Recently, the cryptocurrency market has plunged along with a sharp decline in global stock markets. Many investors have decided to exit the crypto market and take their losses. Others are questioning whether they should have entered the area in the first place. The gloom and doom might have you wondering: Is this the end of the cryptocurrency industry, or is there still hope? Is it a good time to get into the market and make a lot of money, perhaps?
However, cryptocurrency has survived for over a decade despite its high volatility, attracting investors from all walks of life and weathering several such steep drops. Many of them are choosing to trade using authentic platforms like LiteFinance’s forex trading broker.
Given its relative youth, economists and investors alike expect cryptocurrency’s economic impact to remain an active topic of discussion for some time to come. In this article, we will discuss a few ways that cryptocurrency impacted the global economy and shed light on the future of the currency. Read on to find out!
Economic Impacts of Cryptocurrencies Employing Blockchain
In the last few years, blockchain, the technology that forms the basis for Bitcoin and other cryptocurrencies, has gradually become more mainstream. In other markets, this technology has the potential to unlock billions of dollars, according to many experts.
The following business practices in various industries are impacted by blockchain technology so far:
- For financial institutions, blockchain has made cross-border transactions more efficient.
- Messaging apps have taken advantage of the technology to secure private investment deals.
- Blockchain can be used to streamline the leasing and sales of automobiles.
- Smart contracts can be executed on the cloud and secured with blockchain.
- Blockchain technology can be used to reduce paperwork and fraud while boosting accountability in government and public records.
- To ensure that photographers are properly compensated, companies like Kodak plan to launch their own cryptocurrency.
Cryptocurrency’s Economic Impact on Job Markets
During the rise of cryptocurrency, an entire industry has been created that’s dedicated to overseeing cryptocurrency exchanges worldwide. As a result, some early adopters have made a lot of money, while others have built businesses that rely on trading.
In 2017, the number of blockchain-related jobs increased from just over 1,000 in 2016. In the cryptocurrency industry, software engineers have been the most sought-after professionals. The demand for these professions has not declined despite recent fluctuations in the workforce.
Investing and creating jobs in the field of cryptocurrency will increase as more countries legalize the currency.
Cryptocurrency’s Economic Impact on Volatile Global Currencies
Confidence in US banks has been steadily dwindling since the 1970s. Cryptocurrency can also be used in countries where the domestic currency fluctuates, causing living conditions to degrade. The peer-to-peer nature of cryptocurrency means that no central authority has any say in how transactions are carried out.
There are 1.7 billion people in the world who do not have access to a bank account. Because of their financial hardships, they frequently resort to risky lending practices. Many of these people own a cell phone, which means that cryptocurrency can be a viable option for them because of the ease with which it can be transacted via mobile applications.
Cryptocurrency’s decentralization makes it possible for citizens of countries where the currency is unstable to trade freely with citizens of more prosperous countries, generating a level of economic equality for everyone.
Cryptocurrency’s Economic Impact via Low Transaction Costs
Except for Bitcoin, most cryptocurrency users pay little to no transaction fees. No additional costs are incurred because cryptocurrencies and blockchain are decentralized and do not entail investment in physical property. This means that, in contrast to a bank branch, no utility bills, rental property, or employee wages are required to be paid.
The lack of transaction fees also promotes confidence in the cryptocurrency system, resulting in increased use of financial instruments, more transactions, and a more interconnected global economy.
Cryptocurrency’s Economic Impact via Transparency
People, businesses, and even governments can’t alter the blockchain ledger, which is used to record all cryptocurrency transactions. Not only does this empower citizens and reduce corruption but it also increases their access to power and freedom.
This is especially beneficial to underdeveloped countries and oppressed populations. Cryptocurrency’s utilitarian structure enables these people to invest and transact with a global economy, which can improve their economy and quality of life.
In the near future, cryptocurrency has the potential to become a widely accepted form of payment. Investors have been unable to resist buying the dips in recent days, regardless of the current market conditions. Data suggests it is still a good entry point for investors into Bitcoin even though the world’s largest digital currency has hit a low point. Therefore, investing during a market downturn may prove to be a wise move. Prices are low, but the potential for a large profit in the future is enormous.