Income Inequality: Can Bitcoin or Other Cryptocurrencies Fix This?
This was the headline in a Cointelegraph article. It is something that is starting to get some attention and I think it is long overdue.
Hopefully, we see the trend continuing and working its way towards the mainstream media. Many ask what problem cryptocurrency solves. The way things are going, my conclusion is that cryptocurrency, ultimately, is a solution to income and wealth inequality.
It is no secret that the present system is not working for the majority of humanity. A large percentage of the global population lives in complete poverty. Outside of that, even in the developed countries, more than half the population is financially struggling.
Sadly, this is a trend that does not appear to be reversing itself, at least from a monetary standpoint.
To me, this all revolves around the idea of distribution. Our present system has a horrible distribution system. It is becoming obvious where most of the money flow is directed towards.
Of course, many argue for a change of the system to another "ism". The challenge with that is that these systems have shown themselves to be poor at growing the pie. So while distribution might be more effective, the long term result is slowed growth and eventual collapse. The Soviet Union failed to innovate and many of the EU's present problems are following along the same lines.
Lately, the answer is to print money. This is something central banks are doing out of desperation. Simply put, they have no choice. With the global economy suddenly thrown into economic turmoil, things are bordering on civil unrest. Of course, true to form, the bankers go to the same playbook as they always did, only adding to the problem.
Many tout Bitcoin as a solution. As the Cointelegraph article points out, Bitcoin as money is not the solution in this environment. Not from a monetary perspective anyway. Where Bitcoin does excel, just like gold, is as a store of value. Over the next few years, if the money printing continues, Bitcoin could see an appreciation in price. This would bode well for all those holding the king of cryptocurrency.
Sadly, there is a major flaw with Bitcoin. To acquire it, for the most part, one needs to buy it. In other words, the swapping of fiat for Bitcoin is the most common course. Thus, those with fiat are the ones able to add to their Bitcoin holdings. No wonder the bankers are reported to be buying it on the quiet. Eventually, Bitcoin will be the cryptocurrency for the elite, just like gold.
That said, there is a lot in cryptocurrency outside of Bitcoin. Many cryptocurrencies are offering the ability to approach the industry without the ability to buy in yet still position oneself for financial growth.
For the past few years I touted how one of the biggest advantages to Hive (Steem) is the distribution model that it follows. While many complain about it, and certainly we could debate the faults, there is no denying that anyone can come to Hive and start being rewarded in cryptocurrency. Even if HIVE is scarce, there are plenty of other tokens being distributed on a daily basis that is helping to enrich people.
The key to all this is the fact that the ecosystem can keep expanding and growing. There is no limit to how many tokens can be created and projects they are tied to. Value, of course, is going to be determined by the number of users and who is involved with the applications.
Nevertheless, providing a steady reward stream will be an income for many people. This could be used to pay some bills or to help grow one's wealth. Here is where we see the ability to address wealth inequality. We all know there are projects that could see a 10, 20, even a 100 X over the next few years. Having some stake in those projects could provide a fabulous windfall.
The fact that this is global in nature and only limited by the ability to connect to the Internet, we could see a widespread move forward in people's finances. Those logging on in Nigeria can receive the rewards the same as someone in the EU. Location matters little in that regard.
Eventually, we could see similar financial approaches to the existing system. Whereas most of cryptocurrency, at the moment, is looking for the mooning of tokens, the next phase is going to be focused upon growth. How does one increase the number of tokens held and use them to get involved in projects that appreciate over time due to the growth of that application or platform? Ironic that this will provide for a more stable system, something that naysayers have pointed out as a negative of cryptocurrency.
We are rapidly approaching a point where it is easy to see the potential of Web 3.0. Many are discovering how online activity can net a decent income when the centralized platforms are removed from the equation. It is vital to remember that we are in the early stages yet the pathway is being laid.
Web 3.0 will be developed over the next decade. By the year 2030, it will be absurd to do something online that does not have a reward tied to it. Quite simply, those that do not follow this path will be ignored. It often takes a while for the "better mousetrap" to filter through the population but it eventually gets there.
In conclusion, I would have to agree that cryptocurrencies can solve the income inequality problem. Actually, over time, I feel it will also address a great deal of the wealth inequality that we see today.
Crypto-Economics takes things to an entirely different level and provides an alternate to the existing financial system.
