How Blockchain changed the way money works?

What do you think the effects of Bitcoin technology will be? Don Tapscott, the CEO of the Tapscott Group, says that blockchains, the technology behind cryptocurrencies, could change the world economy. Tapscott talks with McKinsey's Rik Kirkland about the possible benefits of blockchains for working together and keeping track of transactions. Blockchains are a type of open-source, distributed database that uses cutting-edge cryptography.

Every day, our global financial system deals with trillions of dollars, which helps billions of people worldwide. But the system has some flaws that lead to higher costs because of fees and delays, more trouble for everyone because of unnecessary paperwork and a higher risk of fraud and other bad behavior.

More specifically, economic crime affects 45% of financial intermediaries, such as payment networks, stock exchanges, and money transfer services, compared to 37% of the economy. It shouldn't be a surprise that rising regulatory costs have been one of the biggest worries in the banking industry. All of this adds to costs, which the public pays for.

But let's look into the crystal ball and think about how it might affect our everyday lives in the future. The pros are too optimistic and have goals that are too high.

Secure Government Communications

Cryptocurrency has a lot of clear benefits and almost none, so the government will eventually accept it and spread it to all countries. Soon, most countries will let you use some cryptocurrency on their territory.

Blockchain-Based Authentication

Shortly, our personal information will almost certainly be kept on the Blockchain. Because of this, a global standard for protecting the identity that gives you more privacy and authority would come into being. Companies are already working on it. With these crypto-identities, everything about us would be saved, from our medical records to our work history.

The Protocols of a Trillion Dollars

In their quest to become trillion-dollar businesses, companies are pushing the economy to heights never seen before. As a result of Blockchains and protocols cutting transaction and data costs by a lot, trillion-dollar Blockchain protocols, like these companies, would start to appear.

Blockchain-based global commerce

It is a good option when two people or groups want to send and receive money for almost nothing. In the future, blockchain technology will make it possible to do business all over the world, making it faster, safer, and more open.

Considerable increases in people's average quality of life

It would be a side effect of all the better processes and procedures that Blockchain makes possible. People would be able to use better financial services more often. Getting rid of intermediaries and letting money flow freely would be very helpful to developing countries. There would be more resources for people worldwide, which would help billions of people.

These are the few possible bright spots in Blockchain's future. We haven't even scratched the surface of the potential for change in a few areas. It will affect a lot of people.

Future people will look back on our time as the Renaissance when everything got better because knowledge was shared with more people.

Three ways in which Blockchain is changing lives

The ways that people pay for things worldwide are changing right in front of our eyes.

The Bretton Woods Agreement, signed in 1944, was a vital part of the modern financial system. After World War II, it was important for money to move quickly and safely across the "western world." To make this idea work, the developing countries all agreed on the rules for their economic and financial exchanges under the monetary management system. It significantly improved the gold-backed money system, which made sending money across oceans too slow and inefficient.

The US dollar was the most crucial currency in the fiat monetary system. It made sending money and goods across borders much easier and cheaper.

Nearly 80 years later, more people worldwide are willing to do business with each other, not just in North America and Europe. The system wasn't made to handle these kinds of transactions.

It should be as easy to send money as it is to send a text message.

It is hard and expensive to send money to an Indian developer through a bank account in Germany. Aside from the fact that the paperwork for the SWIFT system takes a lot of time, an Indian bank does not allow IBAN wire transfers. The transaction fee is at least $20, plus a percentage of the amount transferred in conversion fees. The money may take a few days to clear the recipient's account. Use a global fintech's third-party payment system and follow their thorough Know Your Customer (KYC) protocol. It is the safest way to pay.

It is common to stop transfers of more than $1,000 and send a questionnaire to the person receiving the money. The person who gets paid is at the mercy of the authorities and must explain why he should get born.

Digital money can be stored on any phone

People with skills from worldwide want to be paid in a cryptocurrency backed by the US dollar. Up to 38% of Web3 freelancers would instead be paid in cryptocurrencies like Bitcoin and Ethereum than in other ways. One reason is that local fiat currencies often have higher inflation rates and less buying power than the US dollar. When Iran's official inflation rate goes over 36%, as it did in 2020, cryptocurrencies like bitcoin are needed to protect buying power.

Conclusion

Because of the Internet, the size of the world has shrunk. As of economic globalization, companies can now find skilled workers from all over the world. It lets billions of people join a globally connected economy for the first time. Built on top of the internet, blockchain technology makes it possible for digital assets to be moved quickly, cheaply, and around the world. They are making it possible to participate in the global economy and earn more in ways that weren't possible before, even without a traditional bank account.