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Cryptocurrencies are relatively new additions to the financial world, but they’ve certainly taken the sector by storm during this time. While in the beginning, it was solely the domain of the few and far between who were aware of the tech-based solution, it has since become a common addition to the average investor’s portfolio. There are several reasons digital currencies are an important asset, mainly because they can offer a hedge against inflationary pressures.
And while 2022 has been rather difficult for the market, with prices plummeting and many investors finding their holdings in jeopardy, things have gradually changed since the beginning of 2023. The prices have continued to climb, with investors expecting a bullish run shortly. Investors have become more interested in how to buy Bitcoin, and the growing engagement rates have translated into improved market stability.
However, the influence of the crypto space isn’t important just for the financial aspect but also for its potential innovations in several other sectors. What are some of the ways in which digital currencies and their underlying system could change the world?
Buying and selling
The fundamental pillars of the economic system, buying and selling, dictate how the market evolves. Bitcoin’s initial purpose was to power daily transactions and be used in the same way as fiat currencies. However, that hasn’t come to pass, and BTC was instead regarded as a holding to add to your portfolio. But with the advent of regulations, it’s becoming increasingly obvious that cyber money will have a larger role to play in the economic landscape in the future.
While cash and credit are still the preferred options to complete payments, it’s not far-fetched to imagine that this will soon change. An increasing number of customers use their cards, and many believe that cash will, at some point in the future, become obsolete simply because paying by card is more accessible. This change could also usher in the era of crypto payments.
And while not all companies accept digital coin payments, several, including large brands, do. Bitcoin is the preferred option, as it is safer and more stable than altcoins. However, as Bitcoin’s popularity grows, more institutions and retailers will adopt crypto payments since customer demand will increase.
Affordable transactions
Modern customers are looking for accessibility and cost-effectiveness. Bitcoin can offer both, even in areas that are traditionally known as being quite complex, such as sending money internationally. Cryptocurrencies can offer a better alternative compared to existing ones, as the blockchain is considerably faster and can complete a transaction almost automatically, as well as for significantly lower costs.
At the moment, sending money across borders can be frustrating for many, as it can take several days for the transaction to be processed and reach the destination. Therefore, if the money you’re sending is meant for an emergency, it could mean it won’t be received in due time, causing problems. Bitcoin can provide a much-needed alternative for those that are in a rush and ensure that customers enjoy financial services that are perfectly timed with their needs.
Supply chains
The supply chain is one of the most important aspects of any business, as it ensures that operations run smoothly and buyers can access the items and services they require. The supply chains operating worldwide keep the economy stable and working, maintaining the balance between supply and demand. For this reason, businesses must take care to fix any problem within their supply chain management as it arises, so they can ensure their business remains stable.
Therefore, it should be no surprise that the blockchain can have many use cases for this complex system. For instance, blockchain use can help guarantee product authentication, especially as counterfeits are becoming an increasingly pressing problem. The decentralized ledger can create tamper-proof records because once data is entered into the blockchain, it cannot be altered or modified in any way. This ensures that the product’s origins and all the movements it performs can be traced through the entire system.
Quality control also improves, as products can be tracked more easily as they move through the supply chain. This enables faster and more effective identification, as well as waste reduction through the faster removal of any potentially defective products. And, of course, just as in the case of trading cryptocurrencies, transparency also becomes easier to foster and maintain. The blockchain provides real-time visibility and helps track goods from production to the distribution end.
When visibility is increased, trust between all the parties involved in the supply chain is improved, creating better, safer business practices. And, of course, the blockchain reduces the possibility of fraud. Maintaining integrity in business finances is important for any company, as it improves institutional reputation.
Encourage development
Technology is fundamental to all developments, helping all industries develop and become more efficient. And the field is constantly changing and bringing forth innovations, meaning that virtually all business areas will continue to evolve. The blockchain is just one of the latest modern technologies, but it is definitely among the ones with the biggest potential to change the world.
Its impact can only be comparable to that of artificial intelligence. Still, while in the case of AI, critics bring forth several possible issues that could occur with long-term implementation, such as copyright risks, unemployment and infringement upon personal information, the blockchain isn’t likely to create any negative disturbances.
One of the areas that can become stronger with the use of the blockchain is ecommerce, a field that has become increasingly popular among customers over the past years. Its influence has been mainly brought forward since the beginning of the pandemic when lockdowns left the general public unable to shop safely as before the health crisis. Since then, many clients have begun seeing online shopping as the better, more convenient alternative.
However, many are still concerned about the safety of their data in the online sphere. If businesses began using the blockchain, these worries would be abated, as the possibility of illicit activities would be greatly reduced.
While the blockchain is still not used on a large scale, it likely won’t be long until businesses become aware of its many advantages and begin using it.
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