COINOMICS AS DECENTRALIZED FINANCIAL FREEDOM FOR OUR PEOPLE (PART ONE)
INTRODUCTION
CRYPTOCURRENCY
Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
Cryptocurrencies are intended for payments, transmitting value (akin to digital money) across a decentralized network of users. Many altcoins (i.e., those that are not Bitcoin or sometimes Ethereum) are classified in this way and may sometimes be called value tokens. Cryptocurrencies are a new paradigm for money. Their promise is to streamline existing financial architecture to make it faster and cheaper. Their technology and architecture decentralize existing monetary systems and make it possible for transacting parties to exchange value and money independently of intermediary institutions such as banks.
ORIGINS OF CRYPTOCURRENCIES
Technically cryptocurrencies started with the launch of Bitcoin (BTC) in 2009. Today, there are over 4000 cryptocurrencies published in today ‘s world and more than 100 cryptocurrencies have a market cap over $1 billion. Although there is significant development in the entire cryptocurrency habitat throughout the decade, it has only caught the general public ‘s attention worldwide since mid 2020. Between April 2020 to April 2021, Bitcoin price soared 1,100% YoY and public figures like Elon Musk openly endorsed the investment value of Bitcoin and other major cryptocurrencies.
While the underlying principles and technology of cryptocurrencies remain sophisticated, the openness of the general public’s acceptance in embracing the investment value and practical application of cryptocurrencies has underpinned the future success of the entire cryptocurrency ecosystem. But a prospect begun with a turn of a tide in Bitcoin,
ECONOMIC IMPACT OF CRYPTOCURRENCY
Since the inception of Bitcoin in 2009, the economic impact of cryptocurrency has been both overt and subtle. Now in its eleventh year of existence, the digital or virtual money that takes the form of tokens or coins has established itself as a viable currency and form of investment, and the economic impact of cryptocurrency is evident in a number of areas in national and global communities.
As of January 2020, more than 2,000 cryptocurrencies exist and nearly 36.5 million people living in the U.S. own some form of cryptocurrency. Although cryptocurrency as a whole hasn’t impacted larger sections of the economy like the stock market, 2017 saw hundreds of billions of dollars flow into cryptocurrency, further establishing it as a viable stock to invest in. In fact, experts consider cryptocurrency to be “digital gold” because, like precious metals, it retains value without the risk of depreciation.
Still a youthful currency, the economic impact of cryptocurrency is expected to continue to be a relevant discussion amongst economists and investors alike. Here are some of the ways the economic impact of cryptocurrency has manifested.
ECONOMIC IMPACT OF CRYPTOCURRENCY THROUGH USE OF BLOCKCHAIN
Blockchain, the underlying technology behind cryptocurrency, has slowly moved into the mainstream. Many experts predict that the use of this technology in other markets can potentially unlock billions of dollars for those markets.
So far, Blockchain technology has proved to have impacted the following business practices in several industries:
Blockchain has improved financial institutions’ cross-border transactions
Messaging apps have used the technology in favor of deals with private investors
Car leasing and sales can use Blockchian to streamline car leasing
Cloud computing can use Blockchain to execute smart contracts and resist hacking
Government and public records can use Blockchain to reduce paperwork and fraud while increasing accountability
Companies like Kodak intend to launch their own cryptocurrency to make sure photographers are paid properly
ECONOMIC IMPACT OF CRYPTOCURRENCY ON JOB MARKETS
The rise of cryptocurrency has brought with it an entire industry that is dedicated to supervising cryptocurrency exchanges that take place throughout the world. While some early adopters have become rich quickly, others have developed companies that rely on trading as their source of income.
The number of jobs in the Blockchain industry increased from just over 1,000 in 2016 to over 4,000 in 2017. Software engineers have been the most directly sought after professionals for the cryptocurrency industry. And while this job market has fluctuated in the past few years, interest in these professions have not faltered.
As cryptocurrency continues to be legalized outside of the western world, we can expect to see more global investments and job creation within the field.
