How Blockchain Can Drive Globalization

One of the most important consequences due to the development of blockchain technology is the way in which it can increase globalization, i.e. the process of interaction and integration of people, companies and governments all over the world.

How cryptocurrency transactions can affect globalization

A fundamental aspect of the global economy is the circulation of goods and services. Currencies are used to facilitate these dynamics, but issues such as high inflation rates and currency manipulation techniques are raising many concerns about the validity of traditional currencies.

The stability of cryptocurrencies could make them the ideal tool to facilitate the movement of goods and services. However, some government officials disagree, arguing that the speed and congestion of the cryptocurrency network prevents them from being used as a tool for globalization, but many new projects are starting to counter these claims.

Impact on international transactions

Currently, international money transfers are primarily made by banks, which charge an additional fee for processing payments. In addition, the operation can take several days, depending on its complexity.

The online conversion of cryptocurrency through transactions is, however, a very simple process, which involves practically no cost. This is the reason why in many cases Bitcoin (BTC) is already used as the most convenient way to send money abroad.

Cryptocurrency exchanges are often considered an excellent tool for cryptocurrency conversions as well. Cointelegraph recently reported that the volume of these exchanges has touched nearly USD 10 billion in Bitcoin.

Can Blockchain contribute to the globalization of markets?

Globalization is happening at an incredible rate thanks to the flow of digital information. Analysis firm McKinsey & Company recently published a report stating that "digital flows – which were practically non-existent only 15 years ago – now have a greater impact on GDP growth than historical trade in goods." The flow of information is not limited by national borders or policies, and this has become even more evident with the spread of blockchain technology.

The most difficult aspect of managing cross-border transfers is ensuring compliance with the legal regulations of the different countries, each of which has its own unique set of rules and legal regulations that make it difficult to conduct business between different countries.

Moreover, blockchain technology, by its nature, is not tied to any nation: as a peer-to-peer technology, the transfer of resources on the blockchain can be managed freely beyond borders.

The development of blockchain technology allows small businesses to become international companies. In effect, the blockchain erases the boundaries between large and small businesses, offering both the opportunity to address the global community.