How COVID-19 Reshapes Blockchain, Bitcoin, and DeFi in 2020
The SARS-CoV-2 outbreak has forever changed the way we conceive things we ‘understood’
There was a time before the 2019–20 pandemic, and there surely will be an after. In Europe, it was not the usual case to see people using face masks in the street or taking care to touch things with gloves before Dec 19. Now, we stare at those who do not take any means of prevention while interacting with products at the supermarket.
Nowadays, we wait in the street to respect the capacity of any groceries. Also, we keep the 1–3 m ‘security’ distance as much as possible. Some people take these measures lightly, while others worry. One thing is clear, pickpocketers are having very few occasions to work on their profession.
What is to expect about the blockchain and related niches after the lockdown?
Bitcoin: is it a safe haven?
About the Bitcoin, there have been narratives of uncorrelated assets and safe haven for a while. The virus outbreak has shifted the talk into focusing the safe haven, i.e. this asset move in the ‘opposite’ direction of other assets. However, Bitcoin has proved to be a highly liquid asset that fluctuates on its own rather than correlating to other markets directly.
The Corona crash (mainly in the stock market) has also favored a more educated view on how Bitcoin works. While central banks are pushing the ‘Print’ button to inject liquidity into their countries, Bitcoin cannot be inflated this way. No matter what, you cannot mine BTC faster nowadays. Thus, the value of the cryptocurrency is not changed due to mining efforts overnight.
People are learning and discussing Bitcoin more in-depth.
Central Currencies and Cash
A fixed supply is a very interesting feature of Bitcoin. We know that, eventually, inflation will show up in the fiat markets coming along with harsh consequences, namely the devaluation of cash. Thus, people looking for what else there is; they find BTC, read Satoshi’s BTC paper and realize decentralized systems exist.
Nowadays, trading cash is not easy because using coins and notes could spread the Coronavirus. So, everyday money is not the best payment method today, thus, favoring electronic and digital solutions. While paying by card is hotter than before, using crypto for transactions is also doable.
All in all, digital payment methods will be in high demand.
Stablecoins
USDT and other top stablecoins have seen their market capitalization rise in the past weeks. While fiats lose value concerning the USD, one of the safe havens in fiat, people keep looking for dollars ($). But, there is a limited allocation of physical dollars that people can trade. Plus, the lockdown and service shortage worldwide makes it hard to trade into USD.
What options are there? Tether (USDT) is one of the first that comes to mind since it’s a stablecoin based on the USD. But, there are others, such as DAI, G-coin, USDX, and so on. As a consequence, users are highly interested in crypto dollars and stablecoins. At least in the short term, many people are trying to avoid losing value trading to assets that may not decay no matter what.
In this sense, stablecoins look more trustworthy than many fiat currencies.
Defi: Decentralized Finance
Defi is at an early stage of development. However, the spread of the blockchain and Bitcoin has accelerated years due to the pandemic. Thus, the spotlight also illuminates Defi and the projects working on creating decentralized programmable solutions.
In many countries, governments have all the reasons they wanted to grab more power. For instance, China is controlling its citizens’ movements live. Therefore, citizens are more restrained than in the past during the outbreak.
Although we could think there will be a comeback to the ‘normal’ once the virus is controlled, authorities will not let go. Some countries will retain surveillance once the pandemic ceases.
Decentralized infrastructures are a claim to recover rights in the long run.
Privacy is at stake
COVID-19 has rewired our thinking of security. On the one side, people have become more aware of health measures they should embrace. On the other, the lessons come at a high price, totaling +120k deceases worldwide at publication time.
Regimes are taking the chance to introduce more means of control in the population. Most people may not care during the outbreak, but once the lockdown is over, they will concern. And, they should. The only viable way of releasing power out of central authorities is to go decentralized.
As more people use decentralized services, the online community will regain more freedom. There is plenty of info out there. You can start today.
Woonkly, Decentralized Streaming Services
Woonkly is creating a decentralized platform where content creators meet their audience. By using automated tools, Woonkly will leverage the streaming services we currently use and love. Not only watching videos will be easy but, also, influencers will make more profit from their videos. With the upcoming release of Woonkly 2.0, we expect outstanding UX/UI.
Woonkly reduces the operational costs by connecting advertisers, brands and users. Moreover, Woonkly is fully compatible with any digital platform, tokenized or traditional. More info available on https://www.woonkly.com/.
Written by César Patiño, PR Manager at Woonkly.
