In March 2020, COVID-19 was declared by the World Health Organization(WHO) to be a pandemic. Just over six months after that declaration, there have been almost 33 million cases of the disease worldwide and nearly 1 million deaths. While most of the stories from the pandemic involve its astronomical cost in terms of human life and suffering, the disease has also revealed a number of problems in our global economic infrastructure. A surprising number of these weaknesses might be addressed, or at least reduced, with blockchain technology.
How covid-19 is hitting the blockchain
Many industries have collapsed, while others re-establish after the outbreak that caused their businesses to go down. However, blockchain and cryptocurrency experienced small impact on its establishment due to the crush partly because it is a digital system. However, man as the company’s essential resource, their mass deaths from covid-19 has resulted in a loss of profit. Therefore, this paper has highlighted how covid-19 is hitting the blockchain and cryptocurrency.
1. The Cryptocurrency Scheme Is Doing Better Than Before
Covid-19 outbreak has caused adverse effects in the market industries globally. This has led to many businesses shutting down. In this regard, many people have lost their jobs. All these challenges have created attention to investors keeping an eye on ways of re-establishing their economy. Many people around the globe have shown interest in digital currencies. It is believed to be a better way of curbing the rampant spread of the virus. People prefer using digital currencies to avoid handling hard cash. This has made the cryptocurrency market to grow as compared to other economic sectors.
2. There Will Be an Increment in Use of Blockchain
Many people are now taking a look at this technology to respond to the ongoing covid-19 pandemic. A considerable number of people worldwide have been associating themselves with blockchain technology yearly, making it grow in many ways. Blockchain has made trading with currency possible for investors because it is transparent, secure, reliable, and time-saving. Additionally, many industries and other sectors are considering investing in the blockchain and cryptocurrency. There is an argument that the health industry should start using blockchain as a more natural way of fighting the pandemic of covid-19. When this comes into effect, blockchain use will increase across the world.
3. Covid-19 Will Effect Use of Cashless Across the Word
Many countries across the world have been shunning the use of hard cash in the market. People started paying for their goods using credit cards two decades ago. This was followed by the introduction of digital currency systems across the world. In its early stages, the system experienced resistance from different countries because many societies were used to the old form of business transactions. However, it was received in most developed nations. Many banks considered a transition towards making their payments in digital way.
This, in turn, experienced the use of cash going down in percentage a year after another.
Covid-19 accelerates the use of cashless money across the world. Research made by a health organization shows that the virus is transmitted through the handling of cash. Therefore, people have been advised to shun the use of cash to avoid the spread of covid-19. This has made those countries that encouraged the use of cash to turn into a cashless society.
However, some people believe that coronavirus is not transmitted through cash handling. Despite this, they are turning towards the use of digital currency due to environmental influence.
4. Fraud Resulting in Lack of Trust
Covid-19 led to many people losing jobs resulting in starvation. Some relied on previous investments, although this could not serve them throughout the covid-19 outbreak. People devised different ways of getting money, some using illegal means. Fraud has been experienced in the blockchain and cryptocurrency. Hackers have made their way into the industry during the exchanges. Investors have been left with questions to the industry over fraud attacks. Blockchain and cryptocurrency are experiencing a hard time looking for ways to regain trust from their customers.
5. Changes in The Industry
Every time the market is affected, there must be changes on how to run the services. Does this have an impact on the industry as well as the investor? Blockchain and cryptocurrency are adjusting to the new environment. This is vital for any industry that wants to boost the services offered to the customer. However, it may cost the customer a long time to adjust to the changes, influencing the profit experienced in the industry. Changes come with a cost.
6. Failure to Meet the Target
Blockchain and cryptocurrency have experienced a sudden drop in profits as a result of the covid-19 pandemic. The strategies that were put in place have been inconvenienced, leading to the failure of achieving goals. In turn, the industry has resorted to looking for the fastest methods of improving the sector to meet its goals through a different time schedule.
This means that the industry should go back to the table and draft new policies. In this covid-19 period, this is an essential step that has to be taken. However, this will cost blockchain and cryptocurrency in different ways, including expenses and time.
Covid-19 is having adverse effects on the social, political, and economic sectors. Many industries are encountering losses as they plan to recover from the harsh effects of the pandemic. The pandemic has also hit blockchain and cryptocurrency. As a result, the public has been advised to avoid handling hard cash, and many are adopting the use of digital currencies. However, in this paper, we found that the industry is affected in a negative way as well as positive.
Blockchain tech and the pandemic
Blockchain-based solutions to the informational gaps and delays are already being put into place by a number of the largest global companies. Similarly, supply-side resiliency and adaptability are being improved with blockchain technology as well. Because blockchain technology is perhaps uniquely suited to validating, securing and transmitting data, it is ideal to resolve problems that have sometimes plagued multi-party transactions, particularly when those arrangements cross national borders.
In China alone, as many as 20 blockchain-based applications designed to address COVID-19 were launched in the first two weeks of February 2020. Those new applications included online screening to securely manage health records and a platform to support the proper management and allocation of relief supplies to areas hardest hit.
Many countries have used the technology to monitor and trace the activity of infected and exposed individuals. One such effort, reported in Barron’s, described the use of bracelets to enforce quarantine programs for foreign visitors entering the region.
In the United States, there are a wide number of ways in which blockchain technology might improve the national response to COVID-19 and to strengthen our economic ecosystem long term. For example, blockchain platforms can improve reliability, transparency and security of data, helping to resolve complaints that data has been manipulated or its accuracy compromised in other ways. It could help track the spread of the virus, providing consistent, accurate and essentially real-time information.
Blockchain growth during covid-19 in the finance sector
During 2020, blockchain will continue to grow in the finance sector, ahead of other industries. Applications such as food tracking, goods authentication, and storage of sensitive data involve significant regulatory work to tie real-world objects to their tokenized equivalents.
The most significant breakthrough in this area that we’ll see is the application of blockchain’s fundamental technology to sovereign currencies. China might well attempt an experiment in a model city like Shenzhen this year, and Sweden is another country interested in this possibility.
There will be greater consolidation in the blockchain space. Many companies weren’t prepared for the crisis, whether in terms of infrastructure or their financial arrangements. Well-prepared startups will be accelerated as a result.
Cryptocurrencies will become increasingly used as non-correlated investment options. If you look at the recent market crisis precipitated by the coronavirus, cryptocurrencies and the stock market were only correlated for a little over one week. Bitcoin’s drop was primarily a liquidity issue — gold had the same behavior in that period — and it quickly became apparent that the currency was oversold. The markets are once again uncorrelated. This will drive further interest in blockchain-based financial instruments.
It’s quite possible that, by the end of the year, we may even see what mass adoption will look like. The kind of services and tools that will be used widely in the future will likely already be available this year.
With people staying home like never before, more online gaming will certainly happen globally at scale. This will result in the rise of in-game digital currency usage and related blockchain technology.