Bringing 700 Million People Out of Poverty: Can Cryptocurrency Be Used to End Poverty?
Poverty remains a global epidemic that affects millions of lives, particularly those without stable housing. Across the United States, Australia, the United Kingdom, and beyond, the crisis of homelessness is worsening. As economic inequality grows, the global poverty rate remains shockingly high, with projections indicating that the number of homeless people could increase by millions in the coming years.
Cryptocurrency and blockchain technology have emerged as potential tools to help lift millions out of poverty, providing not just a digital currency but a new way to create financial inclusion and affordable housing for the most vulnerable populations. With over 700 million people worldwide living in extreme poverty, and the number of homeless people set to rise significantly, it is essential to explore how innovative technologies can offer real solutions.
The Devastating State of Poverty and Homelessness
Poverty is one of the most pressing issues facing the world today. According to the World Bank, over 700 million people still live on less than $1.90 a day, defined as extreme poverty. This group is largely excluded from opportunities for education, healthcare, employment, and other essential resources. The impact of poverty is even more visible in the growing crisis of homelessness.
In the United States, millions of people are homeless which includes men, women, and children who are living in shelters, temporary accommodations, or on the streets. Homelessness in the U.S. is further exacerbated by skyrocketing housing prices, stagnant wages, and an insufficient supply of affordable housing.
Australia faces a similar crisis. The country is home to over 116,000 people who are experiencing homelessness, with an increasing number of families, older adults, and young people among those affected. Housing unaffordability, combined with financial insecurity, is contributing to the rising number of homeless individuals. Projections suggest that homelessness could increase by an additional 3 million people globally due to the financial hardships brought on by the economic fallout from the COVID-19 pandemic, further deepening the crisis.
In the United Kingdom, the number of people living in temporary accommodation or on the streets has also surged in recent years. Up to 1million individuals in the UK are homeless, and this number is expected to grow as housing prices continue to outpace wages.
The reality of poverty and homelessness affects not just individuals, but entire communities, creating cycles of disadvantage that can last for generations. In the face of rising inequality and worsening economic conditions, traditional methods of alleviating poverty—government aid, non-profit interventions, and charitable donations—are insufficient to address the scale of the problem. It’s time to look for new, scalable solutions.
How Cryptocurrency and Blockchain Can Help
Cryptocurrency and blockchain technology are often viewed as modern financial tools for investment, but they hold incredible potential in the fight against poverty and homelessness. Blockchain, the technology behind cryptocurrencies like Bitcoin and Ethereum, is essentially a decentralized digital ledger that records transactions in a transparent and immutable way. This provides an opportunity for creating transparent, efficient, and inclusive systems that can directly benefit those living in poverty.
1. Cryptocurrency as a Tool for Financial Inclusion
One of the main challenges facing the impoverished is the lack of access to financial services. Around the world, millions of people live without access to basic banking services, preventing them from saving money, securing loans, or building financial stability. Cryptocurrencies offer an alternative financial system that bypasses traditional banks, allowing people to store and transfer money securely using only a mobile phone and internet connection.
With decentralized finance (DeFi), people in developing countries or economically disadvantaged communities can access loans, savings, and investment opportunities that would otherwise be out of reach. DeFi platforms leverage blockchain technology to provide banking services without relying on traditional intermediaries like banks, reducing the cost of financial services and making them accessible to people living in poverty.
By removing the barriers to financial inclusion, cryptocurrencies can help lift millions of people out of poverty, enabling them to start businesses, pay for education, and improve their livelihoods.
2. Blockchain for Affordable Housing
Perhaps one of the most compelling ways blockchain can address poverty is through its application in the housing sector. Rising housing costs are a primary driver of homelessness, particularly in urban areas. Traditional housing markets are plagued by inefficiencies, fraud, and a lack of transparency. Blockchain technology can provide a more efficient and transparent system for land and property transactions, which could reduce costs and make housing more affordable for low-income individuals.
Blockchain-based smart contracts can be used to streamline the process of buying, renting, or selling property, reducing administrative costs and the need for intermediaries. This could lower the overall cost of housing transactions, making it easier for low-income individuals and families to access homes. Additionally, smart contracts can ensure that rental agreements and property transactions are transparent and secure, protecting both tenants and landlords from fraud.
Furthermore, blockchain technology can enable community-driven housing solutions. Crowdfunding platforms powered by blockchain can allow individuals to pool funds for affordable housing projects, even at a small scale. This could allow low-income individuals to invest in affordable housing developments, giving them a stake in the project and helping them build wealth over time. By using blockchain to ensure transparency and accountability, these community-driven projects can create more sustainable and accessible housing solutions.
Blockchain can also help facilitate the tokenization of real estate, where properties are divided into digital tokens, allowing investors to buy shares in properties instead of purchasing them outright. This would make it possible for lower-income individuals to participate in real estate markets and access affordable housing without the need for significant capital.
3. Cryptocurrency for Direct Aid and Support
Cryptocurrencies also offer a way to deliver direct aid to those in need, bypassing the inefficiencies of traditional aid distribution channels. When aid is sent via cryptocurrency, there are fewer middlemen involved, which means that the full value of donations can be sent directly to recipients, without loss from fees or delays.
Stablecoins, which are cryptocurrencies pegged to the value of a stable asset like the U.S. dollar, offer a safe and reliable form of digital currency for aid. These coins can be used to send financial support to communities affected by poverty, natural disasters, or conflict, ensuring that people receive timely and reliable assistance. Blockchain’s transparency also means that donations can be tracked, providing donors with confidence that their contributions are being used as intended.
A Path Toward Ending Poverty
The potential for cryptocurrency and blockchain to alleviate poverty is immense, but it requires collaboration between governments, businesses, and non-profit organizations to build infrastructure and systems that are accessible and secure. The widespread adoption of blockchain would create a more equitable financial system, providing everyone—from the unbanked in developing countries to the homeless in wealthy nations—greater opportunities to break free from poverty.
In conclusion, addressing the global crisis of poverty and homelessness requires innovative, scalable solutions. Cryptocurrency and blockchain technology can be powerful tools in this effort, creating opportunities for financial inclusion, affordable housing, and direct aid. With the right infrastructure and regulation, these technologies can help bring millions of people out of poverty, providing them with the means to improve their lives and build a better future.
