Blockchain’s Impact on the Global Economy and the Role of Custody
The advent of Bitcoin and the blockchain has brought a lot of change to the world of finance. Previously, the traditional system of financial transactions involved the active participation of third-party financial institutions i.e. Banks. The blockchain has however now availed transactions to be completed between individuals, companies across international borders without the involvement of intermediaries. The world economy was formerly run using fiat currencies/government-backed currencies i.e. dollar, euro, pound etc. With mass adoption on the rise, a few cryptocurrencies are being used to buy goods and complete transactions, with Bitcoin leading the pack.
Aside from performing peer to peer transactions, the blockchain has helped companies to seal and execute contracts with the smart contracts features on public blockchains such as Ethereum. Smart contracts have allowed for a fundraising mechanism- ICOs, known as the “killer application” for Ethereum — that have solved the pain point faced by entrepreneurs raising traditional venture capital. This mechanism has resulted in more than $14 Billion raised for blockchain-enabled companies in 2018.
The main drivers of adopting cutting edge technology — increasing revenue, decreasing costs, and saving time are not lost on major corporations such as JP Morgan which announced its release of its Quorum technology. However, to the average consumer, the cost savings and time savings have not been orders of magnitude better than the original status quo and have not merited the more or less cumbersome process of becoming a cryptocurrency user by obtaining a digital wallet.
With just nine years since the first Bitcoin white paper, blockchain technology is now studied by companies and governments to find possible use cases for efficiency and can in the near future usher in the third industrial revolution. However, companies that will be able to reduce the complexity behind setting up a crypto wallet and maintaining custody of digital assets will be the ones that assist in ushering in the mainstream adoption that is needed for blockchain technology to make a larger impact on the global economy.
