Digital currencies seem to have permanently established themselves in our everyday lives. But what are their use cases besides fiat alternatives and payment for online goods? Could cryptocurrency solve economic issues, like unemployment, for example? There have been multiple studies on the connection between cryptocurrency and unemployment – how one affects the other and is crypto beneficial to the economy in this way. We’ll look at how digital assets have been related to unemployment so far and also answer the question can and should you invest your unemployment money in crypto.
Economy Concerns About Cryptocurrency and Unemployment
Cryptocurrencies, starting with Bitcoin, were created as an alternative to traditional finances. The biggest difference between digital and fiat currencies is that, unlike traditional money, crypto isn’t influenced by banks or governments. They aren’t globally regulated either, every country makes new laws and policies for crypto or includes them in existing financial laws. The removal of a central authority who can freeze your account or change the exchange rate makes cryptocurrency decentralized. Crypto lovers enjoy the assets for the freedom they bring but skeptics argue that because of the lack of global regulations and authority control, crypto can be used for scams or money laundering. While it’s possible, the same goes for fiat money scams too so the argument is weakened.
TL;DR: A summary of Nilanjan Raghunath’s Report on Cryptocurrency and Unemployment
In a report from 2020, Nilanjan Raghunath argues that exactly the freedom that cryptocurrencies bring may influence the economy in a good way. According to the author, if individuals outside lawmakers are given the opportunity to use digital currencies and help with their regulation, the economy of a country may be able to experience readjustments and improvements. The author says that it’s still important that authorities are included to maintain the system. But giving people the power to use money such as cryptocurrencies, will bring more economical justice and a better system. If a state can accept the new regulations for cryptocurrencies, born from the free use of people, this can boost employment, while balancing regulations set both by the country and the users of this new kind of money. The report concludes that while many rich people have become richer from cryptocurrency, this type of money is good for people across different economic classes too. The low entry price of some cryptocurrencies gains possible access to fortune to people who have different financial situations.
To sum it up:
– cryptocurrencies and their decentralized nature can influence and change countries’ economies;
– and people who have lower incomes can contribute to this change too since crypto makes investments more accessible.
It’s yet to be seen how digital money will be regulated in the future. If governments adapt to the new way of finances and implement accurate policies, crypto may become a driver for more efficient economic systems. This on its own can create more employment opportunities and connect cryptocurrency and unemployment as a way for crypto to solve it.
Cryptocurrency and Unemployment – Why Crypto Can Be the Solution?
There are several ways how cryptocurrency and unemployment can connect for digital assets to help solve issues for the people without a job. Here’s how:
💡 New job opportunities through cryptocurrency and blockchain industries
💡 Cryptocurrency is accessible to use
💡 Low transaction fees for crypto
💡 Lending money to startups using crypto
💡 Investing on a smaller scale using cryptocurrencies
Let’s look at those ways cryptocurrency and unemployment can connect in detail.
A Cryptocurrency and Unemployment Solution: New Job Opportunities
Blockchain technology is evolving very fast, along with the whole digital world. People see the potential of it and even some high academic facilities provide education for blockchain specialists. Combined with the people who look for jobs in robotics, AI, and other innovative technologies, a cryptocurrency and unemployment solution can be the creation of new job opportunities. Many people are not only interested in investing in digital assets, but they also want to work in the field. That’s why cryptocurrency and the blockchain technology that it popularizes can be a solution of unemployment by opening new job spots.
A Cryptocurrency and Unemployment Solution: Crypto as an Easy to Use Money
Many countries have a high unemployment rate because of the number of uneducated people. Cryptocurrencies can be a solution for unemployed people who can’t get access to bank systems to still be able to operate with their funds. Most people in developed countries have an online connection and some kind of electronic device. This means that if they have primary education, even without advanced technical skills, they can use cryptocurrency. Additionally, many platforms offer beginner courses and resources on how to use them and how to manage your assets. This makes crypto a helpful tool for unemployed people who can’t afford to make or manage bank accounts but still need to operate with their money.
A Cryptocurrency and Unemployment Solution: Low Crypto Transaction Fees
On the same note as crypto being more accessible than bank accounts, cryptocurrency transactions are not only faster but also cheaper than bank transactions. This means that unemployed people can send and receive their funds with lower fees, helping them save up while looking for a new job.
