Oct 5, 2022
Internet of Value and Its Impact on World Economy.
The “Internet of Value,” a concept developed by Ripple, is a world in which value is transferred and exchanged much the same way as information is today.
Just as individuals have been sharing thoughts, photographs, and videos online for decades, the Internet of Value will enable instantaneous value transactions like foreign currency payments. Beyond the realm of monetary value, too. The Internet of Value will facilitate the exchange of everything of value, including shares of stock, votes, frequent flyer miles, securities, IP, musical compositions, and scientific breakthroughs.
Blockchain is expected to revolutionize financial transactions like the Internet revolutionized information dissemination. This technology will revolutionize the way value is recorded and transferred, much like the Internet did for the spread of information.
Without costly third-party validation for high-value transactions, this will level the playing field for brands, consumers, and financial institutions. This is because blockchain is a distributed, public ledger that is not controlled by any entity.
Areas Blockchain will revolutionize:
Loaning:
Banks and other financial institutions dominate the lending market. This allows them to restrict access to cash based on credit scores and charge exorbitant interest rates on loans. This makes borrowing money from others difficult and expensive. While banks are in a strong position, the economy relies on them to fund large purchases like homes and cars.
Thanks to blockchain technology, anyone globally can participate in a new type of financing economy. We use the term “decentralized finance” to describe this system (DeFi). DeFi’s goal is to simplify the financial system by putting all financial apps on top of blockchain infrastructure.
Smart contracts provide more security in contractual agreements:
Contracts protect both parties interests in a business transaction but frequently come at a high price. Due to the complexity of contracts, it is crucial to devote substantial time, resources, and effort to have an attorney prepare one.
Smart contracts, which consist of immutable computer code, can automatically and legally bind parties in a blockchain system. An escrow is a secure location where money or other assets are held until the requirements of a contract are fulfilled. Since smart contracts are computer-generated and verifiable, there is less need for trust to conclude a transaction. This precaution reduces the likelihood of business transactions getting challenged in court.
Conclusions
The advantages of blockchain extend beyond the financial sector. They span the realms of government, society, humanity, and science. Blockchain technology is being used by some parties to address practical problems.
The growing popularity of blockchain-based financial services may help developing countries enter the global financial system to the extent that new services and value transactions are done on the blockchain.
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