Opinion Everyday use of Cryptocurrency in Poverty-Stricken Nations

Everyday use of Cryptocurrency in Poverty-Stricken Nations

July 11, 2020

When bitcoin and other big cryptocurrencies were conceived, their creators imagined a means of payment, savings, and all other procedures that qualify any fiat currency. In essence, they were envisioned as a means of monetary transaction that would parallel that of the fiat and traditional world, without being in any kind of direct contact with it. That is why the original vision of bitcoin placed it in a very same boat as any other currency since the dawn of time.

However, as the world of crypto came into being and kept on evolving, things like BTC or ETH tokens slowly began to morph and evolve into assets more than any currency. Today, they still continue to be a means of investment and a vessel for holding value than an actual digital currency that is employed for everyday activities.

But this is mainly the case in the developed parts of the world where people ranging from rich crypto investors to esports players, cryptopunks and other similar profiles of individuals tend to buy, hold and sell crypto. In other parts, especially the less-developed regions and nations, cryptocurrency has a very tangible and day-to-day use. One such place is Venezuela, but it is also a great example of the fact that the original vision of Satoshi Nakamoto and other cryptocurrency creators still can see the light of day in its original form.

AirTM Venezuela Project

Over the past 24 months, many in the bitcoin community donated their BTC funds to a fintech startup called AirTM. It is not the only such initiative, but it does offer a glimpse into a wider school of thought that believes in giving out cryptocurrency to places where people are struggling. The country of Venezuela is a location like that. So far, AirTM distributed cryptocurrency worth about 300,000 USD. On the receiving end were over 60,000 individuals in Venezuela who own ID-verified digital wallets.

The money came from a range of donations, covering people like Coinbase executives and other individuals active in the cryptocurrency domain, but also companies like GiveCrypto many others. In the mixture of donations was also a crowdfunded piece of art – a mural, more precisely – that was designed to incentivize donations to the project.

It provided around 12 percent of the donation to the users of AirTM in Venezuela. As for the individual donations, people received bitcoin cash or BCH, zcash (ZEC), and dai (DAI) – most got about 5 USD worth of crypto. The data shows that most users did not withdraw their money to fiat currency and instead decided to keep it into the AirTM ecosystem.

Fund Engagement

The AirTM team created a survey of their users to check out how people in Venezuela have been using their funds and engaging with the platform. The result shows that less than 60 percent (57, to be precise) actually engaged in any way with the crypto they got. Many found that even the conversion of crypto to their AirTM credits or the AirUSD was a big hassle that they did not want to go through. Out of the 43 percent who did access their funds, about 2,000 used it to purchase food. For this, they used AriTM to get bolivars – the local fiat currency – and then purchase things in their area.

The intermediary here was a local bank that was connected to their digital wallets. Besides those, an additional group of Venezuelans used the crypto as a form of savings. However, the majority preferred to switch crypto they had into AirTM credits and then use it however they like. Interestingly, this includes people who are doing things like esports or freelancing, and who receive crypto from third parties for their work. They also employed AirTM as a digital bank and exchange platform where they would convert the bitcoin they got into native credits for this platform.

Improvised Banks

This is another interesting facet of the entire process of operating with AirTM donations and platforms – many users began employing the entire setup as an improvised bank. The same setup includes all elements that any private citizen bank account would have as well. An additional incentive here is that many local and regional crypto exchanges have a bad or sliding reputation, so people fear fraud. At the same time, many are looking to exchange USD into crypto and vice-versa, as the stability of the bolivar continues to deteriorate or holds on to a shaky status quo.

Thus, AirTM presents a logical alternative that users both trust and know how to use. Many might not have bitcoin or zcash wallets, but this platform allows them to overcome that problem easily. Adding all of the other features of AirTM, like the ability to receive payments for work and keeping steady savings that are safe from fiat currency drops in value makes it an ideal pseudo-banking alternative.

User-Friendly Setup

It is clear that AirTM has the huge advantage of being very user-friendly, not just when it comes to the actual day-to-day use, but also in regards to the initial account setup. Venezuela is showing that this is what most people want and look for in fintech companies. With a level of trust, many will accommodate their needs to this particular platform, which in this case involves the use of AirTM credits.

So, while they use bitcoin when, for example, they receive payments for their work or airdrop donations, this biggest cryptocurrency in the world is not actually the start and the end of the entire ecosystem. Instead, it is just a small part of a much larger setup, which in this case, paradoxically comes from a smaller cryptocurrency entity – a single fintech company.

But, unlike the entire bitcoin ecosystem, the environment from the AirTM actually satisfies all of the needs of the users, which is what most individuals look for in Venezuela but also anywhere else in the world. Interestingly enough, this is one of the cornerstones of the original Satoshi Nakamoto vision: not a global bitcoin dominancy, but an interconnected, decentralized, and dynamic network of systems and setups that provide users with the things they are looking for.