Global GDP rose by 2.2% in 2019, the slowest since the financial crisis of 2008 – 2009. Despite the impact of Covid-19, the global economy is expected to expand by 2.4% in 2020.
Blockchain technology can play a huge part in boosting the global economy due it’s many applications which include:
Through collaborations between blockchain companies and traditional enterprises, we can expect to see an increase in efficiency, reduction of costs, and reduction of barriers to entry.
Blockchain-based data exchanges can bring much-needed transparency and speed to the global economy. However, this wouldn’t be without its challenges. Data exchanged via the network needs to be validated, which is no problem for blockchain technology.
The problem lies with regulations. European countries in particular re very strict when it comes to data privacy, for example when you buy a domain name in Europe your personal details are hidden by default.
Whereas if you buy a domain name in the USA, domain privacy is an additional feature you pay for. Another example is the annoying GDPR Cookie Popups you have probably seen 100 times today.
This is all due to the strict data privacy regulations in Europe, regulations that could make it different for companies to exchange data.
However, I believe these are problems we can overcome.
Blockchain technology has garnered interest from traditional businesses, with adoption increasing year after year. For these companies to succeed in a blockchain-enabled global marketplace, they’ll need a decentralized governance model.
This will help these organizations to gain trust on a global scale. By using blockchain technology they can easily set up a decentralized custodian of trust with no third-party interference.
- Joiners – 1/3 of respondents, they are likely to join existing or new blockchain networks. They seek efficiency, compared to other organizations that prioritize revenue growth and cost reduction.
- Builders – the smallest group with just 18% of respondents. They create blockchain networks within their industries to provide new services and new value.
- Expanders – the largest group of organizations with 51% of respondents. They plan to build industry or cross-industry networks. They could even join other blockchain networks, in order to grow in just market share and overall market size.
These organizations share a common objective, which is to drive innovation by creating services and apps that improve the value of the network whilst putting consumers in control of their data.
Services that could be offered include payment remittance or document validation. Whilst all three organization types prioritize blockchain for billing and settlement and payments, they intend to use the blockchain for different purposes depending on their role.
- Joiners intend to consume services on multiple blockchain networks, they also prioritize data sharing and consumer insights.
- Builders struggle with scaling the platforms they create, so they focus their blockchain efforts on global fraud and compliance issues.
- Expanders create innovative blockchain applications to share, reconcile, and manage data spanning cross-industry ecosystems.
These organizations acknowledge that network roles heavily influence the distribution of all revenue generated on blockchain platforms. Builders are expected to take a majority of that revenue for the costs incurred due to their setup work.
The reason for this is that networks are mainly monetized based on the value and volume of the transactions generated on these networks.
Networks usually charge a small fee on a huge volume of transactions which can bring in billions of dollars in revenue. Payment processors are a great example of this.
Final thoughts
To nurture a growing, global marketplace, it’s important to focus on interoperability across the different systems that process transactions.
Decentralized blockchains can work with organizations to increase global economic growth.
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