One of the signs of 2020 is that global markets see lots of instability, which is right at every society level. There may be more opportunities open for individuals, but this hasn't necessarily turned into more people accessing banking services. In some areas, great ideas like micro-lending have taken off, and this has helped. But globally, as we go away from regular Monday-Friday, 9-5 jobs, millions of souls turn to non-traditional work methods. For several of these independent professionals, the result has been that personal finance is going even further endlessly.
At a global level, we're yet seeing vast numbers of underserved persons. Even in developed countries, the gulf within banked vs. unbanked can be deep: in the US, as many as one-quarter of all families are unbanked or underbanked, without easy access to savings, credit, or loans. Several who lack financial literacy and the pandemic have highlighted these problems in ways not seen previously. In nations like the US and Canada, incentive payments distribution has taught how dangerous many livelihoods—and lives—truly are.
According to World Bank estimates, the global market will shrink by 5.2% this year. This would represent the lowest recession after the Second World War. Global problems need global solutions. How can blockchain be utilized to drive a global economic recovery?
While blockchain can not solve unemployment problems or the problems resulting from the cost of living outpaces wages, it can make financial services and products more accessible, secure, and fair. It also supports financial inclusion by keeping fees low and securing every transaction is equal, no matter where it originates or initiates it.
In the United States, several found that the distribution of stimulus checks was neither streamlined nor transparent. How much better would it have been to share those benefits using a blockchain? In the track of COVID-19, nations worldwide (including Canada, New Zealand, Spain, and Australia) have started to examine universal basic income (UBI), and blockchain gives an efficient way to handle shipping logistics. Adding flexibility would confidently impact populations: by stopping automatically when recipients' incomes rise to a specific level, for example, and by beginning again when revenues fall, all without the requirement for complex or convoluted application processes.
By transforming finance, of course, blockchains also have the power to support much broader change. When individuals can connect freely and without constraint, decentralized governance becomes possible. We previously see this on a civic level, with cities such as Oslo, Dubai, and Toronto investigating blockchain-based projects. Done well, smart cities hold out the hope of being more sustainable, more effective, and more able to be quick in answer to changes in the atmosphere. Another advantage is that distributed control will extend participation in governance broadly and horizontally so that all citizens can contribute to a democratic manner that is both clear and fair.
Now more than ever, principal online markets need to rethink the business value they create for their users, not just the value they extract from them. An excellent example of how this works is Reddit: with assistance from the platform, two subreddits have started their cryptocurrencies that can be utilized as tokens for an in-community currency, with distribution linked to contributions and governed by community agreement.
In current years, platforms like Facebook, YouTube, and Airbnb have grown successful due to individuals' content and products rather than organizations. Crowdfunding has become common, with marketplaces such as Patreon and Kickstarter allowing creative businesses an opportunity to raise funds directly from their consumers. What's the next step? The ownership economy will generate new ways to distribute economic value, with platforms that aren't only funded by users but also owned by them. What requires to happen to make this accessible and widely available? Blockchain will be a vital part of making finance more convenient to 99%.
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