How Blockchain Can Boost Economic Mobility?
Blockchain Technology is a new sensation after the Internet. Within a few years of inception economies around the world are finding an array of Blockchain applications, a decentralized ledger technology that assures a peer-to-peer and secure mechanism to verify the information. If there is one area where Blockchain has direct relevance and tremendous potential, it is economics. The main purpose of Blockchain is to remove the middleman from any system. In today’s time, it seems relevant as ‘middleman’ might not be efficient and trustworthy.
Blockchain Technology also brings the possibility of using alternative currency – cryptocurrency. In countries where inflation is at its extreme levels, cryptocurrency can be of great help. Even though crypto use and adoption have now increased massively in both developing and developed nations. Finally, Blockchain brings along a cost-effective and secure way of sending funds, making cross-border transfers and donations. Here are the main reasons why Blockchain can boost economic mobility:
Replacement to Failing Institutions
The present slow economic convergence of several developing nations is because of the instability of financial institutions; add to it the inefficiencies of the ruling government and corruption. But for economic growth focus should be to improve the financial institution and the existing system. However, in a few developing nations lack of security is only taking away the trust of commoners from the age-old financial system.
Blockchain Technology brings a perfect alternative to corruption, inefficiencies, and untrusted financial institutions. This new technology proposes a transparent, immutable, and secure environment that removes the middle-man. Instead of a centralized system that offers easy subversion and manipulation to corrupt officials, Blockchain is completely transparent and scam-free. If anyone is tampering with a block, the change will propagate through the whole chain and other members can easily figure out the malicious actor.
By now everyone is aware that Blockchain is the underlying technology to popular cryptocurrency. At a time when fiat currency values are falling, cryptocurrency is at your rescue. Today as the whole world is going through a tough situation because of COVID-19 and the economic crisis, crypto brings security to your hard-earned money. Blockchain technology brings an interesting alternative to informal lending techniques.
With the Australian Cryptocurrency Exchange platform, commoners can easily avail tailored financial services. Be it decentralized wallets, trading the cryptocurrency, or exchanging fiat to crypto, all can be completed in few simple clicks, without involving third parties. Blockchain technology enables processes to be more transparent by ensuring wider enforcement mechanisms.
Alternative to Fluctuating Fiat Currencies
In many developing nations, hyperinflation, and inflation often leads to the devaluation of fiat currencies at a rapid rate. This is further worsening the situation of commoners as they have to buy items at higher rates. Cryptocurrencies bring that opportunity to counter inflation or hyperinflation. Today cryptocurrencies have emerged as a suitable supplement to any nation’s fiat currency, ensuring decentralized digital payments. Following the COVID-19 crisis and economic turmoil, common people’s faith in the traditional currency system is losing rapidly. There is where digital currencies are cementing their position in the market. Several Australian Cryptocurrency Exchange platforms are also now offering the best exchange rates and low fees, empowering crypto to be used as an alternative to fiat currency.
Today many institutes and organizations are collecting huge fees for facilitating cross-border payments. The Global remittances market touched over the $613 billion marks, as costs of remittances are increasing rapidly everywhere. However, Blockchain Technology can be effective here as well. At a time when traditional remittances costs are estimated at 5% or above, Blockchain can bring that down to a mere 1%. More importantly, new technology guarantees a real-time transaction. Several platforms are now coming up that empower commoners to convert fiat to cryptocurrency in few simple clicks, it can also be withdrawn in local currencies almost instantly.
In general international money transferring process involves many middlemen who benefit from commissions. A good portion of the transaction amount is goes as fees. Blockchain technology will eliminate all the middlemen and help speeding up the process. So now there won’t be any more processing fees or delays. Blockchain will ensure near-instant money transfer in a few simple taps or clicks.
Blockchain Technology will also help in a more straightforward way in different foreign aids. Today issues with foreign aids are multifold. Aids from developed nations are subjected to several overhead costs, such as compensating for third-parties and involved professionals in the process. This complete process often lacks transparency. Not much is known about how much money is finally transferred to the destination account, how much is utilized and either is it beneficial for the cause. Donations are meant for helping underdeveloped sections or countries, but in reality, third-parties or middlemen are benefitted. Blockchain will bring an end to this existing system.
Blockchain is a perfect solution to this foreign aid situation. All middlemen and organizations involved in the donation will now be a thing of the past. This will further decrease the overhead costs meaning direct benefit to the party who is in need. Instead of paying all actors and tedious conversion process, Blockchain technology will directly transfer the benefits to desired hands. Blockchain is known for transparency, efficiency, and reliability, this holds here also. Importantly Blockchain offers traceable and real-time data for all donations. This means all information about the donation and its present status is easily available, which will only help to scale up different social projects in the long run.
Even though there are several benefits of implementing Blockchain, much still needs to be done and achieved. Several potential problems can also arise from this new technology but it is for sure the whole system will improve to a great extent. The global economy now is going through a transition period and Blockchain is the next big thing that is paving way for new developments. By now many would have realized the promising solutions that come with a digital ledger system, hence it is the future.
For undeveloped countries, Blockchain is a boon. Apart from the few points mentioned in the piece, there is an infinity of possible Blockchain applications. In both developing and developed nations around the world, Blockchain will drive new industries and sectors in the coming few years, helping the economy to boost. It won’t be wrong to assume that Blockchain amongst several other latest technologies will play a huge role in creating higher standards of living and ensure strong economic growth in developing countries. It is high time for businesses and NGOs in different nations to seriously consider the promises of Blockchain.
In Post-COVID era Blockchain will play a huge role in reviving economies around the world. High-time for today’s generation to trust and start believing in the potentials of Blockchain and its ability to boost the economic situation.