Its hard to open a financial magazine or newspaper these days without reading some article about cryptocurrencies. Whether bitcoin, ethereum, or litecoin, or any of the other hundreds of digital currencies available these days, investors are smitten by huge price rises and volatile trading. But what effect will cryptocurrencies have on the needy?
The transformative change in society that would result from mass adoption of cryptocurrencies stems from the transition from paper money to digital currency. Instead of taking out a few dollars from your wallet to pay for groceries, you can now click a button on your iPhone that will link to Apple Pay and connect to a credit card stored on your phone.
This is a single step in digitizing transactions but cryptocurrencies will result in something much more significant that may have a greater effect on the poor and needy. Even in todays increasingly digital society, people still do carry cash in their pockets. But in a world of cryptocurrencies, society migrates to a cashless system.
Investors are concerned about which cryptocurrency to buy, litecoin or ethereum, and which digital exchange offers lowest fees and best transactional experience, whether Coinbase or Gemini or Kraken. But for the homeless and needy who cannot afford to buy food or pay for shelter let alone electronic devices to connect to a world of cryptocurrencies, what happens when cash disappears?
The major news outlets these days focus on bitcoin and zcash and monero and other cryptocurrencies from three primary vantage points: investors, government and criminals. Governments are increasingly nervous that the adoption of cryptocurrencies that are not under central bank control and will potentially lead to loss of control over monetary policy. And from the perspective of criminals, it is commonly viewed that cryptocurrencies provide a means to transact in illegal goods and services. But what about a fourth vantage point: the needy who are excluded from the digital currency world altogether?
While it may be possible that some entrepreneur will come along and invent a cheap device that those in need can use to receive digital currencies at no cost from kind strangers similar to how they receive cash these days, the prospects for those who rely on the charity and benevolence of donors are bleak.
But the human spirit is resilient and has found a way to conquer highly disruptive innovations in the past. All you need to do is look to the past when most labor jobs were in the agricultural sector and compare to todays society to see how technology advancements can modify the lives of citizens.
While fear is constant that technology will make workers obsolete and create unemployment across many sectors, humans continually find ways to overcome the struggles of disruptive forces that lead to significant change.
Nevertheless, for those who rely on charity from strangers to feed themselves daily, the mass adoption of cryptocurrencies could result in significant change and lead to structural societal changes.