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This is the second piece in a three-part series, “Cardano & international trade in Developing Countries”, a piece dedicated to understanding the influence Cardano (ADA) blockchain will have in developing countries in the future.

In the previous piece, we discussed in detail the problems faced by developing countries in the world. The high tariff rates faced during trade, technical barriers to trading, increased cost of trading and regulations are some of the problems discussed. These problems heavily affect the growth in trade in Africa, Latin America, central Asia and other developing countries. In this article we focus on the solutions Cardano is trying to solve with its Main net and how solving these issues improves general international trade.

Cardano’s tech solutions for international trade in developing countries

The three main solutions the blockchain is offering are; interoperability, scalability and sustainability in the blockchain industry.

  1. Scalability

The first and second generational blockchain technologies, such as Bitcoin and Ethereum are heavily plagued by lack of scalability issues. This problem hinders the adoption of cryptocurrencies on the global scale which is the major goal. Cardano uses the proof-of-stake consensus algorithm making the system highly scalable with ADA used as a global coin.

Solution to developing countries

For international trade to kick off on blockchain platforms, scalability is a major requirement. Trades will easily be carried out across boarders allowing traders, merchants and consumers to interact on a global level instantly. Developing countries need to focus on adopting the immutable blockchain systems such as Cardano (ADA) to improve the overall trade in these countries. Easy transfer of payments will lead to an increase in demand for goods and services and subsequently the overall production of goods.

  1. Interoperability

An increase in the overall number of currencies used in trade may hinder efficient trade. This is highly the case for most sub Saharan Africa states where international trade volumes are the lowest in the world. The major problem is obtaining foreign currency to trade as most merchants and customers find it very expensive to turn their native currencies to foreign currencies. The problem may well persist with the ever growing number of cryptocurrencies. Cardano offers a system to allow easy interactions between blockchains and their cryptocurrencies.

Solution to developing countries

The interoperability problem easily solves the expensive nature of doing business with foreign currencies. International trade market will face a boom in demand for products and services with Cardano allowing traders to uses any cryptocurrency to make purchases. Developing countries will benefit the most from an overall adoption of ADA’s interoperability feature.

  1. Sustainability

This issue is anchored on the problems facing companies in raising funds for the development costs of the blockchains. Blockchains have a big issue in successive capital raising after their initial coin offering. This stifles the overall process of development while incapacitating the coin to further improvement. Cardano is on hand to solve this process by creating a development fund that allows developers to always have capital for development. The fund is raise from a small percentage of the transaction fees paid on the blockchain.

The platform also allows voting on development proposals to better the quality put up in

Solution to developing countries

Sustainability of blockchains within the international trade industry is key to overall development of trade in developing countries. Cardano (ADA) aims at offering a totally functional network that will allow users and overall merchants of trade do business without worrying on the development process.

Using the blockchain, developers can create a sustainable and scalable network to easily raise capital that will enhance their overall trade in the international markets.

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