Digital Currency and Economic Freedom

Introduction to Digital Currency

The world finds itself at a pivotal moment in time: with the growing popularity of digital currencies, the vision of increasing the economic freedom of the world’s population has a chance of being realized. The implications of this would be profound. Countries that struggled with poverty could more actively participate in the world’s economy to lift themselves and innovation could be accelerated. In short, an increase in economic freedom through digital currencies could improve the lives of billions around the world significantly.

The term economic freedom describes the difficulty members of a society face when trying to participate in the economy. It is measured by a number of different factors including:

According to statista.com, the countries with the highest economic freedom Singapore, New Zealand, and Australia. North Korea, Venezuela, and Cuba rank among the most economically repressed countries.

By comparing countries with the highest economic freedom with those on the opposite end of the spectrum, you can see that the level of economic freedom correlates with various positive outcomes within a society. In general, economic freedom correlates with higher per-capita income, literacy, and life expectancy. Other positive outcomes include:

The differences are especially apparent when comparing the two ends of the spectrum in different areas:

Correlation does not prove causation so we shouldn’t jump to conclusions. However, the aforementioned positive outcomes that go along with economic freedom raise an important question: could the world be positively changed by attaining a high level of economic freedom?

The rise of smartphones and cryptocurrencies provides the opportunity of increasing economic freedom all around the world with unprecedented efficiency and inclusiveness. The impact digital currencies can have on economic freedom are manyfold:

• Ease of starting and operating a business
  Customers can be more easily accessed all around the world. The frictions of accepting payments are reduced. Companies gain better access to global markets.
• Free trade is promoted
  The barriers of physical borders and foreign exchange are broken down. Cross-border transfers can be conducted more seamlessly. Individuals from different countries are able to more easily trade with each other.
• Reduced bribery and corruption
  A reduction of gatekeepers and nepotism reduces inefficiencies and entry barriers along the entire economic spectrum.
• Higher freedom of contract
  Unchangeable smart contracts provide higher security for the involved parties and make it easier for people to enter agreements independent of their residence

During the last 20 years, economic freedom has remained stagnant. Growth of only 3% how important it is to find new and innovative ways, such as Eco, of increasing economic freedom. With the advance of digital currency, economic freedom may increase rapidly within the next 20 years. By creating a high level of comic freedom in the world, innovation will be accelerated, individual sovereignty and independence increased, and easier access to participate in the economy to the poorest will be given.