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The Incredible Impact of Blockchain Technology on the Economy

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The crypto market is booming once again. After a 2-year long bear market, prices are skyrocketing far and wide, with Bitcoin leading the charge. In November, Investopedia reported that prices of bitcoin rose 111% and they seem to be increasing even further.

Bitcoin has tripled in value since it raced past its previous all-time high of $20.000. This has pushed investors, retail and institutional, into a buying frenzy. Everyone is trying to buy bitcoins by any means necessary.

With that said, the impact of cryptocurrencies on the economy goes much further than just the profit opportunities they present. The blockchain technology they are based upon has managed to disrupt almost every industry known to man.

Finances, healthcare, insurances, real estate, and supply chain – blockchain has managed to render each one of these sectors more efficient and cost-friendly, to the benefit of everyone involved.

However, to understand how this is possible, we must delve a bit deeper into the characteristics of this technology. To this end, we must explain its main advantages and its use cases.

Let’s get started with a quick overview.

Introduction to blockchain technology

Blockchain was first introduced to the general public with the release of Bitcoin, way back in 2009. This decentralized distributed ledger was initially used to record and verify the transactions of the Bitcoin network. It provided us with the first decentralized digital payment system, independent from banks and governments.

This simple concept was enhanced even further in 2015 with the release of the Ethereum network. Ethereum introduced us to smart contracts, self-executing applications that execute when certain conditions are met.

This evolution of the blockchain allowed us to create our own cryptocurrencies, jumpstarting the ICO craze of 2017, and driving the prices of cryptocurrencies through the roof.


With that said, smart contracts also introduced us to dApps, which are one of the main ingredients of decentralized finance. Furthermore, they also allow us to tokenize anything of value via non-fungible-tokens on the blockchain.

As such, the decentralized nature of the blockchain and its inherent properties bring numerous benefits to today’s economic environment.

Blockchain use cases impacting the economic environment

Blockchain has seen numerous use cases emerge over the years, many of which have managed to improve the traditional financial ecosystem.

Bitcoin as the ultimate store of value

In the past year, the narrative of Bitcoin being the ultimate store of value has entered the mainstream line of thought.

You see, Bitcoin is a deflationary currency by design. Two characteristics define it as such:

  • It has a limited maximum supply od 21 million coins.
  • It undergoes a reward halving mechanism every 4 years.

As a result, Bitcoin becomes increasingly scarce over time, which increases its value. Furthermore, compared to other traditional stores of value such as gold, it’s much easier to buy, store, or transfer.

Governments have responded to the economic crisis resulting from the pandemic by injecting trillions of freshly printed FIAT money into the ecosystem. This has diluted the value of money, driving investors towards Bitcoin.

Decentralized Finance

Blockchain technology allows us to create decentralized financial products similar to those offered by traditional financial institutions. The DeFi ecosystem, allows users to access a completely decentralized ecosystem, where the only intermediary is the smart contract.

Users can enter a trustless financial system and enjoy products such as lending, staking, and interest accounts, without the hassle of opening a bank account.

In the past year, DeFi has grown by more than 5000%, which shows us that this is more than just a fad. With smart contracts blockchains being upgraded to bring faster and cheaper transactions, we can expect DeFi to grow exponentially in the following years.

Cryptocurrencies as a currency

One of the most important factors in the main adoption of cryptocurrencies is their usage as a digital currency for acquiring goods and services. The more people use crypto for daily purchases, the less volatile the market becomes.

Fortunately, this facet of cryptocurrencies is worked upon on multiple fronts, including:

  • The proliferation of stablecoins – stablecoins are cryptocurrencies that are pegged 1 to 1 to traditional money. They avoid volatility and provide a safe blockchain environment for secure, fast, and cheap transactions. Blockchain has been incredibly important for protecting bitcoins from hackers.
  • Blockchains are becoming faster – thanks to newer and improved consensus mechanisms like PoS, blockchains are able to treat an increasing number of transactions per second.
  • Payment gateways – these crypto on-ramp solutions allow merchants to seamlessly accept cryptocurrencies as payment. At the same time, they can avoid the volatility of cryptos such as Bitcoin by directly receiving FIAT.
  • PayPal and other payment processors – since March 2021, PayPal allows users to pay with crypto. Should this trend continue, the number of users spending crypto will increase immensely.

