Blockchain and global supply

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Globalization has engendered a complex network of international trade and business.

For cryptocurrency to meet expectations, it is clear that it must represent a breakthrough and create value in international business.

Only then will cryptocurrency represent true change on a global scale.

Current trade barriers have a high cost for companies.

International business involves a logistical challenge and global trade is dominated by multinational companies that have a global approach to operations, production and markets.

This means that supply chains Ecuador Mobile Number List commonly span multiple countries. Even relatively simple business functions, such as payments and shipments of product components, can cause logistical problems.

That's not counting additional barriers , such as the different import and export regulations that multinational companies have to comply with throughout their global supply chains.

Right now, international business is being held back by the following factors:

high banking fees
currency conversion rates
human errors in documentation
incorrect storage of documents
slow payments and document transfer
All of these factors require multinational corporations to expand their team to deal with them and keep supply chains running smoothly.

Needless to say, this additional cost burdens international businesses and erodes profit margins.

According to the World Economic Forum's Global Enabling Trade Report , reducing barriers affecting global supply chains could increase global trade by up to 15% and increase global GDP by 5%.

This equates to an increase of around $3 billion in global economic output per year.

How can cryptocurrency help offset supply chain costs?
Cryptocurrency has given us two main technologies to streamline supply chains .

These are:

Blockchain
It is a digital ledger that records information securely, publicly and with an indisputable timestamp.

The problem with traditional data storage methods is that they usually fail at one point.

History has shown that even multinationals are not immune from having their data properties compromised and having to deal with increasing regulatory pressure.

Bitcoin, since its inception in 2008, has never had its ledger compromised. In fact, Bitcoin's bit register secures over a hundred billion dollars of value right now.

Smart Contracts
Or smart contracts. This type of contract allows the distribution and collection of digital or digitized assets.

There is no need for a middleman at all.

The easiest way to think of smart contracts is that they are similar to vending machines.

If a certain condition is met, a predetermined result is executed. With a vending machine, if you put 1 euro into the machine, you get a can of coke.

Smart contracts act in a similar way and can be customized to meet business needs.

Theoretically, anything of value can be traded through a smart contract.
               


Transaction inefficiencies in global supply chains
There have been no major updates to the transaction infrastructure for decades.

Balloon payments can take days to validate; Expensive currency exchange is often required to settle operational expenses across the global supply chain, and banking fees can be exorbitant.

The key point is that the current global infrastructure for transferring value has a lot of room for improvement and this is something that cryptocurrencies can help with.