Without a doubt, coronavirus is the central theme of the last weeks and the coming months. The rapid spread of the virus from Wuhan has plunged the world into a pandemic. Most countries have introduced strict quarantine measures to protect their population from the virus.
Of course, with such a disruption in all international operations, the world economy is entering a prolonged recession. World banks have not yet figured out how to deal with the imminent crisis, which could strike harder than the global financial crisis of 2007-2008.
As a result, governments and banks are opening up to any initiatives that will help to overcome the crisis. Cryptocurrencies, which have long been the dark horse of the global financial system, are coming to the forefront of this battle due to their decentralized nature.
It is not yet clear whether cryptocurrencies will become a possible way out amid the global crisis. However, today we can see specific examples of how cryptocurrencies become a working solution in different sectors.
Cryptocurrency for financial transactions
Online financial operations are now suffering because of high demand. People complain about frequent malfunctions since the load on digital banking has increased dramatically. This is testing the banks’ capacity since not all of them can deal with it. This situation is understandable since the restrictions imposed by many countries affect the efficiency of banks in general, and this also applies to online banking services.
That is why people around the world are increasingly turning their eyes to cryptocurrencies. Being a decentralized and entirely digital payment method, cryptocurrency transactions can be the right solution for the period of total quarantine. Even though Bitcoin remains volatile, many agree that cryptocurrency is less exposed to risks associated with the crisis.
The online gambling sector is one example of how this solution can work fine. Having received a large influx of new users because of the global quarantine, classic online casinos are forced to deal with constant delays in payments due to the overall burden on digital banking. Thus, many operators are now switching to cryptocurrencies, which have long become a part of the online gambling market. When it comes to the actual use of crypto in gambling, in the Bitcoin review by Rhyker, it is stated that the amount of bets in cryptocurrency is now growing.
This short example allows us to say firmly, that if the crisis persists longer than a couple of months, cryptocurrency transactions can crowd out traditional online banking in other areas too.
Today, special funds are being created to support health care workers and other people who are fighting against coronavirus. However, considering the example of China that introduced the Charity Law back in 2016, we can see that the system isn’t perfect. Tracking all donations and transactions, as well as where exactly all the money from non-commercial funds goes, is impossible.
For example, Bill Gates and his wife donated more than $100 million to conduct research on a coronavirus vaccine. Chinese e-commerce giant Alibaba launched a $144 million fund to purchase medicine for the victims in Wuhan. This money goes to funds, and indeed can be allocated to buy the necessary equipment and medicine. However, after that, the trace of goods can be lost. In fact, the Chinese government acknowledged that some of the purchased drugs were lost. A similar situation was observed in China during the 2008 Wenchuan earthquake when the Red Cross organization lost millions of dollars allocated to help the victims.
Another problem is that newspapers and media are the only way to disclose information about where and how money from the funds was spent. This isn’t enough.
Syren Johnstone, an expert from the University of Hong Kong, claims that blockchain technology could make all transactions traceable. All cryptocurrency contributions can be traced from the donor to the final recipient, thereby avoiding loss in transit. It seems like the Chinese government supports this position. Even before the crisis, in November 2019, it promised to launch a national blockchain-powered tracking system for vaccines in the first quarter of 2020. However, this hasn’t happened so far.
To date, China has already overcome the active phase of the crisis. But we want to believe that other states will support the idea of a decentralized service for donations to the healthcare system.
Cryptocurrency mining and vaccines
Mining capacities can indeed drive the development of a vaccine against coronavirus. Various sources suggest that it will take a year to develop a vaccine. Johnson & Johnson has recently announced that their work on the development of the vaccine is going well and a test-vaccine will be ready by September. However, the vaccine for widespread use should be expected at the beginning of 2021.
Nevertheless, cryptocurrency miners around the world are teaming up to speed up the development process. The largest Ethereum miner in the United States, CoreWeave, announced that they are going to combine the power of more than 6,000 computers to create a decentralized super-computer aimed at developing a vaccine.
This idea has not yet been universally implemented but is already supported by independent miners around the world. In the long run, such support could significantly speed up the vaccine development process.
What does the future hold?
Coronavirus is a challenge for the entire humanity. Today, like never before, people must unite in the fight against a common invisible enemy. Although the crypto community often opposes cooperation with centralized social organizations and authorities, they now come together in a shared urge to defeat the virus.
The cryptocurrency industry players and the community will certainly take an active part in the fight against COVID-19. The examples described above are only a small portion of measures that are being taken by the united crypto community. Looking at such good news, the confidence that we’ll win the fight against this virus is growing.
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