Top 5 ways Blockchain technology can help boost the global economy

The current economic situation is a commonly discussed subject, particularly due to the various factors which are impacting it at the moment. However did you ever consider the impact that blockchain technology could have on the economy? In truth it could really boost the global economy, and not by a small amount. In fact according to the International Business Machines company, it could actually have the potential of increasing the worldwide GDP by some 5%!

Many countries who are not embracing the full potential of blockchain technology should adopt digital currencies so as to encourage more effective payments. Blockchain technology could also greatly contribute to develop the economic condition of certain countries such as India as international payment issues could be resolved through it.

The blockchain is indeed a revolutionary concept which is based on a distributed ledger mechanism through which cryptocurrency transaction are recorded. This kind of technology greatly increases the efficiency of payments since speed is increased, and so it is a really cost effective option for businesses. Moreover, it is a highly transparent system.

Blockchain technology develops on the concept of what is referred to as the peer to peer mechanism. The shared ledger of networks enables the date to be stored in a safe and effective manner as it is encrypted.

Considering all this one can safely state that the blockchain technology can support the gross domestic product to grow substantially. Cryptocurrency can indeed provide stabilization of wealth on a global basis. The digital currencies have the undeniable potential to increase the growth of the global economy as they can provide a system whereby financial platforms are easily accessed, and everything is digitized and automated. Here are key ways how this can be achieved.

  1. Compliance considerations - when it comes to transaction management, one of the most critical issues is compliance. It is rather difficult to manage to maintain compliance across different countries and states since there are various rules which vary considerably. As a result in most cases one would end up with costly fees, as well as long waiting times for a transaction to be completed. On the other hand, if the blockchain technology is used such aspects would not be a problem anymore. This is because the blockchain technology does not require the involvements of a third party as the movement of assets is carried out in a seamless fashion thanks to the peer to peer mechanism. No more worrying about complicated tax codes and compliance issues with the blockchain technology
  2. Cost effectiveness – as already noted, the blockchain technology could lead to cost reduction as transactions can be carried out in a cost effective manner. Thanks to the utilization of software, everything is interconnecting directly, and so this enhances accessibility and promotes efficiency. Businesses can thus benefit from reduced costs as cryptocurrencies and the blockchain do not require any actual brick and mortar business in order to exist. Consequently all the costs associated with such transactions are minimal and negligible when compared to traditional transactions.
  3. Financial Inclusion – any business, regardless of its size can be included in international business through the blockchain technology system. This helps in creating a more stable economy while developing international business relations. Economic operations can increase on a global scale thanks to blockchain technology.
  4. New but effective option – the blockchain technology can be regarded as a new concept, but many are already appreciating its value and effectiveness. Any business can make use of blockchain technology – from small start-up businesses to large organizations. They can all accept crypto currency and so this will help in revolutionizing the global economy.
  5. Improved payment options – thanks to the blockchain technology businesses can accept several payments in digital currency. This helps businesses to operate in a more efficient way. Ultimately this has a positive impact on the global economy. The blockchain can also offer great opportunities to poorly banked countries as cryptocurrency is easy to use and high volatile.

Conclusion

Blockchain technology is key in supporting the growth of the worldwide gross domestic product. while traditional systems of finance are still in place, the truth is that they will not hold their strength forever as the blockchain is becoming increasingly popular due to its various advantages. Financial challenges faced by businesses are easily overcome thanks to digital currency, and this is making the blockchain technology increasingly popular, and quite simply, the way to go in this new era where technology is becoming more important.

The distributed ledger technology can actually help to prevent any global financial turmoils, such as the 2008 financial crisis. Back then blockchain technology was practically non-existent, and many believe that if this new technology had been in existence back then, it might have prevented the crisis in the first place. Blockchain technology offers the possibility of maintaining transparency, and this greatly improves the way businesses operate. With the blockchain technology every asset’s value and ownership will be properly and securely recorded through a shared ledger system that is completely immutable and transparent. Hence, any corrupt practices can be avoided once and for all. This enhances the transparency of capital flows and over time it will have a lasting impact on the prevention of any form of financial disaster or crisis.

Regulators will be able to monitor cash flows while transactions are being made, and so this will offer a more realistic picture of the liquidity as well as the distribution of risk. Needless to say, this will have a considerable positive impact on the economy. Rather than allowing things to advance negatively, there will be time to realize if and what seems to be wrong, and consequently the necessary adjustments can be implemented before any crisis ends up developing.

Hence, blockchain technology promotes the health of the financial world, and as a result, it boosts the global GDP. In this day and age the world is aiming at borderless environment when it comes to financial transactions, and the blockchain technology is able to address this need impeccably.


Your Instructor


Alice Thomas
Alice Thomas

Content Writer and publisher.


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