Blockchain, Cryptocurrencies and a New Vision of Money
The current era is an era of instability, uncertainty, complexity and ambiguity. This leads to accelerated development with unforeseen consequences. Linear thinking and the assumption that the future will be what the past was opens the way for more interdependent, networked thinking and events. In the future, when planning your life and making financial transactions, it will not be enough for you to think linearly. Rather, the signs point to a completely new perception of money, digital money. There is a great chance that the whole our vision will be possibly based on blockchain.
Blockchain can already make all assets available for trading through tokenization, and break them into completely small units. Currently, digital assets are so easy to create that we take them for granted. Everything that is present in binary data is autonomous and uniquely identifiable, is a digital asset. These can be MP3 music files, YouTube videos, PDF documents, as well as real estate and businesses.
New business models can also be funded using cryptocurrencies and new forms of crowdfunding. Of all the digital assets that have emerged since the beginning of this millennium, cryptocurrencies will be the most revolutionary. If they prove themselves as a means of saving and a medium of exchange, they can replace the fiat money we know and completely change our banking industry.
Decentralized Trust against Intermediaries
It also means moving from centralized systems to decentralized ones. Traditional banking is a central system through which money transactions (so-called financial intermediaries) pass. Banks earn money on every transaction they make. Cryptocurrencies, on the contrary, are based on a decentralized transaction system.
Banks are not required to conduct a transaction or store money. In the cryptocurrency world, money is stored online using blockchain technology, and each owner is actually his own banker. He can always access his crypto assets by combining a public key that is visible to everyone with a private key that only he has.
This new separation of transactions, combined with technological progress and digitalization, is not limited to traditional companies. In times of change, those who are ahead in digitization win.
Build windmills, not walls
When the winds of change blow, you have to choose whether to build walls or windmills. Companies that didn’t build windmills are disappearing from the market. Over the past 20 years, half of the Fortune 500 companies have simply disappeared from the market because they have adapted too slowly. They were either bought up or liquidated.
Most large companies and international organizations invest in blockchain technology. Blockchain, a technology that has found its first major application in cryptocurrencies, will be used far beyond this area in the future and will potentially accelerate the path to a cashless future.
Sending money around the world can also be accelerated, because a cryptocurrency transaction to the other side of the world can reach the recipient in just a few minutes. By going to Coinmarketrate.com you will see thousands of blockchain projects. Different currencies create their own technologies and processes designed to increase security, stability or speed.
And this technology has another positive point. Our planet will supply 9 billion people with everything they need, and blockchain helps us use resources better together. At the same time, we have an open source protocol (TCP/IP network infrastructure) for our digital life, which needs to be expanded so that it can cope with the current complexities of our society. Today, fiat money is still the de facto measure of strength and value in all countries. However, it remains to be seen whether this will remain the case with the advent of central bank digital currencies (CBDC), which are largely based on peer-to-peer processes.
In any case, crowdfunding cryptocurrencies can help create new business models that rely more on a balance between financial interests and the goals enshrined in the United Nations Sustainable Development Goals.
After almost 11 years of existence, cryptocurrencies have undergone significant development in recent years. Awareness and market capitalization, as well as trading volume, have increased dramatically. Blockchain technology has found application in many areas.
Blockchain technology and its application in the real world
Blockchain is not only the basis of cryptocurrencies. It can be used in various markets. It is needed not only in the cryptocurrency market. Its features (mainly decentralization and transparency) mean that the network can also be used in the logistics, politics or entertainment sector. Blockchain really brings new professions to the market.
- Finance
Let’s start with the most obvious: the use of blockchain in finance. Here, of course, cryptocurrencies immediately come to mind.
The first “fruit” of the blockchain is again Bitcoin, the world’s leading cryptocurrency. Thanks to the technology on which it is based, it allows users to track the process of sending funds, which increases the transparency of trading. In practice, the risk disappears, for example, that an unscrupulous contractor constantly lies to the other party that he sent the transfer due. Thanks to browsers (researchers) such as blockchain.com , we can easily check if someone has actually sent us funds.
An additional advantage of Bitcoin is that its supply (like other cryptocurrencies) does not depend on central banks. This is especially important in the era of ubiquitous currency printing.
- Voting
Another area in which blockchain is used is voting, both in companies and in political elections.
A new model of organizational management has appeared on the blockchain technology market – a Decentralized Autonomous Organization (DAO). It is a decentralized autonomous organization, that is, in practice, an entity represented by rules encoded in the form of a computer program, which is supposed to be transparent, controlled by the members of the organization and independent of any central authorities. Many experts believe that this management model is the future of many markets.
In addition, the blockchain is used when voting for political reasons. Such a choice, mainly based on blockchain, will be harder to fake. They could be more transparent and independent of politicians, eliminating the possibility of manipulating the results.
The first pre-election experiments with the use of blockchain were left behind – both successful and unsuccessful.
The new technology was successfully used, for example, in the canton of Zug in Switzerland, where residents of the region voted with it in a less important referendum.
The voices of American soldiers from Ohio, who were then on foreign military missions, were also recorded using blockchain.
It was worse in Russia. The experiment ended in failure, but, it should be added, not because of the blockchain, but because of other IT systems and general organizational chaos. Independent observers published messages on social networks that they had cast two votes in the elections – one via the network, the other physically.
- Logistics
Another market where blockchain can be used is logistics. Blockchain technology, due to its resistance to hacker attacks and transparency, can facilitate the transportation of various goods. Everyone can check at what stage the transportation of a particular product is.
To do this, you can use the blockchain to mark products as original. It is enough to mark the latter with a QR code, which, after scanning, refers to an entry in the blockchain confirming the originality of the product.
Blockchain is also used in the COVID-19 passport market. New York Governor Andrew Cuomo announced on March 26, 2021, that the city’s “Excelsior Pass” vaccination passport will be put up for sale. They are based on blockchain technology. The passport is issued through a platform that checks whether we have been vaccinated against COVID-19 or have tested negative for the virus. Everything is done using a QR code.
A massive solution, especially for the US government, wants to create the IOTA foundation, which is behind one of the most famous projects in the blockchain market.
- Ownership
We have already mentioned that you can check the original origin of goods using blockchain. This is also possible in the entertainment market. An example is the so-called non-interchangeable tokens (NFT), which are digital certificates of ownership of works of art, collectibles, music, graphics or video clips. Many bands and artists have already decided on such decisions.
Looking into the future, it is also possible to present registers of lands and mortgages based on blockchain. The use of new technologies will lead to the fact that the notary profession will lose its relevance, or turn into something like a lawyer programmer.
As you can see, blockchain technology offers much more than just the transfer of cryptocurrencies. Other use cases will surely be discovered in the future.