The evolution of technology has had a huge impact on many aspects of our history and our daily lives for centuries.
We are moving from the era of Web 2.0, in which social networks dominate screens, to Web 3.0, in which the Internet will be based more on blockchain technology.
Some compare the development of blockchain technology to the advent of the Internet in the 1980s, while others argue that it is just a fad. It has been the cryptocurrency, specifically Bitcoin (BTC), and its miraculous investment potential that has catapulted blockchain technology to the fore. The blockchain continues to revolve around cryptocurrency and its widespread adoption.
However, with over 19,000 altcoins in circulation, could this still be just a “fad” if the market has become so vast and competitive? Let’s explore the real-world application that blockchain technology and cryptocurrency could have in society at large.
The impact of institutional investors in cryptocurrencies
Blockchain technology development is quite experimental at the moment, being predominantly used in niche communities, most notably in the cryptocurrency and NFT markets. However, late last year, following the explosion of NFTs, cryptocurrency rose in popularity and reached mainstream appeal, prompting large companies to start expanding in this space. These include household names like PayPal, Tesla, and Block (formerly known as Square).
As a result, an increasing number of businesses are beginning to accept cryptocurrencies as a legitimate form of payment. These investments are helping to lay the groundwork for what the financial world will look like in the future.
The value of many cryptocurrencies has dropped significantly this year as a result of large investments and a variety of other factors. Many experts believe that this is just the beginning. Retail investors have remained bullish and have bought assets during all major declines.
Pay employees in cryptocurrencies?
People’s growing interest in cryptocurrency is in part because the technology behind it allows for greater financial inclusion than traditional finance.
Employees and employers could benefit from cryptocurrency-based payroll in that it can provide better financial management and no delays. For those already familiar with the benefits of Bitcoin (BTC), it can be an attractive option for paying employees.
Employees of big companies like SC5, IM and Fairlay have already started getting paid in Bitcoin (BTC). In addition, several prominent athletes have requested payment in cryptocurrency, such as Trevor Lawrence and Sean Culkin. This has paved the way for new businesses to accept Bitcoin (BTC) as a legitimate form of payment and purchase.
Cryptocurrency could accelerate economic growth
Underdeveloped countries and emerging economies, which are experiencing rapid economic growth, are more likely to adopt cryptocurrency. Nigeria is an example, with a KuCoin report revealing that 35% of the population has invested in digital currencies.
One of the obstacles facing further adoption of cryptocurrency in these economies is the high gas fees required by the networks to carry out transactions. This is related to interoperability difficulties between blockchains, which is a major issue surrounding the technology.
However, new altcoins have recently emerged to deal with this problem and thus gain a competitive advantage in the market. For example, Calyx Token (CLX) , a liquidity protocol that is currently on pre-sale, has gained popularity in the crypto spaces due to its goals of trading tokens immediately with minimal gas fees. It plans to do this by drawing liquidity from multiple liquidity protocols (using multiple blockchains instead of just one).
Supply chain improvements
Retailers are finding that pre-pandemic supply chain problems persist despite changes in customer behavior.
As the world learns to adjust to a post-COVID economy, incorporating blockchain technology into the supply chain process can help companies meet customer demands for speed, convenience and social responsibility. , improve operational efficiency and optimize inventories.
Retailers are using blockchain technology to create new solutions that engage customers while enhancing their brand reputation for quality and reliability. Some of this will be accomplished with the help of retail supply chain partners.
Traceability, fast payment and financial management could all benefit from cryptocurrency. Obviously, implementing a new system will take time and require a significant investment of both time and money, but the payoff is expected to be significant.
Benefits of decentralization
One of the most important aspects of cryptocurrencies is decentralization, which allows currencies to be fully global without being regulated by CeFi institutions. The use of decentralized cryptocurrencies could improve the efficiency of data transmission and transactions.
The decentralized nature of these currencies eliminates the need for a third party in financial transactions. As a result, transaction times and fees have been cut in half. Cryptocurrencies not only save time by enabling lightning-fast transactions, but also help merchants save money on taxes, as tax collection in cryptocurrencies is difficult to enforce.
Payments can now be made without the need for a third-party exchange thanks to the implementation of Bitcoin (BTC) ATMs and cryptocurrency cards. Although it is still in its infancy, it is a promising start.
The fact that there are no fees, no interruptions, and no paperwork required to change ownership further encourages its widespread adoption.
Also, unlike the bank, cryptocurrencies are ideal for private transactions because they do not reveal much personal data. However, there has been some debate about the degree of privacy of these transactions. If you value your privacy, you should make sure to choose a permissionless blockchain or protocol, which is much more secure.
Even in a more technologically advanced society, digital assets have yet to gain widespread acceptance. However, there are signs that cryptocurrencies are becoming more accepted in society.
The lack of practical application in the real world is currently the most important impediment to the widespread adoption of cryptocurrencies. Small businesses, in contrast to governments and large corporations, are still hesitant to adopt cryptocurrencies. Although there is still a long way to go before blockchain becomes the mainstream currency, we can already see how blockchain and cryptocurrency have altered the payment landscape.