Introduction
The crypto space is full of distractions as users focus more on big issues like bull markets, trading signals and investment opportunities. No other sector is as dynamic as the crypto sector where there is no shortage of talking points. But we seem to ignore or even appreciate an aspect of finance that crypto has massively improved. That is financial literacy.
Before the emergence of crypto and blockchain technology, there was little to talk about in terms of finance. The traditional finance sector is fully busy with offering finance products to make their profit. The education aspect of it was literally dead. But the emergence of crypto directly lead to a revolution where people became increasingly aware of managing assets, earning, investing and long term outlook.
Let us see how far we have grown in terms of financial literacy more than a decade ago since Bitcoin was first introduced.
Financial Literacy was dead before crypto
The level of awareness of money and finance management before crypto came was really very limited. One of the sectors where people should have sound financial education is through the school system. But the question that remains is: Is practical finance taught at schools? The answer is obvious.
The school and financial education
Schools are supposed to help people learn the basic concept of money and finance. Then they are supposed to go beyond that and teach practical aspects like how to manage money, create multiple income streams and invest long-term. Unfortunately, the academic curriculum from the lower to the higher levels of education are often filled with other things than finance.
Granted in some economies where the standard of education is better, the school system tries to include some finance related courses. But in many other parts especially developing countries, financial education is badly missing in the school system. It is not then that many adults today grow up in the society and mess up their finances. Many are battling with debts, loans or are struggling with savings and spending's. The state of financial literacy of most economies could directly be linked to the lack of financial literacy in the school system.
Traditional finance sector has not helped
When we look at the finance sector, we also see a glaring lack of financial awareness. The banks are at the center of this sector. Basically, banks are more focused on attracting more customers, opening more accounts and getting more people to use their services. While there is no problem with growing a business, the traditional finance sector - especially banks have work to do in financial literacy.
While they invest in marketing and growing their userbase, banks should invest more in financial literacy. They should start organizing awareness workshops regularly to educate the masses on how best to manage money and finances. They should also invest more in financial literacy educational material which could be left in conspicuous areas of their branches so that people could pick them up.
They could sponsor interested members of the public to premium financial literacy courses. These efforts would yield more fruit as participants become more skilled in managing their finances. Whether these suggestion could be implemented remains to be seen. But the truth is that the traditional finance sector has done little to improve the level of financial literacy in most places.
Crypto has done more in a short time
The emergence of Bitcoin a little more than a decade ago marked the birth of cryptocurrencies and blockchain technology. Count down to this day, one can only appreciate how much impact cryptocurrencies have made in the area of financial literacy. Even people that have no formal education are now professionals in finance because of getting involved in crypto.
Because of the birth of crypto, a lot of awareness has been created for finance and money. Consider some of the following ways through which crypto has boosted financial awareness and literacy.
Here are some aspects of financial literacy which crypto has taught millions of its users today and some have built wealth from such knowledge
1. Invest long-term: A lot has been taught about investing in crypto. Remember that investment is one aspect of finance that has been left for the big companies or wealthy individuals. But then, crypto has taught its users not just to invest, but to invest for the future.
Many crypto courses for investment includes holding a digital token long-term. This is a finance concept which many have adopted and it is helping them grow their wealth. Many users have learnt the importance of buying crypto and holding it in their wallet long-term until they appreciate in value. Some crypto millionaires made it through buying when the market is down and holding it for a long time until the value appreciates to make profit. That is an aspect of financial literacy made popular by crypto.
Today, there are many individuals that purchased low value crypto and held on for 1 year or more until the price of their assets have gone up. Then the sold for profit. HOLDLing crypto is popular and many in the space are doing it. In essence, this is an aspect of investment that many are not aware of. The idea is that to grow wealth requires time - enough time and patience. Many have profited when the coin they held trippled in value. So long-term investment has been made popular today by crypto.
2. Saving Consistently to grow wealth: Another finance concept that crypto has made so popular is the idea of being consistent in savings as wealth growth strategy. Dollar Cost Averaging is very popular in crypto now. It involves setting something aside that could be saved periodically and consistently. Many are DCAing daily, weekly or monthly. Over time, the compounded savings becomes something really significant.
While DCA is a crypo concept that is now very popular, it is a fundamental concept in finance and a strategy to grow wealth. The more one saves and compounds consistently, the more they increase their wealth or digital portfolio. In the crypto space today, many users have applied this concept and gradually grew their wealth over time.
In the world of finance, DCA could still be applied. If someone is saving 1 dollar every week, the person must have significant savings at the end of a long period like 5 years. Why are many crypto enthusiasts doing DCA now and growing their wealth little by little? They learn it in crypto and its really helping many to consistently build wealth.
3. Others: There are many other concepts that crypto has amplified and that has helped a lot of people become financially smarter. The crypto industry has taught users not to put all their eggs in one basket. Spreading ones portfolio reduces the risk. Users have been taught to always do their own research before investing in a project. This also helps to avoid loosing assets. These and many other aspects of financial literacy have been made more popular by crypto.
Conclusion
Crypto should be hailed for achieving more financial literacy within its short time of existence than traditional finance. Beyond trading and making profits, everyone in the crypto sector should count themselves fortunate because they have learned so much and are more financially literate now than when before they joined the crypto space