The Breakdown - How Bitcoin Helps Marginalized Communities Build Generational Wealth

Starting point is 00:00:00 Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by nexus.io, Arculus, and FtX, and produced and distributed by CoinDesk. What's going on, guys? It is Sunday, February 20th, and that means it's time. You know it for Long Reads Sunday. Before we get into LRS, however, if you're enjoying The Breakdown, please go subscribe to the show, give it five stars, leave a review, or if you want to get deeper into the conversation, come join us on the Breakers Discord. That's the place where we discuss not only what's going on in the show, but what's going on in the world. You can find a link to the Breakers Discord in the show notes, or you can go to Bit.orgly slash breakdown pod.

Starting point is 00:00:57 Today we are visiting one of my favorite topics, a topic that surprisingly does not come up nearly enough in my opinion. The topic is Bitcoin's potential for positive impact on the world. And it seems like a very good week to have this conversation, given how much has been caught up in these big geopolitical machinations, of which Bitcoin is just one part. The piece is by Charlene Federepo and is called why Bitcoin is a tool for social justice. Bitcoin offers immigrant, black, indigenous, LGBTQ plus, and other communities the promise of a more equitable financial system. Sure, you may know the statistics. While typical stock market investors are white men, 44% of Bitcoin and crypto investors are not white. Similarly, studies have shown black and Latino

Starting point is 00:01:52 Americans now outpace white Americans in Bitcoin and cryptocurrency investing. But too many are writing off this emerging trend is just another sign of the Times, another signal of a game-stop investing culture gone awry. It isn't. Rather, Bitcoin's rise in America is deeply rooted in our legacy of oppression of marginalized communities. Black, brown, LGBTQ, and Latino Americans are distrustful of an establishment and its systems that have failed them time and again and are failing them now. The headlines speak for themselves. The COVID-19 pandemic has highlighted racial disparities in the health care system. The senseless deaths of Breonna Taylor, Ahmad Arbery, and George Floyd have sparked nationwide protests against police brutality and racism. Professional sports teams, including the WNBA, MLB, and MLS have all postponed games in protest of racial injustice.

Starting point is 00:02:42 Nearly 160 statues dedicated to the Confederacy have been taken down after being labeled as symbols of white supremacy. These pivotal events have had an impact on Americans. We are reflecting and acknowledging the devastating injustices done to our marginalized communities and communities of color. All Americans are exploring new, innovative solutions to our society's most challenging problems. As the co-authors of a new book on Bitcoin in America, we believe this call to action has led directly

Starting point is 00:03:08 to the rise of an alternative money monetary system. We understand you may be dismissive of Bitcoin, that you may have heard that this technology is tied to white supremacy and groups seeking to spread hate and division. We reject this one-sided message and instead want to explain why we see Bitcoin as a beacon of hope. In the following article excerpted from our new book, Bitcoin in the American Dream, we explain how Bitcoin can be used as a tool for social and economic justice, one that can help underserved communities increase their economic mobility by building generational wealth.

Starting point is 00:03:40 Embedded in our nation's history is a legacy of oppression, racism, and genocide. More than ever before, age, race, gender, and sexual identity are shaping American politics. and for good reason. The U.S. is falling short in creating an economy where all citizens can build wealth regardless of background. Elected leaders from both parties have an obligation to work towards dismantling the system of oppression and discrimination that persist in this nation. Social justice is an emerging part of the Bitcoin discussion. The discriminatory practices of the U.S. banking industry have been well documented. Lawsuits and fines against banks reveal a history of fraud, higher fees, and restricted access to credit that has disadvantaged all of our minority

Starting point is 00:04:19 communities. While no monetary invention can eliminate the effects of discrimination, Bitcoin offers immigrant, black, brown, indigenous, and LGBTQ plus communities the promise of a fair and equitable financial system. Our marginalized communities are already recognizing a potential of Bitcoin. Over 30% of black and 27% of Latino investors own Bitcoin. Innovations like Bitcoin ATMs allow these communities to access Bitcoin. Applications make buying, saving, and investing in Bitcoin easier. For those who have struggle to gain access to banking services, Bitcoin is a breath of fresh air. Bitcoin wallets are software, meaning these devices cannot discriminate against users based on their identity, race, or past financial status. This should prove of interest to progressives who have long been sensitive

