Evolving technology has had a huge impact on many aspects of our history and daily lives for centuries. We’re transitioning from living in a Web 2.0 era, in which social media dominates screens, to Web 3.0, which will see the Internet based more on blockchain technology.
Some compare the rise of blockchain technology to the Internet’s breakthrough during the 1980s, while others argue that it’s only a passing fad. It was cryptocurrency, namely Bitcoin (BTC), and its miraculous potential for investing that has catapulted blockchain technology into the spotlight. The blockchain continues to revolve around cryptocurrency and its widespread adoption.
However, with over 19,000 altcoins in circulation, could it still only be a ‘passing fad’ if the market has become so vast and competitive? Let’s explore the real-world application that blockchain technology and cryptocurrency could have in mainstream society.
The Impact of Institutional Investors on Crypto
Blockchain technology is pretty experimental right now, and is used predominantly in niche communities, most notably in the cryptocurrency and NFT markets. However, towards the end of last year, following NFTs’ explosion, cryptocurrency surged in popularity and achieved mainstream appeal, which prompted large corporations to begin expanding into the space. These include household names like PayPal, Tesla and Block (formerly known as Square).
As a result, an increasing number of businesses are beginning to accept cryptocurrencies as a legitimate form of payment. These investments are assisting in laying the groundwork for how the financial world will look in the future.
The value of many cryptocurrencies have decreased significantly this year as a result of major investments and a variety of other factors. Many experts believe this is just the beginning. Retail investors have remained optimistic and bought assets during every significant downturn.
Paying employees in cryptocurrency?
People’s growing interest in cryptocurrency is due in part to the fact that the technology that underpins it allows for more financial inclusion than traditional finance.
Employees and employers could benefit from a cryptocurrency-based payroll, in the sense that it can provide better financial management and no delays. For those who are already familiar with Bitcoin’s (BTC) benefits, it may be an appealing option for paying employees.
Employees at large companies such as SC5, IM and Fairlay have already begun to be paid in Bitcoin (BTC). Moreover, several prominent athletes have requested payment in cryptocurrency, such as Trevor Lawrence and Sean Culkin. This has paved the way for new businesses to accept Bitcoin (BTC) as a legitimate form of payment and purchase.
Cryptocurrency could fast-track economic growth
Underdeveloped countries and emerging economies, which are experiencing rapid economic growth, are more likely to adopt cryptocurrency. Nigeria is one example, with a report by KuCoin finding that 35% of the population have invested in digital currencies.
One obstacle facing greater adoption of cryptocurrency in these economies is the high gas fees demanded by networks to carry out transactions. This is linked to difficulties with interoperability across blockchains, which is a major issue surrounding the technology.
Yet recently, newer altcoins have been emerging to tackle this issue and therefore gain a competitive advantage in the market. For example, Calyx Token (CLX), a liquidity protocol which is currently in presale, has gained popularity in crypto spaces due to its goals of exchanging tokens immediately with minimal gas fees. It plans to do this by sourcing liquidity from multiple liquidity protocols (utilising multiple blockchains instead of just one).
Supply Chain Improvements
Retailers are discovering that pre-pandemic supply chain issues persist despite changing customer behaviours.
As the world learns to adapt to a post-COVID economy, incorporating blockchain technology into the supply chain process may help businesses meet customer demands for speed, convenience, and social accountability, improve operational efficiency, and optimise inventories.
Retailers are utilising blockchain technology to create new solutions that appeal to customers while also enhancing their brand’s reputation for quality and dependability. Part of this will be accomplished with the help of retail supply chain partners.
Traceability, quick payment, and financial management could all benefit from cryptocurrency. Clearly, implementing a new system will take time and require a significant investment of both time and money, but the payoff is expected to be significant.
Benefits of decentralisation
One of the most important aspects of cryptocurrencies is decentralisation, which allows currencies to be fully global without being regulated by CeFi institutions. The use of decentralised cryptocurrencies could improve the efficiency of data transmission and transactions.
These coins’ decentralised nature eliminates the need for a third party in financial transactions. As a result, the transaction times and fees have been cut in half. Crypto not only saves time by allowing for lightning-fast transactions, but it also helps retailers save money on taxes because tax collection on cryptocurrencies is difficult to implement.
Payments can now be made without the use of a third-party exchange thanks to the implementation of Bitcoin (BTC) ATMs and cryptocurrency cards. Even though it’s still in early stages, it’s a promising start.
The fact that there are no fees, no disruptions, and no paperwork required to change ownership further encourages its widespread adoption.
Moreover, unlike your bank, crypto is ideal for private transactions because it doesn’t reveal much personal data. However, there has been some debate over the extent to which these transactions are private. If you value your privacy, you should make sure you choose a permissionless blockchain or protocol, which is much more secure.
Even in a more technologically advanced society, digital assets have yet to gain widespread acceptance. However, there are signs that cryptocurrencies are becoming more widely accepted in society.
The lack of practical real-world application is currently the most significant impediment to the mainstream adoption of cryptocurrencies. Smaller businesses, in contrast to governments and larger corporations, are still hesitant to adopt cryptocurrencies. Although there’s still a long way to go before blockchain becomes the primary currency, we can already see how blockchain and cryptocurrency have altered the payment landscape.