The Advantages Of BRICS Adoption Of Blockchain Payment Systems As Its Currency

By Okoi Obono-Obla

THE coalition of developing nations, otherwise known by the acronym BRICS (Brazil, Russia, India, China, and South Africa), was founded in 2001, as an economic bloc to challenge the hegemony of the United States of America and Western countries in the global economic and financial systems, commerce and trade.

In terms of population and gross domestic products, BRICIS is a formidable alliance global and, therefore, can not be dismissed with a wave of the hand. 

Recently, Saudi Arabia, Ethiopia, the United Arab Emirates, and Iran have joined BRICS, which even makes the alliance more formidable than ever before. In terms of crude oil production in the world, the BRICS countries control more than 44% of the global crude oil production.

It is heartwarming that BRICS countries have agreed to float an international blockchain virtual currency to rival the United States Dollar, which has come to symbolize the United States of America’s economic imperialism and power.

Over recent weeks, the BRICS economic alliance has unveiled its plans to develop a blockchain-based payment system and a native currency. In that, the collective may well be prepared to shift the global economic landscape completely. 

The effort is part of the bloc’s long-held commitment to de-dollarization of the global economic, financial, and trading systems.

What is the blockchain payment system? 

A blockchain payment system is a digital payment system that leverages blockchain technology to securely and transparently process transactions. Blockchain is a decentralized and distributed ledger technology that records transactions across a network of computers in a secure and immutable manner.

In a blockchain payment system, transactions are recorded in blocks that are linked together in a chronological chain. Each block contains a list of transactions, a timestamp, and a reference to the previous block, forming a secure and transparent record of all transactions.

Blockchain payment systems offer several advantages, including:

1. Security: Transactions are cryptographically secured, and blockchain payments are offered to be altered once they are recorded on the blockchain.
2. Transparency: The decentralized nature of blockchain ensures that transaction details are transparent and accessible to all network participants.
3. Lower costs: By eliminating intermediaries and streamlining processes, blockchain payment systems can reduce transaction costs.
4. Faster transactions: Blockchain technology enables faster settlement of transactions compared to traditional payment systems.
5. Global accessibility: Blockchain payment systems can facilitate cross-border transactions quickly and efficiently.

Popular blockchain payment systems include cryptocurrencies like Bitcoin, Ethereum, and Ripple, as well as blockchain-based payment platforms like RippleNet and Stellar. These systems are being increasingly adopted by individuals and businesses for their efficiency, security, and transparency in processing payments.

It goes without saying that the decision of the economic alliance-BRICS – to go for blockchain payment and a native currency – is deliberate, taking into account the advantages blockchain payment systems offer. 

Blockchain payment systems offer several advantages over traditional fiat currency systems like the U.S. dollar. Some of these advantages include:

1. Decentralization: Blockchain payment systems operate on decentralized networks, meaning that there is no central authority controlling the transactions. This decentralization can provide greater autonomy and control over one’s finances compared to traditional banking systems.
2. Security: Blockchain technology uses advanced cryptographic techniques to secure transactions, making them tamper-proof and resistant to fraud. Transactions on the blockchain are verified by a network of nodes, ensuring a high level of security.
3. Transparency: Blockchain transactions are transparent and immutable, meaning that all transaction details are recorded on the blockchain and can be accessed by anyone. This transparency can help prevent fraud and increase trust in the payment system.
4. Lower costs: Blockchain payment systems can potentially lower transaction costs by eliminating intermediaries and streamlining the payment process. This can benefit individuals and businesses by reducing fees associated with traditional banking systems.
5. Faster transactions: Blockchain technology enables faster settlement of transactions compared to traditional payment systems, which can take days to process. Blockchain transactions can be completed in a matter of minutes or even seconds, making them ideal for cross-border payments and time-sensitive transactions.
6. Global accessibility: Blockchain payment systems are accessible to anyone with an internet connection, regardless of their location or financial status. This can help facilitate financial inclusion and enable individuals in underserved regions to participate in the global economy.

While blockchain payment systems offer several advantages over traditional fiat currency systems like the U.S. dollar, it’s important to note that they also come with challenges and limitations, such as regulatory concerns, scalability issues, and volatility in the value of cryptocurrencies. 

As technology continues to evolve and mature, it will be interesting to see how blockchain payment systems shape the future of finance and payments.

Eighteen-Eleven Media 

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