A Cryptocurrency and Unemployment Solution: Crypto Lending for Startups
Considering mentioned above advantages of using cryptocurrencies over banks, crypto lending can be another solution for cryptocurrency and unemployment. People who are without a job but want to create their own business can take advantage of cryptocurrency lending to start their small or big company. With cryptocurrency peer-to-peer lending you can even receive help from abroad and since it’s between two parties only, you won’t have to pay a bank or any other authority additional taxes, and your payment won’t be restricted.
A Cryptocurrency and Unemployment Solution: Investing on a Smaller Scale
As briefly mentioned already, cryptocurrencies can be a way for unemployed people to invest a small sum and potentially get a profit on their investment. Some coins have a very low price or you can purchase just a fraction of more expensive crypto, for example just one Satoshi out of a whole Bitcoin. This gives an opportunity to people with lower capital to invest and try to grow their fortune.
This answers your question “Can I invest my unemployment money (in cryptocurrency)?”. But remember – never invest the money you need to live. You’re not legally forbidden to invest while you’re unemployed. While it’s possible to profit on your investment, with crypto or other assets, you can lose your funds just as easily as gain more. That’s why you should be even more careful when investing money when you don’t have much to spare.
Cryptocurrency and Unemployment Around the World
Having discussed some of the ways how digital assets can influence the job market and people looking for jobs, let’s look at some cryptocurrency and unemployment real-life cases.
Cryptocurrency and Unemployment in the USA
In 2020 it was reported that the trust in cryptocurrencies had increased, as opposed to the trust in banks which had lowered through the years. At the beginning of the Covid-19 pandemic, people lost their jobs and found a solution with Bitcoin and cryptocurrencies. The research found that people have become more educated and knowledgeable on cryptocurrencies, and the number of those who wanted to invest has also increased.
The biggest amount of people willing to trust and invest in bitcoin and other cryptos are younger people of the millennial generation. When the whole world’s economy suffered the pandemic consequences and people either became jobless or got their pay cut, cryptocurrencies started looking like a real alternative to traditional money. This is heavily related to crypto’s decentralized nature, as people in the US also seem to have shown less trust in banks, especially seeing how banks and governments dealt in the beginning of the crisis.
The fact that Americans recognized cryptocurrencies as a solution to their economic problems, in the midst of the unemployment and health crisis, creates a connection between cryptocurrency and unemployment. This connection would only grow if people continue to support cryptocurrencies and turn to them for help with their financial issues.
Cryptocurrency and Unemployment in Jordan
Jordan is one of the countries where cryptocurrencies and crypto trading are legally banned. However, people have turned to them as a way of salvation from unemployment. In 2022 it was reported that 50% of young people in the country are unemployed and 24.8% is the general rate of unemployment per year. This has pushed mostly young people to use cryptocurrencies as a way to earn income. Because they can’t trade cryptocurrencies legally in the country, they use overseas brokers or pay in cash to cryptocurrency owners who transfer the crypto into their accounts. This case of cryptocurrency and unemployment usage provides another example of people turning to digital currencies when they can’t find a job or want to acquire additional income.
Cryptocurrency and Unemployment in Africa
Unemployment in Africa is very high and young people are the ones suffering the most. However, they’ve also turned to Bitcoin and cryptocurrencies as a way to solve their issues. People in Africa use peer-to-peer crypto trading as a source of income, create businesses that feature cryptocurrencies and open new job opportunities for them and educate each other by translating content about cryptocurrencies and making it accessible to everyone.
How Will Cryptocurrency and Unemployment Interact in the Future?
Younger people, who are also a big part of countries’ unemployment rate, seem to be most willing to trust cryptocurrency. Decentralized finances can be helpful for the unemployed to find new job opportunities in the blockchain field, as well as manage their funds easier and cheaper. The proven cases of unemployed people turning to cryptocurrencies in the midst of an economic crisis are proof of how this new type of money can positively work in the unemployment area. It’s possible to use cryptocurrency as help when you’re unemployed. But always remember to invest just as much as you can lose, and never the money you need to live. This general rule goes for all investments always but especially when you’re not receiving permanent income.