Can Cryptocurrencies Help Decrease The Wealth Gap in America?Date Written: January 3 2018 Written By: George Miller
Although the current global distribution of cryptocurrency itself is not entirely even, this is merely a representation of the current wealth distribution of America and cryptocurrency does in fact have the ability to remedy this. The Brave platform and its BAT are a perfect example of this type of project.
The introduction of cryptocurrency into society has brought with it some revolutionary ideals on its applications within society. The initial spark for the invention of the blockchain and subsequent Bitcoin birth was a result of a faulty banking and financial system; one that did not ensure efficiency and trust on all ends.
There was simply too many promises being made for funds that did not exist, and homeowners were trusting banks that were feeding them false information, guaranteeing a future that was not financially viable for all of these buyers.
This is the innovation of the blockchain, a decentralized ledger that has no single point of failure, and a governance model that distributes voting power. This type of system allows for not only the wealth, but for the distribution of power itself to be removed from the small groups of CEO’s and redistributed to the user base and customers of these companies.
Distribution of Wealth
Currently, 38% of the entire wealth in America is held by only 1% of the population, while the bottom 90% held 73% of the total debt. So how did we get here?
While it has not been a new occurrence, this wealth gap has been steadily increasing for the entirety of the last decade. The root of this problem is that large companies who rely on their users for profit are reaping all of the benefits of the capitalistic economy, and their loyal customers see nothing of this massive wealth increase.
While most recent stories surrounding this topic point to how crypto will be no different, as the rich will have easier access to purchasing more cryptocurrency and will not be likely to share it, this is not how cryptocurrency aims to reform this issue. It is true, however, that only 4% of the bitcoin population owns 90% of the total amount mined so far. This fact does not illustrate the underlying technology and aspirations of Bitcoin and other platforms like Ethereum.
This phenomenon is only occurring due to the fact that cryptocurrency platforms have not yet scaled their technology to be able to support the massive user base that big banks and social media giants have attained, although the technology is getting closer everyday. The distribution of wealth in both the fiat currency system as well as the cryptocurrency sphere shows us that it is the system at large that is responsible, and the lack of distribution of wealth and power amongst giant companies is what is causing it.
How Cryptocurrency Can Help
Cryptocurrency giants such as Ethereum have set their sights on not only an innovative, more efficient means of transaction, but a new and more efficient manner of handling, documenting, and utilizing technology for these transactions. On top of this, they also aim to redistribute the power and ability for users to profit off of their favorite platforms and products. This is all done through a breakthrough technology called smart contracts.
Smart contracts are one of the key innovations of blockchain technology so far, allowing for transactions to be handled P2P, with no fees or third party interference. Instead, they are handled instantaneously and automatically by AI and sensors. Smart contracts can help lock in rules and regulations a company or simple deal must follow, and these laws are openly auditable by every node in the blockchain, and hence every member of the community.
In addition, the rules of a single smart contract are automatically enforced when the conditions are met by sensors, i.e. there is no human interference in the process. This completely removes the chance of fraud and insider tampering.
A perfect example of a project within the Ethereum ecosystem that is aiming to redistribute the wealth within their niche is the Brave platform and its Basic Attention Token (BAT). This system aims to redistribute the profits that giant corporations such as Google and Facebook receive from the private information available to them based on your internet activity.
In its simplest terms, the Brave browser aims to allow users to only view ads when they want to, and not be interrupted with irrelevant and bothersome ads throughout their use of the internet. When users enable this function within the browser or app, they are rewarded accordingly for their time in BAT tokens. The publisher splits the money with the viewer, as the data the user creates is the true source of this income in the first place.
The Brave platform and its BAT are an important step forward, showing that the data the everyday user creates is a large reason they are even able to make a profit in the first place. The total data the average person creates in a single day is worth over $100 to advertisers.
Overall, the current wealth gap in America is appalling, and it shows how undervalued the customer or user is to the corporate giants of America. Google and Facebook both receive over 60% of their total profits from advertisements and user-generated data that they resell to advertising machines across the internet.
As of May 2017, Google was worth over $100 billion. Their user base is what is helping to give them this wealth, and they are capitalizing off of what should be private information and data. Cryptocurrency and smart contracts have the potential to renovate this system and bring it into the future, a future where wealth is not just distributed evenly just to make it even, but one where an entire ecosystem is involved in these companies. This ecosystem will reward the users that are contributing profit-generating data, and not simply horde all of the rewards to themselves.
This system upgrade could apply to all kinds of industries, including digital retail, banking, insurance, and more. Non-tech savvy individuals do not understand how much value they are contributing everyday when using the various apps and tools on their phones, computers and tablets. The small groups of CEO’s and board members running these companies do not want you to know these facts.
Forward thinking platforms such as Ethereum, ARK, EOS, and Ripple are all working toward a more efficient and community-focused future. A digital economy that is more focused on its users can be made possible if the missions of these projects are adhered to and the user’s value is kept in the forefront.