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The Impact Of Blockchain Technology On Economic Environment

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The crypto market is booming once again. After a 2-year long bear market, prices are skyrocketing far and wide, with Bitcoin leading the charge.

Bitcoin has tripled in value since it raced past its previous all-time high of $20.000. This has pushed investors, retail and institutional, into a buying frenzy. Everyone is trying to buy bitcoins by any means necessary.

With that said, the impact of cryptocurrencies on the economy goes much further than just the profit opportunities they present. The blockchain technology they are based upon has managed to disrupt almost every industry know to man.

Finances, healthcare, insurances, real estate, and supply chain – blockchain has managed to render each one of these sectors more efficient and cost-friendly, to the benefit of everyone involved.

However, to understand how this is possible, we must delve a bit deeper into the characteristics of this technology. To this end, we must explain its main advantages and its use cases.

Let’s get started with a quick overview.

Introduction to blockchain technology

Blockchain was first introduced to the general public with the release of Bitcoin, way back in 2009. This decentralized distributed ledger was initially used to record and verify the transactions of the Bitcoin network. It provided us with the first decentralized digital payment system, independent from banks and governments.

This simple concept was enhanced even further in 2015 with the release of the Ethereum network. Ethereum introduced us to smart contracts, self-executing applications that execute when certain conditions are met.

This evolution of the blockchain allowed us to create our own cryptocurrencies, jumpstarting the ICO craze of 2017, and driving the prices of cryptocurrencies through the roof.

With that said, smart contracts also introduced us to dApps, which are one of the main ingredients of decentralized finance. Furthermore, they also allow us to tokenize anything of value via non-fungible-tokens on the blockchain.

As such, the decentralized nature of the blockchain and its inherent properties bring numerous benefits to today’s economic environment.

Blockchain use cases impacting the economic environment

Blockchain has seen numerous use cases emerge over the years, many of which have managed to improve the traditional financial ecosystem.

Bitcoin as the ultimate store of value

In the past year, the narrative of Bitcoin being the ultimate store of value has entered the mainstream line of thought.

You see, Bitcoin is a deflationary currency by design. Two characteristics define it as such:

  • It has a limited maximum supply od 21 million coins.
  • It undergoes a reward halving mechanism every 4 years.

As a result, Bitcoin becomes increasingly scarce over time, which increases its value. Furthermore, compared to other traditional stores of value such as gold, it’s much easier to buy, store, or transfer.

Governments have responded to the economic crisis resulting from the pandemic by injecting trillions of freshly printed FIAT money into the ecosystem. This has diluted the value of money, driving investors towards Bitcoin.

Decentralized Finance

Blockchain technology allows us to create decentralized financial products similar to those offered by traditional financial institutions. The DeFi ecosystem, allows users to access a completely decentralized ecosystem, where the only intermediary is the smart contract.

Users can enter a trustless financial system and enjoy products such as lending, staking, and interest accounts, without the hassle of opening a bank account.

In the past year, DeFi has grown by more than 5000%, which shows us that this is more than just a fad. With smart contracts blockchains being upgraded to bring faster and cheaper transactions, we can expect DeFi to grow exponentially in the following years.

Cryptocurrencies as a currency

One of the most important factors in the main adoption of cryptocurrencies is their usage as a digital currency for acquiring goods and services. The more people use crypto for daily purchases, the less volatile the market becomes.

Fortunately, this facet of cryptocurrencies is worked upon on multiple fronts, including:

  • The proliferation of stablecoins – stablecoins are cryptocurrencies that are pegged 1 to 1 to traditional money. They avoid volatility and provide a safe blockchain environment for secure, fast, and cheap transactions.
  • Blockchains are becoming faster – thanks to newer and improved consensus mechanisms like PoS, blockchains are able to treat an increasing number of transactions per second.
  • Payment gateways – these crypto on-ramp solutions allow merchants to seamlessly accept cryptocurrencies as payment. At the same time, they can avoid the volatility of cryptos such as Bitcoin by directly receiving FIAT.
  • PayPal and other payment processors – since March 2021, PayPal allows users to pay with crypto. Should this trend continue, the number of users spending crypto will increase immensely.

