Dynamics of Bitcoin and Blockchain in the Global Economy

Introduction

The world economy transfers trillions of dollars daily, but the system is riddled with flaws, delays, fraud cases, and crime situations. However, blockchain and bitcoin cryptocurrency technologies have emerged as a potential remedy to the stumbling challenges of international commerce. Today, blockchain and bitcoin are primarily recognized for their use in financial solutions and economic engineering. Blockchain and bitcoin cryptocurrency, as a safe, autonomous, and open ledger mechanism, have changed financial transactions resulting in increased economic efficiency, lower business costs, and higher e-commerce security in the global economy.

Economic Efficiency

Conventionally, the scope of time and money used at the country’s borders has considerable effects on traders’ experience reflecting the nation’s competitiveness and efficiency in conducting business operations. Due to the intricacy of the proof of work (PoW) technology and the processing capacity needed, a typical Bitcoin transfer takes approximately ten minutes to process.¹ The bitcoin protocol is efficient since it permits anyone to participate in PoW, unlike the traditional currency formats, where a governing body regulates the issuance of new payments. Therefore, blockchain and bitcoin cryptocurrency systems eliminate the inconvenience and time-wasting by accelerating global trade workflows by establishing real-time data access to all stakeholders.

1. Romi Kher, Siri Terjesen, and Chen Liu, “Blockchain, Bitcoin, and Icos: A Review and Research Agenda,” Small Business Economics 56, no. 4 (2020): 3, https://doi.org/10.1007/s11187-019-00286-y.

Dynamics of Bitcoin and Blockchain in the Global Economy

For writing your paper, these links will be helpful:

Lower Business Costs

Blockchain and bitcoin technologies eliminate intermediaries, including banks, assuming a decentralized money transfer system that lowers the costs associated with remittances. Numerous companies, including local and multinational organizations, accept bitcoin via the blockchain technology as a payment method due to several factors, such as fewer transaction costs, faster processing time, and global reach of consumer base without the constraints of traditional banking institutions.² Blockchain considerably decreases overhead and charges by reducing bureaucracy and negligence and eliminating the need for intermediaries to authenticate transactions. Hence, blockchain technology has the potential to open up opportunities for organizations by lowering risk and compliance costs, enabling more cost-effective transactions, facilitating streamlined and reliable contract fulfillment, and boosting network transparency.

2. Eva Raquel Gonzalez-Porras, José María Martín Martín, and José Manuel Guaita Martínez. “A Critical Analysis of the Advantages Brought by Blockchain Technology to the Global Economy,” International Journal of Intellectual Property Management 9, no. 2 (2019): 173, https://doi.org/10.1504/ijipm.2019.10022011.

Higher E-Commerce Security

Since blockchain has high-security networks without the need for trusted parties, the greatest significant attribute of immutability precludes any actor from arbitrarily changing data without generating a global system alert. Asymmetrical encryption and complex technologies secure blockchain technology, providing unprecedented safety and reliability for its data and system.³ With encoding, pseudonymity, and sovereignty features, blockchains can safeguard traders’ privacy while accelerating global trade activities by guaranteeing real-time data availability to all stakeholders. As a result, trade documentation, from licensing agreements to source credentials, can be automated and accessible to all pertinent parties in origin and destination economies, facilitating cross-border validations and enhancing international commerce.

3. Neelesh Mungoli, “Deciphering the Blockchain: A Comprehensive Analysis of Bitcoin’s Evolution, Adoption, and Future Implications,” UNC Charlotte, (2023): 3, https://doi.org/10.48550/arXiv.2304.02655.

Conclusion

Blockchain and bitcoin cryptocurrency technologies are a secure fast-growing system that allows the global economy to acquire and gain the trust of stakeholders for information transfers and has revolutionized the normative status quo of several business activities. They are secure, independent, and transparent ledger technologies that have transformed financial transactions in the global economy, yielding better economic efficiency, lower business costs, and higher e-commerce security. Adopting blockchain and bitcoin as the universal financial transaction system can transform many economies worldwide.

Bibliography

Kher, Romi, Siri Terjesen, and Chen Liu. “Blockchain, Bitcoin, and Icos: A Review and Research Agenda.” Small Business Economics 56, no. 4 (2020): 1–22. https://doi.org/10.1007/s11187-019-00286-y.

Mungoli, Neelesh. “Deciphering the Blockchain: A Comprehensive Analysis of Bitcoin’s Evolution, Adoption, and Future Implications.” UNC Charlotte, (2023): 1-5. https://doi.org/10.48550/arXiv.2304.02655.

Porras-Gonzalez, Eva Raquel, José María Martín Martín, and José Manuel Guaita Martínez. “A Critical Analysis of the Advantages Brought by Blockchain Technology to the Global Economy.” International Journal of Intellectual Property Management 9, no. 2 (2019): 166–184. https://doi.org/10.1504/ijipm.2019.10022011.