Challenges and opportunities of Blockchain technology in the financial industry
Blockchain technology poses both challenges and opportunities
The technology offers several opportunities that foster good trade relationships. First, the technology does not depend on a centralized authority and regulations. The initiation of the technology thus does not require any formalities making it an easy and straightforward venture. Additionally, the Blockchain technology enables investors to conduct their operations in a transparent way which thus helps in reducing fraud. The technology also protects data from third parties thus enhancing its credibility. Lastly, security is maintained through the use of encryption. Therefore, the data cannot be hacked.
Some of the challenges that come with the Blockchain technology include; the technology is at its early development stages and thus predicting its applicability, and ultimate success is a difficulty. Therefore much about the concept is still unfolded. Moreover, the technology has led to the increased hype which is causing unrealistic hopes. Therefore, the technology may lead to a situation whereby major financial services being held at stake. Also, the technology’s failure to comply with the set guidelines may attract many corrupt firms to enter into the Bitcoin interface.
2.
Considering exchange rate between VEF (Venezuelan Bolivar) and USD from 1 July 2013 and 1 July 2018 the is a notable change between 1st July 2015 and 1st July 2016. The reasons the contributed to the change are as discussed below;
Food crisis
In the year 2015 Venezuelans was enduring the worst part of the economy’s issues. The legislature could not pay to import essential sustenance things like drain, flour and eggs, leaving numerous grocery stores with void racks. A year prior, McDonalds (MCD) in Venezuela briefly came up short on French fries which hit the country’s economy hard.
Oil crash
Venezuela’s economy depends for the most part on oil. That was extraordinary when a barrel of oil was worth $100 a barrel in 2014 and 2015. As at the year 2016 oil costs have tumbled to as low as $28.36 — the most reduced point in 12 years.
The following factors suggest the reasons that lead to change in exchange rate between Bitcoin (BTC) and USD from 1 July 2013 and 1 July 2018.
Coinrail exchange hack
In July 2018 coin exchange hack was one of the primary news to shake the market, where sources recommended that the aggregate misfortune could entirety up to as much as $40 million.
CFTC subpoenas coinbase, Bitstamp and others while investigating cryptomarket manipulations
The investigations pertaining the activities carried out throughout the use of Bitcoin trade made investors to shift away for the fear of losing their investments.
3. After calculating and comparing the volatility of the two exchange rates; Bitcoin and USD has the highest volatity of 518729.3% compared to the VEF and USD with 2614559.2%. The high volatility in Bitcoin makes it to gradually attain its stability. The increase of its stability is due to the increase of its trading volume compared to Venezuelan Bolivar.
4. Do you agree with the statement below why and why not
I strongly agree with the statement that Venezuela should focus on using cryptocurrency and bitcoin as the national currency. The reason behind this argument is that the country is experiencing hyperinflation making its currency useless. The citizens are finding it hard to live with the current situation of inflation since they are unable to settle their daily shopping and dues with the cash thus turning for bitcoin and cryptocurrencies. For instance, the highest bill is over 100,000 bolivars that cannot be relied upon to settle any transaction. Also, small chocolate is almost three million bolivars thus the current currency is creating chaos in the nation. The people in the nation experience trouble since cash is used in settling public transportation, fuels, and tolls leaving out other necessities.
The residents who prefer bitcoins and cryptocurrency also are enduring problems since some companies are not willing to accept the means of payment. Therefore, the government should set out policies declaring bitcoins and cryptocurrency as a generally accepted means of payment or transfer of value. The system will help the residents to transact freely without barriers since the new methods of payment will be accepted throughout the county as a measure of value as well as means of payment. The acceptance also will relieve the residents the burden of carrying vast sums of money to settle small transactions due to the hyperinflation striking the nation. Thus bitcoin and cryptocurrency would be the ultimate solution to alleviate the resident’s woes in making payments.
5. No, it’s not a scheme due to the following facts
ICO has always created very strong websites and whitepapers explain in full details of any project they intent to launch. In addition most of ICO’s projects always include the names of the developers and team that joined up in coming up with the project. Any ICO project has always enumerated on its future ambitions by clearly laying out a roadmap showing its future intentions thus making it valid and not a scheme.
On the off chance that an ICO all of a sudden begins putting out a great deal of publicity about time limits and a requirement for earnestness, at that point it is certainly something to look out for. Numerous ICO tricks depend on the alleged “FOMO,”
Mostly scums are embedded to use of pyramid structures that eventually collapse due to lack insufficient of funds resulting from the highly number of new buyers brought in. this is not the case with ICO because they normally don’t use such pyramids. Lastly ICO is not a scam because it does not use fake emails phishing scam.