Starting point is 00:05:01 to issues of inequality in America. Nexo is a trusted and easy-to-use crypto platform, where you can buy cryptocurrencies at the touch of a button and start earning up to 18% annual interest that is paid out daily. They support all of the major assets on the market, and even allow you to swap one asset for another or borrow cash against your crypto without selling it. Nearly 3 million people in over 200 countries trust Nexo with their digital assets. So whether you're just getting started or you're a seasoned pro, get the most of your crypto today with Nexo at nexo.io. Meet Arculus, the next generation cold storage wallet. Arculus secures your crypto using three-factor authentication, providing a simpler, safer, and smarter way to store, buy,

Starting point is 00:05:54 Swap, send, and receive crypto. Arculus is offline cold storage. Your private keys are encrypted on the Arculus keycard and are never online. Stay safe from hackers with no cords, no charging, no Bluetooth. Just crypto security made simple. Buy now at getarculus.com. That's G-E-T-A-R-C-U-L-S dot com. The breakdown is sponsored by FTX-U-S.

Starting point is 00:06:25 F-T-X-U-S is the safe, regulated way to buy and sell Bitcoin and other digital. assets with up to 85% lower fees than competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees. One of the largest exchanges in the U.S. FDX U.S. is also the only leading exchange that supports both Ethereum and Solana NFTs. When you trade NFTs on FTCS, you pay no gas fees. Download the FTX app today and use referral code breakdown to support the show. Closing the Black Wealth Gap. For generations, Black Americans have been systematically prohibited from building wealth and ensuring property rights, and they inherit a legacy of disadvantage that impacts their finances today. The institution of brutal, shattle slavery in which

Starting point is 00:07:12 humans were valued as property, was America's first economic system. It turned our country into a financial powerhouse, creating millionaire slave owners whose white descendants enjoy those gains. Even after the Civil War, Black Americans would have property seized under Jim Crow-era laws that confiscated over 12 million acres. Decades later, the New Deal would create the Federal Housing administration, which remains the foundation of our modern real estate market. This new mortgage market offered white American families a path to wealth through home ownership. But this American dream was again not available to black families. The Civil Rights Act of 1968 attempted to outlaw housing discrimination, but our credit system continued to marginalize black Americans who lived

Starting point is 00:07:51 in lower income neighborhoods deemed geographically undesirable. Despite well-meaning past policy efforts, expensive social programs, and a progressive agenda, the black wealth gap remains wide. As of 2019, median wealth for black households in the U.S. was 24,100, compared with 189,100 for white households. This is an imbalance created by centuries of property rights violations and thefts that have left black Americans distrustful. For black Americans, Bitcoin offers the promise of a fair financial system untainted by America's legacy of racial oppression, and strong assurances to the property rights that they have long been denied. Because Bitcoin can be self-custody to black Americans no longer need to solely depend on banks, institutions or intermediaries. Bitcoin allows black Americans to take direct agency, control,

Starting point is 00:08:36 and custody of their financial assets and the opportunity to build generational wealth. Supporting Latino communities. Like black Americans, our Latino communities have historically experienced economic injustice that has hindered them from achieving the American dream. Leading up to the 2008 financial crisis, Latino borrowers were disproportionately offered costly or subprime mortgage loans. Thousands of Latino families lost homes, setting them back in their efforts to build generational wealth and savings. These devastating financial losses, coupled with past discriminatory practices from banks, have fueled the distrust of the finance industry in the Latino community. Perhaps this is why 27% of these Americans use Bitcoin as a store of value.

