More than a decade after cryptocurrencies were introduced to the world, they have established a permanent place in the finances of people. Even if you’re not using cryptocurrencies yourself, you know you’ve got the option to pay for many things through them. However, cryptocurrencies have risen many disputes in the past. People comment on their sustainability, volatility, and how actually useful they are. Digital money hasn’t replaced fiat money completely, though they are used in many places as an alternative. The real change that they’ve brought has been on a bigger scale, as cryptocurrencies have changed technologies and the way people perceive their finances.
There are many uses of digital assets besides payment, as cryptocurrencies are even influencing deeper economic issues. Here we’ll discuss the connection between cryptocurrency and unemployment – how the two have interacted in the past, how crypto influences the job market, and what it can possibly bring to it in the future.
How Cryptocurrency and Unemployment Sit Economy-Wise
The reason why cryptocurrency was introduced in the first place was to help people manage their own money, without institutional interference. Bitcoin and the following assets emerged to let society manage their funds without a bank or government being able to freeze them or affect them in other ways. Naturally, this new financial freedom wasn’t favored by countries so regulations about cryptocurrencies started appearing. There isn’t a global law about digital money, most countries have their own laws or include the assets in other financial laws, to be able to control them on some level. Institutions are likely to try to impose more control on digital assets in the future because they are afraid that the currencies provide too much freedom to people and may be used for fraud. However, fiat money is just as popular of a tool for scams and money laundering so this argument is not as strong when this is considered. To provide an alternative to the governmental point of view on cryptocurrency and unemployment in the economy, we’ll revise quickly the 2020 publication from Nilanjan Raghunath about them.
Nilanjan Raghunath Publication About Cryptocurrency and Unemployment in the Economy
According to a publication from 2020, Nilanjan Raghunath suggests that the freedom that cryptocurrencies have brought may influence the economy positively. She argues that if individuals who use cryptocurrencies but aren’t lawmakers are given the right to help with digital assets regulation, it may benefit the economy of a country, by readjusting and improving it. The author recognizes the importance of lawful regulators, however, she thinks that if people are given the power to use the new kind of money, cryptocurrencies, this will contribute to the creation of economical justice and a better system overall. If common folk who uses crypto collaborates with lawmakers for new regulations in the sector, the results may increase employment and also implement more balanced policies. The author notes that many rich people have become even richer due to digital currencies, however, the new type of money still provides an opportunity for investors with smaller funds to also have potential gains.
If the report must be summarized, it points out two main things:
- The decentralized nature of digital assets can influence and change the economies of countries positively
- People who have lower funds can contribute to the change of economy in their countries, as they can use lowly priced assets.
Cryptocurrency and unemployment can be connected as digital assets influence the economy by giving financial freedom to people. In the future, it will be seen how governments will regulate the money and if they’ll take advantage of the freedom they give to improve the economy and give people more work opportunities.
Cryptocurrency and Unemployment: The Possible Ways for Crypto to Solve It
Having discussed the possible positive influence digital assets can have on employment, we’ll now look at how cryptocurrency and unemployment can connect, as crypto assets try to solve issues for jobless people.
Solution for Cryptocurrency and Unemployment: New Job Openings
The technology that cryptocurrencies introduced, blockchain, is developing and being adopted by different companies very fast. This has made several academic institutions recognize the potential of the technology and provide education for blockchain specialists. The cryptocurrency and unemployment solution here would be for new job opportunities in this developing sector. Together with other tech specialists, like AI or robotics, for example, people who have had education in blockchain technologies, could encounter new job openings as the technology seems to be only growing in popularity. Cryptocurrencies have opened many other job spots for people specializing in the sector. For example, today there are cryptocurrency lawyers, who provide legal counsel for digital assets, or crypto real estate brokers.
Solution for Cryptocurrency and Unemployment: Crypto as Accessible Money
In many countries, the high unemployment rate is due to the big number of educated people. This means that the people without jobs and with basic education may also not be able to operate with the money they have, because they don’t understand bank systems or don’t have access to one at all. Here a cryptocurrency and unemployment solution comes in, as digital assets are much easier to use. People need to have primary education and some kind of electronic device with an internet connection. From there they could use the educational resources on trading platforms to be guided on how to easily operate with their funds. People don’t need expert technical knowledge to understand crypto for basic money management, in some instances, it may be even a lot easier than bank accounts. In this way, digital money can provide a solution for jobless people who can’t have access to or don’t know how to use a bank, but still need to use the money they have.
