Bitcoin in America
America has the most robust and established banking system in the world. On many levels, it is the land of opportunity and the roads are paved with gold. Money works great here. Yet 15% of Americans currently live below the poverty line. So how well does our money system really work?
According to the FDIC, nearly one-third of all Americans are either unbanked or underbanked, meaning they do not have a bank account or have to use non-traditional financial services. 65 million Americans have no credit score — effectively making them invisible. The average American spends $225 a year on bank fees. Over 60% of bank profits from deposit accounts come from overdraft fees alone. It is no surprise that a group of citizens was protesting the Bank of America down the block from my apartment one month ago.
What does it mean to not have a bank account in America? You hold your money in cash. You have a hard time getting health insurance. You can’t buy things online where goods are cheaper. You are at risk of losing your money or being robbed. Your cash loses value just from inflation. You lose time standing in line at check cashing places. You don’t have a good credit score so you cannot do anything that requires good credit, like signing a lease. You are effectively shut out of what normal life looks like for all other Americans. In this day and age, it is nearly impossible to take care of our most basic needs — food, shelter and education — without a bank account.
This is not just an “immigrants in America” issue. This is a “being poor in America” issue.
Article 22 of the Universal Declaration of Human Rights states that everyone has a right to an adequate standard of living. Yet, without access to basic financial services in America, it becomes increasingly difficult to get a roof over your head and pay your bills.
Basic financial services are a critical first step in taking care of and advancing ourselves, our families and our communities. Without it, an adequate standard of living falls further out of reach. Yet millions of Americans do not have access. Globally, the number becomes even more staggering — 2.5 billion adults in the world are too poor to afford basic banking services.
I am not anti-bank — I was a venture capitalist for goodness sake. But I believe that people need to have access to a financial system that allows them to take control of their finances and their lives. It has become a precursor to our other basic rights.
So what does Bitcoin or digital currency have to do with this? Bitcoin started with a hope for a universal currency exchange platform. It creates a protocol for money that works like the internet. It allows anyone with mobile or web access to save, send or receive money.
Somehow, over the past few decades, we became accustomed to the notion that we must pay money to use money. Financial service companies have become gatekeepers where we must pay for basic access to transact. There are monthly checking fees and ATM, overdraw and transfer fees much like how in times past, we used to have to pay money to send information, like a letter. But today, email, blogging and tweeting are free. Sure, there are premium services we may pay for to get added personalization or security, but baseline access is free.
Digital currency protocols offer us a hope for a different future. They are protocols that are not owned by anyone. There is no gatekeeper who can charge for basic access.
What would this mean in practice? It means paying for financial services will not be equivalent to paying for access because access would be universal. We would still pay for value-added services, but you would have access to basic financial services the way you have email today. And people who can not afford regular banks can stop being invisible. It gives everyone a chance. This is the promise I see in the protocol. But for this promise to be fulfilled, we need more people on the network. Like email, it only works if both parties in a transaction have an account. People need to be connected.
When I first became involved in the digital currency space, bitcoin was not an investment vehicle for me. Digital currency was a way that I could stand up and be counted. I could be one of the links that connects people together in a future where we all have equal access to basic financial services. We can choose to live in a society where access to our financial system is metered or we can choose a system that is open like the internet itself.
I don’t know if bitcoin will be the final winner in our financial future, but it has certainly been a pioneer. Bitcoin helped us envision a future where financial infrastructure could be a public good, much like the internet is today.
I know it seems hard to participate because digital currency can be so confusing but I will help you. Raise your hand to be counted. Tweet to me @joyce this week and I will gift you a bit digital currency to get started (dogecoin because, hey, it’s fun!). Get connected.
