Cryptocurrencies to confront rising inequality

Cryptocurrencies are able to help recipients of foreign aid by allowing them the opportunity to exchange peer-to-peer, rather than having to transact through bureaucrats. Español

Elizabeth Stephens
12 February 2018
JoelHopkins anothe world is poasible_0.jpg

Credit: By Guillaume Paumier (Own work) CC BY 3.0 via Wikimedia Commons.

The year 2017 will go down as a particularly tough one for ordinary citizens, particularly in the global South. A sharp rise in government restrictions on fundamental freedoms across regions as well as in levels of inequality played a big part in that negative review.

According to a recent Oxfam report, 1% of the world’s richest now own 82% of the world’s wealth, with a dollar billionaire having been created every two days in 2017. People are actively fighting back against a system that seems to favour the super-rich at the expense of everyone else. According to the CIVICUS Monitor, an online tool that tracks threats to civil society in every country, there were at least 42 reports of activism leading to positive developments for civic space in 2017.

But it’s not only activists challenging the status quo. Ordinary citizens are as well, and they are doing this by turning to innovations that promote alternative economies — such as ‘sharing economy’ platforms and cryptocurrencies, for example – to enable them to function in countries where repression is commonplace and where only the rich can transact.

Sharing economy, sharing rewards.

In addition to global enterprises like Uber and Airbnb, that are growing more rapidly in developed countries, sharing economy platforms are also being adapted to meet the needs of citizens in developing societies – particularly those in which the right to speak out openly, assemble peacefully, and organise around issues is not respected.

In these nations, sharing economy platforms often act as hybrid marketplace models involving both paid-for and gifted services shared across a particular network and free of state intervention.

FabLab is a technical prototyping platform for innovation and invention, providing stimulus for local entrepreneurship. Their offices are based across the world, including over 40 offices in Latin America, and shared learnings uploaded to their platform allow members to access both physical co-working spaces as well as knowledge across the network.Tryngo involves an exchange of goods in the community nearest you.

And in Geneva, they have expanded the concept of sharing economy to include hard skills – you can now share your trade skills with other members of the network for free, and receive skills in return at the Trade School

In this context, Trade School, FabLab and other similar models are able to address the demand for services among citizens – and their lack of funding to access them – by tapping into a skilled marketplace willing to donate or exchange pro-bono services.

Crypto-power to the people

Powered by blockchain technology, cryptocurrencies have also had success in developing countries. Because of the immutable nature of blockchain, cryptocurrencies are able to help recipients of foreign aid by allowing them the opportunity to exchange peer-to-peer, rather than having to transact through bureaucrats, which in many cases would leave them open to extortion, bribery, and other forms of corruption.

Cryptocurrencies also operate on a global marketplace, effectively combating the inflation that many living in poorer countries may face and that renders their home currencies useless. BitPesa, M-Pesa, and MicroMoney are actively being used in African and Asian countries to send cryptocurrencies both domestically and internationally. The UN is even experimenting with sending the cryptocurrency Ethereum to 10,000 refugees in Jordan because it can be exchanged via mobile phone.

Cryptocurrencies and sharing economy models are not perfect, nor are they the only solutions for civil society. Ensuring that sharing actually takes place among groups and individuals that lack the time and manpower to deliver services is a challenge for many sharing economy platforms.

Yet as billionaires dominate headlines and the 1% make critical decisions in Davos that affect everyone else, it is important to note that alternatives for citizens, activists, and organizations exist.

Because of high mobile penetration rates even among poorer and developing countries, they are easier to access now than ever. 

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