“At its core, [cryptocurrency] is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things” – Peter Diamandis
Depending on what you believe (and who you’ve talked to), that word will likely excite you about the world’s (and maybe your own) financial future or you are repulsed by even the thought of yet another person telling you to put your money in that “Bitcoin” thing.
Regardless of your current view point, however, the truth is that whether or not the price of Bitcoin falls to zero or rises to the tens of thousands, cryptocurrencies, and the technology they are built upon, are rapidly revolutionizing the global economy. One of the most profound ways is cryptocurrency’s innate ability to support globalisation.
The purpose of this article is to explore how cryptocurrency supports globalisation, how that applies to the Commonwealth e-commerce marketplace, and provide you a thorough understanding of why we’ve created our own cryptocurrency here at InventoryClub.
The What And How of Cryptocurrency
To understand how cryptocurrency is helping to revolutionize the Commonwealth e-commerce market, let’s first understand what it is and what it does. Simply put, cryptocurrency is a digital currency that relies on cryptography to secure the creation of new currency and transfer of funds. It is designed to be a secure and, in many cases, anonymous medium of exchange.
It is transferred directly from peer to peer, eliminating the need for banks, financial institution, or government mediation. All transactions are recorded on an immutable digital public ledger called a blockchain. Cryptography is used to secure the currency and verify the transfer of transactions.
Unlike conventional currency, a cryptocurrency has no tangible form. It exists only in the blockchain network. Also, the supply of a cryptocurrency is not controlled by a central bank.
In order to hold cryptocurrency, you need a digital wallet. The system works through transactions, where funds are transferred from one digital wallet to another for the payment of goods and services or the transfer of assets.
Let’s take a step-by-step look at the process of a transaction:
- The person looking to transfer funds initiates a transaction request
- The request is shared across all the nodes in the blockchain network
- The network uses the user status and transaction details to validate the transaction
- Once validated, the transaction undergoes verification by referring to the contracts (between the sender and receiver) and other records such as the currency ownership
- Once a transaction is verified, a new block of data is created and entered into the ledger
- The ledger entry is permanent and cannot be modified or deleted
This entire process is completely automated (no third party intermediaries needed) and takes place instantly.
Cryptocurrency and Globalisation
Cryptocurrency has the power to drive globalisation forward at an unprecedented rate. There are various ways in which cryptocurrency and the blockchain work to support globalisation, and in particular the Commonwealth e-commerce market.
Banking The Unbanked
Something that often goes unnoticed to the people in highly developed economies is the population of the world without access to a simple banking account. These people are called the unbanked, and across the globe their number is estimated to be into the billions.
According to World Bank, there are more than 2 billion unbanked people, mostly from low and middle income developing economies but also from high-income nations, who are unable to access the convenience and security of using a bank account for their financial needs.
The Commonwealth is home to a large number of the unbanked, with a large percentage being in African and Asian countries.
Cryptocurrency, along with blockchain, provide the capacity to change that. With cryptocurrency and blockchain, the unbanked will be able to have clear identifying information, one of the biggest challenges they face when dealing with traditional banks. This identity will be a digital one that can be used for everything from banking to asset verification.
Through cryptocurrency, they are also able to create their own secure and convenient alternative financial system that can be used for remittance as well as savings and building a portfolio of financial assets.
Cryptocurrency and the blockchain enable the unbanked to get involved with digital transactions and the digital economy, expanding the global e-commerce marketplace through digital consumption.
Faster And Cheaper Transfer of Funds
Conventional methods (money transfers, wires, etc.) of transferring funds can take a lot of time (sometimes days) to complete. The time it can take for validating and verifying transfer transactions, particularly international ones, can sometimes take as long as a week. It’s really the amount of intermediaries necessary that cause the transfer of funds internationally to be so costly, both financially and time-wise.
Cryptocurrencies take a transaction that would traditionally need days to a week and shorten it to instantly. The blockchain allows funds to not only be transferred instantly, but securely and transparently as well.
By using cryptocurrencies and the blockchain to transfer funds, particularly internationally, you eliminate the need for third party intermediaries. Transfers not only happen much faster, they are much cheaper as well.
Safer And More Transparent e-Commerce Transactions
A major proponent of globalisation is e-commerce. E-commerce allows online merchants to enjoy a global reach by crossing cultural and national boundaries. It allows online merchants to engage a consumer in ways similar to a face-to-face experience, but on a far more extensive, global scale.
With all of this opportunity, however, comes a challenge. One of the primary concerns in e-commerce is facilitating safe, transparent transactions. Cryptocurrency offers a reliable solution to providing safer and more transparent e-commerce transactions. This not only applies for the consumer’s benefit, but for the e-commerce platform as well.
Cryptography and the blockchain are used to secure and verify the transfer of funds/assets as well as transaction records. With this higher level of immutable record keeping and security, e-commerce platforms are more easily able to safely expand into previously underserved marketplaces around the world and provide these consumers an access to goods previously unavailable.
For example, in the case of the InventoryClub e-commerce marketplace Commwea, the platform has been built for the specific purpose of serving the Commonwealth marketplace by providing consumers access to goods and merchants a platform for them to sell their goods. Commwea operates from a blockchain foundation and uses blockchain technology to facilitate safe, secure and transparent transactions between merchants and consumers.
VNT Tokens: The Currency Of The InventoryClub Marketplace
In relation to having an effective e-commerce marketplace, cryptocurrency offers many benefits. And it’s these benefits of security, transparency, banking the unbanked, etc. that have lead us to creating our own cryptocurrency.
Creating our own cryptocurrency to be used within the InventoryClub marketplace provides powerful benefits to our members and merchants. The primary reason we’ve created the Ventory (VNT) token is to provide a currency to power the proposals marketplace. VNT is the currency used to control the flow of funds in and out of the InventoryClub marketplace.
VNT tokens are built on the Stellar Network and benefit from built-in token abilities and built-in decentralized exchange along with liquidity through existing remittance providers. In addition to creating and managing our own secure token, we use Stellar to process VNT payments and exchange the tokens for fiat currency in the same transaction cost-effectively.
To hold your VNT tokens we’ve created the digital wallet VNTPay. You can use VNTPay to add or withdraw funds. When adding VNT you choose either XLM (Stellar Lumens), BTC (Bitcoin), ETH (Ethereum), or a fiat currency of your choice to make the purchase. When withdrawing VNT from your wallet, you can choose XLM, BTC, ETH or a fiat currency of your choice to complete the transaction. For each you are presented with the current exchange rate and value, which is then automatically converted in your wallet to proceed with the adding or withdrawal of funds.
Using VNT, merchants and members located within the Commonwealth, and across the globe, will have a singular currency to use for proposal transactions. This comes with many advantages, with the main benefits being enhanced security and cheaper, faster transactions. VNT is also what allows the power of our blockchain tech to create a highly secure and seamless marketplace experience for you. All of this means we’ve designed VNT tokens to serve you by being fast and highly secure for usage in our Commonwealth e-commerece ecosystem.
Now, as far as how exactly the proposal marketplace works? Well, that’s another blog post for another time.
Interested in learning more about how InventoryClub can help you take advantage of the tremendous financial opportunity that is happening right now in the Commonwealth? Check out our whitepaper.