As complicated or confusing cryptocurrencies might be, they are just an accounting unit and have the same role as money has in modern society, but are not controlled by reserve banks. There was a time when finance specialists thought that Bitcoin would merely make an impact in the world’s economy, but now its value stands over $6,000.
Even though economists would not admit it but the US Treasury serves as the global central bank, with the US dollar being the world’s reserve currency. In fact, the US was the epicenter of the 2008 global financial crisis, but a lot of countries felt its aftershocks. No matter how much central banks resist the adoption of digital currencies, there’s no denying that they can considerably benefit the global economy.
Initial Coin Offerings (ICOs) are equivalent to Initial Public Offerings (IPOs), but for blockchain projects. The blockchain raised over $6 billion through ICOs in 2017 and over $13 billion in 2018. ICOs/IEOs have taken power from venture capitalists and placed it directly in the hands of the masses. The story of cryptocurrencies has just started here, and they promise significant benefits to the economy and global financial system.
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Get Access to Better Financial Services Even in Poorly Banked Countries
More than a third of the world’s population does not have any access to banking services that can help them out in times of crisis. These disadvantaged people have no option other than to resort to substandard lending practices that incur them higher interest rates, leading to more instability among such people.
As blockchain technology diminishes the risk of fraud and corruption, even underdeveloped countries could enter the financial transactions game and give a chance to their economy to receive the necessary lift. The IEOs have further established the element of trust as crypto exchanges have involved themselves entirely in the funding processes.
The decentralization of cryptocurrencies makes their trading possible across borders. Business owners and investors will be able to keep track of their funds and have at least some authority, even in such an intense political and financial climate. Blockchain technology will start a financial revolution that will leave everyone financially connected, empowered, and enabled.
Ensure Well-Performing Stock Exchanges through Advantage Online Trading
Exchanges have been some of the earliest adopters of blockchain with NASDAQ announcing its initial security transactions using blockchain as early as 2015 and is now working with 7 crypto exchanges. Blockchain streamlines complex processes and risks, like proof of payment and transfer of stocks. Moreover, as cryptocurrency becomes more popular, it is giving rise to new avenues for trading via blockchain-based trading platforms.
It is expected that blockchain technology could impact stock trading as much as it had affected currencies. Apart from NASDAQ, the New York Stock Exchange, the Tokyo Stock Exchange, India’s Securities Exchange Board, and the Deutsche Bourse have already started blockchain technology for some of their transactions.
The most beneficial aspect of blockchain in stock trading is that it can speed up the settlement of trades. The stock market traders, brokers, and regulators are required to go through procedures that take days before completion. Through decentralization brought by blockchain, the stock exchanges can become automated and efficient.
Ensure Quick, Transparent, and Low-Cost Transactions
Blockchain technology facilitates the entrepreneurs to convert digital coins into currencies that can later be redirected to business investments, purchases, and payments. Since all these transactions are digitized and automated, it is convenient to track them through a distributed ledger, giving another edge to the technology.
The cryptocurrencies are already taking over the world gradually and putting the traditional financial institutions in the backseat. The IEO/ICO scene is progressing day by day owing to the support of big names. Furthermore, the world will be able to tear down the borders and seek complete social and financial inclusion. Thus, giving more boost to cryptocurrency as it has everything that can address such issues.
The standard wire transfers and foreign purchases involve fees and exchange costs. While most crypto exchanges have a fixed-fee format, the cost of transactions varies from platform to platform and is lower as compared to standard transaction costs. Moreover, the transfers are pretty quick and do not come with typical authorization requirements or wait periods.
Small and Budding Entrepreneurs Are Empowering Themselves
Privately-run, smaller businesses contribute to more than half of the economic growth and employment. Startups have become integral for the economy as they help in resolving pressing issues. Blockchain makes access to capital easier for entrepreneurs and helps in removing the glitches in the supply chain process.
As important as it is to raise money from the right people, it takes a lot of time away from your business. The traditional method of venture capitalists can take months of meetings, travel, and email before the investment gets approved. Using ICOs or IEOs, the entrepreneurs can make the masses participate in the fundraising process and have enough funds at their disposal within a short time.
As a blockchain-based system allows the users to create a permanent record of easily-accessible documents, this forms a basis of trust for the lenders and gives them an opportunity to safely loan money. Thus, more entrepreneurs can receive investments and will be able to fund their startups conveniently.
The Bottom Line
ICOs have indeed made many investors millionaires and the technology is still at a young stage. The top benefit that comes with ICOs or IEOs is liquidity, as someone living in Tunisia can easily fund a venture starting in the U.S.A. The day is not far when blockchain will have the ability to disrupt the traditional financial system.
From providing user-friendly financial tools to creating reliable agreements between parties, blockchain is revolutionizing transactions, trading, and economy. But it is indeed its role in quick fundraising and facilitating entrepreneurs that made the masses quickly adopt the technology and empower themselves to take their ventures to greater heights.
