Recent years have seen a lot of interest in Crypto investment. This article will be examining the social impact of digital currency.

Many have been interested in cryptocurrencies as a new digital currency and investment type in the last few years.

Even though blockchain technology has benefits like decentralization and security, it is imperative to look into the ethical issues that come up with its rise.

One of the main worries about cryptocurrencies is how they might affect the environment, especially the amount of energy needed for mining.

Cryptocurrencies have caused people to worry about financial inclusion and illegal activities.

The value of most cryptocurrencies fluctuates substantially owing to speculation.

While stablecoins (cryptocurrencies tethered to an external reference asset) may have reduced volatility, they face significant challenges.

There is a lack of trust in crypto assets because of its decentralized governance (which operates without intermediaries or a governing body).

So far, cryptocurrencies have yet to achieve the widespread adoption necessary to function as a currency.

As a society, we must also address the ethical risks that the digital currency market and the underlying technology have revealed.

Due to users needing to utilize pseudonyms to maintain the system’s transparency, cryptocurrencies have been linked to illegal activities like money laundering, terrorism financing, and arms deals.

Investors in cryptocurrencies are left defenseless in the absence of regulation. Addiction issues, especially among the young, have been exacerbated by the volatile nature of the cryptocurrency market.

As a society, we must address the ethical challenges that the cryptocurrency market and the underlying technology have revealed.

Finally, blockchain technology harms the environment due to its high energy requirements.

Despite the gravity of the ethical concerns raised, the opportunities, improvements, and technological leaps made possible by blockchain technology and cryptocurrencies should not be ignored.

Ethical Measures to Improve the Use of Cryptocurrency

How can we keep an open mind to the potential and advances of blockchain technology and cryptocurrencies?

We suggest measures that can lessen the impact and contribute to developing a sustainable and moral digital currency system. They include;

Develop central bank digital currencies
National and international regulations should be put in place
Environmental impact reduction
Responsibility investment models should be promoted
Blockchain technology should be put to good use

Develop Central Bank Digital Currencies

Find out more about and create digital currencies released by central banks.

These can benefit from digitization while building trust, stopping speculation, and creating security and crime-prevention measures.

All of this is possible with the help of a government agency that can use its power over money to help people.

National and International Regulation Should be Put in Place

Set up national and international rules to stop criminal activities (or the money laundering that goes along with them), eliminate systemic risks in the financial system, keep an eye on intermediaries (especially in a decentralized network), and protect investors.

Environmental Impact Reduction

Improve blockchain’s environmental impact using less computational power and more energy-efficient consensus mechanisms.

Responsible Investment Models Should be Promoted

Encourage a sensible approach to investing and avoid excessive speculation by spreading financial literacy. It must include tools for overcoming addiction issues.

Blockchain Technology Should be Put to Good Use

Make appropriate use of blockchain technology and the growth of crypto assets in situations where doing so will improve the effectiveness of the current monetary system.

The complexity of cryptocurrencies necessitates interdisciplinary discussion. These recommendations from the field of business ethics are intended to contribute to this discussion.

The construction of a model for digital currencies must consider the actual function of money, which is to serve as a means for people to acquire the goods and services necessary for their development through trade while respecting their dignity and contributing to the greater good of society.

Why is the Social Impact of Digital Currencies Important?

There are different ways to explain social impact, but in general, it is how things people do affect themselves, their families, and their communities.

A lot of the time, social impact is defined by how something helps people or solves a social problem.

Not only can digital currencies help keep track of social effects, it can also help change them. A lot of people talk about how public and private groups say what they’ll do, but it’s hard to show that they actually do it.

We can be told things, but we need to be shown things. These days, we live in a fast-paced, international, and digital world. Accountability is tricky when it comes to business, government, and charities.

In the fight against false information, openness to the public is very important.

Vitalik Buterin, one of the co-founders of Ethereum, gave $1 billion worth of cryptocurrency to India’s Covid-Crypto Relief Fund earlier this year.

His public digital wallet that is backed by the blockchain showed the exchange, so we know.

Imagine making governments keep their spending promises and keeping track of the work that charities do to help people in disasters and distribute aid.

Blockchain may be able to rebuild those links between organized systems and the people they serve because it keeps track of, audits, and shares information with everyone.

Geolocations, timestamps that can be checked, and details of the supply chain can help people figure out what’s really going on.

The Social Impact Of Digital Currency

As we have discussed the ethical measures for improving the use of cryptocurrency, we will now look at the social impact of digital currency.

Protecting user identity and data
The decentralized character of Blockchain technology
Access to finance
Equity and justice
NGOs and Blockchain Technology

Protecting User Identity and Data

There is more than one way to keep people and their info safe. A “verifier” can confirm the identity of any user without that person giving up or sharing any information using the zero-knowledge proof.

This method keeps the user’s privacy safe while also keeping the blockchain safe from crooks who might be dangerous.

Another good thing about blockchain technologies is that each person has private and public keys.

There is no scientific way to distinguish the private key from the public key because each user’s private key is kept very safe.

The Decentralized Character of Blockchain Technology

Since blockchain data is distributed rather than centralized, individuals can take control of their personal information and records. Every person is responsible for their data, which opens up new rights and liberties.

Second, the concept of decentralization rests on the premise that every node keeps its copy of the ledger, which is only updated when all blocks, including newly added blocks, are confirmed.

Lastly, the transparency created by the blockchain’s decentralization and openness of ledgers, transactions, and participation can deter attacks and evil activity.

Access to Finance

Blockchain technology has enabled many people worldwide to use digital currencies for business.

With the development of digital wallets and cryptocurrency, the World Bank says that 1.7 billion people worldwide can now enjoy the same benefits that bank customers have had for a long time.

They just need a device that can connect to the internet, like a phone or computer.

Equity and Justice

Blockchain has become what many people worldwide do for fun and as a significant way to make money. Blockchain has many benefits, one based on fairness and equality.

The miners are picked randomly, and there are no history checks done ahead of time, so there can be no discrimination.

There is growing debate about whether the blockchain’s reliance on randomness is good or bad because it can draw hackers and other bad people.

However, consensus is still heavily based on randomness.

In Proof of Stake, randomness is less specific than in Proof of Work. This is because the miner with the most coins “at stake” gets to add a block. This level of advanced chance is not possible with the idea itself.

Proof of Stake versions exist where no miner can own more than 30.8% of the total currency. These are based on randomness.

NGOs and Blockchain Tech

One group that stands to gain the most from the progress of blockchain technologies is non-governmental organizations (NGOs).

To begin, blockchain technologies and cryptocurrencies have made it cheaper for people worldwide to make donations and large amounts of money.

This is because they have lower transaction fees than the old banking system. Because of this, many NGOs have started to accept cryptocurrencies as a way to donate.

Thanks to the “secure essence of the blockchain,” they will also be able to reach more people and be sure that the gifts are real and that the people who receive them are who they say they are.

Final Thoughts

Many people are talking about blockchain, and even more are trying to stop people from using it and cryptocurrencies because they are bad for the earth.

Blockchain technologies positively impact the world economically and socially, even though they use much power. Many miners have avoided using power plants because of green energy.

The Ethics of Cryptocurrency: Examining the Social Impact of Digital Currency