World Economy & Crypto
While Bitcoin might be viewed as a fun digital cash experiment or a curiosity to many, there are areas in the world where capital controls are imposed on citizens. Basics like taking cash from the bank are prevented in times of economic turmoil, and many turn to bitcoin in spite of regulations and bans. With the 2015 example of Greece still fresh in our memory, it is easy to see how many have lost faith in one currency or another. A currency’s value is based on belief and faith that, when shaken, the typical reaction is to turn to something believed to be more valuable. For a long time, that has been the U.S. dollar. However, more and more are turning to bitcoin as an alternative in part because it is not controlled by any government or central bank.
U.S. Economy & Crypto
Fiat currency in the US has only been around since 1971 when President Nixon ended the gold-backed dollar, so it is still relatively young. Since then trillions of dollars have been printed that are backed by central bank loans where interest is paid to them. As more money is printed, the value of the said currency goes down. Bitcoin has a limited supply so inflation and devaluation will be a lot harder to occur.
The U.S. economy was on its longest bull run in history when the stock market corrected back to where it was at the start of a grand run-up in 2017. Asset prices were at record highs and stock trading was like a crazy whirlwind. But everyone knows that what goes up must come down, and down it went. Is now the time to usher in the widespread use of bitcoin and make it more mainstream? No cryptocurrency has ever faced an economic recession or depression – but bitcoin was created in response to the 2008 banking crisis. So, will it prove to be the safe-haven store of value many hodlers claim it to be?
The months of March and April 2020 proved to be rocky, indeed for many assets. As of early May (time of this posting), bitcoin looks to have decoupled from traditional markets with a gain of nearly 5.9% so far this month, whereas gold has declined by 1% and the S&P500 was down by 2.2% on a month-to-month-basis. So far in 2020, Bitcoin is the best performing asset with a 28% year-to-date gain as of May 7.
There is a challenge that lies ahead to make globalization in the financial world work for everybody and not the few in-the-know. A decentralized ledger that verifies and permanently records transactions across the world no matter where you are or what the local currency may be is the main function of the blockchain.
Entering The Global Economy
The decentralized blockchain gives people, local communities, and businesses the opportunity to enable connections across borders to share information and to do transactions and create an exchange value peer-to-peer. Blockchain will give the average person a better chance of getting into the global economy while being able to control and manage their own information in a safe and encrypted manner. Poor economies across the globe will no longer be tied down by the limits of cash it has. This will give people the means to make payments, store value, and access credit from anywhere in the world. This could really change the way wealth and opportunity is distributed.
Farmers will be able to connect to global supply chains, musicians will be able to track their song lists and get the compensation they deserve for their copyrights. We are already seeing blockchain being used by the way of Artificial Intelligence, Cloud computing and storage, VR technology, and 5G technology. In the world of AI (artificial intelligence) blockchain technology is able to help AI power apps and platforms to access data stored and managed by others without involving a middle man. This will make it possible to deliver accurate, secure, and faster customer support and exchange of information. Blockchain use in Cloud Computing will reinvent the industry by making it easier to keep track of who is using or administering the cloud and audit every individual process. Small chunks of data can add on as an extra layer of security protecting things like personal data or private keys.
Yes, it looks as though this is the right time in history to push blockchain technology to its limits and see what this innovative technology can do to make things better for everyone around the world.