Cryptocurrency can be one of the most effective ways the world has ever seen to increase economic freedom. If this happens, the consequences are profound. It could lift many countries out of poverty, improve the lives of millions of people, and boost the velocity of revolution in the world.

About a month ago I decided to dive in and learn more about cryptocurrency since my investing in it was doing well. So here I am sharing the knowledge that I have got.

In this article, I'll attempt to explain what economic freedom is, why it is important and how cryptocurrency can change it.

What is Economic Freedom?

Economic freedom is the measure of how easy it is for the members of a society to take part in economic activities. It has various factors e.g:

1. How easy it is to start a Business?

2. Whether property rights are enforced? (can you keep what belongs to you)

3. Stability of the Currency.

4. Free trade with other nations.

5. Regulation of Business and Labour.

There are several organizations that rank and score the countries of the world by how economically free they are. The data shown below is published by the Heritage Foundation and Wall Street Journal. Here are the top and bottom ranking countries from their 2016 list.

By looking at the names in the list given above, you can start to guess why economic freedom is important. Below is a picture that explains this concept Alternatively.

Why is economic freedom important?

Economic freedom has a direct relation with the number of positive outcomes in society.

Some you might expect, like higher per-capita income, life expectancy, and literacy. But economic freedom also correlates with some things you may not expect, like:

• Better income for the poorest 10%

• Improved environmental protection

• Fewer wars and violent conflicts

• Higher self-reported happiness of citizens

• Less corruption and bribery

Below is a chart that explains economic freedom more comprehensively. The red bars show the countries with low economic freedom and the green bars are the ones with high economic freedom.

Correlation, of course, does not prove causation, so we must be careful not to jump to too many conclusions. Societies are very complex, and what works in one place may not necessarily work in another. Still, it raises an important question: if the world had more economic freedom would we all be better off?

Impact of digital currency on economic freedom

Economic policy and financial infrastructure can take a long time to change. Some might say they have been frozen in time for the last forty years or more.

Now for the first time, with the proliferation of smartphones and the creation of cryptocurrency, we can have the opportunity to increase the economic freedom of every country around the world in a much more efficient way.

This is how digital currency enables economic freedom:

1. It makes it easier to start a business
   Anyone with an idea can have customers around the world in just a few hours. It reduces the friction of accepting payments and helps companies expand globally.

2. It enforces property rights
   Many people today are unable to safely store wealth without it being stolen or confiscated. Digital currency will allow anyone to be in control of their own money (see brain wallets). In this sense, the digital currency will “bank” the unbanked of the world.

3. It promotes free trade and globalization
   Digital currency excels at cross-border transfers. It breaks down barriers for people in different countries to trade with each other (for example to get a loan or hire someone to complete a job).

4. It enables freedom of contract
   With Ethereum smart contracts, the hurdle has been lowered for people to enter agreements, regardless of where they live or whether they can afford a lawyer.

5. It encourages people to leave low scoring countries
   People will find it easier to emigrate if they can take their wealth with them and use it in a neighboring country. Digital currency makes every country’s economy interoperable. With lower switching costs, countries will improve.

6. It reduces corruption and bribery
   With fewer gatekeepers and intermediaries to start a business, there won’t be as many places to apply pressure or curry favor.

7. It provides access to a stable currency
   Digital currencies are more volatile than the dollar or euro today, but their volatility has decreased every year (and are now approaching the levels of some fiat currencies). In the coming years, the digital currency will be more stable than many of the 180+ fiat currencies in the world.

Today, Digital currency is still in the early stages. But as with many technologies, when it tips the result can be dramatic.

Conclusion

Over the past 20 years, the global average economic freedom has gone up by only 3 points (from 57% to about 60%). Things are moving in the right direction, but far too slowly. The need of the hour is that we should promote Cryptocurrency as far as possible.

END

Image Source:

1.https://miro.medium.com/max/2400/1*VGW3GT91-BFBazWjAahP-g.png

2.https://miro.medium.com/max/700/1*SyEueAESCvGe47w8mmo14g.png

3.https://en.wikipedia.org/wiki/Economic_Freedom_of_the_World

4.https://miro.medium.com/max/2400/1*YtuTV68c1eZX-Btz6XoA-w.jpeg

5.https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DwR0N9EYR3Oc&psig=AOvVaw1ikGbXtTegw5ltpBjjOfdb&ust=1620403079499000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCLCAjYXltvACFQAAAAAdAAAAABAD