Blockchain Technology and Globalization – TheNews.Asia


Why the blockchain industry must globalize: what is at stake?

We could look back in a few hundred years and see this current industrial revolution as a result of the Internet, just as the first industrial revolution was the result of Colombian exchange. At its center is an information revolution, after all, where profit stands for scientific knowledge and forms of technical knowledge.[1] Blockchain technology does not theoretically need the Internet to work, but it certainly exists because of the Internet and in practical use Internet or at least a closed internet connection is required. The necessities and practical bases of blockchain technology are significant because they remind us how civilization intends to build on its previous successes to overcome their predecessors. With the weakening of weaker technologies and practices, new and more powerful take their place to perform tasks with greater efficiency and effectiveness. As for the Internet, blockchain technology can be the most effective improvement the world needs.

Efficiency, profits and trust are at stake. The world is becoming undoubtedly more globalized where the dominant predominant economic system is based on capitalism. Capitalism demands ever faster returns on investment and a shorter distance between the investor and the investment.[2] Blockchain technology can offer the ends of capitalism with a faster and more efficient push to a completely globalized world where the maximum number of people has access to information, trade and trust.


The importance of trusting

The first and perhaps the most important component that is at stake with regard to globalization is trust. Fukuyama describes trust as social capital when used in an economic sense. His comparison between companies with high social capital, such as the United States and Japan, and companies with low social capital such as China and France[3] become obsolete if we consider blockchain technology as an element of trust between the parties. Through intelligent contracts and immutable block records, unauthorized blockchains remove many of the company's internal barriers and companies that meet when they try to make deals with each other.

The record printed on the blocks can not be changed by one or more computers. All of this, but eliminates the likelihood of moral hazards and reduces asymmetric information because the data is completely transparent. The asymmetry of information and moral hazards are the main deterrents for companies trying to tap into unexplored markets or dealing with low-credit economies that were not available before but are now available due to globalization. The cost of capital of a business increases significantly when there is greater information asymmetry among the operators of a stock. The same principle can be applied to the trading of cryptocurrencies.[4] Although it is common for traders to share information, insider trading in the financial sector is strictly prohibited by the SEC, but not in encryption. Insider trading is a known risk in the trading of criptos "when it comes to new currencies and speculators who receive the earnings.The coins can be bought using cryptocurrencies and even if [some] the transactions are anonymous, the regulators have methods to discover the identity of the bad actors ".[5]

Smart contracts completely remove share capital from discussion when they are used in the same way as a normal commercial contract. When two companies write and execute an intelligent contract, they do not need to worry if the other party has performed a duty or provided an asset because the entire process is automatically controlled by blockchain elements. "The check in the mail" is no longer a trope that can be cited to delay a penalty or otherwise mislead the other party because you can get access to the data stored on the blockchain regarding their smart contract. The intelligent contract that regulates the business controls the progress of the fulfillment of its obligations by the other party.

To be continued as part of a series.

[1] Yujia Liu, et al. The payoff to skill in the third industrial revolution. American Journal of Sociology, vol. 118, n. 5, (2013) pp. 1331.

[2] M. Kearney, The local and the global: the anthropology of globalization and transnationalism. Annual review of anthropology, vol. 24, (1995), pp. 550.

[3] Francis Fukuyama, Social capital and global economy. Foreign affairs, vol. 74, (1995). pp. 89-92.

[4] James Choi and Hongjun Yan. The information asymmetry increased the cost of capital for companies. (, 25/01/2013).

[5] Bitcoin Exchange Guide News Team. The cause of SEC Insider Trading resolves while Cryptocurrency Crackdown continues. (, 08/11/2018)

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