People in economies suffering from market volatility are turning to Bitcoin applications to help them maintain their standard of living. Workers in Venezuela are using the popular Bitcoin marketplace Purse to save on basic necessities. As well, people in India are escaping the devaluation of their currency with payroll service Bitwage. In each case, Bitcoin seems to be making a difference, according to industry sources.
Purse Marketplace Helps People Save Money
Alongside nations like Canada, the United Kingdom and the United States, the world’s largest Bitcoin marketplace, Purse, has been adopted by individuals in countries stricken by economic hardship. Argentina, India, Venezuela, Brazil, Nigeria, Ukraine, Mexico, Philippines, Italy, and Croatia all rank among the top twenty nations using Purse for its considerable discounts. Each of these nations has experienced either geopolitical or financial turmoil in recent years.
“People are currently using Purse in places like Brazil and Venezuela to buy food, beauty products, medicine, and other goods that they cannot purchase or obtain cheaply in their country,” says Steven Mckie, Purse Head of Growth and Product Content. “Countries like Venezuela can make it very difficult for citizens who are not wealthy or have connections to get the everyday essentials they need and maintain some modicum of normality in their day-to-day lives.”
These emerging market nations are comprised predominantly of Android users, who will now be able to use Purse’s Android app, released last week, to quickly earn and store bitcoins, and shop with their cell phone.
“If you have a volatile currency like, say, the bolivar, and want to pay for a particular good, it’s best to hold your funds in bitcoin and get the discount on daily essentials through our platform,” Mr. Mckie says. “Furthermore, we can onramp more individuals in emerging markets by offering them a way of making money as a merchant and earning bitcoin.”
Thanks to the deployment of an iOS application in November 2016, and the Android app last week, Amazon’s North American marketplace is available to Purse users globally as the company continues to pursue a full-fledged ecommerce solution. Previously, users would have to use the Amazon marketplace associated with their country through the local currency, if Amazon was offered in their country at all. Not anymore.
Alongside emerging markets, nations like Japan, Russia, France, Germany, Spain, Poland and the Netherlands appear on the list of Purse hotspots.
“Now there are no borders from wherever Amazon users wish to shop, and as long as they’re using bitcoin, without going through local currencies, they will save money doing so,” Mr. Mckie explains.
Bitwage Helps People Earn Bitcoins
Purse isn’t the only Bitcoin application helping people in emerging markets. “People living in countries with economic instability, such as Venezuela, Brazil and India, can actually make a lot more money if they are working for US, EU and UK companies,” says Bitwage CEO Jonathon Chester. “This is not just because companies in these countries pay higher wages. By leveraging the bitcoin blockchain as an underlying mechanism, you can receive rates much better than interbank rates.” This is demonstrated on Bitwage’s rates page.
For instance, Mr. Chester tells Bitcoin.com, a user in India would make over 20% more if they had received wages through Bitwage in India during the first two weeks of the country’s demonetization of certain notes.
This is why Bitwage is launching its new job board, BitWage.Me, which features a reputation system and seeks to connect people in places like the United States and Europe with workers in emerging markets. “So that we can empower local communities around the world to find good jobs and make more money when receiving their salaries,” the CEO says.
Similar trends are developing in other countries on the Bitwage platform. “Ukraine is growing, Mexico also happens to be interesting,” says Mr. Chester. “There are basically geographical price arbitrage opportunities in all of these places. Meaning that local demand for bitcoins is higher than global, which means price is higher locally.” Thus, individuals can buy bitcoin at normal prices and sell high in these countries.
“This has led up to as much as a 25% premium on your wages during the first couple weeks of the India demonetization crisis that begun November 8th of last year,” Mr. Chester elaborates. “The main way to take advantage of these premiums is through wages/business disbursements, because, unlike traditional arbitrage opportunities, it is a lot harder to get the money out of the countries which they were sent into.”
While not every country that is economically unstable has a big or growing bitcoin market currently, it is safe to say that once there is a group that is educated on the subject in the country, a market will develop, according to Mr. Chester.
“As this is the case, it’s interesting to keep an eye on the economically unstable countries,” he says. “The main issue is getting bitcoin in these places, since no one wants the currency of an economically volatile nation, such as Venezuela or India. In order to get bitcoin into the country you either need to mine it there or get paid with bitcoin from overseas.”