ECONOMIC IMPACT OF CRYPTOCURRENCY ON UNSTABLE DOMESTIC CURRENCIES
Since the 1970s, confidence in U.S. banks has consistently decreased. And in countries where the domestic currency is constantly fluctuating, causing living conditions to plummet, cryptocurrency can be used to circumvent these situations. Cryptocurrency is a wholly utilitarian practice in which peers oversee each transaction without the oversight of the government.
1.7 billion people worldwide don’t have a bank account. They are financially disadvantaged and often must resort to dangerous lending practices. Interestingly, a large number of this population possess a cell phone, and because cryptocurrencies can be transacted through mobile applications, cryptocurrency can easily become a viable option for them.
An added advantage of cryptocurrency is that it’s completely decentralized, which means that for citizens living in countries with currency instability, cryptocurrency allows them to trade freely across borders with citizens of more well-off countries, creating a level of economic equality.
ECONOMIC IMPACT OF CRYPTOCURRENCY FOR ENTREPRENEURS.
With its decentralized format, cryptocurrency is a global economy in which all users exchange currency regardless of their citizenship. This is particularly profound for entrepreneurs who are no longer subject to a national audience but one that is international with whom funds can be exchanged without the hassle of exchange rates and international law. In fact, there are cryptocurrency companies that assist business owners in Africa make financial transactions with European, American, and Asian companies with the intention of creating financial coverage and financial liberation through exchanges worldwide.
In an increasingly digitized world, the social need to communicate across borders is now manifesting itself in financial needs, and traditional financial institutions are not able to provide this as well as cryptocurrencies can. In time, entrepreneurs can assist in the opportunities to invest in, save, and send money across borders, in turn reframing global business practices.
Economic Impact of Cryptocurrency on Small Businesses
Big businesses are taking over many different markets, and supporting small businesses is now more critical than ever before. Small businesses are not only important, but they allow customers to support a good, genuine company and a great cause. Cryptocurrency can provide several benefits to small businesses.
The low transaction fees that come with cryptocurrency are one of the biggest reasons many establishments have opted to accept the digital currency. While traditional forms of currency, especially credit and debit cards, can cost businesses high processing fees, cryptocurrency takes away nearly everything.
In addition to low transaction costs, crypto transactions can happen almost instantly. While debit and credit transactions may take a few days to process fully, a crypto transaction is fast and efficient. Furthermore, there is no need for a third party in crypto transactions meaning the transactions can happen quickly.
Another great benefit of accepting crypto is that it can open small businesses to broader audiences. Due to crypto being a universal, international currency, it can be used by anyone, enabling small companies to serve global customers. Additionally, with crypto being popular among younger individuals, accepting cryptocurrency can allow a small business to appeal to a younger audience. Accepting crypto enables a business to reach a broader range of customers and demonstrate its ability to innovate and progress as a company. Crypto is still a new commodity, making it the perfect time for businesses to adopt it.
Why Invest in Cryptocurrency?
Many traditional investors have chosen to invest in cryptocurrency. The digital currency has many benefits for individuals looking to invest in something other than a conventional stock. Crypto has been making a huge impact all over the world. Some individuals say that it has the potential to take over the world the way the internet did in the nineties.
Cryptocurrency cannot be controlled by a government entity, which draws many investors to buy tokens of their own. Currency that the government issues, also known as fiat money, has the potential to depreciate over time, but cryptocurrency does not. Due to most cryptocurrencies having a limited supply, no governmental agency can lower its value through inflation. In addition, the government can't tax or take crypto tokens without permission.
Cryptocurrency has the potential to continue to become a mainstream form of currency in the near future. As it grows in value and popularity, the benefit of investing in crypto becomes more apparent. Whether you have been investing for years, or have just begun looking into buying crypto, investing can be made easy with Pelicoin.
The second part of this write up will look into cryptocurrency economic impact on the Nigerian Youths, the revolution of crypto and how Nigerian Youths become more interested and world leading in the Crypto-economic.
ahmad.msalihu22@gmail.com
Comments
Post a Comment