How Blockchain & Cryptocurrencies Could Eliminate Poverty
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.