Can Blockchain Technology Prevent Another Economic Downturn?

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Blockchain – Can it help stabilize the financial system?Below is a good article on blockchain technology and whether it can help alleviate some of the problems that we had with the last economic downturn.  Now, I personally have a different view on this – I believe that the next downturn will be driven by different factors – which means that the problems that will happen cannot be solved through blockchain.  That said, this is a good article and helps you think through the different issues that surround the new technology and how they help in everyday life.see more at https://kcbusinesslawgroup.com/https://www.mintdice.com/blog/could-blockchain-prevent-another-economic-crashLike any other system, the global economy is susceptible to failure at many different points. Unfortunately, due to the interconnectedness of the world, an economic crisis in one country could have disastrous consequences for other countries. This was the case during the United States economic crisis of 2008 in which the stock market crashed.Economic collapse on any scale usually happens as a result of disparities in the system that can easily be overlooked in the absence of clarity. However, blockchain technology could help avoid a financial crisis due to its transparency, security and decentralized mechanism. Cryptocurrencies such as Bitcoin are powered by this same technology which acts as a ledger for all transactions carried out on a network.The endless benefits of the technology have attracted countless investors over the years. Now, it is fast becoming an addition to every major corporation, from IBM and Mastercard to Nasdaq. Its properties are also attractive to financial institutions which constitute the industry that is most in need of the benefits it provides.The financial crisis of 2008 caused by a lack of transparency, greatly impacted various significant financial institutions and economies on a global scale. Blockchain technology affords banks full transparency, allowing them to spot such a crisis from a mile away. This way, they can take the appropriate preventive measures to ensure that it does not happen again. Banking authorities must make an effort to study the technology and better understand how it can be a force for the prevention of the next financial crisis.WHAT WAS THE 2008 ECONOMIC CRASH?The economic crash of 2008 was the worst economic disaster in the U.S. and the world since the 1929 Great Depression. The crisis caused a great recession after the cost of housing fell by 31.8%, even lower than that of the Great Depression. Although the crash occurred in 2008, the first signs were observed in 2007 when the prices of homes were too high.As a result, homeowners began to default on mortgage payments, leading to a downward economic turn which spread to the U.S. financial sector and eventually affected other countries. At the time, houses became extremely cheap, and homeowners were given loans worth up to 100% of the value of their new homes. Taking advantage of the profitable real estate sector, banks also made investments in subprime areas.The affected institutions stretched from investment banking corporations to commercial banks, insurance companies, and lenders. The situation […]

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