16May

Q&A: Why Black and Brown People in the U.S. Should Invest in Crypto

The cryptocurrency market is a hot topic. In many respects, it has become mainstream. However there are still large segments of the population that do not have access to adequate information in order to actually participate in this digital revolution. The barriers are many.   The record of the exchange below does not delve into those barriers but instead shine light on one specific dimension of the problem. And that is access to information. This article chronicles a conversation between myself and a colleague who I call a Bitcoin evangelist. He has been part of the Bitcoin revolution from the beginning.  Specifically he was the founder of a Bitcoin exchange in Ghana, West Africa.  He also was one of the first employees of a popular Bitcoin exchange in Kenya, East Africa in early 2000s. Below we discuss our understanding of the phenomenon that we are currently seeing when it comes to Bitcoin, and cryptocurrency markets.

Mawuli: 

The fact is that real wages haven't really risen in the U.S. since the sixties. So a lot of Boomers who maybe are not part of the 1% and or who are like middle-class, but not necessarily solidly middle-class, have to think of new ways and re-imagine their retirement and IRAs. And, maybe they're interested in this idea of crypto, but they're not really understanding, like technology, how it works. And so we want to be able to also speak to them and talk to them in a way that makes sense. These people usually have a solid understanding of capital markets and how investment portfolios work, but they don't necessarily understand the technology behind distributed ledger or crypto. And so we want to be able to speak to them, um, in a way that makes them understand both the tech side of things and then also how the investment side of things work. So those are the two segments that I'm thinking of off the top of my head. 

Sika: 

What I hear are women and minorities. I'm also thinking that this blog is about financial inclusion. 

The world of cryptocurrency is notorious for being predominantly white and male. You don't see women and you don't see minorities at all. So those are the groups that have been sidelined by the traditional system and even more so by crypto. So these are the people that, um, will find it useful and it also makes it possible to apply for funding somewhere else using the financial inclusion. So, yes, this is not financial advice. This is for educational purposes. When you're investing, there's the risk of loss. We are providing you just a gateway into understanding cryptocurrency markets, but we advise that you look at other resources. The digital divide is a real thing. And I think that access to information, over even being able to buy cryptocurrency requires a bank account. If you're low income, you're less likely to have a bank account. So we have to think through those things a little bit, like, if we're going to be doing this stuff around financial literacy, it's a much higher level. That's why I'm saying, I want kids of immigrants because they're more likely to be connected to the banking system. African-American populations are different because the history of poverty and access is different for them.

Mawuli:

So I guess in the questions you could, that can be one of the things you build questions around –how people who are experiencing the digital divide can get access to the system. And there are ways, for example, to buy Bitcoin without using the banking system. Even like me, I'm sort of excluded right now. I literally have to go to the Bitcoin ATM every weekend to buy my Bitcoin. So that's one way to buy cryptocurrency.  There is also another way where you use United States Postal Service (USPS) money orders to buy Bitcoin. 

Sik:

How do you know all this crap?

Mawuli:

Because I went through. I'm going through it myself. So I have to find solutions. And that's how I discover these things.

Sika:

Wow. That's pretty rad. You're a pretty resourceful guy.

Mawuli:

Yeah. I've had a lot of interesting experiences.

Sika:

You have brought up a lot of really good and interesting points that I think are solid and will definitely contribute to the richness of our blog. The other thing that I want to be really cognizant of is really understanding and defining what a capital market is. And really making a distinction between traditional investments via the stock market, and this. So I guess what I am trying to ask is whether cryptocurrency investment is an actual investment tool? I am assuming that is true, crypto is not necessarily like, capital market? 

Mawuli:

Well, it depends on your definition of a capital market.  Yes, I do see the trend where, um, the stock market, so to speak, is being recreated in crypto. Like you saw yourself, we have an endless list of cryptos. You have at least a hundred of them that even meet their small business qualification as in they have more than 5 million in funding and revenue and they're all listed on the crypto capital market.  So to speak, anybody can buy them and that's how the price goes up and down.  Crypto markets behave somewhat like a stock exchange.  It's a new version of a capital market built-in crypto.

Sika:

Yeah. And so we should be talking about that too. Like this idea of a traditional capital market. Cause I think when you're talking to Baby Boomers, they're really gonna be like, you know, how does this relate to the capital markets as we know it? What are the differences? We need to unpack those concepts (capital markets, crypto exchanges, stock markets, etc.)  Then we need to help them understand the technology piece of it.

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