Cryptocurrency is globally gathering more fame as many obtain potentially huge profits from it. However, their volatility also involves the risk of dramatic losses. Such contradiction creates constant hesitation and confusion among people as many believe cryptocurrencies are here to last while others perceive it as a bubble that could burst anytime soon. If cryptocurrency progresses and eventually stabilizes, then this new type of digital cash could have the potential to revolutionize how businesses operate. More importantly, it could offer new financial opportunities for those who live in poor economies.

What Are Cryptocurrencies and Blockchains?

Entrepreneur studying QR codes on wall
Entrepreneur studying QR codes on wall

To begin, cryptocurrency is a digital asset used as a form of payment that can be exchanged online for certain services or goods. They operate throughout a decentralized technology known as blockchain. In simple terms, a blockchain is a ledger of transactions much like a bank maintains, but copies of that ledger are distributed globally among computers automatically updating with each transaction. The beauty many see from this decentralized structure is that cryptocurrency exists outside the control of central authorities and the government. To summarize this information, cryptocurrency is electronic money stored in computer files that is tracked by blockchain technology. It functions with no laws and regulations, meaning that it’s maintained by the people rather than a single central party.

Cryptocurrencies are mostly praised for their transparency, profitability and inflation resistance. The impact cryptocurrencies could have on businesses is a huge market integration that is still in the process of mastering. Once prices become more stable, businesses will begin to see cryptocurrencies as convenient and acceptable payment methods for people to make online payments in a much secure and faster manner. Several financial and economic experts believe that the concept of cryptocurrency will continue to thrive, and thus, create a big impact on the global economy. The blockchain technology’s nature of being transparent and decentralized could aid at improving the security and speed of supply chain operations.

Blockchain – A Solution for Supply Chain Cyber Security?

Director of Marketing at Roambee, Premsai Sainathan, mentioned in Blockchain – A Solution for Supply Chain Cyber Security? that “blockchain based information exchange systems will play a huge part in the transformation of supply chain management in the coming years.” Customers will have the ability to view information about the quality, authenticity, and actual source of products they are purchasing from retailers. At the same time, auditors will have the ability to view shipment’s information and history in a faster and easier way to prevent fraud within the supply chain. WaltonChain (WTC) and VeChain (VET) are two examples of current cryptocurrencies created to provide businesses with new tools to improve data transfer and supply management.

Cryptocurrency as a Great Opportunity for Developing Countries

Indigenous woman cooking at shopping plaza in Bolivia
Indigenous woman cooking at shopping plaza in Bolivia

The potential cryptocurrencies have to set better financial coverage to starting businesses could result in creating a better financial connection with the rest of the world. According to data released from the World Bank, over 1.7 billion adults worldwide have extremely limited access to basic banking services. Such individuals who want to start a business, but have limited access to banking services often don’t receive loans due to their instability to pay back interests. This is where cryptocurrencies play a vital role in offering new opportunities, as trading can be done freely across borders since it functions in a decentralized manner.

BitPesa

Currently, there are several apps and programs that facilitate the use of cryptocurrencies to bring excluded groups closer to the wider audience. BitPesa, for example, is a company that helps entrepreneurs located in Africa make financial transactions with other companies from around the globe as it uses blockchain technology to increase efficiency across markets. By using BitPesa, entrepreneurs are able to convert altcoins into fiat currencies in a matter of seconds that can later be redirected to business investments, payments, and purchases. The use of technology could result in a financial revolution caused by an inclusion among a broader percentage of people to be financially connected and enabled across borders.

Times are now unpredictable and there is uncertainty regarding how exactly cryptocurrencies will impact the daily lives of an average person. Nowadays, cryptocurrencies face a lot of volatility, but once it matures and stabilizes, then it could have potential to revolutionize how businesses operate. Moreover, as the world is facing a growing need to tear down borders, I have no doubt that cryptocurrencies will thrive as an opportunity to provide economic and social solutions to minority groups from around the globe.

What do you think about how cryptocurrency can revolutionize the economy? Let us know down in the comments.

This article originally published on GREY Journal.