Cryptocurrency in Third-World Countries

Being from the US and moving to Africa has really piqued my interest about cryptocurrency's possible effect on third-world countries and their economies.

For reference, I am living in Tanzania, however, it seems that many third-world countries and their fiat currencies suffer from inflationary problems. Examples include Zimbabwe, Venezuela, Vietnam, and many other countries around the world. Many crypto assets, despite their volatility, are still more stable than the local currencies of these countries. For this reason, I think cryptocurrencies will become a safe-haven for those who have their money stored in unreliable banks around the world.

Another interesting application I read about was giving immigrants a better system of sending money to support family members overseas in these third-world countries. Currently, wire transfers carry high fees for international transfers, and take away significant portions of income meant to aid development in less wealthy countries.

Often times, the family member(s) sending money overseas already doesn't have much to start with. Giving these people a faster and more affordable means of money transfer would make a huge difference in there lives. $30 to many of us in highly developed areas might not seem like much, but it can last a long time in other countries around the world.

I look forward to seeing how cryptocurrency and blockchain applications are adopted over time. Can you think of any other ways that third-world countries can benefit from the growth of cryptocurrency?

Cryptocurrencies have the potential to change the lives of some of the worldโ€™s poorest and most desperate people for the better. Cryptocurrency can improve lives by helping residents of developing countries participate in the global economy and escape from poverty.

Cryptocurrency can solve one of the greatest problems facing people living in some developing nations: inflation. People in some nations are poor because their money is worthless. Corrupt or incompetent governments can make money worthless by simply printing too much of it.

Cryptocurrencies seem like the type of endeavor that will split the world into the haves and have nots. Despite its talk of democratization of currency via removal of the impact of central banks, cryptocurrencies practically are only available to those people with access to technology. This is the kind of thing where first world countries have a distinct advantage over third world countries.

Despite this expectation, the reality is that cryptocurrencies not only have a strong role to play in the future of many third world countries, but also have already provided some interesting benefits to third world people, spurring some exciting innovations.

The third world countries are definitely getting the benefits of cryptocurrencies. The first benefit is that cryptocurrencies have reduced the cost of remittance. People who migrated to developed countries can save the high costs of remittance by sending money in the form of cryptocurrencies. Moreover, it will improve the financial inclusion. In the developing countries like Pakistan, Burundi, Yemen, Nigeria, and Cameroon, less than 15 percent people have bank accounts. With the introduction of virtual currencies like MPesa and BitPesa, the millions of people will have access to banking services. Moreover, the all the cryptocurrency transactions are done online, therefore they can help reduce corruption.

I am Nigerian and I am happy I came across this thread. I'll tell you a bit about the benefits of the Blockchain and cryptocurrency on our lives at the moment: it is quite minuscule. I eagerly look forward to the future!

Here's where I'd like to see the blockchain deployed:

  • Decentralized land registry: Land ownership is a messy business. Landgrabbing is rife and it is not unheard of in Lagos for instance, that the same piece of land will be sold to more than ten different buyers.

  • Decentralized fertilizer distribution: The current system works better than what was in place two years when corruption was still giving the system a beating: a corrupt politician could allocate tons of the stuff to himself and pay way below market prices at the expense of farmers who actually need it.

  • Livestock register: Tax revenue from livestock running into hundreds of millions of dollars are lost each year because livestock taxation is steeped in corruption. However, this will be a tough sell to the Fulani's because they will most likely want the corruption to continue.

We had a rash of highly coordinated scams between 2012 - 2017. Most were pyramid schemes and bogus HYIP cryptocurrency scams, so many people have lost interest in cryptocurrency at the moment. I personally lost money in such a scheme.

There is, however, a very small but highly dedicated segment of the population that is actively into cryptocurrency; but, just a few diasporans are remitting money through crypto. Also, only mostly young people are technologically exposed enough to make use of cryptocurrency in that context. Adoption of cryptocurrency for remittances will happen in Africa but it will take some time. As much as ten years.