Starting point is 00:09:17 The COVID-19 pandemic exposed more economic disparities for the Latino community. Stanford University found that Latino business owners had their paycheck protection program, PPP loans, approved at half the rate of white-owned businesses. Bitcoin empowers the Latino Latino community with access to a fair economic system and offers a path to prosperity through enhanced financial tools. Empowering first-generation immigrants. America is a country built by immigrants, and immigrants remain a cornerstone of our economy. Of the country's nearly five million business owners, 900,000 are immigrants. The reason for this is that first-generation Americans are often breadwinners for family members abroad. America accounts for nearly 24% of all remittance transactions.

Starting point is 00:09:58 Unfortunately, remittance services are expensive. The U.S. is among the least costly countries from which to send remittances, yet the average fee is 6% per transaction. Many immigrants are adopting Bitcoin as a way to avoid these fees. With Bitcoin, immigrants can convert dollars to Bitcoin and send Bitcoin to family members abroad. Fees on the Bitcoin network are often much cheaper. Sending $1,000 abroad on the Bitcoin network costs about $4 on average, compared to $60 when using a traditional remittance service.

Starting point is 00:10:25 Lightning wallets and emerging technology running on top of Bitcoin takes this a step further, with average fees of less than one cent. These savings add up. Unlike remittance services, Bitcoin operates 24-7 and settles in about 10 minutes. Armed with this tool, first-generation immigrants can keep more of what they earn when they use Bitcoin. Including LGBTQ plus Americans. One in four LGBTQ plus Americans report financial challenges based on their orientation or gender identity, and they are less likely to have a savings or retirement account. LGBTQ families typically include at least one non-biological parent, and many state laws make estate planning especially tricky. Should an unmarried LGBTQ-plus American die without a will, courts may not recognize the custody

Starting point is 00:11:07 of their children. Perhaps because of these issues, one-quarter of LGBTQ plus Americans own Bitcoin, Bitcoin offers the LGBTQ-plus community at the opportunity to transfer money to beneficiaries instead of relying on shifting state-based legislation. The ability to own in-custody Bitcoin offers this and many other tangible benefits. Domestic Violence Survivors. One out of four American women will experience some type of gender-based violence, and the vast majority of domestic abuse survivors will be subject to financial abuse. The domestic abuser may take loans in the victim's name without consent, force agreements

Starting point is 00:11:42 with financial documents, or control how the victim spends money. As a result, survivors of domestic violence often suffer from poor credit history and a lack of resources even after they escape abusive relationships. Bitcoin offers a path for survivors. The 2020 book Cypher Punk Women offered one detailed account by a domestic abuse survivor who used Bitcoin to help save in a way that went undetected by their abuser. Bitcoin empowered this individual by offering the tools for financial independence. The domestic violence survivor was able to build wealth outside of traditional bank accounts and outside their abusers' control.

Starting point is 00:12:16 Conclusion, Bitcoin has opened an escape hatch for a generation of marginalized Americans and made them excited about saving and investing. But poor regulation could force Bitcoin services, to resemble our legacy financial system. As of writing, U.S. Bitcoin exchanges require users to meet the same requirements as banks. Their users must have bank accounts or debit cards, and they must rigorously collect customer information, undermining benefits for marginalized groups.

Starting point is 00:12:40 We believe Bitcoin must be a part of future education curriculums, so all communities can prosper in the next generation. All right, back to NLW here, and I don't have a lot to add. I'm going to let those words speak for themselves. The only thing that I will add is that this is exactly the type of discussion that I hope finds its way into the political discourse around Bitcoin in the weeks, months, and years to come, as very fundamental decisions are made about how it's going to be regulated. This is not a left or right issue, and we should push back fiercely against the attempt to reduce it

Starting point is 00:13:12 to another partisan football where just knowing whether someone has a D or an R next to their name is going to make you know what they think about Bitcoin. Right now, Bitcoin has been remarkably resilient to the partisan calcification of American politics. Let's keep it that way. Until tomorrow, be safe and take care of each other. Peace.

The Breakdown - How Bitcoin Helps Marginalized Communities Build Generational Wealth

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.