There’s a great deal of publicity noticeable all around about blockchain innovation right now. An ongoing World Economic Forum report predicts that by the end of 2025, 10% of GDP will be put away on blockchains or blockchain-related innovation. This implies it’s presumably something which everybody associated with business should pay heed to. Nonetheless, there’s as yet an absence of understanding about what it is, and what it does.
This makes it hard for the layman to evaluate whether it’s something deserving of their time and consideration. Also, for another innovation to progress toward becoming standard, not to mention change the world (as blockchain lovers guarantee it will) it must discover a fan base beyond the technically minded.
One way individuals portray blockchain innovation is the “internet of value”.
We have turned out to be accustomed to sharing data through a decentralized online platform (the internet). However, when it comes to transferring money, we are typically compelled to fall back on traditional, centralized financial establishments, for example, banks. Indeed, even online payment techniques which have sprung into existence since the introduction of the internet – Paypal being the most evident model – generally require combination with a financial balance or credit card to be valuable.
How can Blockchain help?
Without essential banking services, poverty hit nations find themselves stuck with stagnant economic systems. Blockchain technology, on the other hand, introduces a plethora of options that can enable crucial steps to a more stable & developed country. With the blockchain’s algorithms, an individual can transfer equities, money, titles, bonds or other crucial assets from peer to peer in a private, secure and more cost-effective way. With the stubborn grip of financial intermediaries loosening because of blockchain innovation, individuals without the accessible financial solutions in developing nations may find themselves on a playing field with other and more fortunate parts of the world.
As per Gartner, Blockchain technology seems to have already passed the peak of the hype cycle and seems to have entered a period of disillusionment, that brings about a realism to the blockchain technology.
The introduction of blockchain technology in the day to day practices within large multinationals has already begun, with the finance domain is the quickest out of the blocks, getting in the hype & down to business.
So, how exactly is Blockchain technology going to help in the economic growth and development?
Presently, many fees are being collected by the companies that facilitate cross-border payments. In the year 2017, the global remittances market had reached over $614 billion.
The prices of remittances have been calculated to be around 5% & the average transaction fee in sub-Saharan Africa is at about 9% for the cross border payments. But, blockchain, in reality, may bring these prices down to just 1% Blockchain also promises real-time transactions across the borders & may also help in reducing the risks existing from the currency fluctuations.
As per many economic development experts, the slow economic development of the developing countries is the direct outcome of the instability of the institutions & of the inefficiencies & corruption that result.
Blockchain, here, offers an amazing option to the untrusted institutions, proposing a transparent, secure & an immutable environment that reduces the requirement for a middle-man or an official institution. Instead of the centralized system of property rights that offers an easy leeway for the manipulation & subversion to the corrupt officials, blockchain technology has the advantage of being the decentralized ecosystem where the transactions are being processed by the multiple nodes in the network.
Blockchain can even help in some more straightforward ways, for instance in the context of the foreign aid.
Problems with foreign aid to developed nations today are multiple: donations are usually subject to essential overhead prices to compensate for each actor and third-parties in the procedure, which generally disincentivizes the potential donors; donations usually lack the data transparency, both in the context of how the money gets to the destination and also in terms of how it is used & helpful for the cause; donations are usually thought of as counterproductive for a developing country, keeping it in a position of dependency with the donators.
The adoption of blockchain to power cheaper and more streamlined payments may transform world economies. We must try to embrace the innovation that the blockchain technology may bring to our nation. The debate surrounding the blockchain as being disruptive is passé. Instead, we must look at how the blockchain technology & the digital assets like XRP may enhance and improve the remittance payments experience for the individuals all over this nation, for the good of well-being and economy.
If you are an entrepreneur or a business owner looking to develop a blockchain application, you may hire blockchain developers from a reputed company for the best of the services. Make sure to check the portfolio of the company before hiring them.