Concluding words

Only a decade after its inception, blockchain has brought the financial revolution humanity sorely needed. While cryptocurrencies aren’t going to replace the current financial system anytime soon, they provide a decentralized alternative that will allow us to improve it going further.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.smartdatacollective.com/impact-of-blockchain-technology-on-economy/

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‘SNL’ host Elon Musk takes a Saturday off from Tesla’s troubles

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By Joseph White

DETROIT (Reuters) – Elon Musk’s turn as host of this week’s “Saturday Night Live” television program will be a light-hearted, brand-building break from the pressures of running Tesla Inc and SpaceX – or land the billionaire in another bucket of hot water.

That uncertainty appears to be the point for both Musk and NBCUniversal’s <CMCSA.O> venerable comedy sketch show.

Musk has been encouraging fans and detractors to anticipate shenanigans, potentially involving the Dogecoin cryptocurrency. Musk has touted Dogecoin on his Twitter account, and the cryptocurrency’s value has soared ahead of his appearance.

“I’m a wild card, no telling what I might do,” Musk, wearing a black bandana, joked in a brief promotional video for the show alongside Saturday’s musical guest, Miley Cyrus.

“Same here,” Cyrus said. “Rules? No thanks.”

Musk has been in New York this week preparing for the appearance. A photo posted to the “Saturday Night Live” Twitter account on Wednesday showed him hunched over papers, wearing a “Nuke Mars” T-shirt. Musk has mused about using nuclear weapons to reshape the Red Planet for human habitation.

Some “SNL” cast members have expressed displeasure at the show’s decision to give its platform to one of the world’s richest people. Musk’s appearance has drawn comparisons to the show’s controversial decision in 2015 to invite Donald Trump to host as he was preparing for his presidential run.

Although it is rare for a business executive to host “SNL,” South Africa-born Musk, 49, is no stranger to pop culture or comedy.

He has appeared on “The Simpsons,” “Rick and Morty,” and “South Park,” and dates a pop star, Canadian singer Grimes. Musk’s persona helped inspire Robert Downey Jr’s portrayal of superhero Iron Man in a series of Marvel films.

His humor also shows in the names of Tesla car models S, 3, X and Y (“sexy”). He once built and sold flamethrowers to promote his tunnel venture, the Boring Company. In 2018, Musk smoked marijuana on a live web show, and later offered $420 a share – a drug reference – to take Tesla private.

While Musk has been getting ready for the cameras, Tesla has been in a rough patch.

Longtime major shareholder Baillie Gifford disclosed it had sold 41% of its Tesla shares. Police in California are investigating a fatal accident in which a Tesla crashed into an overturned truck. Documents prepared by California regulators said Tesla executives do not believe Tesla can deliver the “Full Self Driving” autonomous vehicle technology this year, contradicting Musk’s statements.

(Reporting By Joe White, Editing by Nick Zieminski)

Image Credit: Reuters

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://datafloq.com/read/snl-host-elon-musk-takes-saturday-teslas-troubles/14510

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U.S. Commerce chief cites auto chips shortage in jobs report

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WASHINGTON (Reuters) – U.S. Commerce Secretary Gina Raimondo said on Friday the semiconductor shortage was a factor in April’s jobs report that showed hiring unexpectedly slowed.

The Bureau of Labor Statistics said the auto sector shed 27,000 jobs in April as automakers were forced to cancel production shifts and furlough workers amid the chips shortage.

“We’re working very hard to get the president’s plan passed in Congress to fund a semiconductor fund. The fact of the matter is we need to get back into the business of making more chips in America. And the supply chain issues are very real,” Raimondo told MSNBC.

(Reporting by David Shepardson and Susan Heavy; Editing by Chris Reese)

Image Credit: Reuters

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Source: https://datafloq.com/read/us-commerce-chief-cites-auto-chips-shortage-jobs-report/14509

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U.S. auto part makers brace for a bumpy ride as chip shortage to intensify

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By Ankit Ajmera

(Reuters) -U.S. auto parts suppliers warned of more production cuts at major automakers as a global semiconductor chip shortage worsens before easing in the second half of the year and aiding in a partial recovery of lost sales.

The chip shortage came at an inopportune time for automakers as demand rebounded from pandemic lows due to low interest rates and consumers’ preference for personal transport amid the health crisis.

“We’ve embedded a 3% reduction in industry production to factor in what we’re anticipating and expecting as further announced downtime that hasn’t been publicly announced at this point,” Lear Corp Chief Financial Officer Jason Cardew said on Friday.

“We have line of sight on a more meaningful reduction (in production) in the second quarter than IHS Markit and others are projecting,” Cardew said.

