How Cryptocurrency Revolutionized the Global Market
By Matthew Tansley on The Capital
Cryptocurrency, along with blockchain technology, has become a major disruptor in the global business process.
It’s been used for many crowdfunding initiatives and made it easier for start-ups to raise money by offering ICO (Initial Coin Offering) to potential investors.
This resulted in the rise of more tech projects which has led to several innovations in the financial sector and many more to come.
Crypto and Blockchain Technology Transforms Industries
Cryptocurrency-related technology offers new opportunities for businesses to improve their operations.
Here are two cases where blockchain and crypto improved some vastly different industries:
IOTA and Lidbot Partnership for Sustainable Waste Management
Waste management became more expensive and harder to manage because the collection, contracting, and payment processes still relied on a paper trail to track orders despite the growing population.
The Problem: This makes it easy for some people to commit fraud and other forms of corruption.
This is where the IOTA and Lidbot partnership comes in.
The Solution: Lidbot is a system that uses new technologies, like cryptocurrencies and blockchains, to streamline waste management.
It partnered with IOTA because of its scalability and flexibility. Plus, it secures data transfers and makes it easier to track.
Sensors that communicate with one another are placed on bin lids to measure the exact amount and location of waste before storing it on a tamper-proof ledger.
The best part is that IOTA has zero transaction fees, making it the ideal solution for automated payments involving trucks, landfills, and bins.
The efficient system and low fees allowed waste management companies that applied the Lidbot system to cut down the costs of operations by 50%!
Abu Dhabi Islamic Bank Embraces Blockchain Technology
The Problem: Securing trade finance easily in remote parts of the world for developing economies or emerging markets.
I won’t pretend to be an expert on securing finance for international trade deals but as we all know, corruption is an issue in many parts of the developing world and trust is hard to find.
The Solution: Abu Dhabi Islamic Bank (ADIB) partnered with TradeAssets and became the first banking institution to use blockchain technology for trade distribution.
TradeAssets will automate financial transactions between banks from emerging markets efficiently and store everything on an immutable ledger.
Adopting blockchain technology should help the region to transform its finance sector and will be a major step in turning the region into a global financial hub.
4 Ways Crypto has Changed the Financial Market
Leveraging cryptocurrency and blockchain technology is a game-changer. Here are four ways on how these innovations have revolutionized business operations:
Faster Transactions
Transferring cryptocurrency is done in an instant (kind of) wherever you are. All you need to do is send the money to the receiver’s wallet address and you’re done.
Best of all, it doesn’t incur any additional fees plus it can be verified and secured in the blockchain.
Use Case: Stellar Lumens (XLM) — Money transfers can take anywhere between 1–5 days and cost a lot of money for banks and customers. Microtransactions are also expensive which is why you see a minimum spend on credit cards in many shops. Stellar technology reduces the amount of time transactions take to almost nothing. Fees, well they pretty much killed them, a fee of $0.01 is enough to handle 600,000 transactions. This may well unlock a new marketplace of cheap items.
Improve E-commerce
More people are opting to shop online because it’s convenient. However, there are certain security issues such as credit card fraud and chargebacks.
With cryptocurrency, instances of fraud are greatly reduced because the system makes it impossible to repudiate transfers plus the online ledger makes it very easy to validate the transactions.
Use case: Shopify store owners can already use Coinbase, Dwolla, BitPay, or GoCoin (as well as others) to take payments in Bitcoin.
Promote Innovation
Many technological advancements have risen over the years, but generally, it is quickly patented and made secret.
This is great for business, keeping competitors in the dark but this comes at the cost of huge delays in the growth of technology.
Many blockchain and cryptocurrency projects are totally public. Anyone can access the code and come up with a new way to make use of it. If you want to be a Bitcoin developer, no problem, just jump onto the Github and get going!
Plus, ICOs are efficient crowdfunding initiatives for start-up projects.
Use Case: Touted as “the world’s programmable blockchain”, the Ethereum (ETH) network was built as a platform to host almost any digital application (DAPP) imaginable. Open access and a common coding language make this available to almost anyone for a reasonable cost.
Easier Cross-border Transactions
Since international cryptocurrency transfers are more cost-efficient and faster, it opened up possibilities for companies such as having access to a global workforce.
This is very crucial especially during times of crisis because it helps companies to continue their financial operations.
Use Case: Ripple (XRP — Xrapid) — International money transfers usually take 3–5 days and cost a lot of money for banks and customers. Ripple technology has reduced this transaction time down to seconds and removed a large amount of the fees.
Is Cryptocurrency the Future?
Companies are starting to realize how using cryptocurrency and blockchain technology can greatly improve their operations.
It makes it easier to track thousands of transactions and allows businesses to automate payments much faster than traditional methods.
There are still many untapped areas within industries that can still be developed using this exciting innovation but as you’ve just read, even your bins are becoming smart!
Time will tell how far blockchain and cryptocurrency can revolutionize businesses and our daily lives.
This article was written by Matthew Tansley, Cryptocurrency trading expert and Founder of ProfitFarmers.
