Blockchain is already changing the lives of thousands of workers in emerging countries

Technology for storing and transmitting information without a central authority, blockchain allows you to transfer digital assets quickly and economically. Are we seeing the emergence of a new economy?

The rise of the Internet has made the world seem close at hand. Economic globalization enables companies to source talent from all parts of the world, giving billions of people the opportunity to participate in a connected economy for the first time.

The blockchain provides a global network for the rapid and inexpensive transfer of digital assets, a network modeled on that of the Internet. This technology creates new ways to earn money and allows everyone to be part of a global financial system, without the need for a bank account. So is this the emergence of a new economy?

Global payments are stopped

The current banking system is based on 1944 Bretton Woods accords. In the postwar period, the speed and reliability of payments between the countries of the “Western world” were a top priority. Following this idea, the Bretton Woods monetary management system established the rules of trade and financial relations between the United States, Canada, Western European countries, Australia and Japan. This was a huge improvement over the gold-based monetary system, which was too slow and inefficient for cross-continental money transfers. The fiat (or fiat) monetary system with the US dollar as the world’s reserve currency provided a much faster and cheaper way to send money and trade goods globally.

Almost 80 years later, the situation has changed with an emerging workforce wanting to negotiate not only with Europe and North America, but also with all regions of the world. The Bretton Woods system was never designed to handle this type of transaction, and it shows.

Sending payments should be as easy as sending a text message

Paying an employee or contractor in India from a German bank account is usually cumbersome and expensive. Indian banks do not offer IBAN transfers and with the SWIFT system there is a lot of paperwork to complete. Payment settlement takes days and costs $ 20 or more, plus a conversion fee proportional to the amount sent. Best practice is to use a third party payment system and follow the lengthy KYC procedure. For payments over $ 1000, the amount is often blocked and a questionnaire is sent to the recipient of the money. The beneficiary must justify why he receives this sum and relies, in a sense, on the leniency of the authorities to receive his hard-earned income.

“In ten minutes I receive the funds in my personal account”

In 2009, when bitcoin emerged as the world’s first blockchain-backed digital currency, it was hard to imagine that this technology would one day connect hundreds of millions of people. Today, new applications of this technology emerge every week, forming a parallel value network to the Internet. Payments are settled in minutes at a cost of a few cents, depending on the blockchain network used. Now, blockchain use cases go far beyond bitcoin. Stablecoins, or stablecoins in particular, are gaining in popularity. They represent the value of a “real” currency, such as the US dollar, and are not subject to the high volatility of other cryptocurrencies.

Joel Oshigbuwho works as a front-end developer for the German cryptocurrency startup basenode.ioand whose salary is paid in tether (USDT), explains: “I usually choose USDT because it is the most popular stablecoin, the easiest to find a buyer and the least likely to be attacked by a bank.” His employer, Oliver Schantin, co-founder and CEO of basenode.io, says employees can choose the cryptocurrency they want to be paid in or have the option of being paid in fiat currency. The company has developed accounting software for blockchain-based payments. “We expect the number of cryptocurrency payments to continue to grow exponentially in the years to come. Accounting and billing of cryptocurrencies will become a major concern for freelancers and businesses, “explains Oliver Schantin.

Anyone can hold digital currencies on their phone

Talents from all over the world try to get paid in dollar stablecoins. It is estimated that 38% of Web3 freelancers they prefer to receive their salary in cryptocurrencies. One of the main reasons for this trend is that fiat currencies generally have a higher inflation rate and lose purchasing power against the US dollar. The Iranian national currency showed an official inflation rate of over 36% in 2020, making cryptocurrencies an indispensable tool for preserving purchasing power. An Iranian developer explains why he receives his salary in cryptocurrencies: “Due to inflation and the volatility of the local currency, I generally prefer to keep my stablecoin payments in my KuCoin account, but if necessary I will use another wallet address, created on a local cryptocurrency exchange, in this way I instantly convert the funds received into my local currency and deposit them in my bank account in less than two minutes ”.

How remote workers make a living from video game NFTs

Today, new markets are forming in the cryptocurrency ecosystem, offering people the opportunity to make a living in ways never seen before. The videogame Axie Infinite, based on NFT, has experienced strong growth in its user base in recent years, reaching more than one million players worldwide. Most of them are part of the emerging markets of Southeast Asia. You will play Axie Infinite accumulating currency and virtual items, then selling them to European players, who are willing to pay a higher price to progress faster in the virtual world, has become a source of income in this region of the world. This strategy is beneficial to both parties and allows everyone to make a living from telecommuting, which only requires a laptop and an internet connection.

Education is a key ingredient for financial inclusion

Telework is now an option for many professionals in emerging countries, which avoids the inconvenience of moving and adapting to another culture. The first step to working in the blockchain field is to acquire relevant professional training. The society Launch Eko, a Web3 platform for education and recruitment based in Frankfurt, found that providing educational inclusion is critical to achieving financial inclusion. Therefore, the platform offers blockchain training for specific professions such as solidity developer, blockchain community manager or blockchain content creator. These training courses are offered free of charge to talents in emerging economies, enabling them to acquire the skills and experience needed to work in the blockchain field. To complete the cycle and provide financial inclusion, EkoLance connects talents with employers around the world who offer remote job opportunities. Edit Activitiesco-founder of EkoLance, says: “We envision a future where blockchain-based accounting and payment services become mainstream, as thousands of African remote workers still living in countries where blockchain and cryptocurrency adoption is slow or completely. prohibited will be able to work where they want, earn what they want and get paid “.

In short

With companies like EkoLance educating a growing number of future employees about the benefits of blockchain-based payments, one can only imagine how future generations will change the way global payments are regulated. Blockchain has the potential to change life around the world. By promoting the financial inclusion of underbanked and non-bank workers, this technology can have a huge impact on their lives. Fast, easy and hassle-free global payments, the ability to be personally responsible for your assets, and new revenue-generating opportunities are all concrete examples of what you’re already doing. The continued development of the blockchain and the shift to new business models could lead to even more positive effects for workers in emerging markets.

Article translated by Forbes USA – Author: Philipp Sandner

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