After my Last Post How Steemit, Crypto-currency and blockchain can help developing countries. Part 2 @jamtaylor pointed out that using other articles to state my findings my be considered plagiarism if not cited properly. So, I decided to write my thoughts about the issue without using any external resources in an attempt to get some of the great minds on Steemit to help me reach a conclusion regarding this issue. I believe that the blockchain might change the world with some effort from people who are willing to work hard to make this happen.
Let me Start with explaining what started all this
In Developing Countries the value of the local currency is going down and prices are going up (inflation).
There is no enough foreign currency . So the price of the dollar against the local currency is rising.
People are struggling to import stuff since there is no foreign currency. which lead to price increase.
You cant even buy foreign currency in the bank ( unless you are a big company or you are travelling ) still limited
you cant even buy bitcoin :S for example if the bitcoin price is x it cost me 1.5x to buy a bitcoin (Imagine)
How the Blockchain can help developing and underdeveloped countries?
First "Inflation"
As Discussed Earlier the value of the local currency is going down and the prices are going up. This is happening primary because the money supply is controlled by the government. The Government can print more money in an attempt to increase spending. This leads to an increase in the money supply which devaluates the domestic currency. If the money supply is more regulated, then we can avoid the devaluation of the currency and the prices will be more stable. Crypto-currency in my opinion might be the solution for this issue. The money supply is automated. Either limited or there is a set yearly inflation. In both cases it is predictable which will avoid disruptions and allow the currency to be more stable thus more stable prices.
How Do you Think cryptocurrency may be able to stop inflation ?
Second "lack of foreign currency"
In many developing countries there is a problem of lackin foreign currency. This is usually caused by 2 main reasons. First, the high demand on foreign currency by importers. Developing Countries are usually dependent on foreign goods, to import foreign goods you need foreign currency (usually the $) . Another main reason that causes the lack of foreign currency is the low supply caused by low export rate, no tourism and low international activities. As a developing country you are constantly struggling to maintain a decent level of foreign currency but often fail.
I believe crypto-currency might be an easy solution for all this hassle. Maybe use bitcoins to import foreign goods, maybe create crypto-currency like Russia is attempting to do so. But there is no doubt that replacing the $ with crypto-currency will make the situation better .
Any Ideas on how Crypto-currency can solve this issue??
Which brings us to the last and most important point
Third: "You cant buy bitcoin"
In many Developing Countries you are not able to buy any crypto-currency. To buy crypto currency you need a forign currency. Buying foreign currency is not usually easy and will cost you money. People end up spending 150% of the price to be able to by a crypto currency.
@aenor commented
I think it can help only if there is an easy way to convert to their own currency (which then allows them to pay bills etc). The key thing holding back cryptos in the developing world is lack of exchanges and interfaces with their own currencies. If you can't convert it to your own currency and you can't use steem to buy stuff directly, it doesn't help.
So the obvious solution here is to convert domestic currencies into crypto currencies. How is that possible?
Conclusion
It is very clear the foreign currency is the obstacle in many developing countries. No enough Foreign currency means high prices, people cant buy crypto-currency and inflation.
The question remains: How the Block-Chain and crypto-curency can help developing countries with bad economies change the financial system?
Any Thoughts will be highly appreciated.