Has Bitcoin Altered the Construction Industry!

Construction Industry

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Since bitcoin’s first appearance and push into the mainstream, numerous discussions have arisen about how bitcoin and other cryptocurrencies will affect the global economy. For example, the central bank of France has recently released a report that highlights ways in which bitcoin is revolutionizing financial transactions within the construction industry.

The report was produced by Bruno Biais, head of economic analysis at the bank, and Cyril Durand. The two researchers found that blockchain-based cryptocurrencies are already impacting the construction industry through intelligent contracts.

Purchasing items for projects has always been difficult because of high administration costs and risks associated with both the buyer and seller. Blockchain technology, however, is creating ways to bring these parties together with the use of smart contracts on a decentralized platform.

For instance, Biais and Durand explained how developers could purchase materials directly from manufacturers using cryptocurrencies through platforms without high fees or unnecessary risk. Project owners can also accept bids on their projects through platforms like Ethereum, which still provide lower costs than traditional bids from financial companies. Just like France, China is also involved in making trades in a secure and efficient trading platform, you can visit the website for more info .

In the report, Biais and Durand said: “First, they make it possible to buy low-risk goods and services online thanks to the system’s decentralization and transparency, as well as offering security against counterfeit.”

The central bank of France has been a longtime supporter of blockchain technology. In 2014, the central bank released a white paper outlining how bitcoin’s blockchain could benefit the economy. 

The French central bank has been following cryptocurrencies closely since 2014. Last year, the bank announced that it would begin testing blockchain solutions for its local operations. In addition, SOCAP, a global professional organization for accountants, also said that it would include cryptocurrency information in its Certified Blockchain Professional (CBP) course.

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As France continues to embrace cryptocurrencies and blockchain technologies, more discussions on the matter will likely come about. Bitcoin has created waves in finance and other industries. For example, bitcoin could revolutionize the construction industry because of its transparency and security features.

Five benefits of Bitcoin to the Construction industry

1. Affordability

Bitcoin has been slowly growing as a currency, and more people are adopting it as a mode of payment over the traditional fiat currency. The low transaction fees of Bitcoin help the user to transfer an amount that otherwise would have taken days through other conventional methods in just minutes. The cost-effectiveness of cryptocurrency is what makes it such a preferred choice.

2. Trust 

With the increasing number of security breaches the financial sector faces, it is difficult for people to trust them fully. However, the bitcoin network is secure because transactions cannot be reversed once confirmed and recorded on the blockchain. Furthermore, you don’t have to carry out any verification or registration process to make a transaction, making it even more trustworthy.

3. Efficiency 

The blockchain network within the cryptocurrency is highly efficient as it can process millions of transactions per second compared to other conventional methods, which take days. This saves not only time but also money because there are no extra costs involved in making any settlement or clearance between parties.

4. Accessibility

The majority of the construction projects are in developing countries where the population is either low or medium-income earners who cannot afford to use their bank accounts. However, with cryptocurrencies, one can carry out transactions without going through any regulations that financial institutions ask for at times. Thus, it gives equal access to anyone who holds the currency.

5. Transparency

A blockchain network is highly transparent by nature as it stores every transaction detail entered into its database, which can be accessed by almost everyone who has made a transaction. This eliminates manipulation and exploitation of funds because everything is out in the open for people to verify and check at any given time.

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You must know that the cryptocurrency market is still nascent and not accepted globally. The construction industry should embrace blockchain technology for better management of funds and records, which will bring transparency to this sector.

Has Bitcoin harmed the Construction industry in any way?

The construction industry is one of the most vital industries in almost every country because nearly everything we see is construction – be it roads, buildings, or even small tools such as glasses and utensils. Over time, this industry has faced many challenges, such as corruption and project delays, leading to several other problems. Still, Bitcoin has never benefited from this or harmed the construction industry.

The main problem in the past was that companies paid for projects by cash under the table, which led to unrecorded money inflows and outflows. But with increased awareness about bitcoin and blockchain technologies due to media coverage, people are slowly moving towards legal ways of paying.

Therefore, there is no direct impact of bitcoin on the construction industry. Still, it can help streamline the payment system and resolve disputes if both parties follow the legal way of transactions for better transparency between them.

Conclusion

Bitcoin and other cryptocurrencies can transform the construction industry by cutting down on costs and time. 

The transparency in the blockchain network will also ensure that all transactions are genuine without any misappropriation of money or funds. Thus, with its immense benefits, it would benefit the construction sector to explore bitcoin and other cryptocurrencies to carry out their daily transactions.

Construction industry article and permission to publish here provided by Jean Nichols. Originally written for Supply Chain Game Changer and published on May 23, 2022.

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