Concluding words

Only a decade after its inception, blockchain has brought the financial revolution humanity sorely needed. While cryptocurrencies aren’t going to replace the current financial system anytime soon, they provide a decentralized alternative that will allow us to improve it going further.

Source: https://cryptoverze.com/the-impact-of-blockchain-technology-on-economic-environment/

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El Salvador to airdrop $30 in Bitcoin to every adult citizen

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The president of El Salvador  has announced the government will airdrop $30 worth of Bitcon (BTC) to every adult citizen of the country.

The announcement was welcomed by Bitcoiners, with influencers speculating El Salvador’s government wil need to purchase the required BTC it intends to distribute adding more than $100 million in buying pressure on markets.

Quickly googled estimates of the adult population of El Salvador varied, with onchain analyst Willy Woo tweeting that Bitcoin’s global user base will grow by 2.5% thanks to the influx of 4.5 million Salvadorians.

Others placed the Salvadoran adult population as high as 6.5 million (which is actually the total population), with Yahoo Finance anchor Zack Guzman using the figure for some rough back of the envelope calculations suggesting that $195 million worth of Bitcoin will be airdropped across the country.

Exact figures are hard to find but Statista shows that in 2019 the population aged 15 and above was 4.72M.

However, crypto Twitter’s euphoria may be be slightly premature, as local publication Prensa Latina notes El Salvador’s citizens will only receive the free Bitcoin after downloading the government-issued cryptocurrency wallet application.

The news was announced during a June 25 press conference, with President Bukele stating the government’s “wallet app will even work anywhere with a cell connection, and you won’t have to have a cell plan for the app.”

President Bukele also stated that the country’s much-celebrated Bitcoin law recognizing BTC as legal currency nationwide will come into effect on September 7.

Related: Opposition poses constitutional challenge to El Salvador’s Bitcoin law

El Salvador’s Bitcoin law was passed roughly two weeks ago. While the move has been praised by the global crypto community, the legislation has faced opposition from a minority political party and the World Bank.

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Source: https://cointelegraph.com/news/el-salvador-to-airdrop-30-in-bitcoin-to-every-adult-citizen

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Ethereum London upgrade launches on testnet as 100K staked in a day on Eth2

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Ethereum’s forthcoming London upgrade, containing the highly-anticipated Ethereum Improvement Proposal (EIP) 1559, has been deployed on the Ropsten testnet.

Following the June 24 launch on Ropsten, London is now expected to progress through Ethereum’s Goerli, Rinkeby, and Kovan testnets at roughly weekly intervals — from which point the Ethereum community expects a date for mainnet deployment to firm up.

The new upgrade will see transaction fees burned. According EIP-1559 tracking website, Watch the Burn, roughly 88,500 testnet ETH nominally worth $177.6 million has been burned on Ropsten over the day since London’s deployment.

The high rate of Ether being burned on Ropsten has reignited discussion regarding whether EIP-1559 will render Ethereum deflationary — where more ETH is destroyed than new supply enters into circulation — and what this could mean for Ethereum’s price moving forward.

However, EIP-1559 is not the only upgrade that the community is looking forward to from London, with David Mihal of CryptoFees describing EIP-3074 as “fixing one of Ethereum’s most overlooked security issues” to do with approvals.

Related: A London tour guide: What the EIP-1559 hard fork promises for Ethereum

Coincidentally or not, crypto data aggregator, CryptoQuant, identified that 100,000 Ether had been deposited into Eth2’s staking contract around the same time as the launch, worth roughly $200 million.

CryptoQuant also noted that more than 5% of ETH’s supply is currently locked in staking worth approximately $11.75 billion.

