There is a continuous growth seen in the world economy, coming because of the digital transformation of all things across the globe. The meaning of a digital age is not the integration of the internet into all activities, rather it is the use of the latest technology to keep up in a better way with the developments in the world.
The world economy because of the incessant development in technology is witnessing an unparalleled growth, but the question is that what is the digital economy?
Digital economy stands for the economic activity that takes place as a consequence of billions of people using the means of technology, devices or the internet to connect, communicate, market, sell to enhance the process of business growth. The digital economy is actively dependent on hyper-connectivity which means that the interconnectedness among individuals, companies and machines can be a result of the use of the internet, cellular technology and the internet of things (IoT).
The digital economy is transforming the methods of conventional idea implementation and the architecture of businesses. the use of digital means is also bringing a major change in the way firms interact with one another and how the consumers of these company products used to avail themselves of the services, information and goods provided by them.
Today when the technology is still on the path of growth, the integration of blockchain is aimed to give a boost to the means of digital economy used in the world. Blockchain, as one of the latest technologies present today can completely transform the way the digital economy is producing results for the world.
The survival and growth of any organization are intrinsically dependent on the company’s ability to beat the rivals in competition and create a place in the market among peers by bringing talent, ideas and capital into performance. The influx of internet in the past few decades has brought an enormous decline in the cost of communication and transaction, there emerged new platforms that have delivered goods and services at an unprecedented speed. This led to the new participants in the digital world to take advantage from the technology of blockchain to break loose from the bounds of the pre-existing business methods and enter into the world of transformed business applications.
The reason that the successful techniques were able to achieve the status of the winner was their ability to rise above the level of other competitors and show the level of efficiency which wasn’t displayed by anyone else. The same online reputation and presence resulted in many companies’ making a mark in the global marketplace where individuals along with products and services effectively came to display themselves like never before. This enabled the users to properly curate and work towards the security of transactions, this new development in markets making an online presence set the world to receive returns that have highly benefitted businesses under the umbrella of digitization.
The same wave of digitalization seems to be taking great prints of blockchain technology and cryptocurrencies into the primary digital applications. This new system will still maintain that intermediaries add a positive value to transactions, however, they will be required to play a different kind of role. The use of blockchain will provide an unparalleled opportunity to many established participants, that can take help from it to up their game in business.
A New Way to Scale a Global Platform
The comprehension of the basic idea of transformation that is brought to the world through the implementation of blockchain technology is a case of Bitcoin. The currency has often been criticized for not having the potential to match the prevalent methods of payment or meet the requirements of the financial systems, but it has remained incredibly successful in adhering to the cause it was designed for. The primary cause of designing a system like this was to give the world a network which doesn’t necessarily need an expensive middleman to process the transaction. Cryptography coupled with game theory works in a way which enables the bitcoin network to generate a consensus regarding the activity taking place in the blockchain after consistent breaks. The mining of bitcoin and cryptography is an arduous process and is often condemned by many forces to be a drainer of energy, however, the same process is known for its cheap cost and a theft-free method of the transaction too. Bitcoin has an inherent ability to process fund transfer without an additional cost attached to it. Moreover, it doesn’t typically breach the confidence as the transacting parties enjoy full liberty when making the decision and have a choice of keeping the entire business private and the transaction safe yet traceable.
The financial markets that allow crypto-tokens, like Ethereum are representative of a system which is similar to spot market in decentralized setup, but the same system can imitate a more intricate form of governance in a conventional setup.
Crypto-tokens along with blockchain work together to reduce cost in two primary places, the point where a transaction cost is verified also ensures that its recorded on the blockchain, with the cost of networking noticed too. Apart from this, a market to function requires features like the verification of individuals, firms, goods and services that are involved in the transaction, so everything can be verified and audited easily, following a transaction. But, where the entire process depends on laborious activity and takes the involvement of a third party as mandatory for the market security reasons. The implementation of this process can easily take place on a distributed ledger. However, the features of time-stamping and immutability present in blockchain weren’t the basic features of the technology, yet they make it the most suitable and cheaper among all other technologies that are present in the market.
The architectural design that is inherent in the cryptocurrencies is entrenched in the use of the token to trigger the growth, operations, and security of the platform. The Bitcoin token can push the growth of an entire system, where everyone is allowed to create a distinct and exclusive application with the underlying protocol without seeking permission from an intermediary or a network manager. In order to develop consensus, the users can make use of incentives coupled with the agreement on a massive global scale to optimize the scope that an online community in a conventional setting can achieve.
The term ‘Nexus of Contracts’ has been used since the past three decades, which is also valid for crypto-tokens that are a step in the search of a systematic form which is not at all geographically bound and has the capacity to utilize resources in an efficient manner. This new method gives spot market the efficiency to perform in a more complex form of governance and also enables its use within an organization.
Blockchain technology is playing a vital role in the growth of the digital economy in the current world. The integration of blockchain with the information present in the digital world is aiming to transform the way organizations make use of technology. Blockchain, in an ideal setting, is going to enable cybersecurity, the growth of digitization, the incentive for organizations and more. The automation of information and preferences enables the development of an ecosystem, that goes par the mere ability of a human mind and manifest in the building of blockchain technology, giving a push to talent and ideas that have not been imagined or used previously. The blockchain is definitely beyond the application of bitcoin or cryptocurrency and holds a great potential to add to the digital economy through various means.