What Place does Crypto hold in the Fourth Industrial Revolution?
A key technological advancement in the “Fourth Industrial Revolution,” also known as “The Great Reset,” will be cryptocurrency. Blockchain has been compared to past industrial revolution-sparking technologies like the steam engine and the internet and has been dubbed a pillar of the Fourth Industrial Revolution. It has the potential to upend current corporate and economic frameworks and could be especially useful in emerging market economies.
Twenty years ago, there would have been far more resistance to the idea of cryptocurrencies than there was in 2008. That is now even more true. People seem to be more receptive to the idea now. With the soil prepared by the Fourth Industrial Revolution, a future replete with cryptocurrencies is now sprouting before our eyes.
Let’s find out how crypto can make a difference in the fourth industrial revolution.
Attack on Corruption
According to studies, the impoverished pay the largest proportion of bribes relative to their income. The impoverished in Paraguay pay 12.6% of their income in bribes, compared to high-income households, who pay 6.4%. Corruption is easier to tackle with blockchain than with conventional money due to the absence of anonymity and traceability.
For instance, if a government decides to build a road, it may keep track of every dollar’s expenditure, identify all users of the funds, and ensure that only those with the proper authorization utilize the funds for the intended purposes. Investigations into fraud and corruption that would often take months could be completed instantly. The impact of development may be increased if this kind of financial monitoring serves as a deterrent against bribery in the public sector.
To end extreme poverty and increase shared prosperity, the World Bank Group strives to ensure that economies in developing nations can take advantage of this innovation. The World Bank introduced bond-i, a new debt product powered by blockchain, in August 2018. Bond-i is the first bond in history to be formed, assigned, transferred, and maintained using blockchain throughout its life cycle.
The World Bank also attempts to use blockchain to increase supply chain transparency. Blockchain, for instance, would encourage farmers and the middlemen between farms and mills to record more information about products as they pass down the supply chain.
The Fourth Industrial Revolution can hasten growth by reducing fraud and corruption. However, because the technology is still in its infancy, significant technical and regulatory risks and hurdles will need to be resolved before it can be widely adopted.
Protection of Financial Data
Blockchain networks for Bitcoin and other cryptos guarantee security at every level. However, because Bitcoin is stackable, further security may be added on top of the blockchain. This makes Layer-2 and Bitcoin transactions secure and quick.
These advantages are precisely what the Liquid Network offers for Bitcoin transactions. Liquid functions as a one-to-one conversion process that is backed up on the Bitcoin main chain.
Users can create new assets like stablecoins and security tokens after converting their coins to liquid. They can benefit from faster transaction times and improved transaction confidentiality. From here, anyone completing and validating a transaction with Bitcoin can easily implement further security into financial management.
Getting Rid of Scalability Issues
Bitcoin’s utility has historically been hampered by the many limitations placed on cryptocurrencies, which include caps on transaction volume and speeds. That is no longer the case. Scalability issues are being resolved through improvements in Bitcoin networks and smart contracts, enabling users to conduct transactions with the same ease as a credit card.
One illustration of these scaling options is the Lightning Network. This layered blockchain infrastructure, which can execute billions of transactions per second, overcomes the restrictions of legacy systems by managing transactions off-chain while still keeping the data in a blockchain ledger. As a result, the blockchain functions as a smart contract enforcer and an authenticity authority. Such capabilities will likely support the development of smart contracts on Bitcoin networks as the fourth industrial revolution progresses.
Boosting International Trade
Finally, Bitcoin is reasserting its promise in the Fourth Industrial Revolution by enabling greater visibility and ease in global trade. Steps for deeper Bitcoin market integration include reducing global poverty, addressing scalability issues, and protecting financial data. The potential of this cryptocurrency to layer greater security and functionality means that future data-driven marketplaces will benefit greatly from adopting this technology.
The Bottom Line
There are unquestionably enormous challenges brought on by the Fourth Industrial Revolution everywhere, especially in the financial systems. Coincidentally, implementing the transition to a global, trustless, and open new economy is appropriate for Bitcoin and blockchain technology.
The current development includes a decentralized financing alternative that functions effectively in the new process and frequently gains power by continuing to be a global economy. We may observe that the currency is currently shifting toward network accessibility, which further alters the difficulties associated with the conventional image of banking and finance.
By enabling millions of smart devices to conduct frictionless and transparent financial transactions without the need for human interaction, Bitcoin can power this new economy.
Blockchain technology and the widespread use of cryptocurrencies have been made possible by Bitcoin. The potential of Bitcoin has now reached the fourth Industrial Revolution (Industry 4.0). The use of Bitcoin as decentralized finance (DeFi) in this new revolution is on the rise, and it has immense promise for a connected world economy.