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Source: https://cointelegraph.com/news/ethereum-london-upgrade-launches-on-testnet-as-100k-staked-in-a-day-on-eth2

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Crypto Companies Innovate to Serve Their Users Better

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The quest to leverage the crypto and DeFi boom means crypto companies must constantly be innovative to serve their users. If company “A” doesn’t do it, there is every certainty that company “B” will fill in that gap. TrustToken, Phemex, and Kryll are among the many crypto companies constantly innovating and launching new features on their platform. In this article, we shall look at some of the ways these companies are evolving in order to meet the demands of their users, and serve them better.

New $USDT lending pool by TrustToken

On June 18, 2021, TrueFi launched a new USDT lending pool for collateral-free loans. According to Head of Strategy Ryan Rodenbaugh, USDT remains one of the most demanded assets by crypto borrowers – and the new pool has grown rapidly in both size and utilization.

Growing these lending pools was helped by lucrative incentives: depositors enjoyed loan interest and generous TRU token rewards totaling more than 40-50% APY. In lending, utilization is key: with much of the capital sitting unallocated, are TrueFi users “overpaying” for stablecoins deposits?

TrueFi governance was quick to respond: a new proposal adjusting pool incentives based on utilization, pegging incentives for given lending pools (of TUSD, USDC and USDT today) to their rate of borrowing – dynamically – helping TrueFi reward the most productive assets.

The pools add a new way for crypto holders to earn returns while sitting in the safe haven of stablecoins during the market’s swings. In fact, TrueFi pools may offer some of the highest earning opportunities on stablecoins – and are free of impermanent loss.

Phemex launches Learn and Earn on its platform

Since its launch in 2019, Phemex crypto and futures trading exchange has been making giant strides in the crypto space. The platform offers spot trading, contract trading, and futures trading. It seeks to position itself as the most trusted in the industry.

In its bid to educate beginners on the crypto and blockchain industry, Phemex has recently launched its “learn & earn” program. The purpose of the new feature is strictly to incentivize new crypto users.

The new feature comes with interactive videos and other intuitive lessons designed for beginners. To motivate these learners, the crypto exchange has come with a way for learners to earn rewards while they learn. At the end of each lesson, users will be presented with a short quiz for them to provide the right answers. If a user answers all the questions correctly, the user will receive a reward from the platform. This becomes a good motivation for learners to pay attention and be serious throughout the learning process.

No more struggle to understand jargon-filled information

The “learn & earn” program is designed to be beginner-friendly and offers learners a fun and easy way to understand cryptocurrency basics. Users will first learn about Phemex’s essential features and how each feature works. The program also explained how cryptocurrency works and how beginners can trade cryptos on exchanges.

Kryll allows users to create their own crypto trading strategies

Krill is a crypto trading marketplace where users can create and own trading bots. There are currently more than 270 active trading strategies on the platform. Users can also publish their trading strategies for other users to use, and the publisher makes good profit in the process. In its bid to offer efficient services to users, Kryll developed tools that allow its users to create powerful trading bots for Binance, Kraken, and Bittrex. The interesting thing is that users don’t need to have prior coding skills to use this new feature on Kryll. Creating your trading bots on the platform is as easy as drawing on a whiteboard.

Users no longer have to constantly stay in front of their computers to trade. These bots are hosted in the cloud and operate 24/7. As a user of Kryll, you can now leverage the trading bots to save time and optimize your profits.

The platform also has a marketplace which gives users access to a community of experienced crypto traders who automate their trades on Binance, Kraken, Bittrex, and HitBit. Users can test, rent and offer automated trading strategies with each other.

Building better interaction with users

The innovative approach of crypto companies like TrustToken, Phemex, and Kryll is the tip of the iceberg, considering the high number of features introduced in the crypto space every day. It is an indicator that the cryptocurrency industry is still growing, and there are still more grounds to cover. TrustToken, Phemex, Kryll, and other crypto platforms are persistently leveraging the crypto boom to interact better with their users.

Image by Arek Socha from Pixabay

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Source: https://bitcoinist.com/crypto-companies-innovate-to-serve-their-users-better/?utm_source=rss&utm_medium=rss&utm_campaign=crypto-companies-innovate-to-serve-their-users-better

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