Posted On : 10th May, 2021 by ViitorCloud
You must have heard the term Bitcoin a lot of times since a few years. The revolutionary and disruptive technology behind the cryptocurrency Bitcoin is Blockchain. Do you know what a Blockchain is? Let’s simplify the concept for you to understand it better. Blockchain is a type of database that stores the data in blocks that are chained together.
So what is so special about this chained database that we refer to it as a disruptive technology? You see, since the beginning, people have been keeping records of almost all the transactions. As we are moving towards digitization, the recording of these transactions has become more complicated. Whether it is the transfer of money amongst two individuals, documentation of the movement of goods or executing contractual negotiations. The increase of business and economics throughout the world has formed a chain of diverse record systems that are prone to mistakes, scams and misinterpretation. Consider the Gold industry, for instance. The course of Gold from the mine to the consumer involves a series of complicated moves that include judicial, administrative, commercial, and, production practices. Present supply chains depend on agents for each round of the process from government administrators to attorneys, auditors, traders and banks. That increases the time & cost exponentially. Gold smuggling and duplicity can hinder the government from collecting appropriate taxes and the consumers face the possibility of buying fake Gold. This is where Blockchain technology can help.
Blockchain is capable of getting rid of these vulnerabilities with transparency. It offers all those included in a business chain a safe and synchronized account of actions. The blockchain registers each step right from the start till the end, even if it includes thousands of transactions or just one online payment. Each transaction that takes place is put in a block. Each block is attached to the other blocks i.e. each and every block is linked to the previous and the next block. All the similar transactions are put together in a block and its fingerprint is added to the one after it. That creates an immutable chain. A blockchain enables everyone in the business network to have a copy of all the data and record. No one human or company has absolute control over the system. That ensures security and transparency and eliminates the risk of frauds and errors. Many countries around the globe Hire blockchain developer India for building robust blockchains for efficiently running their businesses.
Let’s have a look at the three digital, crypto and blockchain predictions for 2021.
Growth of Central Bank Digital Currency (CBDC).
The digital payments area saw a robust finance activity in 2020. Also, there has been plenty of news about account-based CBDC. A few emerging markets have stated that they have either started or are starting a CBDC. Some may not understand that building a digital currency is easy, but what is more significant is how it is connected to the broader ecosystem to assure a seamless flow of money.
We may also see a few emerging market’s central banks working to include a proper CBDC. The central banks may permit the private banks to develop a stablecoin for the retailers supported by the CBDC. That would ultimately build digital payment support for digital transactions, and encourage banks to expand their digital offerings.
The COVID-19 pandemic has now stimulated the digital transformation in the previous year. You can expect to see more digitization in the finance sector this year. You may see the equity listings on the present legacy markets starting to shift to digital exchanges. The charges of being a public company are much less than the prevailing ones. Also, privileges are amazing. Legacy digitalization will be a reality this year.
Work aimed towards more comprehensive decentralization.
Various Web 3.0 platforms support the trend of greater decentralization. Ethereum has a crucial role in the advancements of Web 3.0. At present, a few other Distributed ledger technology (DLT) platforms such as Cosmos and Polkadot strive to provide better interactions and enhanced compatibility between different blockchain networks.
A lot of Ethereum fans maintain that it’s not required to have various chains to deploy decentralized applications. Many developers would willingly let the end-users select which blockchains they’d prefer working with. Individuals & businesses would profit from more options like Tron, NEM, Zilliqa and many others. Ethereum transaction charges have reached a very high level lately and the blockchain has become pretty unusable due to huge network traffic.
Added Progressive Crypto Regulations.
India and other countries that are a bit uncertain about the idea of cryptocurrency can take certain steps that may hinder the growth of this industry. You may have heard what China did to OKEx or what the USA did on BitMEX. These are like warnings for the crypto exchanges. Even in the countries that have a more friendly approach towards this technology, a few sections have not been so good for quite some time now. You can expect an enhanced regulatory examination here as well.
A co-founder of a DeFi financial service states that the stablecoins, whose supply took 5 years to reach 6 billion, may see a regulatory pushback. But, it took just about 4 months for it to double from there. As a result of this sudden boom, the FATF circulated a cautionary statement. This continuous growth in stablecoins will surely attract the attention of the regulatory authorities, who may put forth a few regulations. It is obvious that if the market capitalization grows from five billion US dollars to twenty-six billion US dollars in a few months, it is bound to attract the attention of the regulatory agencies. These regulations will help in the better usage of the Blockchain technology.
Blockchain is a disruptive technology that has the potential to transform how the data is stored, accessed and altered. It brings much-needed transparency to the system that ensures enhanced security and tamper resistance. Blockchain will do for corporations what the internet did for communication. You can Hire blockchain developer who can help you build blockchains for your business.