Solution for Cryptocurrency and Unemployment: Cheap Money Transactions
Another cryptocurrency and unemployment solution comes as cryptocurrency transactions are much cheaper than banks’. People could save a considerable amount from the transaction fees that banks imply if they use crypto transactions. Additionally, the transactions are also much faster. In that way, people with no current income could save up from the taxes of their savings while operating with their money in a similar to the traditional bank way.
Solution for Cryptocurrency and Unemployment: Crypto Lending for New Businesses
Again competing with banks, cryptocurrency and unemployment could work to provide startups with the financial support they need to begin. Cryptocurrency lending could be a way for people without jobs who want to start their own companies but won’t be given a loan by a bank. Peer-to-peer lending eliminates the physical boundaries, allowing people from abroad to lend crypto to startups and saving from additional taxes that banks require. Crypto lending differs from banks in some ways, that’s why you should get familiar with how it works in detail before you decide to use it. However, here what is important is that this opportunity exists for jobless innovators and can help them begin their new companies and provide further job positions for other people on the look.
Solution for Cryptocurrency and Unemployment: Opportunity to Invest
As mentioned by the author whose publication we discussed, cryptocurrency and unemployment could provide jobless people a way to invest when they’ve got little money. Some assets have a very low price, meaning people could easily purchase them. There’s also the possibility to purchase fractions of bigger cryptos, like Bitcoin or Ethereum, and still invest in digital money. This creates the opportunity for people with smaller funds to invest and potentially get returns on it.
This also answers the question probably many people have: “Can I invest my unemployment money?“. Yes, you can invest them in crypto or any other asset, there’s no law that will forbid you. However, you should remember that like any investment, there’s absolutely no guarantee that your money will grow or that you’ll get rich. You may lose your money just as easily as you can get returns on your investment. For this reason, you should only invest the money you can live without, and not all that you have.
How Cryptocurrency and Unemployment Worked in the World
There have already been interactions around the world between cryptocurrency and unemployment. Here we’ll look at three different instances when digital assets somehow influenced the lives of people looking for jobs.
Cryptocurrency and Unemployment in the USA
In 2020 it was reported that in the USA, the trust in cryptocurrencies increased while the trust in banks had gone lower through the years. As a result of people losing their jobs at the beginning of the Covid-19 pandemic, they turned to cryptocurrencies. People became more educated about Bitcoin and altcoins and the number of investors increased.
Younger people proved to be most likely to trust cryptocurrencies as a way to solve their economic problems. This created a connection between cryptocurrency and unemployment that will continue to exist, if more Americans turn to digital money as an alternative to fiat currencies and banks, changing the payment and system for the money they trust.
Cryptocurrency and Unemployment in Jordan
Even though Jordan is one of the countries where cryptocurrencies are illegal, people have chosen them as a way to escape unemployment. In 2022 was reported that 50% of young people in the country are unemployed and the general annual rate of unemployment is 24.8%. Similar to the USA, the young people in Jordan connected cryptocurrency and unemployment in order to earn income.
Since cryptocurrency trading is forbidden in the country, residents have resorted to using oversea brokers or paying in cash to other crypto traders to transfer their digital assets. This is another example of a real-life connection between cryptocurrency and unemployment where people turned to digital assets to earn income when they can’t find a job.
Cryptocurrency and Unemployment in Africa
Young people in Africa are the ones that are suffering the most from the record-high unemployment rate in the country. There they have also chosen cryptocurrencies as a solution to unemployment as they trusted Bitcoin and other coins to provide them income. People in the country generate income from peer-to-peer crypto trading, open new job positions through starting crypto businesses and educate each other by translating crypto information, making the digital money accessible to everyone.
How will Cryptocurrency and Unemployment connect in the Future?
Cryptocurrency and unemployment seem to work best for young educated people who are looking for jobs and want to generate additional income to help them out. Digital money can provide new job opportunities, help unemployed people manage their money more easily and cheaply than banks, and provide support for startup companies. As the popularity of digital assets increases, it’s possible that they’ll find another solution for jobless people in the future. The regulations of cryptocurrency may influence the job market positively as well, if lawmakers decide to listen to the public and take advantage of the freedom decentralized finances bring, instead of fighting it. Cryptocurrency can’t solve unemployment completely but it can be part of the solution for many people while they find a new job.