Blockchain and crypto coin technology experts answer: What impact has the COVID-19 outbreak had on the industry?
Who could have imagined a year ago how different our lives would be in just 12 months? Last November will undoubtedly remain a significant point in human history – the moment when it all began. Although „patient zero“ has not yet been confirmed – if it ever will be – we now know that it all began in China on November 17, 2019, when the first patient presented symptoms of a new coronavirus disease called COVID-19, according to the South China Morning Post with references to government data.
In January 2020, the city of Wuhan, in central China, suffered the massive expansion of the COVID-19 epidemic, and „41 hospitalised patients with laboratory-confirmed cases were identified,“ according to a publication in The Lancet. Just two months later, in March, the World Health Organization declared COVID-19 a global pandemic. One by one, governments around the world closed their national borders, suspended public events and banned gatherings of people. The conversation unearthed two terms, rarely used before, that have now been declared the words of the year 2020 by the British Collins Dictionary: „quarantine“ and „social distancing“.
It is hard to imagine which spheres of our lives have not been affected by these dramatic and tragic events, with the number of confirmed global cases exceeding 55 million.
Nevertheless, the current COVID-19 crisis has also had a positive impact on the world. European conservatism, which has long been dependent on the traditional financial system, was challenged as the pandemic forced Europeans to move to cashless payments and cryptosystems. Some say that it has even underpinned the widespread adoption of commercial solutions based on cryptosystems and DLTs around the world by changing people’s understanding of money.
Specifically, the COVID-19 outbreak has boosted Bitcoin’s safe haven narrative (BTC) as central banks print $15 trillion in stimulus in an attempt to alleviate the effects of the pandemic on world economies. Amid rising inflation rates, people are turning to Bitcoin as the next inflation hedge.
Meanwhile, in the name of public health, governments are initiating COVID-19 monitoring programmes, raising serious concerns about privacy violations and the squeeze of centralisation in the process. Without stopping there, governments have also taken another step in the erosion of civil autonomy through the development of digital central bank currencies, initiatives that have been boosted globally due to the COVID-19 crisis. While experts see the solution for safeguarding privacy in decentralised technologies, the issue of over-promised decentralisation remains open.
However, the coronavirus outbreak significantly changed everyone’s lives, creating the new normality we now live for. However, despite all the challenges we have faced economically, politically and socially since the beginning of the year, there is no doubt that the pandemic is driving digital innovation and accelerating mankind’s 20 years of technological development.
It is too early to know when it will all end, as the COVID-19 continues to gain speed. Now, a year after Wuhan’s first case, Cointelegraph contacted experts in Blockchain technology and in the crypto space to hear their views on how the coronavirus pandemic has impacted the industry.
What impact has the COVID-19 pandemic outbreak had on the crypto space?
Asheesh Birla, CEO of RippleNet:
„COVID-19 exacerbated the inequalities for many people who do not have access to banking or have no access at all and highlighted the gaps we have in our financial infrastructure, where those who have less pay more – on average the cost of sending $200 is $14. Despite the pandemic, people still need to send money to their family and friends abroad. As a result, remittances have continued to increase in some of the largest corridors. In the US-Mexico corridor, for example, there has been a significant increase in remittances since the beginning of the pandemic, with Mexico receiving $4.02 billion from abroad in March 2020, a 36 per cent increase over March 2019. Ripple can help reduce the cost of remittance payments by using crypto-currency and Blockchain technology to make cross-border payments faster, cheaper and more reliable. Bitso, one of Mexico’s main exchanges, is operating about 10% of total US remittance flows to Mexico through Ripple technology that uses XRP as a bridge currency. In tandem, there is more interest in the space than ever before with big companies like PayPal and Square betting on crypto currencies, pushing them into the conventional world. The validation of these companies has contributed to a greater interest in the usefulness of cryptomonies, and their ability to better serve their companies and customers.
Da Hongfei, founder of Neo, founder and CEO of Onchain:
„From my perspective, COVID-19 did not have a negative impact on the Blockchain technology space – if anything, it drove greater demand for innovation and adoption of Blockchain technology. By revealing the weaknesses of our current paradigm, COVID-19 also highlighted the urgent need for Blockchain technology. For example, COVID-19 demonstrated the failures of the current centralised supply chain system, revealing its fragility and lack of agility. By leveraging Blockchain technology, we can build a decentralized supply chain that can quickly determine and then distribute products based on the needs of a specific area. Similarly, Blockchain technology could also be deployed to more effectively track and locate infection cases, while protecting patient privacy. In fact, we are already seeing this shift to the Blockchain at a time of uncertainty – more and more institutions and individuals are adopting Bitcoin, as it is considered a stable and major asset in these difficult times. In any case, I believe that the COVID-19 firmly demonstrated the need not only for Blockchain technology, but also for a truly digital and intelligent economy. In the future, we must break with our current paradigm to embrace a truly digital and globalised world that has the flexibility, agility and efficiency to flourish and prosper.
Mike Belshe, CEO of BitGo
„The economic turmoil of our pandemic times is creating changes in attitudes and a greater interest in digital assets. The COVID-19 has significantly accelerated the adoption of and interest in crypto-currency around the world. It is important to note that the determined effort of companies like ours to build a secure and compliant base is enabling the influx of new investors in cryptomonies, including large institutional companies such as investment banks and large custodians. Fortunately, we are able to meet the moment as a result of all the hard work we have put into building a new monetary system from scratch these past 10 years. Before COVID-19, most people didn’t pay as much attention to the economic factors that make Bitcoin relevant. Frankly, they didn’t need to. If you’re making a profit in the stock market, you keep what you know, and you don’t have to worry about learning something new. But now all that has changed with the pandemic: fiscal policy around the world is causing governments to print money wildly, reducing its value and causing inflation. Investors now understand that they have to get ahead of this. They are asking many more questions and are understanding the basis of Bitcoin’s thesis: that an asset shortage is important. Digital assets are a hedge against inflation and a secure store of value. Investment leaders such as Paul Tudor Jones, Stanley Druckemiller and Bill Miller are proving that Bitcoin is now an important part of any portfolio. This year has brought a lot of uncertainty, but people feel empowered to educate themselves about what they need to do to get involved with cryptomonies. All the building blocks are in place – legal compliance, custody, liquidity, portfolio management and wallet technology, as well as tax tools – giving investors the tools they need to invest in digital assets.
Preston Byrne, Partner at Anderson Kill, P.C.:
„The most tangible impact of the COVID-19 outbreak on crypto-currencies was the validation of crypto-currency’s central thesis that our societies are fragile and that mathematics, not men, is likely to form a stronger foundation for future social organisation. The reliance of virtually all major economies on fiscal and monetary stimulus to keep afloat reinforced and broadened public perceptions of the weakness of traditional institutions and fiat money. Crypts‘ are a diverse set of beliefs and areas of interest ranging from hard money, to resistance to censorship, to secure communications. These technologies are a unique response to the social and business adaptation to the stress factors that have dominated the headlines over the past year, whether they are talking about ‚money printers go brr‘, the continuing exodus of big technologies or the widespread social unrest in cities.
Tim Draper, venture capitalist and leading investor at Bitcoin:
„Many people, trapped in their homes, finally made time to put together a Bitcoin portfolio, but the real impact of Covid was that the closure was devastating for many families, and when the government printed $13 billion to try and put a blindfold on it, it made it clear that you’d rather be holding Bitcoin than these diluted and dilutable dollars. I hope the ‚fiat duty‘ now includes the possession of some Bitcoin as flood cover and manipulation of government currency.“