There is no denying that decentralized cryptocurrencies will have a significant impact on our outdated financial institutions in the near future. Decentralized digital currencies are making waves around the world in technology hubs like Japan and South Korea, as well as other major economies such as Australia, England, Canada, and Russia. While the legalities of cryptocurrency are still in question, investments by large institutions and notable celebrities imply that things are moving in the right direction for decentralization.
With widespread adoption looming on the horizon, how could cryptocurrency change the construction industry? In this article, the Clearwater construction attorneys at Cotney Construction Law will answer this question by focusing on the industry-specific uses of cryptocurrency.
Streamlined Payment Systems
Established payment systems are slow, complicated, and expensive. An international wire payment of $5,000 sent from South Korea to the East Coast of the United States costs roughly $35 to $50 depending on your domestic financial institution’s policies as well as those of the foreign bank. You also have to account for the exchange rate, which can subtract even more money from your payment. On the other hand, cryptocurrencies such as Ripple’s XRP token can perform the same transfer in two to three seconds.
This level of speed and efficiency could change the construction industry drastically. For smaller firms, it would open up another payment processing system to help secure payments that can’t be manipulated by fraudulent payment disputes. National firms would be able to make and receive payments across state lines instantaneously while global firms could do the same on an even larger scale. Whichever way you look at it, in an industry plagued by liens, disputes, and nonpayment, cryptocurrencies can help foster accountability and ensure contractors are paid for the challenging work they do. You can consult our Clearwater construction lawyers to learn more about the laws governing cryptocurrency.
Boosting the Efficiency of Communications
Not all cryptocurrencies are seeking to displace fiat currency and transform our financial institutions, some are designed with a specific purpose in mind. In the construction industry, communication with investors has always been a point of contention. Public contracts hosted by the government use a bidding process to connect contractors with projects, but that system is unreliable, unbalanced, and doesn’t offer private contracts. Builderium is a platform for connecting contractors and investors. It uses “Build Tokens” to make quick, easy payments.
Cryptocurrency’s short stint on the mainstream media in late 2017 and early 2018 introduced the world to Bitcoin, Ethereum, Litecoin, and hundreds of other “altcoins.” That recognition has lead to a global discussion that seeks to test the efficacy of cryptocurrencies. This trend will undoubtedly result in changes in the construction industry.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.