Blockchain is emerging as a key tool to empower Black entrepreneurs and address the diversity gap in the tech industry.
Over the years, the tech industry has struggled with a lack of diversity, particularly in underrepresented communities such as Black and African American people, as well as other minority groups.
While initiatives have been launched to address this issue, there is still a significant gap in representation, access to financing and opportunities for Black entrepreneurs.
The following will explore how blockchain can address structural racism and wealth gaps and provide opportunities for Black-owned businesses and projects to thrive.
The Challenges Black Tech Entrepreneurs Face
The lack of Black representation in tech goes beyond simply meeting quotas. Only 2.3% of American businesses are black-owned, despite blacks making up nearly 14% of the population. Black-owned businesses also have a higher failure rate: 8 in 10 failing in the first 18 months.
The challenges faced by Black tech entrepreneurs come from multiple levels of the startup ecosystem. Furthermore, they often stem from systemic barriers and biases that limit access to resources and opportunities.
Startups are also affected by discrimination, as Black entrepreneurs struggle to access early-stage, high-growth projects without meeting the equity requirements of an accredited investor.
Blockchain as Equalizer
Still, there is a significant opportunity for growth and innovation in this sector. Blockchain technology and cryptoassets are set to transform everything from financial services and supply chains to government services, making it possible to address inequality at its roots.
This is so revolutionary because blockchain removes many of the traditional barriers to acquiring, storing and transferring wealth. It is permissionless, meaning consumers do not have to access crypto assets through a central authority. It allows almost anyone to access early-stage, high-growth projects without meeting the wealth requirements of an accredited investor.
While the crypto industry has historically had a gender imbalance, recent trends indicate a shift towards greater gender diversity. Gemini’s State of Crypto 2022 report shows that globally, 47% of those interested in purchasing cryptocurrency for the first time over the next year are women. In developing countries, female participation in cryptocurrency ownership is particularly high: women make up more than half of cryptocurrency owners in Israel (51%), Indonesia (51%) and Nigeria (50%).
On the other hand, in more developed regions, the proportion of women who currently own cryptocurrencies is lower. This includes the United States (32%), Europe (33%) and Australia (27%), where only around a third of cryptocurrency owners are women.
DAO and Crypto Companies Work to Close the Gap
Technology accelerators like Smarter in the City, Black Founders, and Blacks in Technology provide workspace, collaboration opportunities, and advocacy for Black entrepreneurs.
Decentralized autonomous organizations (DAOs), defined simply as blockchain communities with a shared bank account, can go a step further. Black-owned blockchain companies, projects, and DAOs help with both access and funding.
Since no centralized leadership runs DAOs, they are less likely to exclude people based on identity factors like age, gender, or race. Such lack of discrimination goes beyond DAOs and encompasses the blockchain as a whole.
The lack of representation of Black entrepreneurs in the tech industry is a persistent issue that must be addressed to promote diversity, equality, and inclusion. Blockchain offers a promising solution by empowering underrepresented communities through decentralized finance, DAOs, and other crypto-native solutions.
It is paramount to ensure that diversity and inclusion are at the forefront of technological entrepreneurship to create a truly equitable and inclusive world.
By Audy Castaneda