Over the past few centuries, America has subjected Black Americans to countless inhibitory tactics, stunting the growth of generations to come. American institutions used everything from financial to educational discrimination to strip Blacks of any chance at opportunity. Fortunately, there is now financial technology that bypasses these old institutional gatekeepers. In particular, blockchain, cryptocurrencies, and NFTs are the best vehicles for Black Americans to obtain generational wealth.
Ways in which America has stifled Black generational wealth
Countless studies over the years have shown a troubling degree of racial wealth inequality in America. Retracing American history shows several vital moments where cities and institutions deliberately blocked Black Americans from crucial financial and social programs. Here are just a few notable ways in which this played out.
For starters, redlining was a form of housing discrimination prominent in the 1930s by which cities would use maps to segregate Black Americans from their White counterparts. Specific neighborhoods deemed “risky” would be denied mortgage loans, preventing residents from moving into nicer, predominately White areas. Since real estate is one of the most important and lucrative investments someone can make in their lifetime, Blacks not having access to that investment vehicle has proven detrimental.
Another example of how Blacks were denied a chance at generational wealth was the Tulsa Massacre. In 1921, a booming district in Tulsa, Oklahoma, made up primarily of Blacks, was destroyed due to a series of misunderstandings, greed, and racism. The district in Tulsa was known as “Black Wall Street” due to the several affluent, Black-owned businesses in the area. After rumors of a local dispute spread through the community, a combination of factors led to a White-led riot. The destruction and looting led to the loss of Black-owned businesses and an estimated death toll of up to 300 Black citizens. The Tulsa Massacre is an example of racist Americans extinguishing Black prosperity on a large scale.
Likewise, many people are unaware of Seneca Village, now known as Central Park in New York. In the mid-1800s, free Blacks created the village, which eventually grew to a population of over 250. But New York’s elites later dispersed the village because they decided they wanted to build Central Park. Elites effectively robbed Black landowners of a chance to establish generational wealth in one of the most influential cities in America.
Seneca Village and Black Wall Street are just two well-documented examples of how real estate discrimination dampened the growth of Black Americans. Redlining is an example of how even the government and its institutions were complicit in creating barriers. America stifled Black American progress, and this can be traced back to the earliest days of the country’s existence. And it’s still happening today, often in more systemic ways and across all industries.
Cryptocurrencies and Black generational wealth
America’s institutions have failed Black Americans and other marginalized communities. Even though progress is being made, a legacy of discrimination has left growing wealth inequality among America’s diverse populations. However, the advent of blockchain technology has unleashed a permissionless, transparent and decentralized mechanism for redistributing power among the masses.
Cryptocurrencies are a new asset class with an extremely low barrier to entry for investing. New investors can purchase crypto fractionally, meaning they don’t need to buy a whole token to enter a position. Most exchanges allow you to purchase crypto with just a dollar. Bitcoin, the most well-known and largest cryptocurrency by market cap, is often lauded as a store of value more effective than gold. Bitcoin’s inventor programmed it with artificial scarcity, making it a deflationary hedge against the limitless printing of fiat currencies. Making small, consistent investments into a cryptocurrency like Bitcoin could save you in the future and allow you to pass that wealth on to descendants
Instead of going to the bank and undergoing background checks that judge people based on past financial behavior to determine their loan eligibility, people can now access various financial tools to help them earn income passively or pull out loans for starting a business. Decentralized finance (DeFi) is a sector within the blockchain industry that allows lending, borrowing, and earning interest yields on capital.
Furthermore, Non-fungible tokens (NFTs) are a type of blockchain-powered asset that allows anyone in the world verifiable ownership of various objects. The digital art world has so far benefitted the most from this. Artists worldwide are minting their work and opening up revenue streams directly connected to their fans. NFTs have use cases that extend far beyond art too. Overall, it’s never been easier to start a business by minting ideas as NFTs.
Blockchain technology is what powers these asset classes. A blockchain is a digital ledger of transactions that are publicly viewable and unalterable. Thousands of computer nodes worldwide run these decentralized networks, so government entities cannot control them. Through smart contracts, developers can program applications on blockchains that don’t require intermediaries to facilitate transactions. Without centralized control, platforms and organizations cannot discriminate against users and prevent them access to powerful financial tools. For these reasons, blockchain-enabled finance is one of the best ways for Black Americans to obtain wealth. Leveling the playing field and fostering an equitable economy is a win-win for everyone.