But I agree with you, Blockchain holds a lot of developmental promises for Africa and less developed regions of the world.

@Coin_Raven NIce analysis. Can you already buy cryptocurrency on the street from your country or do you have to use abroad exchanges... Are there any exchanges in Nigeria.... and what is the government's response to blockchain?

Hi @Ingram

We have folks who mine and sell cryptos and some small exchanges. A Dubai blockchain company [can't recall their name now] recently setup up shop in Nigeria. They plan to base their Eastern and Western African operations out of Nigeria.

We have two major events/conferences here. On the whole, I think Kenya has the most vibrant cryptocurrency scene in Eastern and Western Africa.

The Central Bank of Nigeria released a statement some months back which was at best confusing but the gist of it was that they will watch from the sidelines. As for government adoption: that's a lofty dream. In 20 years perhaps!

I believe corruption is one of the major concerns in low-income and developing countries. Corrupt officials and lack of economic democratization have left the collective welfare and growth of these countries in hands of a few people. Around 70 percent population of these countries now lives below the poverty line.

Cryptocurrency, especially those based on smart contract protocol will allow transparent contract system. All records are saved on the blockchain that allows citizens to monitor how state funds are being utilized easily.

@Coin_Raven that's so interesting to hear a perspective from the inside as it were. There are small projects cropping up in areas that so desperately need them and it gives me real hope that blockchain can actually even the playing field, even if it takes decades to do it.

Often developing countries do not have sufficient separation between the government and the legal system. This means that corruption can make it difficult for people to get a fair deal. For example, if a relative of a government minister starts up an insurance company, collects a few million dollars in insurance premiums, and then decides to fold the business, saying that it was not profitable, it is easy for them. Nobody will waste their time trying to take this person to court. So financial instruments, even when government backed, are not always popular or even functional in developing nations.

But smart contracts on the blockchain can turn all of that around. You don't need to trust the CEO, you need to trust the code that the contract is built on. So I'm hoping to see things like insurance, and superannuation become available to people in developing nations based on blockchain technology.

The thing that is currently holding much of this back is the oracle. The means through which the smart contract gets facts about the outside world. How does the oracle know if the car was really stolen or the house really did get burnt down? Solving this connection between the real world and smart contracts will make a big difference to many lives.

Another major issue in developing countries is an inability to prove identity. The project ID2020 is working on using the blockchain to enable anyone in any country to have an identity. Part of the genius in their system is enabling other members of a village, family, workplace or so on to attest to someone's identity. That way people do not need their government to enable them to have an identity.

Then once identity is established, it makes many other things possible. @Coin_Raven mentioned the problem of land grabbing. This is a big problem in Cambodia where I live too. But if you could associate GPS coordinates with an identity on the blockchain, then this issue would be solved.

And I have often been surprised in my travels to see how fantastic the Internet infrastructure is in less developed nations. It is always better, faster, more reliable, more accessible, and cheaper than in Australia. And the saturation of smartphones in these countries often surprises me too. So blockchain solutions that work on mobile devices could be adopted extremely quickly in developing nations. And I would not be surprised to see them overtake established nations very quickly. The old countries are slow to move.

For the governments of developing countries there is another benefit. Creating physical coins and notes is expensive. Not just the act of manufacturing them, but all of the security required to control its creation, distribution, storage, accounting, removal and destruction. Then once these physical notes and coins go into circulation, they need to be transferred in and out of banks, safes, and transported in security vehicles. This requires a lot more infrastructure than cryptocurrency. It is also reasonable to assume that a society that does not carry cash, will suffer less from robberies and spend less on managing that crime.

So while residents are set to benefit in many ways from access to cryptocurrency, governments could avoid or reduce a lot of costs by converting their economy off physical money.

