It is worse than it was before, but wealth inequality seems to be increasing. The gap between wealth and income disparities seems to be growing over time, regardless of whether we are talking about income gaps or wealth. This despite the well-intentioned efforts of governments to help the disadvantaged.
Can BTC (BTC) –and all cryptocurrency — help with this? Critics would argue that BTC’s concentrated ownership makes it unlikely to save the poor. However, participants and proponents of crypto believe that it can play an important role in shifting the balances at least a little.
According to Cryptonews.com, the industry figures speak out in favor of Bitcoin because it offers a variety of benefits. These include removing middlemen and preventing inflation and money printing. Although not all crypto experts believe Bitcoin can solve inequality, most industry professionals agree that Bitcoin has the potential to transfer wealth to younger generations and stop Cantillon effects only benefitting Wall Street.
Stopping inflation and Cantillon effects, encouraging greater participation
Blockstream Chief Strategist Samson Mow believes that Bitcoin can reduce inequality, in large part due to its fixed supply limit of 21 million BTC.
“Inequality is a major problem. Bitcoin solves this.” Many countries use the US Dollar as their currency. But when the [ US Federal Reserve] money printing machine goes brrrr,” he explained to Cryptonews.com.
Mow specifically argues that Money Printing, which has been more common in the aftermath of the 2007-8 financial crises and the current Covid-19 pandemic, only tangentially benefits general population. This is primarily through trickle-down effects.
Some commentators believe that Bitcoin and cryptocurrency can facilitate wealth transfers from the more fortunate to the less fortunate.
“Perhaps Bitcoin and crypto have the greatest impact on inequality and will continue to do so in the future.” They offer huge potential gains and don’t have the restrictions or lack of accessibility associated with traditional investment options. The early adopters of crypto have experienced immense gains, and we are currently witnessing one the greatest wealth creation and transfer events ever recorded in the history of the globe,” stated Jay Hao, OKEx CEO.
This wealth transfer could occur in either of these two ways:
- Because younger generations are more likely to adopt crypto earlier, it may be a benefit to them over older investors who arrive later (and bring their bags).
- Because crypto removes all barriers to participation
Yoni Assia points out that around 1.5 billion people remain unbanked. 5.5 billion are insufficiently enrolled, which is a problem that affects both developed and developing economies.