Impact of Blockchain and Cryptocurrencies During the Covid-19 Pandemic
Following the eruption of Covid-19 that caused a global standstill, modern healthcare systems are finding a challenge in dealing with abrupt health emergencies. As a result, the deadly virus continues to strike numerous regions, with data recording cases surpassing the 180 million mark.
The global economy is also crippling due to the coronavirus pandemic, forcing governments to look for advanced mechanisms to boost a nation’s development efforts. Such solutions include cryptocurrencies which represent digital versions of money.
Another additional solution is blockchain technology-an innovative advancement initially featured during the inception of Bitcoin in 2009. Essentially, the implementation of blockchain and cryptocurrencies have a significant contribution geared towards solving modern-day problems. Here’s an outlook.
Roles Played by Blockchain and Cryptocurrencies Amidst the Epidemic
The ongoing pandemic exposes various flaws within the traditional financial system, hence, putting pressure on fiat currency issuers to print and supply more money into the economy. As a result, major fiat currencies, meant to be global reserve assets, face the risk of devaluation as more money is distributed to cater to healthcare and economic needs.
Cryptocurrencies, however, bring a more convenient financial infrastructure that focuses on a fast and secure way of transacting with the help of blockchains. Below are the impactful steps that blockchain and cryptocurrencies are taking to combat the Covid-19 pandemic:
Implementation of the Track and Trace Feature
Blockchain technology plays a crucial role in enabling the track and trace feature, which builds an effective distribution network during the epidemic. In addition, blockchain Companies such as IBM are already active in the supply chain sector through its Trust Your Supplier solution.
Food industries, for instance, need quicker methods of onboarding a qualified supply team since previous methods have proven to be unsuccessful with the current disruptions. IBM’s solution handles such issues in the supply chain sector by increasing supplier onboarding and validation using a cost-effective blockchain network with minimal risks.
The traditional methods of verifying an individual’s identity are prone to errors since the processes rely on human intervention. Nonetheless, blockchains address these concerns by employing a digitized way of verifying certificates or IDs.
The application of blockchain technology in digital authentication services is visible in the United Arab Emirates, setting up a similar structure to keep workers away from public offices after the coronavirus eruption. Additionally, the UAE leverages a blockchain network to undertake credential checks for healthcare workers and safekeeping of pharmaceutical data from unauthorized hands.
The Emergence of Coronavirus Surveys
To combat the deadly virus, the Algorand Foundation launched its survey app dubbed as IReport-Covidapp. The carbon-negative platform designed this application to allow users to share any Covid-19 related information anonymously via the Algorand public blockchain.
That way, IReport-Covidapp ensures everyone’s identity is sealed to instill confidence when relaying any report or experiences with the spreading virus. As an added advantage, the app provides valuable and informative data that may be applicable when conducting medical research.
During the outbreak, large chunks of cryptocurrency donations have been made by users from across the globe. One notable contribution involves Ethereum’s co-founder Vitalik Buterin who provided 50 trillion Shiba Inu coins to an Indian Covid relief fund in May 2021.
The crypto mogul also made an additional transfer of 500 ether to the same relief fund. In response to India’s Covid-19 situation, Polygon’s founder Sandeep Nailwal introduced a relief campaign that saw participation from Vitalik, who disbursed 100 ETH and 100MKR. In March 2020, Binance exchange showcased its efforts through a Crypto Against Covid fund to accumulate $5 million.
The amount raised was digital currencies such as BNB, XRP, BUSD, and BTC. However, Crypto derivatives exchange, Bitmex, wasn’t left behind as it made a $2.5 million donation to combat the virus outbreak.
Another noble contribution emerged from the Stellar Foundation in April 2020, where it matched its offerings with the Tor Project. As a result, 20% of the total donations consisted of cryptocurrencies within no time, as revealed by the project’s fundraising director, Sarah Stevenson.
Access to Financial Services
The traditional financial system gives small and medium-sized businesses a hectic time when trying to access financial support. Business owners are left to look for alternative sources of capital since financial institutions take more extended periods to approve loans. Considering that, this fact drives entities to leverage Decentralized Finance protocols, which offer fiat loans against a user’s crypto holdings.
What’s more, the decentralized technology used on the DeFi network eliminates intermediaries and timely procedures that may delay loan approvals. Examples of lending solutions on the DeFi ecosystem include Aave, Compound, Maker, dYdX, and many more.
Introduction of a Blockchain-based Tracker
Through the Hedera Hashgraph, a DLT network for developing applications, Acer built and launched a coronavirus Hashlog tracker in February 2020. The dashboard allows users to access data concerning the virus from the CDC and WHO. Asides from that, the Hashlog tracker also analyzes and displays data based on sentiments from Twitter users, the location of tweets, and the number of tweets in a day.
The rate of crypto adoption remains uncertain; however, the covid-19 pandemic proves that blockchain and cryptocurrencies encourage an effective financial system. The crypto community is actively participating in the fight against the virus, with numerous donations taking digital currencies.
On the other hand, blockchain solutions provide cutting-edge technology that promotes security and transparency of data during these trying times. In the end, governments, health practitioners, and the public can have hope in managing the global crisis as everyone leverages responsive technological advancements.