Benefits and Risks Associated With the Use of Blockchain and Cryptocurrency as a Form of Payment in Ghana
Benefits and Risks Associated With the Use of Blockchain and Cryptocurrency as a Form of Payment in Ghana: A Case Study of Selected Bitcoin Trading Companies
The hustle from joggling through several bank cards for online transactions in today’s e-commerce environment can sometimes be extremely stressful not to talk of the cost of transactions. Although cash is a quick and efficient payment method, the disadvantages of its use are numerous. Keeping cash is followed with many costs, including fraud, money loss, depositing, as well as the costs associated with managing money in financial institutions. However, new technologies are emerging that have the potential to address this deficit in electronic payment infrastructure. Digital currency and mobile money solutions are components of new industry classifications referred to as Financial Technology (FinTech) and Digital Financial Services (DFS). These technologies are swiftly evolving, and with time they will mature and generate widespread usage. Regulators in financial capitals around the world are all examining ways to enable the technological innovation offered by digital currency and related technologies, while putting measures in place to mitigate a number of risks that have been associated with their broader adoption.
- bitcoin
- cryptocurrency
- blockchain
Electronic money is not a new phenomenon. Trade over the Internet has increased the use of new technologies, thereby increasing the demand for new electronic payment methods. What really is new is electronic payment in retail and use of the Internet as new monetary market. Today, money becomes ready information on the microprocessor or in the database. Blockchain technology presents a universal internet currency for this new market, which in turn presents both risks and benefits associated with its adoption or use in various countries.
In Ghana, the trading or use of cryptocurrency is not yet legitimate due to some identified risks associated with its use. Studies show that cryptocurrencies can be used for criminal activities when they fall in the hands of hackers due to cybersecurity breaches. There are no historical data that allows access to how much it can be trusted. Bitcoin, like other cryptocurrencies, is still under development. Thus, something completely unexpected could happen to it, which invariably happens at the development stage not only with economic objects but also with experimental technologies. Bitcoin for example does not provide any consumer protection. A perfect transaction cannot be undone. All that remains after a failed transaction is to try to convince the recipient of funds to return them voluntarily. There is also no guarantee of minimum profitability or, at least, break-even investments
It is worth noting that opportunities cryptocurrency and blockchain present far outweigh the anticipated risks. The unlimited possibilities for a transaction is a great benefit as each of the wallet holders can pay to everyone, anywhere and any amount. The transaction cannot be controlled or prevented, so transfers can be made anywhere in the world wherever a user is placed with a wallet. There are no borders as payments made in this system are impossible for cancellation. Coins cannot be forged, copied or spent twice; there is a reduced transaction fee and zero inflation risks; while creating employment through mining.
It is recommended that Ghana Government embark on an inclusive approach to the exploration of digital currency that provides sufficient opportunity for public input and policy review.