To read Cointelegraph Article:
https://cointelegraph.com/news/income-inequality-can-bitcoin-or-other-cryptocurrencies-fix-this
If you found this article informative, please give an upvote and rehive.
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This is something that's so true, neither capitalism not socialism is the thing that needs to change, most of the world countries aren't even focusing on what they'll do to improve the lives of their citizens
It's time for the world to fully adopt cryptocurrency and blockchain, it's definitely time.
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This is just a big issue to discuss. Government must be open minded.
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Bitcoin solves one problem of wealth inequality.
It prevents banksters from printing money.
Inflation is the stealing of money, skimming a portion, and this affects the poor most of all.
It also enriches those closest to the money printers.
The other problem of wealth inequality is the Pareto Principal.
20% of the people do 80% of the work. And thus (sorta) get 80% of the money.
But, with a stable money supply it tends to works itself out.
If someone hoards 90% of the bitcoin, then the 10% circulated is that much more valuable.
(the only problem is when that big chunk enters circulation)
These problems with money will be solved by block-chain cryptos.
And it will probably be something upside down and inside out from what we have today.
Something like a debt based crypto, where the debt comes into being when the first customer buys the first widget. (because the making of the good is the actual wealth, but it is also worthless unless desired by someone else) And that debt is stored in the block chain and gets repaid by future exchanges. With also a diminishing.... you can't hold onto the note forever. Its less valuable over time.
But this gets into really sticky maths and game theory.
I enjoy reading your article where you
indulge the reader to get the point
from start to finish.
Income inequality commences a long, long time ago
and the ramifications of its existence allows a group
to always benefit from it by all means necessary.
Hopefully your post should be read by those that need
to confront the system so crypto can spread the wealth.
You said it on your post, the wealthiest knew crypto potential and again
they will absorb it.
Crypto surely lays a ground for growth and it will take a generation upon generation to erase this circle of income inequality.
The only head start, everyone has to come together, value each other.
Community principle is to grow within each other.
My hope is for this community to instill and encourage
the minnows to grow together with the whales.
This is not an easy subject to grasp around cause
the point of view will differ immensely.
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The growth of getting reward for doing something online could be rising faster than we think. This space might look slow to us because we are here on daily basis but there growths within the cryptosphere we can hardly keep up with.
I don't think any system will ever give wealth equality. You always have people smarter and just a huge amount of people are just terrible in making decisions.
inequality can mean one of two things imo. There's literal inequality where two people work 40 hours a week and one makes more than the other. You're never going to eliminate that except through totalitarian enforcement. Then There's egregious inequality that is brought about by luck or circumstance where someone trades no time for income yet uses their wealth to generate income off the labor of others. I'm not sure that level of inequality can be eliminated by crypto either, as we're seeing the exact same pattern play out with many coins. With each solution there's a problem. If you confiscate inheritance so that nobody can fall into wealth but they have to earn it (i.e. daddy's rich but son is poor), a very loud and vocal group of people cry oppression. If you let human nature run it's course however, you end up with corruption in government and oligarchies running the world, and the bottom 99% cry oppression.
I do believe that crypto does have the answer though, because it eliminates the human element, or it can, and like you say it takes away the importance of location. Both capitalism and communism have historically succumbed to total system corruption. Hopefully trustless systems can rectify some or all of these problems with wealth inequality, but I don't think there is ever a solution that is going to make everyone happy. Some people aren't happy unless they can find ways to have more than others, many of them sociopaths, but many of them also just paranoid and hellbent on their own personal survival. It's why I keep investing in Hive, as there seems to be a magic balance being struck here on many levels.
I cite Brazil as an example, which today is obliged to print more money to try to sustain the country's economy and be able to distribute basic aid because of this pandemic.
I found the point that we can use cryptocurrencies other than BTC to be able to escape income inequality very interesting. HIVE is a bridge where we still have other ways like second tier tokens so that anyone can have their first income for free.
It would already be a big step because as we know that most people are unable to buy.
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I think it can, but I don't think it will, it may even the playing field a little bit but the way I see it now it just seems like parallel oligarchies trying to mirror the previous system with them now on top. Not really a bad thing, as long as people have choice they will eventually move to where they are treated best even if its only slight bump up in change, any progress at this point is good progress.
if only they'd consider more freedom to try and fix it, but that's never on the table lol