
Why Cryptocurrencies?: For the Unbanked - lawn
https://whycryptocurrencies.com/for_the_unbanked.html
======
TazeTSchnitzel
Yes, and someone who can't get a bank account can definitely afford to acquire
a fast persistent Internet connection and ever-increasing amounts of storage
to download the full Bitcoin/Ethereum blockchain so they can send and receive
“coins” with extremely volatile prices and huge transaction fees.

~~~
tannerwj
Correct me if I'm wrong, but you don't need a fast persistent Internet
connection or enough storage to download the full Bitcoin/Ethereum blockchain
to be able to send transactions correct?

~~~
android2222
I think you do since not having it means that your wallet wouldn't know if
you've spent or received any coins.

~~~
tannerwj
For that you would just need some sort of Internet connection and some
storage, nothing out of reach for the vast majority of people, or am I wrong
again?

~~~
android2222
Yeah I mean there are many many parts of rural north america that do not have
easy access to broadband. I grew up in Wisconsin - I just simply couldn't give
someone coins when I'm up in the Northwoods.

Here's a quick example: [https://www.vox.com/2017/6/20/15839626/disparity-
between-urb...](https://www.vox.com/2017/6/20/15839626/disparity-between-
urban-rural-internet-access-major-economies)

Edit: If you give someone a coin with the private key on paper, technically
you can give them coin offline, but the rest of the networks have no clue this
happened, and you can't spend unconfirmed monies.

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vorpalhex
We should separate what the tech can do in theory, and what the tech in
practice can do.

In theory, cryptocurrency can probably do this. Even as someone who is
extremely critical of cryptocurrency and blockchains, this is actually one of
the few use cases in which it makes sense - "Hey Bob, I want to buy a business
license online. If I give you a $20, can you give me some bitdollars?"

On the other hand, this probably won't work out in practice. Cryptocurrency
exchanges do fall under KYC, so the documentation burden still exists. The
unbanked could build their own exchange... if they had the capital. In
addition, the high level of technical complexity and the need to trust in the
unseen (proof of work stakes aren't as good as physical bills when it comes to
trust) means the benefits are negated compared to just using the grey market
to have someone transact on your behalf (which is a common practice for the
unbanked, and also my uncle who still doesn't understand Amazon).

Someone could solve these problems, but they'd need to maintain an ongoing
company to do so, which would again trigger KYC and downstream fees.

~~~
brycehamrick
Cryptocurrency exchanges do fall under KYC _in the US_ and only if you want to
do certain things, like purchases over a certain volume or fiat withdraws.
There's no reason someone in India, for example, would need to go through a
KYC process simply to buy a small amount of cryptocurrency. There's also
plenty of P2P networks like LocalBitcoins that fit this use case much better
than an exchange.

~~~
umeshunni
> There's no reason someone in India, for example, would need to go through a
> KYC process simply to buy a small amount of cryptocurrency.

Except for local laws which explicitly require KYC for crypto transactions:
[https://bitcoin-india.org/kyc_aml_policy](https://bitcoin-
india.org/kyc_aml_policy)

~~~
brycehamrick
That appears to be one exchanges policy, not law. There may be a law I'm
unaware of but in any case this wouldn't come into play using something like
LocalBitcoins. Exchanges need to do this in order to conduct transactions with
banks—obviously something that isn't needed for unbanked populations.

~~~
lawn
You're not wrong, but LocalBitcoins will also require KYC now.

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SkyMarshal
This and all other discussions of cryptocurrency being useful to the unbanked
always fail to address the root of the problem - the unbanked don't have
money. Get them steady reliable cash flow first, and bank accounts or other
financial services will follow. Not vice versa.

Cryptocurrency won't help solve that root problem for poor people, only for
VCs and technologists building themselves new money, exploiting the Cantillon
Effect, and casting about for justifications to moon the market price.

To its credit this article came close to discussing this, it actually shows a
chart comparing reasons why the unbanked don't have bank accounts. The main
reason by far is, no money. But once that's established, then real question
becomes - how do you solve _that_ problem using cryptocurrency?

Nobody has an answer for that so they just conveniently skirt around it in
these type of discussions.

~~~
lawn
I basically agree.

The point I wanted to make isn't that cryptocurrencies is a solution for all,
or even most, of the unbanked. But it may be a solution for some of them. Most
cite no money as the issue, but a whopping 40% didn't. Even if it's only
applicable to 1% of all unbanked, that's still 17 million people who might
benefit.

> Get them steady reliable cash flow first, and bank accounts or other
> financial services will follow.

For some, but not all. For instance giving them more money won't necessarily
increase their trust in possibly corrupt banks. And it doesn't magically mean
they'll get an account since they might still not have the required
documentation.

~~~
SkyMarshal
_> For instance giving them more money won't necessarily increase their trust
in possibly corrupt banks._

Yes, hence why I said “bank accounts or other financial services”. The latter
could be either centralized or decentralized. Either way, they still need cash
flow/income first.

