquisitive chickens and goats.