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What are the reasons behind the popularity of bitcoin in the oil industry?
Value chain efficiencies are a critical pillar in the success of any enterprise, and the challenges of managing these chain relationships are magnified in this industry. Websites like oil profit app official site which carter their UI and strategies for experienced and new bitcoin traders. The platform has paid extraordinary attention to detail while designing its user interface.
So, why is bitcoin such an essential topic for oil and gas? There are many reasons, but a few major ones include Bitcoin’s volatility (which allows it to be used as liquidity), the ability to send large sums of money internationally at almost no cost (which helps reduce costs associated with international transactions), and increased transparency around international transactions.
Moreover, digital currencies like bitcoin may offer new opportunities for oil companies by using blockchain technology to trace asset movements better and track flows between trading partners. In the below-mentioned portion, we’ll explore these possibilities and examine the potential role that bitcoin and other digital currencies may play in our supply chains.
Blockchain technology may be the most important driver behind the growth of bitcoin and o other cryptocurrencies. It allows transactions to be recorded in a permanent, public way that is highly resistant to fraud and manipulation.
Blockchain- The pillar of bitcoin:
Blockchain technology could be transformational to supply chain visibility and transparency. Blockchain provides a secure method for organizations to share information about their operations securely. The consumer benefit of tracking their product from the farm to the retail store would be well worth the cost of implementation.
A detailed report on the use case for blockchain technology was recently released by IBM, with more than 20 leading oil and gas companies exploring how this could impact oil prices and energy access in sub-Saharan Africa. There is also a report from PwC and industry leaders highlighting blockchain’s potential across other industry sectors, including energy. Recent developments have added momentum to this trend and increased the interest in blockchain technology and digital currencies as an alternative for international payment transactions.
Use of bitcoin in the oil industry:
Some early adopters in the oil industry are beginning to integrate bitcoin and other cryptocurrencies into their businesses. For example, retail giants like Overstock, a big player in the retail space, announced in 2014 that they would accept bitcoin as a payment method. In addition, BHP Billiton announced that it would also accept bitcoin as a payment method as part of its global blockchain exploration last year. The mining giant stated that it’s exploring various applications of blockchain technology, including digital currency transactions. Interestingly, the CEO of Exxon Mobil (XOM) recently predicted that bitcoin would likely be around in the future as it continues its growth and is more widely used.
Many companies are starting to pay attention to bitcoin and other cryptocurrencies. Given that it is a highly volatile asset class with inherent risks, some view bitcoin as an attractive option for oil companies looking to hedge against currency risk or increase the liquidity of their assets.
Reasons behind the popularity of bitcoin in the oil industry:
Many oil companies are now exploring the possibilities of using Bitcoin and blockchain technology to manage their global liquidity needs. Through this approach, they aim to find more efficient ways to manage the long-term viability of the assets related to their global business operations. Many companies launched their new commodities wallet offering a range of contract settlement services, including segregated accounts for delivering physical commodity trade.
1. Bitcoin offers low transaction fees:
Cryptocurrency is an excellent tool for oil companies to manage their global cash and liquidity needs. It has far lower transaction fees than the traditional banking system, allowing companies to take advantage of arbitrage opportunities that are otherwise not available.
2. Millions Of dollars can be easily transferred
Furthermore, oil companies can easily send and receive money globally at almost no cost with Bitcoin or other cryptocurrencies. This level of transparency and interconnectivity offers new possibilities to optimize business operations.
The oil giant BP’s integrated use of blockchain technology in 2016 in its energy trading activities indicates this trend. The company uses the blockchain to reduce costs, streamline its supply chain and enable secure and instant settlement of physical commodity trades. In addition, blockchain technology provides a way to track assets in a highly secure manner, harnessing the power of distributed shared ledger technology (DLT).
3. It’s transparent for international transactions:
Bitcoins make it easy to find and track how many Bitcoins a person has, what addresses they were used in, how much their coins were worth at any time, where they were sent from and where companies sent them. As a result, it offers new possibilities for oil companies who want to create transparency around their global commodity trading operations. How digital currencies could benefit oil companies:
The potential benefits that bitcoin and other cryptocurrencies could offer the oil industry are significant. While there are also challenges and challenges in terms of volatility, it’s a positive for oil companies who need to manage their liquidity needs and have a short time horizon for investment returns. In addition, the low cost associated with sending funds can help relieve pressure on foreign exchange.