Blockchain for the 99%: How everyday workers and business owners can benefit -
June 11, 2020

Blockchain for the 99%: How everyday workers and business owners can benefit

Blockchain for the 99%

Any follower of the cryptocurrency space will be familiar with the words “institutional money”. The term is repeated so often it has effectively become a meme. “Institutional money” is the big hope retail investors cling to, looking for the trigger of the next bull market. But whether the news seems positive or negative, focusing on the activities of a few wealthy funds can distract us from the real power blockchain has to revolutionize the global economy.

Blockchain was developed to increase economic justice. It is a technology that can reduce the inefficiency and even corruption that accompany centralization. While those who already have access to significant capital can make lucrative investments in blockchain, it is important to remember how everyone – the 99%, encompassing everyday workers and small business owners around the world – stands to benefit.

Growth without borders

Blockchain is essentially borderless. Sending money overseas works exactly the same way as sending money to your neighbor, and fees remain independent of the sum involved. Transfers are also significantly faster than with traditional banks, taking minutes rather than days to settle.

Besides removing barriers to transferring money, blockchain also makes banking and financial services more accessible. Just like using a business instant messaging app, anyone with a mobile phone can create a secure account. This is especially significant in the light of recent data from the World Bank showing that 1.7 billion adults globally have no access to a bank account – but two-thirds of them own a mobile phone.

These properties enable the global economy to open up in a way that can benefit both workers and small business owners.

Firstly, consider the possibilities for expanding remote work. Before the coronavirus outbreak, the number of remote workers in the US more than doubled between 2005 and 2015, and by the end of 2022, 1.87 billion people globally – 42.5% of the global workforce – were expected to have remote jobs. Measures to counter the spread of COVID-19 have since demonstrated the practicality of remote work to millions of people, which may accelerate this trend.

For employers, the advantages are clear. Companies can enjoy access to a global labor market, with the opportunity to hire talent anywhere in the world, including developing countries. They can also make significant savings on renting office space. Employees benefit too, with no need for a daily commute and more freedom in determining their working hours, which helps achieve a better work/life balance. For parents, this translates into more time spent with their families.

Borderless digital currencies can significantly facilitate the existing trend towards remote work and the benefits it can bring.

The growth of remote work is just one example of an increasingly open economy. Underserved communities in particular stand to benefit. Granting roughly 1 billion people access to a digital bank account can itself massively encourage economic activity. And because of blockchain’s borderless nature, small business owners in undeveloped markets can find far more opportunities to attract investment. This is to say nothing of how the efficiency benefits of blockchain can help producers receive a fairer share of profit.

In short, blockchain means increased economic inclusion for billions across the planet and greater flexibility in working conditions.

Fair monetary policy

Increased economic inclusion also means increased freedom to break free of mismanaged national currencies. While a degree of managed inflation can be good for economies – encouraging people to spend and hence stimulate growth, rather than save – printing huge sums of money has always ended in disaster, destroying people’s savings and rendering currencies useless even as a day-to-day medium of exchange.

Sadly, hyperinflation as a result of irresponsible monetary policy continues to be a problem worldwide, with well known examples being Venezuela, Belarus and Zimbabwe. However, even countries like Lebanon are affected, with the measures to counteract the coronavirus accelerating an existing banking crisis.

Crypto assets or tokenized versions of stable national currencies, all managed from a mobile phone, are more attractive than cash-in-hand payments using euros or US dollars as an alternative to unreliable national currencies. Self-custody also makes it impossible for cash withdrawals to be blocked, as happened recently in Lebanon.

This brings us to one of the defining features of Bitcoin and many other digital assets: enforced protections against hyperinflation. While Bitcoin has a fixed maximum supply of 21 million (effectively making it deflationary, since coins will be lost), other assets like Ethereum have no maximum supply but limited inflation rates.

Crucially, inflation for cryptocurrencies is not controlled by a single central bank, but by the community running the currency’s blockchain, which is distributed around the world. Even though the US dollar is not experiencing a hyperinflation crisis, its centralized nature means this is not impossible in future: political changes allow for changes in monetary policy set by the Federal Reserve. With cryptocurrencies, radical changes in monetary policy are practically impossible, given the distributed nature of their communities.

But preventing hyperinflation is not the only issue when it comes to fair monetary policy. The management of normal inflation in developed countries also points to economic injustice.

As a case in point, consider the current coronavirus stimulus package in the United States. While a certain degree of increased inflation during a crisis is not necessarily a problem, there are many questions that can be raised about who will benefit from this cash injection and whether the stimulus is really reaching those who most need it. The centralized management of inflationary stimulus packages makes it possible for those closer to power to benefit most – and with the currency devaluing as a result, they can effectively represent a redistribution of wealth towards the top.

Blockchain-based currencies offer opportunities for stimulus packages that do not raise the same concerns. It would be straightforward for a central bank–operated cryptocurrency to allow stimulus “checks” to be credited to wallets. For example, in a centralized system based on blockchain, specific wallets could be registered for tax tracking, making it trivial to send a set amount to each citizen. The stimulus process would be faster, with reduced bureaucracy and reliance on physical infrastructure. With a simpler, more transparent process, the privileging of specific entities close to those controlling the money supply would be less of an issue.

Unfortunately, the current Digital Dollar Project does not seem to be created in this spirit, proposing a “two-tiered banking system” where commercial banks and other regulated entities act as intermediaries between the Federal Reserve and end users. The project’s whitepaper claims that this “preserves the current distribution architecture and its related economic and legal advantages”. In light of the above concerns, we must ask – advantages for whom?

By contrast, fully decentralized digital currencies have far greater protection against both total mismanagement and corruption. Moreover, blockchain technology makes it practical for even state-controlled blockchains to make inflationary measures more fair. Of course, whether central banks embrace this possibility remains to be seen.

You can stay up to date with Nash by following our Twitter and Instagram. We also encourage all Nash Exchange token (NEX) holders to join our community platform, where they can talk directly with the team and receive reliable answers to questions.

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