Bitcoin and other cryptocurrencies have demonstrated significant utility in cross-border remittances, particularly in regions with underdeveloped banking infrastructure. Compared to traditional bank transfers, crypto-based transactions offer advantages in speed, cost-efficiency, and accessibility. As the oldest and most established cryptocurrency, Bitcoin often serves as the primary choice for international payments.
In recent years, some commentators—predominantly from developed nations—have argued that Bitcoin's on-chain transaction fees make it unsuitable for everyday use in developing economies. They often promote alternative cryptocurrencies as more practical solutions. However, this perspective frequently overlooks the actual needs and conditions within these regions.
Miguel Cuneta, co-founder of the Philippine-based crypto firm Satoshi Citadel Industries, recently addressed this issue on social media. He criticized those who advocate replacing Bitcoin with competing cryptocurrencies based solely on transaction cost arguments.
Understanding the Reality in Developing Economies
Cuneta, who established a payment company in the Philippines five years ago, has witnessed firsthand how Bitcoin creates positive change in his country. He challenges the assumption that lower fees automatically make alternative cryptocurrencies superior for developing markets.
"No, people won't abandon Bitcoin for BCH or other cryptocurrencies just because of lower fees," Cuneta stated. "Nobody cares about this. You should stop saying this—it's condescending and ignorant."
The Philippines presents a compelling case study: while banking service coverage remains limited, smartphone and internet penetration rates are remarkably high. This technological infrastructure has facilitated Bitcoin adoption despite transaction costs.
Beyond Transaction Fees: The Systemic Challenges
Cuneta emphasizes that many proponents of alternative cryptocurrencies fail to understand the complex systemic issues facing developing nations. Poverty, corruption, and financial exclusion cannot be solved overnight by any single technological solution.
"Bitcoin is a tool that will be used to benefit the world, but not in the ways those from San Francisco, New York, or London might imagine," he notes. "The problems of the third world are systemic, and no technological solution will solve them overnight."
The reality in the Philippines illustrates this complexity:
- 80% of the population lacks access to formal banking services
- Credit card penetration stands at just 3%
- 99% of commerce is conducted using cash
- 21% of the population lives in poverty, with many surviving on just $2 per day
The Infrastructure Development Approach
Despite these challenges, the Philippines shows remarkable potential for cryptocurrency adoption. The country has:
- 50 million people aged 23 and under
- 60 million internet users
- One of the world's fastest-growing smartphone adoption rates
- A rapidly expanding middle class
The country's cryptocurrency industry has flourished through local initiative. In 2017, the Philippines became the second nation globally to regulate virtual currency exchanges through its central bank, recognizing the technology's potential.
Through these efforts, users can now easily convert Bitcoin (and other cryptocurrencies) to fiat currency for mobile top-ups, money transfers, and other financial services. 👉 Explore practical payment solutions
The Historical Parallel: Internet Adoption Patterns
Cuneta draws an insightful comparison to internet adoption in the 1990s. Claiming Bitcoin cannot create meaningful change because of current transaction costs resembles arguing in 1995 that public internet infrastructure wouldn't transform society because computers and internet access were initially expensive.
Just as internet cafes provided affordable access to technology in its early days, third-party cryptocurrency services now enable widespread adoption at minimal cost in developing regions. This approach may represent the primary pathway to mainstream adoption.
Building Toward the Future
The ultimate solution likely involves Bitcoin (or similar technology) serving as foundational infrastructure, with second or third-layer services providing simple, intuitive, low-cost interfaces that maintain open and inclusive characteristics.
This development will take time and cannot be rushed by those outside the communities most affected. As Cuneta emphasizes: "Please stop using my country or other developing nations to promote junk projects and shitcoins. We're not sitting around waiting to be saved. We're busy building our own future."
Frequently Asked Questions
Why is Bitcoin considered for cross-border payments despite its transaction fees?
Bitcoin offers borderless transactions without intermediary banks, which can ultimately reduce costs and processing time compared to traditional systems. While on-chain fees fluctuate, they often remain competitive against international bank transfer fees, especially for larger amounts.
How do developing countries access cryptocurrencies despite banking limitations?
Many developing nations have high mobile penetration rates, allowing users to access cryptocurrencies through mobile apps and third-party services. These platforms often function similarly to internet cafes did in the early internet era, providing accessible entry points to technology.
What makes Bitcoin preferable over newer cryptocurrencies with lower fees?
Bitcoin's longer track record, greater security, wider recognition, and stronger network effects often outweigh the theoretical advantage of lower fees offered by newer alternatives. Users value stability and acceptance over minimal cost differences.
Are second-layer solutions addressing Bitcoin's transaction cost issues?
Yes, technologies like the Lightning Network are creating additional layers that enable faster, cheaper transactions while maintaining Bitcoin's security foundation. These developments are particularly relevant for smaller everyday transactions in developing economies.
How long until cryptocurrency becomes practical for daily use in developing countries?
Adoption is already occurring through gradual infrastructure development rather than sudden transformation. As with internet adoption, this process will take years rather than months, with solutions evolving to meet local needs and conditions.
Do transaction costs actually matter to users in developing nations?
While costs are always consideration, users often prioritize reliability, accessibility, and functionality over minimal fee differences. The ability to participate in the global economy frequently outweighs concerns about transaction fees that remain competitive with traditional alternatives.