India is poised to grow its economy by a very ambitious margin. It has a young and very educated population that is helping it to wedge itself into the global economy. As millions are raised up out of the poverty level and enter the middle class, the economy is starting to see a sort of snowball effect.
Something that could help the economy in India reach its ambitious target is to use the blockchain. We’re not just talking about trading Bitcoin and researching the safest online Bitcoin wallet but the actual technology used that makes cryptocurrencies possible.
In this article, we will go over some of the ways that the blockchain can help grow India’s economy.
How does the Blockchain work?
The technology behind the blockchain is founded upon the concept of a total trustless and decentralized platform. What that means is that there is no need for third party authentication for contracts as they can’t be changed.
And it is decentralized as there is no one particular server, but rather a chain of nodes found on thousands or even millions of computers. This makes it almost impossible to hack as a hacker would have to enter all of the computers that have a copy of the blockchain on their computer.
The possibilities are endless as a result of the characteristics of the blockchain. Smart contracts don’t need to be verified by third parties as they are immutable so time and money is saved in the process. This is a huge advantage for the financial sector which is likely to be the area that sees the biggest benefits for the economy of the world’s largest democracy.
It doesn’t stop there, though as many industries stand to benefit from this technology.
Where India’s economy stands now?
For the last few years leading up to 2020, India’s economy was growing at a rate faster than any other economy in the world. Generally around 6% to 8% but slowed down considerably the first quarter of this year.
It is now growing at a rate slightly above 2% but this is still currently better than many other economies due to the impact of Covid-19 on the world.
There are forecasts of a slight improvement this year rather than another slowdown.
How the Blockchain can be applied?
The most obvious area of growth for India is in banking. Roughly 10% of the world’s unbanked population is in India. Since an economy needs people with bank accounts so they can save money and also have a means of making payments, this can help grow the economy.
The blockchain and Bitcoin in India is a great replacement for people that don’t have access to banking or don’t wish to. It is easy for them to use and they pay far less in fees so they end up keeping more money in their pocket.
Another area with a lot of potential is from money transfers. India has a high number of workers all over the world who send money back to families left behind. These transfers previously were expensive and involved a lot of paperwork. With the blockchain, it is a much easier process and comes with far fewer fees.
There is no foreign currency conversion to deal with and no need for a third party like a bank to get involved which significantly lowers the fees. This means more money in the recipients pocket to add to the economy.