Can Blockchain Provide a Boost for Economic Development?
By Knoxon Tech on Altcoin Academy
Blockchain seems to be the remedy and solution for many and various shortcomings noted across different industries and specific sectors.
Yet, one of the greatest potentials assigned to this foundational technology is aiding in economic development.
Besides opening new job positions and forging new professions related to blockchain, as well as products and services based on blockchain technology, blockchain may as well act as a solution for inflation and underdeveloped countries that may have issues with trusting institutions.
Having the ability to remove the middlemen based on a unique way of governance where blockchain allows decentralization, national currencies suffering from inflation and hyperinflation can rely on digital assets to degrade and even prevent inflation from taking place.
That is only one of the numerous ways how blockchain can provide a boost for economic development.
What about blockchain as a new source of capital?
It may be more than difficult to take a loan from a bank in a developing country.
Collaterals are often hefty (and too hefty if you ask anyone who tried taking one).
While banks also often ask for insurance that interested parties don’t have alongside imposing high-interest rates on loans.
There are already startups and companies offering loan services to people across the globe, all with lower collaterals when compared to banks and with increased access to these services.
A new source of capital is created based on blockchain, facilitating low-interest rates and without asking for insight into your credit score.
Blockchain against the failing institutions
One of the main reasons for slow economic growth in developing countries lies in the lack of efficiency and high rate of corruption across public institutions.
One of the pillars of blockchain is immutability, which enables trustworthiness and reliability, as well as efficiency that lacks in these sectors.
Cross-border payments made fast and cost-effective
Billions of dollars are spent on fees going for the coverage of cross-border transactions.
Many people from developing countries are forced to move in search of better job opportunities and greater capital to support their families.
Families are left behind, while worker emigrants are sending money back to their native countries to support their families.
Fees paid on these cross-border transactions are too high, especially for developing countries, while many people from these parts don’t even have access to bank services.
Blockchain removes middlemen from the equation, relying on decentralized authority, which enables lower fees and faster processing times.
Can you think of more examples with blockchain as the main star of global economic development?
