Mar 13, 2019

Why Cryptocurrency Matters for Women

People sometimes characterize cryptocurrency as a boy’s club. From the outside looking in, that is a plausible narrative. Most, but not all, cryptocurrency developers and entrepreneurs are men. Bitcoin and other cryptocurrencies are open source projects, and the demographic distribution looks a lot like other open source projects. Some conclude that this skew means that cryptocurrency communities must be hostile or dismissive of women.

I think this characterization is unfortunate for two reasons. First, I find it inaccurate, as it does not comport with my experience in the Bitcoin community since its early days. More importantly, it may preemptively turn women away from getting involved with cryptocurrency. This would be a shame, as there are many ways that women, in particular, can benefit from digital cash.

In honor of Women’s Month, this article celebrates the contributions that women have made to cryptocurrency. Furthermore, I explain why cryptocurrency is important to women, and how digital cash can strengthen financial autonomy.

Jump in Ladies, the 'Mempool’s' Great

Cryptocurrencies tend to be run as open source projects, which means that they are open to contributions from anyone. This is in contrast to a closed source project, which is controlled by some private body, with all of the subsequent hiring, employment, and assignment duties that come with proprietary management.

Because there is no central party to control contributions to open source projects, there is no potentially biased barrier to entry. Contributors can be anonymous, and it is possible that participants know very little about others’ true identities. A person’s contributions are judged on the merits to the project.

On the other hand, open source projects, especially new ones, may lack the infrastructure to onboard specific pools of talent. This could limit the breadth of new contributors, which some fear could ultimately limit the project’s potential.

Commentators have discussed the relative lack of women contributing Bitcoin code since the early days of the network. I always found this a bit puzzling, because I had been treated very well by the community—if anything, I suspect that people may have been nicer to me. Of course, I had never attempted to contribute code, but that was not one of my strengths. Rather, as an analyst with interests in the intersection of technology and policy, I focused my efforts there.

The fact that few women contributed to open source code did not mean they were absent from the cryptocurrency community. They were making waves in founding ground-breaking projects, developing new bodies of law, and setting the standard for public advocacy. Looking around the newly-forming community of cryptocurrency entrepreneurs and commentators, I did not see a boy’s club. I saw strong and dedicated women applying their talents to forge new paths and excel.

While it is heartening that there are inspirational female leaders in cryptocurrency to serve as examples and mentors my experience may not be universal, and perhaps more work needs to be done to help women and other groups feel comfortable to get involved with cryptocurrency. Indeed, digital cash technologies may be particularly important for underrepresented groups.

Cryptocurrencies Preserve Financial Autonomy

Why have women been drawn to cryptocurrency leadership? The core value proposition of these projects—to better facilitate direct person-to-person exchange online—is a fundamentally appealing one that can benefit all people.

Before the development of cryptocurrency, most people had few, if any, alternatives to third party-managed payment systems for government-created money. Central banks had to be trusted to issue new money, and financial intermediaries had to be trusted to faithfully execute transactions as directed by customers.

People in stable economies often take a functioning currency and payment system for granted. But in many places in the world, this is an unavailable luxury.

Consider the tragic situation in Venezuela, where unstable governance and monetary mismanagement led to runaway inflation. In cases like these, trust in governments to manage currency is decidedly unearned. Yet people, especially lower income or less enfranchised people, may find it harder to secure alternative stores of value, like harder currencies or precious metals. It is no surprise that Venezuelans across the income spectrum have turned to Bitcoin to save their families.

Surveillance and control of payment systems can also be a major humanitarian problem. People living in countries that are subject to capital controls or international sanctions may find it incredibly hard to purchase needed items, things like household necessities, technologies, and even medications. Payment processors and financial institutions can be leaned on to limit or block transactions, leaving people with little recourse or alternatives.

The problem becomes more pronounced when physical distance separates parties to a potential exchange. Cash provides one avenue for in-person transactions. But when an exchange is coordinated online, people were virtually forced to trust a trusted third party to facilitate the exchange.

Bitcoin was the first cryptocurrency to allow people to transact online without needing to rely on a trusted third party. The Bitcoin network issued new currency units on a predictable basis, removing the threat of government-created hyperinflation. Furthermore, the network facilitated transactions in a permissionless fashion, so no third party in the middle could block or track cryptocurrency transfers.

Why Cryptocurrency Matters for Women

The existence of digital cash is a great development for all people. It can have particular benefits for women, as they often face unique financial challenges.

Women’s financial autonomy is limited in many parts of the world. Some countries impose prohibitions on the activities and commercial opportunities in which women can participate. In some places, women cannot even open their own bank account, either because of legal prohibitions or a lack of financial infrastructure or access (they are “unbanked.”) Even in developed economies, women who are subject to domestic abuse are too often also subject to financial abuse, or situations where an abuser controls access to money and financial services, thereby further enmeshing victims in hard-to-escape situations.

Cryptocurrency affords women with a permissionless option to freely engage in trade or develop savings.

Women in countries that legally limit their financial autonomy can use cryptocurrency to save money or purchase otherwise permissioned products. Unbanked and underbanked women, likewise, can utilize cryptocurrencies to come into the fold of financial servicing. (There are a host of outreach groups aiming to bring cryptocurrency to unbanked women in the developing world.) And women who find themselves in situations of financial abuse can use Bitcoin and other privacy-preserving cryptocurrencies to take back their financial autonomy.

Although cryptocurrency can provide important and possibly life-saving benefits for women, they currently constitute a small sliver of estimated cryptocurrency holders. This is a shame, but it is also an opportunity. Expanding cryptocurrency access among women can not only increase their standard of living and preserve their human rights, it will expand the commercial sphere as well.

We can expect more entrepreneurs and outreach groups to help women and other marginalized groups get involved with cryptocurrency as its social infrastructure continues to mature. Both women and cryptocurrency will be better off because of it.

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