Can Cryptocurrencies Help Solve These 3 Financial Problems?

By Nathan Sykes

There’s a lot of talk about cryptocurrencies these days, and justifiable excitement in the air. This branch of technology is much more than an alternative currency, though. In the right hands, it could become a remedy to some of the most stubborn financial problems.

We’ll talk about three of them today. These financial issues might fly under many people’s radar, but they nonetheless cause significant problems throughout the developing and developed worlds alike.

1. Getting Relief Funds Where They Can Do the Most Good

There is an exciting, emerging field in the larger nonprofit world dedicated to bringing blockchain-based financial infrastructure to parts of the world. These regions might suffer from intense inflation, or they may not currently have the kind of stable, structured financial system that makes even the most fundamental exchange of goods possible.

In other words, blockchain can help money reach places in the world where money has little meaning.

GiveCrypto is one nonprofit organization — or is it a tech company? — operating out of Silicon Valley that’s using cryptocurrencies to fuel a new kind of charitable outreach. Here’s executive director Joe Waltman in his words:

“Crypto has the highest likelihood of being helpful to people in places where money is broken … And there’s probably no better example of broken money right now than Venezuela.”

For families left vulnerable and reeling from the turmoil in Venezuela, the roughly 67,000% inflation rate is unlivable for millions of citizens. Blockchain, in this scenario, provides Venezuelan families with weekly donations, equivalent to around $7, through a smartphone app.

Cryptocurrency used this way helps build a transferable and fungible financial vehicle that has meaning within the borders of a country, as well as across the world.

Venezuela is a test case to be sure, in part because another fundamental property of currency is that it must be durable. Blockchain must further prove its durability. But right now, many Venezuelans have access to commerce and food who didn’t have it before cryptocurrency came into their lives.

2. Retirement Plans and Pensions

The World Economic Forum noted in a recent report that the global pension savings deficit will continue growing at a rate of 5% per year until 2050. That essentially means there’s not enough buy-in anymore to make private corporate pensions cost-effective.

Plus, 90% of Irish workers are not on track with their pension savings.

Blockchain and cryptocurrencies won’t help raise wages and won’t change people’s spending and saving habits. But they might breathe new life into the private pension market now that fewer than 13% of workers can rely on a company-backed pension.

When it comes to improving the bloated pension infrastructure, blockchain has applications. The Netherlands’ largest pension fund plans to tokenize individual investments in infrastructure, using blockchain, as a way to fund retirement accounts.

And that’s just one application. Others might take a different structure, such as using a blockchain ledger to record employee earnings in an employee shared ownership plan. The Employee Retirement Income Security Act covers this type of retirement account.

3. Make Business More Affordable and Open

Money is profitable friction. If every company had currency, and had to give up 3% of the value of every transaction to banks merely to do business with another company, that would be a broken system that benefits the already successful at the expense of everybody else. Foreign exchange fees become a way to disincentivize one person or country from doing business with another.

Fiat currencies issued by central national banks observe international borders. And credit card companies charge a multiple-percent fee when people exchange funds and goods across borders.

Blockchain offers a way to make the global financial system cheaper to navigate and more open and accessible to larger and smaller businesses alike, and an environment where foreign and domestic payments can clear much more quickly.

American Express cited a 2017 survey by The Economist and IBM which predicted 65% of banks would adopt blockchain by 2020. Shedding foreign transaction and other business fees might feel like a curious move for a profit-driven industry to make. But banks that can help shepherd a company or corporation through globalization without unnecessary border-based fees would have a clear-cut competitive advantage on their hands.

Blockchain and the Future of Money

If these problems with money weren’t on your radar, now they should be. These examples can help you better understand why blockchain has so many people excited about finding possible solutions for some of the most familiar and frustrating global financial problems.

Bio: Nathan Sykes is the founder of Finding an Outlet, where he writes about the latest in technology and business news and advice.

More information about Irish Tech News and the Business Showcase

FYI the ROI for you is => Irish Tech News now gets over 1.5 million monthly views, and up to 900k monthly unique visitors, from over 160 countries. We have over 860,000 relevant followers on Twitter on our various accounts & were recently described as Ireland’s leading online tech news site and Ireland’s answer to TechCrunch, so we can offer you a good audience!

Since introducing desktop notifications a short time ago, which notify readers directly in their browser of new articles being published, over 16000 people have now signed up to receive them ensuring they are instantly kept up to date on all our latest content. Desktop notifications offer a unique method of serving content directly to verified readers and bypass the issue of content getting lost in people’s crowded news feeds.

Drop us a line if you want to be featured, guest post, suggest a possible interview, or just let us know what you would like to see more of in our future articles. We’re always open to new and interesting suggestions for informative and different articles. Contact us, by email, twitter or whatever social media works for you and hopefully we can share your story too and reach our global audience.

If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at Simon@IrishTechNews.ie or on Twitter: @SimonCocking