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Academic research on bitcoin is skyrocketing. Publications in major research journals rose 267 percent in two years, according to CoinDesk, a cryptocurrency news portal (Hileman, 2016). Magazines and institutes dedicated to the new technology mushroom across the globe, including leading global institutions such as the ‘Digital Currency Initiative’ at the MIT Media Lab. The reason for this hype is clear: we are talking about a technology that, according to Spanish bank Santander, could save banks US $15-20 billion a year from 2022 onwards – even without altering the business model. (Santander InnoVentures, Oliver Wyman and Anthemis, 2015) It is difficult to quantify what its effects might be if its potential is fully unlocked. (Pejic, 2019, P. 5)
The big cryptocurrency picture in developing countries:
Finance and information technology are growing and moving in parallel and are a significant part of our life. Nowadays the fact that we can search for and find almost anything on the internet is incredible. Also, the exponential technological developments that enable us to access all these new inventions are magnificent. The amount of data is massively increasing and time has become highly valuable from the financial perspective. Holding and processing such a huge amount of data requires significant computing power. The blockchain as a technology is a whole new level for the future of humanity. Surely, the financial sector faces significant changes. Blockchain and cryptocurrencies are moving together and slowly gaining more popularity. Over the past ten years, cryptocurrencies, with the help of cryptology and blockchain technology, appeared and opened a brand-new world. Satoshi Nakamoto and other clever and talented developers and cryptocurrency enthusiasts created a whole new level of financial playground within a short amount of time.
Despite volatility in cryptocurrency prices, fast changes, fake news, scams, crazy shitcoins (official expression for coins with no use case, no value, easy tokenomics, weak developer team etc.), and trust issues, the popularity of cryptocurrencies is expanding continuously. Finally, the governments and institutions slowly realized the potential. In 2024 we living in a time where we can hear about million-dollar NFTs (non-fungible tokens) where Artists become millionaires in a single second, staking, lending, or things like the war of two meme coins – the Shiba Inu versus Dogecoin – with Elon Musk’s tweets is part of the cryptocurrency owner’s every day and the big adaptations juts starting now with the ETF-s, Facebook, and crypto metaverse & CO.
Believe me these challenges are very present even if you haven’t heard about them yet. During the last few years, cryptocurrencies have become extensively adopted and internationally more accepted and the big run is just now coming. Several new cryptocurrency companies emerged which led to a successful innovation, however, several went bankrupt. Studies about cryptocurrencies may be booming, but they are still in the beginning phase. There are many quintessential parts of our lives where cryptocurrencies and blockchain technology could be used, and we, humanity will harvest the grapes within a few decades.
Money is not the only option, for instance, an e-voting system that can replace voting on paper; recording personal files in hospitals that are sensitive and require more privacy protection; car purchasing history with km registration against data-adulteration; or a diamond tracking system. Only our imagination can make our borders for the new use cases. So these and additional innovative applications will become more general over the coming decades, and it is expected that it will be possible for everyone to keep their identity secure and all data protected.
The Chainalysis: Global Crypto Adoption Index
Top 20 countries, based on three metrics: Total crypto activity, trading activity of non-professional users, and peer-to-peer exchange trade volume. All are weighted by purchasing power parity per capita. Countries are scored on a scale of 0 to 1. Chainalysis ascribes the rising adoption levels in emerging markets to a few key factors. For one, countries such as Kenya, Nigeria, Vietnam, and Venezuela have huge transaction volumes on peer-to-peer, or P2P, platforms when adjusted for purchasing power parity per capita and the internet-using population. Chainalysis reports that many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don’t have access to centralized exchanges. The report also says many residents of these countries turn to cryptocurrency to preserve their savings in the face of currency devaluation, as well as to send and receive remittances and carry out business transactions.
(https://www.cnbc.com/2021/08/18/new-cryptocurrency-bitcoin-user-global-map.html)
One is sure, that the fintech sector is changing continuously, daily, and the world’s financial system will become more complex in the long-term. How different or complicated will it be? In advance, it is not possible to prognosticate. There are several potentialities and expected reforms. Many individuals, companies, and governments that believe in this new technology are waiting for upcoming improvements. These developments could lead to various banking, investing, or changes in fiat money. It is not excluded that the actual fiat currencies could be replaced entirely in the long term, especially in countries where the local fiat currencies are not stable. We can clearly see from the Chainalysis 2021 Global Crypto Adoption Index that the inhabitants of developing countries found a way to money and the people in developed countries sometimes totally forget about the fact that the masses potentially hide in cryptocurrencies and what kind of power they simply neglect because it is “too exhausting to learn about it”.
As a utopic philosophy, the changes would create a white economy and eliminate all black and grey economies in the future. This result would be the most secure option since the added data in the blockchain is irreversible and cannot be deleted.
Cryptocurrency is a challenging new field to discover for every economist and IT talent. My research question grew out of a single point of thought: Not all of humanity is in such an advantageous situation as the inhabitants of the developed countries. There are many aspects as to why it is more comfortable to live in a developed country. The healthcare system is better-equipped, clean water is available, there are better subsidiaries, higher living standards, and wages, numerous suitable transportation possibilities or a more organized financial system are part of the developed countries’ everyday life. These examples are the measurable reasons as to why it is mostly easier to live in North-America or Europe. To be an inhabitant of a developed economy means ordering goods and services from the internet or transferring money anytime goes without saying.
The issues mentioned above: Banking availability, accessibility, and inflation are present in many African or Latin American countries. Taking advantage of cryptocurrencies might enable the population of developing nations to become a stronger part of the global economy. The main question in this case is, from the perspective of money, that the limited availability of banking with a high cost could be competitive enough against cheap global cryptocurrency transactions. It can be stated in advance that this issue is intricate. On one side, the inhabitants receive and spend their inflating currency on the local market, and they can afford less day by day. On the other hand, for local companies, it is a challenging task to expand and move on to the international markets. This vicious circle makes the overall economic situation in these countries more difficult.
Neither inhabitants nor companies are able to create savings and step into the international playground with the usual banking system. Banking is not a user-friendly option because of infrastructure insufficiencies, the length of international transactions
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