The Economic Impact Of Smart Ledgers On World Trade – Cardano ADA Foundation Sponsored Research

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In line with Cardano (ADA)’s goals of providing the structural highways for supporting and facilitating international trade and leveraging developing countries in the process, the Cardano Foundation has sponsored a research paper (authored by The Centre for Economics and Business Research, one of the UK’s leading economic consultancies and published in early April 2018) that examines the overall potential impacts of smart ledger technologies on world trade.

This is the first such study of its kind, which attempts to frame distributed ledger technologies in the context of global capital flows and provide some quantified estimates. The paper states:

“The Centre for Economics and Business Research (Cebr), with assistance from The International Association for Contract & Commercial Management (IACCM) and Z/Yen, have estimated the potential impact as anything from a ‘modest’ rise in global trade of 35 billion per annum to perhaps as much as 140 billion. The lower estimate of 35 billion USD may not justify ‘revolutionary’, yet as Cebr notes even this conservative estimate would be associated with 3 to 6 USD more gross domestic product per average global worker in a world where many still earn below 2 USD per day.”

The publication goes on to investigate the various frictions, such as the institutional divergences between politically separated markets in geographically disassociated jurisdictions, which encumber global trade, and how smart ledgers could fulfill the institutional gaps to minimize those frictions in economizing associated operational and bureaucratic costs.

Employing econometric modeling that focuses on the macroeconomic variables driving global trade and examining the role of the technology from an option pricing point of view (derivatives overall being a 1.2 quadrillion dollar market, according to Investopedia), the 78 page long publication extrapolates realistic and grounded expectations on how the technology could gradually foster a smoother and better functioning global trade environment in the near future.

In a world of information asymmetries, relationships between counterparties often rely on social improvisation and fragile peer-to-peer trust assumptions, particularly in the less developed regions of the world. This is why systems that provide reliable counter-party validation in assisting the establishment of trust are particularly important in facilitating global trade. Cardano (ADA) seems to be building its platform with that mission in mind.

For one, Cardano makes extensive use of Haskell in designing its system – a purely functional, statically typed language with a high degree of fault tolerance. Haskell is widely used in academia and industries, and it is widely considered one of the most secure programming languages. It’s commonly employed by aerospace companies and defense contractors.

Smart contracts on Cardano are also defined in a Haskell derived language (called Plutus), which provides extremely robust security in mission critical infrastructure intended to secure billions of dollars of value at stake. Notably, Cryptol is an example of  a Haskell-based cryptographic toolchain used by the NSA. These high assurances of software standards and peer-reviewed academic scrutiny are some of the defining features that make Cardano stand out as a third generation distributed ledger.

In the concluding paragraphs, the publication goes on to mention:

“Interest in Smart Ledger technology is strongly associated with the price surges in Bitcoin and other cryptocurrencies throughout the course of 2017. This price association distracts from the wider application and benefits of Smart Ledgers. In fact, the recent Bitcoin developments may well turn out to be counterproductive if the associated bubble ends up tainting the associated technologies.”

Despite considerable speculation infiltrating the cryptocurrency market and its associated risks, Cardano (ADA) continues to build disruptive technology aimed at fostering international trade and bolstering global economies in the process.


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