Top Problems That Bitcoin Can Fix

Perhaps it's the perfect time for governments to think outside the box. Here are some of the most common financial problems and how Bitcoin can fix them.

Whether you stay in a developed or third-world country, you must have heard people complaining about high commodity prices. Citizens have occasionally protested against things like high gas prices and, in some cases, heavy taxation. You'll agree that the currency exchange rates also fluctuate constantly, thus making international traders highly vulnerable to losses.

The most recent inflation your country ever experienced wasn't the last one. Therefore, multiple similar instances are probably on their way coming. So the most critical question becomes; how best can we manage our financial systems to ensure nothing wrong ever happens again? Maybe we know the correct answer. Bitcoin technology provides robust solutions to most of the problems associated with the current financial systems.

Why Has the Conventional Money Failed?

Besides the two financial challenges mentioned above, the traditional banking systems have many other flaws. The problems have made life difficult and rendered millions of people jobless. One of the primary challenges of decentralized financial systems is the lack of transparency. Those in charge, especially in the developing world, mismanage funds.

Unfortunately, the fiat currency systems lack robust auditing mechanisms to trace the perpetrators and punish them accordingly. As a result, the stealing culture has been consistent, leading to the loss of billions of public funds meant for various projects. Additionally, NGOs are battling corruption cases annually. Most of the money they donate doesn't reach the target because of theft.

Apart from high susceptibility to corruption, conventional money transactions are significantly expensive. You'll have to part ways with a considerable percentage of the amount you're transacting any time you make a payment. Besides, cross-border transactions take too long to process, causing delays and economic losses.

The other thing people hate about conventional money is how the government has excess control over it. The authorities can seize your funds any time they want. Also, the government can impose financial policies that make importing or exporting goods challenging.

Key Problems Bitcoin Technology Will Solve

If Bitcoin technology continues to advance and spread as it does currently, most of the traditional banking system problems will soon end. The following are some of the global challenges Bitcoin will eliminate.

High Costs

Bitcoin technology has a more innovative way of minimizing transaction charges. The platform does not work with any central governing authority. As a result, it has low human resource requirements, which keep the operational costs down. So it means you won't pay much as service fees whenever you use your Bitcoin wallet.

Joblessness

Shortage of job opportunities has become an international concern, especially since the outbreak of the coronavirus pandemic. Many people lost their jobs due to various countries' new safety measures. However, the lack of or shortage of jobs may soon be a thing of the past.

Bitcoin technology is coming with a range of investment opportunities. For example, unlike seven years ago, you can easily purchase and trade cryptocurrency today on prominent exchanges like this BitProfit. Crypto trading is vital because it allows thousands of jobless individuals to invest and earn a living.

Corruption

Corruption is undoubtedly one of the primary drivers of slow economic growth in developing countries. The acts like nepotism and tribalism have led to uneven wealth distribution. Besides, corruption causes significant financial losses in various government ministries annually.

A high-tech payment system like Bitcoin can ensure higher levels of integrity and accountability. Thanks to blockchain technology, any transaction details added can't be edited or deleted. Every record is permanent and accessible for public scrutiny.

Environmental Degradation

Climate change is one of today's most dominant threats to human existence. Surprisingly, unhealthy human activities such as urbanization and energy production cause deforestation.

Bitcoin mining is an incredibly power-hungry process. Bitcoin mining companies are now shifting to renewable energy sources to keep the industry sustainable to generate cheap electricity. Additionally, they've implemented energy-efficient consumption practices to tame the demand for more electric power. This move is essential in environmental conservation since it has slowed down deforestation and significantly minimized the emission of greenhouse gases.

Final Thoughts

Even though it's still experimental, Bitcoin technology has an overwhelming potential to fix various global financial problems. Some of the challenges Bitcoin can solve include; high transaction costs, limited access to financial services, corruption, joblessness, and inflation.

Countries like El Salvador and The Central African Republic are leading in adopting Bitcoin technology. El Salvador has already approved it as a legal tender, while the Central African Republic is doing the same.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.