In the United States, 2019, the Federal Deposit Insurance Corporation (FDIC) found that “Nearly 95% of U.S. households (approximately 124 million households) were banked” and that only 5.4% (7.1 million) households were unbanked. This is impressive as it gives the US, and many other first world countries, a large economic advantage over countries such as Argentina where the unbanked makeup roughly 51% of the population (Acuant). Unfortunately, this becomes even more true in comparison to countries such as Mexico, Haiti, and Niger with unbanked populations ranging from, 64, 70, and 85% (Acuant). Even so, where there is misfortune, opportunity can be found lurking.
Although Argentina, for example, has a 51% unbanked population, 78% of citizens are internet users, leading to 27% of people in the country having access to the internet but no bank account. Similar discrepancies can be found across various countries such as Lebanon and The Dominican Republic, where the differential of internet users without bank accounts is closer to 23% and 31%.
Now with decentralized crypto exchanges almost anyone with an internet connection, access to a bitcoin ATM, and the know-how, a factor I assume is the most lacking in these poorer regions, can 1. Hold a valuable currency 2. Lend and borrow money via a decentralized application (Dapp) and 3. Invest. The power of gaining compound interests is grossly underestimated and, unfortunately, taken for granted amongst the youth here in the United States, as a 2018 study by Next Gen Personal Finance found that only 37% of adults age 18-35 invest in the stock market. These individuals consciously choose not to invest while there are many who are completely unaware that this option is even afforded to them.
Nonetheless, as the late great Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.”
It is because of DeFi that these financial tools, traditionally offered by big banks, can now be utilized by the masses and reach places that a conventional bank cannot. Like most innovations, DeFi is an agent of liberation. It has the potential to lift millions from poverty and grant them the gift of financial freedom! Now, what does that mean for you, the reader? Well, if you have come into contact with this article it is likely you have access to these financial tools already, so my recommendation is simply: Get ahead of the game and use them. Take advantage of the tools you have at your disposal and seek to gain compound interest via the crypto market. Whether it be Bitcoin or Ethereum that is up to you, however, what I can say with confidence is that if you are not in this space, especially as an investor, you are making a big mistake.
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