February is Black History Month, and it’s worth recounting that cryptocurrency and blockchain technology have already had a significant impact on the
February is Black History Month, and it’s worth recounting that cryptocurrency and blockchain technology have already had a significant impact on the African-American community.
Peoples of color own cryptocurrencies at consistently higher levels than white people, surveys show, while anecdotal evidence suggests crypto has also unleashed a wave of innovation and entrepreneurial energy in the Black community — from New York City’s new mayor converting his first paycheck into crypto to basketball star Kevin Durant launching a new special-purpose acquisition company to focus on cryptocurrencies and blockchain.
And all this may just be scratching the surface. “Blockchain has the potential to be a beacon of light in the story of Black economic empowerment,” Marco Lindsey, associate director of diversity, equity and inclusion at the University of California Berkeley’s Haas School of Business, told Cointelegraph.
Cryptocurrencies and blockchain enterprises with their special qualities that can turn users into owners and owners into users align with historic Black aspirations such as financial independence and security, University of Kansas professor and historian Nishani Frazier told Cointelegraph, adding:
“They can enable the Black community to lift itself up in the philosophical sense of Black empowerment.”
These “powerful possibilities,” as Frazier described them, are exciting — and not just in the United States. In the global context, crypto continues to be, at least in part, about disenfranchised peoples participating in mainstream economic life, often for the first time.
Banking the unbanked
It’s sometimes forgotten, after all, that 1.7 billion people globally remain unbanked, underbanked or lack access to traditional financial systems, Cleve Mesidor, public policy advisor at the Blockchain Association, told Cointelegraph. For this group, sometimes living in countries with high inflation and lacking confidence in their local fiat and central bank, cryptocurrency represents “economic empowerment and an opportunity for financial freedom.”
Cryptocurrencies and blockchain technology “allows greater access to populations typically left out of traditional markets,” agreed Lindsey. It enables “anyone with an internet connection and some capital to invest” to participate in a vital, emerging technology scene, including seed-stage investment opportunities.
It’s natural to celebrate these developments — especially during Black History Month — but by the same token, one can’t ignore the “flip side,” either, said Frazier. “As much as I enjoy cryptocurrency as a Black person, I can not afford to live in a utopian bubble, and say, ‘Cryptocurrency: Hurray! Equality!’ It’s very complex.”
The technology can be opaque, even for those with technical backgrounds, and crypto remains an extremely volatile investment. Hackers and fraudsters populate the cryptoverse as well. The Black financial experience in America, too, is rife with exploitation.
Frazier recalled that years ago, insurance companies wouldn’t provide insurance to Black people, especially in the U.S. South. Some larger companies eventually began to offer “penny insurance” — where a person might “pay a little at a time” for a policy — burial insurance, for example.
But “those companies were notorious for taking your money and disappearing,” recalled Frazier. “They preyed upon the Black community.” Her point is that even in these more enlightened times; crypto is still risky; people can still get hurt; and one can’t overlook the downside of things.
Others, like The New School economist Darrick Hamilton, have noted that Bitcoin (BTC) is a high-risk, high payoff alternative. “In the end, it’s a casino,” he told Time Magazine.
Lindsey agreed about the risks and added that vigilance will be needed to maintain inclusion moving forward. An ongoing education process is required, including a focus on individuals and small businesses from underserved communities. Otherwise, “the industry runs the risk of replicating the inequities we see in more traditional sectors.”
“More diverse investors”
As noted, surveys reinforce the notion that crypto resonates with people who, for various reasons, have been excluded from the dominant economic system. A Harris poll last year found that 23% of African-Americans own cryptocurrency, for example, compared with only 11% of white Americans.
According to researchers from the National Opinion Research Center (NORC) at the University of Chicago, “the average cryptocurrency trader is under 40 (mean age is 38) and does not have a college degree (55 percent). Two-fifths of crypto traders are not white (44 percent), and 41 percent are women. Over one-third (35 percent) have household incomes under $60,000 annually.”
“Cryptocurrencies are opening up investing opportunities for more diverse investors, which is a very good thing,” said NORC’s Angela…
cointelegraph.com