Why It’s Time to Start Talking About the New Digital Economy?

What is the digital economy? First of all, cryptocurrencies appeared in the banking and financial sectors as a means of digitization. Few people could have guessed how strongly cryptocurrencies would take root and develop in other industries and business platforms. But today, expert opinion is that cryptocurrency is a key fragment in the evolution of the New Digital Economy.

The Internet is what drives the digital economy. According to digital economy statistics, more than half of the world’s population 54.4% use the Internet, 42% of people have an account in at least one social network, and a large proportion of 68% are mobile phone users. Information is available to people anywhere in the world, in many cases for free or at a price that a person can afford, and the resources of this information are unlimited. Still not everyone knows digital economy definition.

It is not superfluous to mention that thanks to the Internet, people from all over the world can communicate with each other with incredible ease. In the course of this evolution, transactions have become much easier between consumers and entrepreneurs – traditional ways have been destroyed, which made way for new ones. One such new opportunity is blockchain technology. The digital revolution has already turned human individual life upside down and is approaching to fundamentally change the economy to which everyone is accustomed. Nine world-famous companies hold 90% of the world economy and these are Apple, Facebook, Google, Microsoft, Baidu, Alibaba, Amazon, Xiaomi and Tencent.

Information exchange

When the printing press appeared in the 15th century, the effect on society was the same as from the advent of the Internet in 1969. Thanks to these technologies, people have become connected with each other. The following innovations have changed the way you book and rent a car, apply for a loan, or even go grocery shopping every day, all of which have gone digital.

Digitised economy

Dubai and Amsterdam, like many others, are moving in the intellectual direction of developing their internal systems and each of them has its own digital currency economy. In such places, the infrastructure, having gained digital advantages, provides enterprises and buyers with good interconnection. This is made possible by extensive fiber connectivity and a good supply of internet traffic. The regions of Asia and the rest of Europe have also evolved in the digital environment – Estonia, for example, is developing the idea of ​​citizenship in a digital form. In the course of the development of the fourth industrial revolution, Germany, as a representative of one of the leaders in this sector, is also increasing its economic performance.

New digital transformation economy and blockchain technology

Thanks to the rise of bitcoin and other alternative coins, most people in the world have become aware of the existence of blockchain technology. As mentioned earlier, its original purpose was to ensure the anonymity and security of the bitcoin platform on a financial level. In the process of digital transformation, each company was able to develop its own separate ways to implement blockchain technology. There have been many applications in the economy over the years that large companies have implemented and continue to develop in their business.

Low-latency digital infrastructure is considered the door to the future of the economy. Few could have imagined for a couple of years that grocery shopping could go online, so we can expect that all the daily activities that a person still performs himself can soon be delegated to machines that will put the digital economy legal services on a new stage of evolution. Despite the fact that the implementation of the blockchain is still in its early stages, there are areas where it is already actively used – there are opinions that the Internet can be used to the maximum only with the help of blockchain technologies.

One of the important stages of technological transformation is its adoption by the masses, so it takes more time. For example, the cost of transactions can be reduced using blockchain technologies, and they can also be used as a transaction record system. If these actions are taken, the economy will be transferred to a new level. Blockchain can create new sources of influence and control. At the same time, it is important to mention that the blockchain is no longer a “breakthrough” innovation, but a fundamental one – the basis for economic and social systems.

Supply chain and blockchain

At the moment, many countries are facing supply chain disruption at home. This is because the traditional simple supply chains of decades ago have been digitally corrected as they only happened locally. With the advent of digital technologies, everything has become much more complicated due to the global growth in production. Customers and businesses often face the challenge of transparency – the true cost and condition of a product often remain unknown.

Transactions and blockchain: digital financial operations

For a long time, fintech organisations have been a few steps behind due to outdated traditional systems and processes that have been slow to adapt to the world’s rapidly evolving technologies. By incorporating blockchain into their systems, financial institutions have processes that keep pace with innovation and even lead the market. In the recent past, large organisations first invested in the study and research of blockchain technologies, and then implemented, for example, cross-currency cross-border transfer based on blockchain. Or they issued their own coin-tokens so that financial institutions could transfer payments in this currency among themselves.

Source of alternative capital and blockchain technology

Even today, some developing countries do not give their residents full access to bank loans – this is made difficult by the fact that banks need rough guarantees and insurance from individuals or start-ups, and they often simply do not have them. There exists such a thing as a UK digital economy bill, still it is not widely spread. This makes the issue of financing significant, as developing countries can benefit greatly from small and medium-sized businesses and grow from start-ups. With the advent of blockchain and access to digital technologies, this situation has changed for the better. Sometimes a virtual IBAN account is needed to receive money superfast. Loans have become easily available to entrepreneurs or individuals around the world. But this does not change the fact that this process still requires securities and somewhat extensive collateral.

Why blockchain is good and cryptocurrency is bad?

It is important to distinguish that the blockchain is a technology developed before the cryptocurrency Bitcoin, Ripple or Ethereum, and so on. And they, in turn, are a product of the blockchain. After some time, in many countries, there was an opinion that the blockchain is, by definition, a better thing than a cryptocurrency. For instanc in Asia, the India digital economy is rapidly growing.

The technology has many other products; there are many digital economy examples,so cryptocurrency remains just one of them. Some countries, such as China, are introducing regulations that restrict or even prohibit the use of cryptocurrencies. And at the same time, they are supporters of blockchain technologies because they understand that ignoring the potential of this innovation will lead to economic problems.

Why is blockchain so special for the new digital economy ?

One of the reasons is its transparency, as all parties can have access to the data, which removes the security issue. Hackers target businesses that store full customer names, their social security accounts, dates of birth, personal addresses, and so on in their databases. This situation can be corrected through the use of blockchain – all data will be encrypted and stored on secure databases from deletion, downloading, viewing, and forgery. Blockchain provides the ability to make a digital record and a personal signature for each payment. In the future, they can be checked, transferred, stored, and more easily identified.

Thanks to blockchain technologies, it is possible to transform both business and government structures on a global scale. As mentioned earlier, entire cities are already moving towards smart city status, and companies are using blockchain technology to increase efficiency, transparency, and accountability in their business. PayDo is a payment service provider that offers multiple options including a European IBAN and multi currency account. Register now and see how beneficial it is!