How Cryptocurrency Affects The Economy?
Bitcoin’s economic impact has been both overt and subtle since its inception in 2009. Now in its eleventh year, digital or virtual money in the form of tokens or coins has established itself as a viable currency and form of investment, with the economic impact of cryptocurrency visible in a variety of areas in national and global communities.
More than 2,000 cryptocurrencies exist as of January 2020, with nearly 36.5 million Americans owning some form of cryptocurrency. Although cryptocurrency hasn’t had a large impact on the economy as a whole, such as the stock market, 2017 saw hundreds of billions of dollars flow into cryptocurrency, establishing it as a viable stock to invest in. Experts consider cryptocurrency to be “digital gold” because, like precious metals, it retains its value without risk of depreciation.
Still a young currency, the economic impact of cryptocurrency is expected to remain a topic of debate among economists and investors alike. Click here to find out more on nft marketplace development company.
Here are some examples of how cryptocurrency’s economic impact has manifested itself.
- The Economic Impact of Cryptocurrency Using Blockchain
- Blockchain, the underlying technology of cryptocurrency, has gradually entered the mainstream. Many experts believe that the use of this technology in other markets could potentially unlock billions of dollars.
- So far, Blockchain technology has had an impact on the following business practices in a variety of industries:
- Blockchain has improved cross-border transactions for financial institutions.
- Messaging apps have leveraged technology to facilitate transactions with private investors.
- Blockchain can help streamline car leasing and sales.
- Blockchain can be used in cloud computing to execute smart contracts and prevent hacking.
- Blockchain can be used in government and public records to reduce paperwork and fraud while increasing accountability.
- Companies such as Kodak plan to launch their own cryptocurrency to ensure that photographers are properly compensated.
- Cryptocurrency’s Economic Impact on Job Markets
- The rise of cryptocurrency has given rise to an entire industry dedicated to supervising cryptocurrency exchanges all over the world. While some early adopters became wealthy quickly, others built businesses that rely on trading for a living.
- The number of Blockchain jobs increased from just over 1,000 in 2016 to more than 4,000 in 2017. The most directly sought after professionals in the cryptocurrency industry have been software engineers. And, while the job market has fluctuated in recent years, interest in these professions has not.
- As cryptocurrency becomes more legal outside of the Western world, we can expect more global investments and job creation in the sector.
- Cryptocurrency’s Economic Impact on Unstable Domestic Currencies
- Since the 1970s, trust in US banks has steadily declined. In countries where the domestic currency fluctuates constantly, causing living conditions to deteriorate, cryptocurrency can be used to avoid these situations. Cryptocurrency is a completely utilitarian practice in which peers supervise each transaction independently of the government.
- Globally, 1.7 billion people do not have a bank account. They are financially disadvantaged and frequently have to resort to risky lending practices. Surprisingly, a large proportion of this population owns a cell phone, and because cryptocurrencies can be transacted via mobile applications, cryptocurrency can quickly become a viable option for them.