Regardless of the several obstacles to growth in the way of blockchain, crypto has proven to be truly resilient. Even those times crypto fall, it has always found a way to get back up besides being stronger and more efficient than ever. This is why lots of enthusiasts and advocates have boldly declared and classified Bitcoin as a “safe-haven” asset?
Although, due to worldwide pandemic going on currently, which also caused a major worldwide economic crisis, besides it’s because of this worldwide economic crisis, people could be able to identify some significant defects in the blockchain system.
Based on Gartner’s predictions, by 2030, blockchain will develop about $ 3.1 billion in value, an important amount of which will result from the advancement in the effectiveness of present operating models and business processes. Nevertheless, the main value will be revealed in how the blockchain will enable a paradigm shift when societies, companies, customers, and everyone interact, create, and share value.
Everything looks feasible because blockchain offers trust and reliance in an environment that, in principle, does not enable the participants of a network, who probably might not fully know each other, to share value in digital environments, abolishing the need for authority.
It eventually leads to blockchain having a significant influence on IT environments and practically all those that share information or that contain digitally manageable information. Well, this is the case of supply chains and the essential traceability of various products.
Blockchain Recovery Strategies
1. Re-Risking The Economy
The economic rescue plans pay more attention to saving small and medium-sized enterprises and securing low-income and middle-class families and other people who are not financially comfortable.
It will be great if the governments wouldn’t only ponder on protecting people. It’s also important that they should motivate them to take new risks. For the past few years, economic development has been driven, in a big part, by those innovators who “think outside the box” and take the opportunity to release a new business or support a new business. Risk-taking is undoubtedly a virtue that requires to be well encouraged and well appreciated.
These recent events caused by the pandemic will have a massive effect on people’s readiness to be an entrepreneur. For instance, the end of COVID-19 will not be easily seen, unlike the obvious endings of wars or natural disasters that occurred in the past.
Currently, an identical feeling of hope may probably seem difficult to imagine. Whatever illusions that things will instantly go back to the way it was before have vanished as everyone has been advised us that social distancing is going to be observed for a long time.
Under these conditions, it will be challenging but crucial to get people to take risks once again.
2. xFrom Protection and Paternalism to Empowerment and Re-Risking
Recently, an angel investor Jason Calacanis came up with a wonderful idea in a podcast, in that podcast, he talked about making great intelligent investment decisions. Although, he meant risky but smart, and he also of high confidence that everyone must adopt this kind of behavior. He also foretells that the “democratization of private company investing” in the future.
People can safely put their money to work and invest directly or indirectly in companies whose shares are traded in public and open markets, like NASDAQ and the New York Stock Exchange. You don’t need to be a professional investor or fulfill certain requirements concerning income, net worth, or professional experience. Anyone can go online and purchase in publicly listed companies.
But this approach isn’t enough if we truly desire to reconstruct the economy. Even though you believe that stock markets will rebound in the post-coronavirus economy, it will still be difficult for the general public ( individual and retail investors) to make money in the public markets.
Although, private company investing is made available only to the accredited investors. Institutional investors, doctors, lawyers, dentists (DLD) investors, and other rich investors accomplish the restrictive investment requirements. These legal rules and regulations are created to secure the less rich by not allowing them to take any risk in less clear private markets.
This seems inaccurate. But of course, equity-based crowdfunding initiatives enable investors to place bets and buy into private companies, irrespective of their net worth or income. Although the investment chances are still limited and subject to regulatory restrictions.
If we wish to reconstruct the economy in the post-coronavirus era, we have to design more equal opportunities for prosperity and wealth for everybody. Enabling both accredited and non-accredited investors to invest and trade in private companies can secure and empower the low-income and middle classes and help to de-risk the economy.
Yes, making bets in the private markets is undoubtedly very risky, and not all investments will be successful. Still, we must be aware that non-accredited investors might probably be “sophisticated” and requiring any protection. Well, for some types of investments. They may possess the skills and experience to make effective investment decisions in fast-rising start-up companies at an early stage.
3. New Opportunities for an Old Technology
It’s at this point blockchain is being effectively utilized. For the past few years, the blockchain has been one of the top trendy techs. Blockchain was trendy and has attracted lots of attention from organizations, governments, businesses, capital markets, and researchers. It’s rare to see a problem that blockchain and its related technologies couldn’t provide solutions.
But around 2019, all the hype about it reduced a bit, but the interest never vanished.
Lots of the previous blockchain initiatives desired to begin a revolution. The notion was to challenge or interrupt existing centralized institutions and systems. This was ideological and political; it was indeed a blockchain revolution.
For instance, the initial decentralized autonomous organization (The DAO) that released around 2016. This was a blockchain-based effort to arrange a new style company, a software run corporation without managers, CEO, or directors. While this project had the great goal of recommending more fundamental forms of democracy and equality into corporate systems, presently, it seems excessively naïve to know that decentralized technology could neglect about two hundred years of economic history and transform the world.
But presently, things might be different. Solutions that use blockchain technology in more moderate, still, practical ways, can become beneficial in this coronavirus era.
Well, the notion of introducing blockchain technology to improve investments in private companies isn’t new. Distributed ledgers that keep a full record of the ownership and transaction history of the securities developed trust in the private market and assisted in streamlining the investment process.
Bringing a blockchain-based trading and settlement infrastructure makes meaning in the underdeveloped markets for private company shares. These markets aren’t controlled by centralized, server-based clearing, and settlement platforms, which are the state of things in the established public and open markets.
The application of smart contracts such as computer protocols can further automate the investments and trade of private company shares without requiring intermediaries, thereby importantly decreasing time, costs, and mistakes.
The issue with the present approaches is that they concentrate on programming existing compliance rules into smart contract protocols, assuring that only accredited investors can invest in private companies.
Conclusion (Post-pandemic Blockchain Thunder)
Well, it is challenging to guarantee that one of these approaches, as all of them are projections of an industry that transforms every time. Whether blockchain becomes a solution to the problems experienced by the traditional financial system and the de-globalization caused by Coronavirus, a valued tool of authoritarian governments hoping to widen their surveillance abilities or the power of the underground shadow markets, is ambiguous.
The present pandemic will surely enhance the adoption of blockchain technology and cryptocurrencies, either legal or illegal, and attract several new faces.
Investors who preferred to remove crypto from their collection, clearly acted without caution, as any possible course of events will deliver blockchain as a worthy and significant technology in the future.
Several governments across the globe are already aware of that. They are currently discharging sustainable frameworks for regulatory sandboxes by facilitating different crypto operations, such as trading activities, without offering safety, which enhances the significance of the most authentic exchanges such as Coinbase or Bitstamp.
Although, the fraudulent activity is a major side effect of a decentralized economy, and protective measures are an aspect that still requires to be enhanced. But, in the history of little crypto exchanges such as HitBTC have never been hacked, which implies that blockchain is not yet prepared to have its place at the center of the worldwide market because of an absence of trust from people.