The issue of third world country counts, but the most important venom is that, if only cryptos can be exchanged for Fiat with a turbo speed transaction, then the vision of blockchain would have been achieved. [https://bizdynamicx.com/how-to-withdraw-transfer-send-bitcoin-from-localbitcoins-in-240-seconds/]

Having gone over to a news tabloid and read an argument. The argument was really on the possibility of exchanging Bitcoin to fiat. Which if possible, then could be said that Bitcoin has value.

While there was a continuous hit about the topic, this was an example of really exchanging Bitcoin to local currency.

About adoption, even though it might take some time, the stance is that ad far as more enlightenment are made up, then the blockchain vision will work out excellently.

@timmarsh African governments need people like you on their blockchain taskforces to offer advise on how to use the technology to resolve some of institutional problems plagueing Africa. Speaking of which, the ICT minister in Kenya recently set up a task force to look into Blockchain. It's rumored that the minister is a Bitcoin dealer which if true proves that some government officials have already dipped their hands into the crypto cookie jar.

Look at what's happening in Venezuela; the president strongly believes that Petro will bring some financial stability and autonomy to the country. Of course such revolutionary leaders will face fierce opposition but their disruptive ideologies are just what the world needs.

@bizdynamicx Kenya just got its first Bitcoin ATM whoop!whoop! Those of us who love crypto and live in Africa know just how a big deal that is. So, by and by, Africa will get there when it comes to cryptocurrencies. Funny enough, a financial product from Africa like MPESA has achieved global fame due to its convenience and efficiency. Therefore, I believe that Africans can come up with revolutionary crypto projects that will leave a mark the world over.

@cryptoqueen said in Cryptocurrency in Third-World Countries:

@timmarsh African governments need people like you on their blockchain taskforces to offer advise on how to use the technology to resolve some of institutional problems plagueing Africa. Speaking of which, the ICT minister in Kenya recently set up a task force to look into Blockchain. It's rumored that the minister is a Bitcoin dealer which if true proves that some government officials have already dipped their hands into the crypto cookie jar.

Look at what's happening in Venezuela; the president strongly believes that Petro will bring some financial stability and autonomy to the country. Of course such revolutionary leaders will face fierce opposition but their disruptive ideologies are just what the world needs.

@bizdynamicx Kenya just got its first Bitcoin ATM whoop!whoop! Those of us who love crypto and live in Africa know just how a big deal that is. So, by and by, Africa will get there when it comes to cryptocurrencies. Funny enough, a financial product from Africa like MPESA has achieved global fame due to its convenience and efficiency. Therefore, I believe that Africans can come up with revolutionary crypto projects that will leave a mark the world over.

You seem like you know a lot about Kenya, @CryptoQueen. Where are you located? ๐Ÿ™‚

P.S. Crypto will be MPESA x 100+ ๐Ÿ˜›

@AfriDylan Am in Kenya. Out here, there's some buzz about cryptocurrencies with a number of meetups and blockchain associations in place. Actually when you want to explain to some one what crypto is, MPESA is the best analogy to use.

@cryptoqueen said in Cryptocurrency in Third-World Countries:

@AfriDylan Am in Kenya. Out here, there's some buzz about cryptocurrencies with a number of meetups and blockchain associations in place. Actually when you want to explain to some one what crypto is, MPESA is the best analogy to use.

Haha yeah... though they aren't completely one and the same, I think MPESA will definitely help with adoption in these areas. The fact that you can transact with MPESA on a phone made in the early 2000s is pretty neat--the same applies to cryptocurrency.

Like you said, it's easier for people to grasp some of the basic potential of cryptocurrency when they are already transacting with mobile money in the form of MPESA. Despite lagging behind in many ways with technology, African countries almost have an edge on other areas in that sense.

Many people in the world pay attention to different opportunities to earn. Cryptocurrency in the third-world countries here is one of the most important accents. That is the reason why a lot of people work with https://3commas.io/blog/7-tips-for-creating-the-ultimate-cryptocurrency-investment-strategy became so popular and ready to go almost for every person in the area.

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