11 June 2020

It is often normal to hear many stories about the impact of crypto in real life. Yet, sometimes it is hard to discern the reality from the myth. Many people talk about how useful crypto can be. Some mention its anonymity. Others about the speed of transactions. And many more talk about the almost non-existent transaction fees. While all these points are more than valid, we cannot forget the most important point: people. If people do not find a use for crypto, they won’t use it.

Yet, there is a group of people who are tipping off the adoption of crypto: Latin Americans.

Given their circumstances and its rampant poverty, crypto was the next logical step. We talk about using crypto as a store of value. We talk about using crypto as a payment method. We talk about crypto impacting real life. One could say that Latin America has been an expert on this subject.

Crypto for the Unbanked

This was the case for Colombia: a country where poverty is unbanked. In 2018, Steven Gilbert helped during the Puerto Rican hurricane relief project. Drawing on his experience, he set out on his new challenge: to help the unbanked.

He flew to Bogota, Colombia. Then, he decided to help nine families in the Ciudad Bolivar neighborhood, one of the poorest of the city. The task was not only helping them out but also educate them about blockchain and crypto. In a country where the poor do not have a bank account, they receive their wages in cash. Steven asked people to download Breadwallet onto their phones, and he gave them an ETH. At the time, it was around US$ 200.

His goal was not to make a simple donation − his goal was to give them something that could change their lives. He showed them that even though it did not matter if they didn’t have a bank account. They were one QR code away from something similar.

Finally, he said the difficult part was getting the local businesses to accept crypto. As one might know, crypto can be hard to get the grasp to and it is a little bit scary at the beginning. Despite this, the 44 beneficiaries of the test had an amazing time in their first exchange with crypto.

Venezuela’s Crypto: The Good, the Bad and the Ugly

Next to Colombia is Venezuela – a country that became a myth for the crypto community.

Thousands of articles have been written about how Bitcoin can save Venezuela’s economy. It has become routine to read every week that Venezuela has a new ATH in LocalBitcoin’s volume. Many cryptos have gone crazy in marketing efforts to appeal to the Venezuelan public.

The truth is that a lot of what we read about the crypto in Venezuela is not 100% factual.

Yet, the Venezuelan case is much more complex; it is not a black-and-white situation. Indeed, LocalBitcoin’s weekly volume is a common record-breaker. It is an undeniable fact. This does not mean adoption is solid, it is a signal of the hyperinflation Venezuelans fight. Yes, Adoption exists in Venezuela − but not at the rates usually reported.

Another thing widely shared is that most establishments accept crypto. Once again, this is a half-truth. While some mall stores have a “crypto accepted” sign, the vast majority of them tend to stay away from it. Other stores accept crypto, yet they charge extra if that is the payment method. The excuse they give is that they must take into account the volatility of crypto.

But not everything is a half-truth, though − there is some sort of contrast as well. Last year, BCI’s (Bitcoin Interest) project made a sizable donation. A member of the BCI community told the sad story of his small town of 5,000 people. The other members of the community, moved by the story, decided to agree with him to coordinate a donation. The results impressed a lot of people: 12.5 tons of food. This philanthropic effort had a name that reminds us of what should be most important: Food, Not Lambos.

Like Venezuela’s case, we have Argentina − a country where inflation is rampant. The second week of May represented an ATH of the volume of Argentine pesos in LocalBitcoins. At the same time, this represented 62 BTCs − far from the April 2016 ATH of 228 BTCs.

The adoption of crypto in Latin America is happening − There’s no need to speed it up any further. It will happen and it will be impressive the scale on which it will happen.

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Edmund McCormack
Tech industry veteran and blockchain technology investor. Simplifying cryptocurrency for almost a decade.

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