| This is a common Bitcoin talking point, but it's not a good one. There are over two billion people in the world who have no bank account or access to even basic financial services; “banking the unbanked” is much discussed in international development circles. Around 2013, Bitcoin advocates started claiming that Bitcoin could help with this problem. Unfortunately: * The actual problems that leave people unbanked are the bank being too far away, or bureaucratic barriers to setting up an account when you get there. * Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain. * Bitcoin is way too volatile to be a reliable store of value. * How do they convert it into local money they can spend? * 7 transactions per second worldwide total means Bitcoin couldn’t cope with just the banked, let alone the unbanked as well. * A centralised service similar to M-Pesa (a very popular Kenyan money transfer and finance service for mobile phones) might work, but M-Pesa exists, works and is trusted by its users – and goes a long way toward solving the problems with access to banking that Bitcoin claims to. Advocates will nevertheless say “but what about the unbanked?” as if Bitcoin is an obvious slam-dunk answer to the problem and nothing else needs to be said. But no viable mechanism to achieve this has ever been put forward. |