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What is blockchain?

what is blockchain

You’ve definitely heard about them by now. Even if you’re not a trader, you’ve definitely encountered the words “cryptocurrency” and “blockchain” already. That’s because this relatively new technology has been the cause of much discourse recently, owing to its ever-evolving popularity. 

While digital money has initially only been used by a few groups of tech-savvy individuals who were aware of their existence, cyber coins have skyrocketed to popularity like no other asset before or after them. 

Nowadays, they are the domain of an increasing number of traders and investors looking to diversify their portfolios which are lured in by the promise of high returns and gains. There’s also a case to be made for crypto acting as a hedge against inflation and also as a definitive store of value.

And while cryptocurrencies have occupied center stage for a while now, researchers are also becoming increasingly interested in the technology powering it, the blockchain. While it is nothing new, it has become mainstream with crypto’s popularity. 

While cyber money just so happened to be one of the earliest and most widely-recognized applications of the decentralized ledger, most experts have opined that there are numerous ways in which blockchain could help change the world. Let’s have a closer look at some of them.

Helping small businesses 

If you’re a small business owner, you know there’s no shortage of challenges you have to face. From staying relevant on the market to competing with bigger brands and corporations to keeping up with the trends to ensure your clients keep coming back, you’ve got your work cut out for you.

 And, of course, you also have to keep everything in perfect working order, make sure your employees are satisfied, your accounting and legal practices are fair and sound, and that there are no mistakes along the supply chains.

One of the most critical parts of using the blockchain is streamlining processes. Your business can use algorithms that allow transactions to occur in real time. It’s the best way to avoid dealing with the often time-consuming and complex task of managing financial transactions rapidly and fluidly.

 Processing payments from all over the world can also pose further issues, but if you’re looking to expand your business, you must also make sure you’re reaching a clientele that’s as extensive as possible. Using the blockchain system means you’ll have a much easier time operating transactions, regardless of their geolocation.

You can also get the upper hand over your competitors. For example, one area of increasing importance to customers is how fast they receive the products they’ve ordered. When your supply chain is in order, you’ll be able to deliver everything on time. 

Blockchain tech helps with that by streamlining processes and reducing the likelihood of human error. When you can show your clientele that you can deliver orders on time and in perfect condition, you’ll improve your market reputation, which is your indirect business card. Your loyal customers will pass on the word to friends and relatives who’ll want to give your brand a try as well, thereby boosting the number of people that buy from you and growing your business.

What other Reads?

Banking opportunities 

We’ve already established that the most common association the public makes regarding the blockchain is a cryptocurrency, particularly Bitcoin, the coin the majority has in mind when the subject of digital money comes into question. Traders routinely check the Bitcoin price before making any transaction because while BTC is commonly recognized as more stable than the altcoins, it still records periods of significant volatility.

But trading isn’t the only way in which crypto can be used. It has increasingly been recognized as a way to increase banking opportunities across the world. While technology has become increasingly more important in the daily lives of individuals, there are still areas in which this is unfortunately not always the case. 

As of June 2021, El Salvador adopted Bitcoin as a legal tender. As such, it became the first country in the world to bestow fiat currency rights and usage scope on a digital coin. In 2022, the Central African Republic followed in its footsteps and adopted crypto as a legitimate currency apt for daily usage.

With blockchain technology, people from across the globe can access banking services where they would otherwise not have had the opportunity. In El Salvador, for instance, a large percentage of the population doesn’t own a bank account and, as such, has never used a credit card or internet banking.

 Standard banking procedures may be difficult to access for nations with emerging economies, particularly in remote or rural regions. That’s where crypto comes into play, ensuring that individuals can transfer money swiftly without significant delays or high fees.

There is, however, a problem that might stem from the access to the digital infrastructure necessary for trading. In some parts of the world, constant access to the internet can be a struggle, while other regions might lack it entirely. In areas where blackouts are frequent and long-lasting, there’s the problem of accessing crypto wallets as they’re needed to perform transactions.

Apart from banking, the blockchain can also help in areas such as land titling or maintaining health records. In Kenya, IBM partnered with Twiga Foods, which connects suppliers, vendors, and customers to provide access to high-quality foods and produce to extend micro-financing practices.

 In Nigeria, blockchain tech has previously been used to detect and monitor the toxin level in rivers, therefore speeding up the process of cleansing the waters. Lastly, the Haitian government has postulated that the blockchain could be used to register property transactions, voting, and a plethora of other bureaucratic processes.

The bottom line 

While still a new technology, the blockchain shows look incredibly promising so far. Its wide area of use cases has not been seen before in a single system since the advent of the internet. While there’s still quite a way to go until it is used at a broad, global scale when the infrastructure is put into place, it could potentially solve many of the problems the world is struggling with at the moment.

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