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Blockchain, COVID-19

Impact of the COVID-19 Pandemic on Blockchain Industry

The COVID-19 pandemic has affected almost all sectors across geographies putting development and project plans on hold. While companies struggle to make do with remote working during the lockdown situation, some jobs demand physical presence and labor. Since all the markets and industries are on temporary shutdown it becomes hard for a project to continue.

The blockchain industry has got its share of corona woes. However, compared to the other sectors there have been some positive developments as well. In this blog, we will discuss both sides of the COVID-19 impact on the blockchain industry, while highlighting the underlying factors. 

Different Country, Different Affect

The pandemic impact on the blockchain industry has been different geography-wise. The extent of the virus spread in a region has played a major role in its blockchain development.   

China is already on its way to recovery after the pandemic lockdown was lifted. Industries have resumed their regular work and projects that were temporarily halted resumed. The country is ready for the launch of its national blockchain network, which has been scheduled for April. Even the mining companies are back in action, after the temporary closure of the facilities. 

The picture is different in Russia, which is reporting hundreds of new COVID-19 cases every day. It has already postponed its crucial cryptocurrency law, due to the virus outbreak, without any update on when it will be finally passed. The government has also cut the blockchain development budget by half. 

The scenario mirrors that of America’s which at present has the highest number of corona-affected, with a high mortality rate. Most of the blockchain offices have shut their doors temporarily, due to the lockdown. However, a few remain operational through remote working. 

More or less the blockchain projects in different geographies have suffered a setback due to the pandemic induced lockdown situation. If not then it has delayed the process of project delivery and deployment. 

While that is one part of the story, a significant number of projects have remained unaffected due to the decentralization and minimal need for human interaction. Leading companies in the blockchain and crypto world like Steem, HashCash Consultants, Cardano, and the others are functioning like usual with all the new projects advancing according to the present timeline. 

Budget and Staff Cuts

The pandemic has brought forth a global recession, due to which there has been widespread cuts in budget as well as staff within the industry around the world. The extreme measures were taken by many companies to reduce the repercussions of the economic downturn. 

Companies have been making marketing budget cuts left and right by canceling their participation in conferences as well. If they are not letting go off people, then they are curtailing the predetermined budgets in marketing and other areas to manage the situation in the best way possible. 

Some companies have moved their focus to short-term initiatives, that will have a lesser impact on the finances. Some are revising their finances and budgets and distributing it according to their urgency in projects and revenue generation. 

Effect on the Exchanges

While many blockchain projects and organizations have suffered a setback due to the pandemic and economic downturn, the crypto exchanges mostly remain unaffected by all of it. On the contrary, many trading platforms have reported an increase in user sign up in the last weeks, with a significant surge in trading volume as well.

Even in Asia, where the virus outbreak originated, the exchanges have hardly suffered a setback in terms of trading and otherwise. The region even saw the launch of a few exchanges, as per schedule within this period. 

Market experts explain, that since the majority of the exchange functions are digital it the usual business does not get affected even during the lockdown. Since the financial markets are bear, people are investing and trading in cryptocurrency, which was initially designed to battle recession situations like the one we are experiencing now. With more people on quarantine and social distancing, they are spending most of their time online and trading in crypto to earn profits. 

A Surge in Blockchain Deployments

Talking of silver linings, there has been a surge in blockchain deployments during the ongoing pandemic phase. Governments, international health organizations (WHO), a consortium of companies, etc have come forward to introduce blockchain solutions to minimize the losses suffered due to COVID-19.

Read Also: How Blockchain is Helping Insurance Firms to Fast-Track Corona Claims

Blockchain projects have been deployed to track the supply of critical medical items in China and other countries. It has proved beneficial in streamlining the corona insurance claims as well. 

The WHO has launched a blockchain platform for tracking the movement and pattern of the virus spread through the sharing of authentic information within different channels.

More charitable organizations notably the Red Cross (Italy and Denmark) are accepting crypto as donations. The Italian Red Cross received great response by initiating a crypto fundraiser and they were able to surpass the initial fund target. 

Another area where blockchain projects have shown promise is the drug and vaccine development specifically for corona. Researchers have been using technology to find a unanimous treatment for the disease. According to reports, blockchain is being used to accelerate the time frame of the usual process of drug development and discovery and then getting through the phase of clinical trials. 

Last but not the least, very recently an Italian news agency launched a blockchain platform to curb the spread of false corona news amid the crisis. The project helps the traders to track the news provenance through a decentralized platform. 

There is no denying that both the COVID-19 pandemic and the economic downturn have led the blockchain industry and crypto to suffer an initial setback. However, there is optimism in the way the industry rose to the occasion and made its contribution to fighting the crisis along with the rest of the world. It has given the people a chance to see first hand the true potential of the technology. 

More people are showing interest in crypto trading and investments while blockchain projects keep streamlining critical industries and their supply chain through its unified approach. 

The latest developments have had many experts believe that blockchain is gradually shaping the future of the post-pandemic world. Once this dark phase gets over, there will be lots happening within the industry.  

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