How Blockchain & Cryp­tocur­ren­cies Could Elim­i­nate Poverty

Trillions - - In This Issue -

It is com­monly be­lieved that money must be earned and that sim­ply giv­ing peo­ple money can do far more harm than good. While this is true in some cir­cum­stances, it is not true in all.

Brazil's Bolsa Fa­milia pro­gram, which pro­vides fi­nan­cial aid to fam­i­lies if their kids are in school and get pre­ven­ta­tive health­care, has been highly suc­cess­ful. The pro­gram now reaches nearly 25% of the pop­u­la­tion and has clearly demon­strated that strate­gic re­dis­tri­bu­tion of wealth can re­duce chronic poverty and the crime and des­per­a­tion it breeds.

With au­to­ma­tion and ro­bots to ren­der a large per­cent­age of the work force in some coun­tries ob­so­lete, even rich coun­tries have started to con­sider or toy with guar­an­teed min­i­mum in­come in which every­one would re­ceive a ba­sic in­come.

One of the chal­lenges of any so­cial sup­port pro­gram is en­sur­ing that it isn't abused and doesn't in­crease gov­ern­ment debt.

Blockchain technology com­bined with a dig­i­tal cur­rency lim­ited to cer­tain goods and ser­vices, such as food, health­care, rent, trans­porta­tion and not cig­a­rettes or al­co­hol, could greatly re­duce the po­ten­tial for mis­use while re­duc­ing poverty. Bit­coin has clearly demon­strated that a cur­rency need not be gen­er­ated through tax­a­tion or in­cur debt. The abil­ity for na­tions to dis­trib­ute fi­nan­cial aid in a man­aged way with­out in­cur­ring debt could in­deed lib­er­ate much of the world from poverty and ren­der rent-seek­ing cap­i­tal­ist or­ga­ni­za­tions like the U.S. Fed­eral Re­serve, World Bank and In­ter­na­tional Mon­e­tary Fund ob­so­lete.

What would be re­quired for suc­cess is for busi­nesses and in­di­vid­u­als to ac­cept and value the dig­i­tal cur­rency.

Venezuela and Dubai have promised to ac­cept their own dig­i­tal cur­rency for pay­ment of taxes and other gov­ern­ment fees. This en­sures that there is at least some place to spend the dig­i­tal money.

A steady in­crease in value of the cur­rency would also help en­sure ac­cep­tance.

State cur­ren­cies that are traded in­ter­na­tion­ally can gen­er­ate the hard cur­rency na­tions need to pay off their for­eign debt, free up their cap­i­tal for eco­nomic pros­per­ity and lib­er­ate them­selves from the debt-poverty cy­cle man­u­fac­tured by U.S., EU and in­ter­na­tional bankers.

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