With $1 trillion in international business to come as a result of implementing blockchain, according to the World Economic Forum, there’s no reason not to use it right now. We, for the most part, know what blockchain can do.
When, where, and how are the questions before us when international trade is brought into focus. Nationally, governments can do what they want and can thus scale blockchain with ease.
Facing the regulations of global policies, however, stages the conflict we have. We have to realize that the only thing standing between the revolution of blockchain and international trade is policy. There is, without a doubt, a massive transformation that blockchain will lead the world into.
No matter how you look at it, as long as governments change their policies, technology will improve international trade.
Wait, What is Blockchain, Anyway?
Blockchain is a decentralized algorithm that tracks contracts, transactions, and the exchange of goods or services. What it ultimately results in is a ledger that anyone can access. The distributed ledger technology (DLT) is the foundation of each block of information that will revolutionize how international business is done. The difference in terms, which creates the “blockchain phrase,” comes from a sequence.
When a single ledger consists of multiple transactions, they create a long string or chain of information that can be accessed at will. Each link in this chain is a block, which represents an individual transaction.
The technology is invigorating society because of the encryption that’s also involved. No matter who or what the entities that have completed a purchase are, none of them can alter a completed chain.
The result is a self-governing log that tracks transactions, but that does not require any single entity in place to preserve those transactions when needed for later verification. Implementing this technology will give international relationships a significant, needed boost. Here’s a better look at the core advantages of using blockchain and how it will disrupt the global business world as we know it:
Breaking Down the Barriers of Trust
“Who me?” This is a common phrase that you might come across when international parties, who have no trust, are doing business.
Through blockchain, there is no central authority to put one’s financial fate in. The decentralization of each transaction or contract means that nations can do business without having to check and double-check the business ethics of the receiving or sending end.
Commission-less Transactions with Cryptocurrency
One of the most exciting advances for international business is its potential for lower transaction fees. In some cases, transactions will cost absolutely nothing. The reason for this is due to the use of cryptocurrency. This electronic form of payment is powered by blockchain technology.
As long as international entities convert their capital into a universal currency type, all transactions will have a standard cost.
Faster Processing
The delays we discover in international transactions come from the tools required to verify, convert, and then secure any deal. Each of these stages is quickly achieved within the blockchain.
This results in a lower cost overall, but more importantly, blockchain works at a pace that decreases the time in completing an exchange. International business industries immediately reduce their wait.
Indisputable Claims
No one would do business if they feared that their exchange couldn’t be honored at some later date in the future. Recall that every successful block in a DLT system is encrypted.
The reason for this is to eliminate the potential of fraudulence—or for one business entity to devise fake claims. Since blockchain data is indisputable, all parties can work with the confidence that they’re financially and legally protected.
Decentralizing the “Global Organization.”
Blockchain could be the single factor in making the reality of a global economy possible. The most significant conflict that international trade faces are the inevitable argument over who has or doesn’t have authority.
This is often seen in ITAR registration. Decentralized business eliminates conflict among foreign nations.
Shifting Regulations and Procedures
The core shift that our future promises are a change in regulation. Through Bitcoin, Ethereum, and other business applications, the advantages of blockchain have proven themselves.
As international business entities shape to adapt to this technology, the final stages will disrupt current regulation and policies. The reality, however, is apparent.
For the first time in global history, technology is presented to us that can unite all economies as one.
Spurring Startups and Innovative Thinkers
The next stage is to sit back and watch the new discoveries that come about. Business owners and startups are already leading us into a new world of solutions. Giving these innovators the legal boundary to improve international trade is exciting.
The work will bring different cultures together and streamline how business is achieved.
Today, only time can tell us how impactful blockchain will be in international trade.
