17 April 2024

Currencies for the new normal

| The European |

StormGain CEO Alex Althausen explains why building a portfolio of cryptocurrencies with real-world applications is a very smart move in these uncertain times

With the coronavirus pandemic causing market turmoil and the global economy almost certainly heading towards a period of recession, you could be forgiven for adopting a largely pessimistic outlook. The truth is that the current health crisis is like nothing we’ve seen for over a century, and it is precisely this uncertainty and unpredictability that is hurting the global economy more than anything else.

The biggest surprise of the pandemic’s economic contagion has been its absolute pervasiveness. Stocks and most commodities were always going to decline amid near-zero levels of trade, but many had held high hopes for cryptocurrencies. In the months leading up to the outbreak, digital assets had been touted by experts as a potential new safe haven – described by some as millennials’ gold. But what if the reason for crypto’s failure was an over-emphasis on store-of-value to the detriment of utility? After all, digital currencies have so much more going for them than gold. They’re much more scalable, more portable and can even be used for specific applications. In times like these, perhaps we should be looking at crypto’s value in terms of what it can actually do for us instead of purely as a speculative instrument.

As we find ourselves staring down the barrel of a virus-induced recession, what better time to think about how blockchain technology could facilitate remote trade during future lockdowns?

Smart contracts

There is no denying that smart contract technology (most famously embodied in Ethereum) removes many concerns surrounding doing business virtually. Since smart contracts are designed in such a way that both parties must have fulfilled their side of the bargain before receiving their respective consideration, they enable businesses and freelancers to provide goods and services remotely with confidence.

Whether it’s for procurement, paying suppliers or receiving payments from end-clients, smart contract architecture simplifies the whole process while all but totally eliminating the need for human interaction.
It means the wheels of your business can keep turning as you release funds, products and services, without doubting for a second that your counterparties will meet their contractual obligations.

Potential of IoT technology 

The latest estimates see the Internet of Things (IoT) market worth $3tn a year by 2026, which represents a huge pie for well-placed businesses to carve up between themselves. And following the development of Tangle – a novel cryptographic protocol favoured by IOTA, the biggest IoT-based coin on the market – the future just got even brighter.

With its decentralised, dynamic nature, crypto-technology is uniquely suitable for the IoT network. Devices interconnected via blockchain will be able to operate faster and more securely, independently handling everything from utilities usage and maintenance, all the way to royalties collection and copyright protection. The benefits of this in a quarantine situation are obvious as the algorithms ensure everything keeps ticking over without the need for human intervention.

ID verification

The World Bank estimates that more than 1.1 billion people have no valid form of identity documentation. This is clearly a problem at a time when an increasing number of companies, banks and financial institutions are under pressure to introduce ever stricter KYC (Know Your Customer) initiatives. And the total lack of policy coordination between various governments and jurisdictions only adds to the scale of the challenge.

If future lockdowns are to occur, even more of our trade will likely be virtual and the ability to perform remote ID checks will thus be crucial. Some companies, such as IBM, Cisco and Microsoft have been quick to adapt and are already using blockchain tech to verify users. The ideal coin for this kind of application would be regulation-friendly Chinese project NEO. In addition to smart contracts and fast transactions, NEO’s architecture also includes a unique digital identity for each user.

Keep calm and carry on

Despite the current market pessimism, the expert consensus is that crypto can look forward to impressive growth over the coming years. However, what will ultimately decide the true value of individual coins will be utility. It makes sense, after all. Once the novelty of anything wears off, people begin to pay more attention to what real added value it brings to their lives. Whether you’re talking about smart contracts, IoT interconnectivity or digital transparency, users need their coins to actually do something.

Out of the top altcoins with practical uses, Ethereum, IOTA and NEO are already among the most popular. Nowadays, there are numerous platforms selling these cryptocurrencies and more, although sometimes it’s hard to sort the wheat from the chaff. But if you’d like to put together a nice portfolio of coins with real-world applications, StormGain could be just the ticket. With 23 crypto pairs available to trade on their user-friendly, ultra-secure platform, you’re sure to find what you’re looking for. And unlike other brokers who punish buy and hold investors with account maintenance fees, StormGain pays you 10% annual interest on all your crypto deposits. We can help you to start building a better future today. ν

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