Why Blockchain Tech is Big News
Nov 6, 2021
It’s no secret that businesses today face a myriad of considerable challenges: Inefficient bureaucratic processes, high fees, user data protection, international trade regulation, to speak of only a few.
There is however one technology that offers at least some respite from this tidal wave of hurdles! You guessed it: Blockchain. Having been working within the industry now for over six years, our team here at MEX Digital has seen some incredible opportunities to improve the way businesses operate. So in this post, we’re going to highlight some of our favourites.
One of the most common ways we’ve seen this technology impact businesses and ambitious entrepreneurs is through the ability to raise capital. This is most commonly done through “Initial Coin Offerings”, or ICOs.
Anyone in the crypto industry would remember the craze of 2017 when just about every single entrepreneur tried an ICO, but there’s a reason for that: They’re remarkably easy!
Technology like the Ethereum blockchain makes it simple to mint your own token, and sell it in exchange for cryptocurrencies such as Bitcoin or others. Without Ethereum’s platform, those thousands of ICOs would never have happened, and today, in 2021, we wouldn’t have projects like PolkaDot, Binance, EOS or even Stratis. And that’s just to name a few.
Now of course, there were scams galore, and today it’s become a little more challenging due to regulatory oversight - but that’s important to protect the everyday consumer. These days, more common forms of blockchain-based capital raising are IEOs and IDOs: Initial Exchange Offerings and Initial DEX Offerings (on a decentralised exchange).
Using these formats, entrepreneurs can reach millions of potential investors, and raise capital in a far easier way than trying to convince a bank manager or VC fund to partner with them. And with more responsible regulation, we’re seeing responsible entrepreneurs with solid projects. Without blockchain tech, IEOs, IDOs, and even ICOs would not be possible today.
Privacy and Protection
Considering most of the interactions between customers and businesses based online are controlled by usernames and passwords stored in centralized platforms, there are major concerns regarding personal identity and user data management. Hackers can access and misuse data stored on these platforms, using it for identity theft and worse; credit card fraud.
The trouble with the centralisation of data storage is that it is protected by a single point of entry. Meaning if a hacker can gain access to that single entry point, they have everything. Blockchain technology distributes this entry point across hundreds of nodes, meaning hackers would need to hack every single node, instead of just one point.
Public blockchains like Ethereum, IOTA, EOS, Cardano among others make it extremely hard to penetrate the encrypted data due to the way that their protocols are distributed. In addition to the distribution, their encryption methods are some of the most secure in the world. Bitcoin’s SHA256 encryption algorithm was developed by the USA’s department of defense, now imagine that algorithm multiplied across thousands of nodes and you have a whole new level of securing your data.
Storing user data on blockchain databases is going to become increasingly common in coming years, and due to their open source design, they’re already remarkably affordable. This will make it much cheaper and increase confidence for users utilising corporate services online.
Blockchain tech has made cross-border trade more accessible than ever. Satoshi Nakamoto’s vision of a peer-to-peer digital currency for the internet has proven to be incredibly robust and markedly trustworthy. Since launch in 2009, Bitcoin has been successfully used for trillions of dollars of trade across international borders - and because there is no limitation to jurisdiction when it comes to the internet, there is no such limitation for Bitcoin and other cryptocurrencies.
Blockchains like Ripple, Ethereum, Litecoin and of course Bitcoin have made it supremely easy to transfer value between borders, and businesses are using them en masse. At present, it is estimated that over $400 billion of transfers are made every single day, and all without having to worry about Swift codes, bank documentation, and confirmation times.
Thanks to the make up of blockchain infrastructure, transferring value between wallets is extremely cheap. Depending on the design of the blockchain, fees can vary from $40 per transaction right down to less than 1c. Ethereum’s Proof of Work algorithm makes for a higher cost, but it’s a fixed one - so $10 billion in USD Tether could effectively be transferred for $40 (at current GAS fees). Whereas the same transaction at even 0.05% would cost $5 million with a traditional bank.
Ripple’s blockchain infrastructure has been designed in a way to be remarkably affordable, making transactions less than one tenth of a cent! Businesses like Xago have partnered with Ripple to make international trade on the XRP network substantially more affordable, which is reducing the barrier to entry for businesses looking to enter international trade.
All in all, these are some of the more exciting ways that blockchain technology has made business easier in the international economy. And when you consider that the technology is only twelve years old, there is still an infinite world of possibilities as it develops and evolves. MEX Digital is committed to innovation, and we’re proud to offer some of the most groundbreaking blockchain tokens on our platform.
Always remember: Crypto trading is extremely risky due to the volatile nature of cryptocurrencies, you should never risk more than you are willing to lose