Author: Gerard Ferreira
By its very nature, cryptocurrency and Blockchain technology were created to challenge the financial status quo. With increasing popularity and adoption, both are affecting economic activities in myriad ways.
Due to being decentralised, cryptocurrencies eliminate third-parties, such as banks, from the transfer of funds.😲 This results in reducing the cost of transactions while making them faster and more secure.
Additionally, due to efficiencies that Blockchain tech provides, there is economic benefit to financial institutions and industries including insurance and real estate. Rather than be left behind, companies can use Blockchain to reduce costs and increase profit.
Example 1: Blockchain-based supply-chain management that enable companies to further streamline processes, minimizing wastage (and additional cost).
Blockchain tech has also birthed/developed industries, from mining to software development. As technology continues to grow, so do these sectors, with an increasing demand for relevant professionals. Crypto-related startups have launched around the world, with some already having noticeable success (e.g. Coinbase and Binance founders are millionaires).
Example 2: From individual miners, we now have mining pools, i.e. groups of computers dedicated to Blockchain mining and cryptocurrency reward.
Increasing numbers of people worldwide are also investing in cryptocurrency. Without the barriers to entry of traditional stock exchanges. Case in point: In Bitcoin’s market cap of $690 billion 💰, crypto is becoming a major investment vehicle.
Cryptocurrency has indeed become a driver of financial globalization, giving crypto-minded traders worldwide reach. For SMEs, this is significant, potentially transforming them from local entrepreneurs into international agents, as financial barriers are removed and a single, accessible currency is used.
Governments have started showing interest, with the Eastern Caribbean Union and El Salvador adopting cryptocurrency as legal tender. This was done to decrease transactional costs, enable foreign nationals to remit funds to relatives back home and make purchasing easier for locals who don’t have bank accounts.
Getting local, the cost of corruption is not yet measurable. And while we’re still far from daily Blockchain adoption, its inherent transparency can eventually go some way to minimizing ‘bobol’. An ideal – but that would be the day!
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