By Peter Chawaga
There are hardly any technologies, industries or ways of life that have remained free of disruption from the surging prevalence of coronavirus. The virus, which causes the respiratory illness COVID-19 and has infected some 350,000 people worldwide already, has prompted quarantine orders, an influx of hospital visits and major disruptions to the world’s economies.
Even inherently decentralized ecosystems, like those of blockchain technology and cryptocurrencies, are being significantly altered — perhaps even permanently reshaped — by the epidemic.
Blockchain Technology and Much-Needed Medical Supplies
While coronavirus and the worldwide surge in health complications has put an incredible strain on healthcare workers and the supply chains they rely on, this moment has also put an undeniable spotlight on the potential of blockchain technology. Blockchains, decentralized databases that can track transactions in immutable and transparent ways, have been heralded as solutions to the private and centralized databases that undergird some of our society’s more intractable industries — particularly, the healthcare industry.
So, it shouldn’t be a surprise that some are pointing to this moment as a chance for blockchain-based solutions to provide relief to those in need of a streamlined route to medical supplies.
“Traditional tools of Excel Sheets and Google Forms are currently being used to govern supplies, with legal contracts being uncertain, inability of individuals to fly to verify factories’ capacity and breakdown of trust of the trade finance and letters of credit traditional payment mechanism,” Forbes reported of the current issues facing the medical supply chain. “Lack of trust is the biggest bottleneck preventing this market ramping up quicker, and speed is of the essence in the next few weeks.”
As its proponents know, blockchain technology is designed to inherently offer trust between transaction parties. As such, it may offer a solution to the current crisis.
As Forbes highlighted, blockchains may be leveraged to continuously update factories with medical product specifications, ensure payments to supply producers and track the transportation of these supplies, among other things.
“As the U.S. Congress explores a $2 trillion economic stimulus package, a blockchain solution could also help ensure companies adhere to conditions set in such a package,” per Forbes.
Cryptocurrencies and Traditional Assets in a Time of Crisis
Blockchain technology also undergirds an asset class that, like all others, has been and will continue to be significantly affected by the coronavirus epidemic: cryptocurrencies. Most recently, it appears that investors are turning to bitcoin as a way to opt out of the traditional financial systems that are now being manipulated by central authorities.
“Bitcoin’s … price shot up along with gold and stock futures after the U.S. Federal Reserve announced a quantitative easing package with no upper limit to support the economy amid the coronavirus crisis,” CoinDesk reported. “Immediately after the … announcement, bitcoin jumped from $5,860 to $6,628 in an hour.”
It can be inferred that investors see bitcoin as a safety net that is free from centralized reactions to coronavirus.
“Essentially, the Fed now stands ready to expand its bond purchases as required. The central bank’s balance sheet hit a record $4.7 trillion last week,” according to CoinDesk. “Bitcoin’s move higher along with gold is likely to revise the safe-haven narrative but it will be interesting to see if the positive correlation persists.”
As economies around the world continue to reel in the face of coronavirus uncertainty, quarantine orders and loss of productivity, migration into cryptocurrencies will be an indicator to watch. Through both its potential use in traditional supply chains and as the backbone of cryptocurrencies, blockchain technology is proving to be worthy of attention in these uncertain times.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.