Does Bitcoin hold greater social value in developing countries with limited banking access?

This is an interesting topic, and it was one of Bitcoin's earliest and most attractive visions. Let me share my thoughts.

In short: The ideal is grand, but reality is harsh, yet it has indeed solved major problems in certain specific scenarios.

Let's first talk about its advantages, the 'ideal' part:

1. Solved the problem of 'bank accounts' from scratch: In many developing countries, opening a bank account is a cumbersome process, often requiring proof of assets, which leaves many people excluded from the banking system. Bitcoin is different; you only need an internet-connected smartphone and a wallet app to instantly own a 'digital wallet'. This wallet can receive, send, and store money, essentially fulfilling the core functions of a bank account. For those without banking services, this is a leap from zero to one.

2. Significantly reduced the cost and time of international remittances: Imagine someone working abroad who wants to send money to family back home. Traditional methods (like Western Union) have prohibitively high fees; sending 1000 units might incur tens or even hundreds in fees, and transfers are slow. Remitting with Bitcoin theoretically bypasses all intermediaries, with fees potentially just a few dollars (though they can sometimes rise), and funds usually arrive within half an hour to an hour. For families relying on remittances, every penny saved is hard-earned money.

3. A tool against hyperinflation: The fiat currencies of some countries are highly unstable; governments print money indiscriminately, and what could buy a cow today might only buy an egg tomorrow. In such situations, converting local currency into Bitcoin becomes a means of storing value and preventing asset depreciation. Although Bitcoin itself experiences significant price volatility, compared to rapidly collapsing fiat currencies, it at least offers an option to 'transfer assets to the global market'.

Now, let's discuss the 'harsh reality' part:

1. Extreme price volatility: This is its biggest drawback. Bitcoin's price can fluctuate by 10% or more in a single day. For an average family, putting all their savings into Bitcoin is akin to gambling. Remittances received today might be worth 1000 units, but tomorrow they could be worth only 800, making daily life impossible. Therefore, it acts more like a speculative asset than a stable store of value.

2. The barrier to entry is actually not low: We might find using a mobile app simple, but for many who haven't had much exposure to the internet, understanding concepts like 'wallet address', 'private key', and 'seed phrase' remains challenging. Moreover, if your private key (which is like your ultimate password) is lost or stolen, your money is gone forever; there's no customer service, no bank to help you recover it. This model of 'taking full responsibility for your own assets' places significant pressure on ordinary people.

3. The 'last mile' problem: Even if you receive Bitcoin, how do you use it to buy groceries or pay rent? You'll eventually need to convert it to local currency. This requires convenient and reliable exchanges or OTC (over-the-counter) traders in the local area. In many places, this 'money exchange' step itself is inconvenient, and there's even a risk of being scammed. If very few merchants accept Bitcoin payments in a given location, its practicality is greatly diminished.

4. Internet and electricity issues: In regions with underdeveloped infrastructure, stable and affordable internet, or even a consistent power supply, are luxuries. Without these, Bitcoin cannot even be considered.

In summary:

Bitcoin has opened a window for those excluded by the traditional financial system. It has indeed demonstrated immense social value in international remittances and asset hedging in extreme circumstances, addressing urgent needs for many.

However, due to its inherent drastic price volatility and non-trivial barrier to entry, it is currently difficult for it to become an everyday 'currency' or 'bank' for ordinary people in developing countries. It's more like a 'Plan B', a very useful toolkit for specific moments, rather than a solution that can completely replace traditional banks.

Therefore, it's reasonable to say it has 'greater social value' because it addresses more pressing issues of survival and financial security, rather than being an investment game 'to make the rich richer'. But for this value to become widespread, there is still a very long way to go.