Ford Motor Co, a major customer for Lear and peers including BorgWarner and Magna International, has said the chip shortage would halve its vehicle output in the second quarter.

Europe’s Volkswagen, another customer for the three suppliers, has said it is in “crisis mode” over the lack of badly needed automotive chips, with the shortage intensifying and hitting its profits in the second quarter.

Lear, which makes automotive seating, cut its global vehicle production forecast to a 9% rise, from up to 12% it had predicted at the beginning of the year, while also expecting second-quarter revenue to fall 9% from the first.

Auto suppliers also cautioned that the pain from the shortage could linger at least until the next year.

“We don’t expect the supply/demand imbalance to fully recover to normalized levels until 2022,” said Joseph Massaro, chief financial officer of Aptiv, a maker of advanced driver assistance systems, vehicle computers and high-voltage cabling.

Auto suppliers are also grappling with pressure on their margins from rising costs of key inputs such as steel and copper.

However, many expect to offset some of those costs as automaker customers focus on building higher margin, more profitable pickup trucks and sport utility vehicles.

“On the biggest raw material purchases, we have about 60% pass through with our customers,” BorgWarner Chief Executive Officer Frederic Lissalde said.

Still, most suppliers have raised or reaffirmed their full-year financial outlooks, thanks to the better-than-expected performance in the first quarter.

Analysts highlighted risks associated with the production outlooks from some suppliers as chip demand rises from other sectors such as enterprise, cloud and consumer electronics following speedy COVID-19 vaccinations and economies reopening.

“The question in my mind is can this (production loss) be made up later on in the year. And that’s really an unknown,” Magna Chief Financial Officer Vincent Galifi said.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)

Image Credit: Reuters

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Source: https://datafloq.com/read/us-auto-part-makers-brace-bumpy-ride-chip-shortage-intensify/14508

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Auto sector urges U.S. Congress to help fund its computer chip needs

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By David Shepardson

WASHINGTON (Reuters) -The U.S. auto industry and United Auto Workers union on Friday urged Congress to tie billions of dollars in government funding to boost semiconductor production to help fill the needs of automakers forced to slash production because of chip shortages.

Congress “should prioritize production of the semiconductors necessary to assemble vehicles here in the United States. This will ensure that motor vehicle manufacturers have a fair share of chips needed to meet consumer demand,” said the American Automotive Policy Council, Motor & Equipment Manufacturers Association and UAW on Friday in a joint statement.

Tech companies and other industries have repeatedly urged the administration not to pick “winners and losers” or attach conditions to funding to address the chip shortage.

The Bureau of Labor Statistics said the U.S. motor vehicle and parts sector lost 27,000 jobs in April.

The letter seen by Reuters said the U.S motor vehicle industry is estimated to have lost over 330,000 production units as a result of the chip shortage.

Carmakers across the world curbed output, hampering attempts to recover from the pandemic, due to a shortage of chips used in everything from computer management of engines to driver assistance systems.

The global chip shortage hit automakers hard after many canceled orders when plants were idled during the coronavirus pandemic. At the same time, demand for chips boomed from consumer electronics makers churning out premium devices for people spending more time at home.

Automakers have warned the chips crisis could last until 2022 and have pressed the U.S. government to act.

Ford Motor Co last week warned the shortage may slash second-quarter production by half and for 2021, cost it about $2.5 billion and about 1.1 million units of lost production.

President Joe Biden has proposed $50 billion to boost U.S. semiconductor production.

The letter urged the government to “include specific funding for semiconductor facilities that commit to dedicating a portion of their capacity to motor vehicle-grade chip production.”

On Friday, the National Electrical Manufacturers Association, Association of Home Appliance Manufacturers and Air-Conditioning, Heating and Refrigeration Institute urged Commerce Secretary Gina Raimondo to ensure chip supplies are “fairly allocated across industry sectors.”

The groups said they were “dismayed” Raimondo said she was seeking to prioritize automakers. “We simply ask for fairness so that the health, safety, comfort, productivity, and other needs of Americans can be met,” they wrote.

The department did not immediately comment. Raimondo told MSNBC Friday that the auto chip crisis was a factor in April’s jobs report. The auto sector shed 27,000 jobs in April.

(Reporting by David ShepardsonEditing by Chizu Nomiyama, Keith Weir and David Gregorio)

Image Credit: Reuters

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Source: https://datafloq.com/read/auto-sector-urges-us-congress-help-fund-computer-chip-needs/14507

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