There are hardly any industries, technologies or ways of life that have managed to remain free of disruption from the increasing prevalence of the Coronavirus. The virus originated from China, which is the cause of the respiratory illness COVID-19. More than 680,000 people have been infected by the virus all over the world. It has led to quarantine orders, an increase in hospital visits, and lockdown in various countries and is responsible for major disruptions to the world’s economies. Even ecosystems that are inherently decentralized, such as those of cryptocurrencies and blockchain technology, are also in the process of being significantly altered. In fact, they could even be permanently reshaped due to the pandemic.
Blockchain Technology and Essential Medical Supplies
There is no doubt that the Coronavirus and the surge in health complications worldwide has put healthcare workers as well as the supply chain they depend on under incredible strain. Due to this situation, the potential of blockchain technology has found itself under the spotlight. Put simply, blockchains are decentralized databases that can be used for tracking transactions in transparent and immutable ways. Therefore, they have been heralded as solutions to the centralized and private databases that serve as the foundation of some of the most intractable industries in society, such as the healthcare industry.
Hence, it is not really surprising to know that people are considering this moment as a golden opportunity for blockchain-based and cryptocurrency solutions to provide relief to healthcare people who are in search of a streamlined route for getting medical supplies. Currently, supplies are being governed with the help of traditional tools like Google Forms and Excel Sheets. However, there is no certainty when it comes to legal contracts and individuals are simply unable to verify the capacity of factories. In addition, there has also been a breakdown of trust of the traditional payment mechanism of letters of credit and trade finance.
All these issues are creating problems for the medical supply chain. The biggest bottleneck that is preventing this market from ramping up quickly is the lack of trust. But, speed is what is required by the industry in the next few weeks in order to get some form of control over the Coronavirus. Proponents of cryptocurrency and blockchain technology are aware that it has been designed to inherently ensure trust between two parties in a transaction. This means that it could provide a major solution in this financial crisis. It is possible to leverage blockchainsfor continuously updating factories with specifications of medical products, ensuring payments to supply producers and tracking the transportation of all supplies, and more.
The U.S. has introduced a $2 trillion economic stimulus package and a blockchain solution could really come in handy for ensuring that all companies adhere to the conditions that have been outlined in such a package.
Cryptocurrencies and other Assets in the Time of Crisis
As mentioned before, blockchain technology also serves as a foundation for a class of asset which, like all others, has already been and will continue to be considerably affected by the coronavirus pandemic; cryptocurrencies. Most recently, it seems as though investors are now turning to Bitcoin, the pioneer cryptocurrency, as a solution for opting out of traditional financial systems, which are now being subjectto manipulation by central authorities. A quantitative easing package was announced by the U.S. Federal Reserve and no upper limit was announced. The purpose is to support the economy during the coronavirus crisis. After this announcement, the price of Bitcoin shot up, along with that of stock futures and gold. Immediately after the announcement, Bitcoin’s price went from $5,860 to $6,628 within an hour. It will be interesting to see if this positive correlation persists.
Thus, it can be assumed that investors are now regarding Bitcoin and other cryptocurrencies as a safety net, which is free from any centralized reactions to the coronavirus. As economies all over the world are reeling due to the coronavirus uncertainty, loss of productivity and quarantine orders, migration into cryptocurrency is definitely an indicator to watch. In these uncertain times, both cryptocurrencies as well as the blockchain technology that powers them are worthy of attention because they can play a very important role.
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