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- 1 Coinbase report shows crypto payments are cheaper and faster than traditional methods
- 2 Blockchain networks facilitate transactions in minutes with negligible fees
- 3 Stablecoins help citizens in countries with struggling economies preserve wealth
A new report from the leading crypto exchange Coinbase spotlights the immense potential of blockchain technology to transform payments and finance. Analyzing consumer survey data and usage trends, the report makes a compelling case for the cost and efficiency benefits unlocked by crypto.
The Allure of Faster and Cheaper Transactions
Coinbase partnered with research firm The Block to survey Americans about their satisfaction with existing payment systems. 71% wanted cheaper transactions, 70% faster payments, and 63% increased accessibility.
Delays with methods like bank transfers, credit cards, and services like PayPal contrast sharply with seamless crypto payments enabled by blockchain networks. Where bank wires can incur $50 fees and take days to process, crypto transaction fees are just pennies and confirmed in minutes or less.
According to the report, crypto payments are, on average, 5,000 times cheaper and over 400,000 times faster than legacy systems. These advantages have a profoundly positive impact on financial inclusion and everyday transactions.
Under the Hood – How Blockchain Enables Speed and Savings
To understand why blockchain technology offers such enormous efficiencies, it helps to examine some key structural differences from conventional finance:
- Decentralization – No single entity controls blockchain networks. Transactions occur directly between participants through automated protocols. Removing institutional middlemen cuts overhead costs dramatically.
- 24/7 Operations – Cryptocurrency markets never sleep, enabling round-the-clock payments without wait times for back-office settlement. Transactions confirm in minutes no matter when sent.
- Automated Execution – Smart contracts execute transactions per preset coding without human intervention. This automation provides instantaneous settlement while reducing errors and miscommunications.
Together these attributes enable blockchain networks to facilitate exchanges far more swiftly and cheaply than traditional banking and payments infrastructure with its legacy databases and manual processes. Global, always-on decentralization unlocks the next evolution of finance.
Bridging Global Economic Divides
For financially struggling countries, decentralized payments can provide economic relief by preserving wealth. The report analyzes how citizens in Nigeria and Argentina leverage crypto amid rampant inflation.
As national currencies like the Argentine Peso and Nigerian Naira suffer extreme devaluation from economic mismanagement, crypto helps shield people’s buying power. Trading volume on exchanges soars in these countries as interest peaks during currency crises.
Stablecoins like USDT, USDC, and DAI play an instrumental role by maintaining pegged values. It shields against volatility while still enabling blockchain’s transaction efficiencies. Crypto provides accessible global finance amid unreliable domestic infrastructure.
How Inflation Catalyzes Crypto Adoption
Rampant inflation destroys savings and erodes household buying power. When national currencies drastically lose value annually, citizens literally witness their wealth disappear before their eyes.
Fleeing to alternative stores of value becomes imperative under such conditions. As Coinbase’s report revealed, crypto exchange volumes soared in Argentina and Nigeria amid periods of severe inflation and currency depreciation.
Without the ability to adequately preserve hard-earned income in fiat money, digitally scarce cryptocurrencies and stablecoins tied to assets like the U.S. dollar provide refuge. For billions living under corrupt regimes and crumbling economic conditions, crypto could provide economic salvation.
Driving Financial Access Through Blockchain
In addition to stability and payments, decentralized networks expand access to other financial services. The report found that processing loans on DeFi platforms is 144 times quicker than traditional lending.
By connecting peers directly for lending and borrowing with automated smart contracts, DeFi makes credit more inclusive for the underbanked. Nearly 2 billion people lack adequate financial access, hindering development and perpetuating poverty.
Other key financial applications enhanced through blockchain include:
- Remittances – Crypto transfers enable fast, low-cost cross-border wage payments for migrant workers supporting families abroad.
- Insurance – Parametric coverage dispensed automatically when crisis triggers occur increases protection for vulnerable groups.
- Investing – Tokenization removes exclusive barriers to alternative assets like private equity, venture capital, and real estate.
As these expansive financial use cases gain traction in parallel with payment adoption, blockchain technology promises to bank the unbanked incrementally. Crypto’s open infrastructure has effectively zero barriers to entry compared to the exclusivity of legacy finance. Just having an internet connection opens the door to this parallel financial realm with its own native assets and expanding functionality.
Conclusion
The Coinbase report builds a persuasive case for blockchain technology’s advantages over status quo systems in efficiency, affordability, and accessibility. Crypto payments are magnitudes cheaper and quicker, while also able to circumvent restrictions from struggling financial regimes.
Just as the internet expanded information access, decentralized global finance networks hold revolutionary potential to drive societal empowerment through economic enfranchisement. Wider integration into everyday transactions seems inevitable, given the unambiguous benefits.
With 2+ billion people worldwide lacking meaningful access to critical financial services, blockchain technology can unlock unprecedented inclusion and empowerment. As digital assets become interwoven into the lives of the disadvantaged, we inch closer to a more equitably prosperous global economy.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
