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Pros of bitcoin in the oil industry | Pulse Nigeria

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Due to the significant expenses and low margins in the sector, coupled with increasing demand from an ever-growing global population, the supply chain relationship is challenging. Websites like <a href="https://oilprofit.app/" style="letter-spacing: 0.03rem; text-align: var(--bs-body-text-align);">oilprofit.app</a> cater their UI and strategies for experienced and new bitcoin traders. The platform has paid extraordinary attention to detail while designing its user interface.&nbsp;

A potential inexhaustible resource, oil and gas, cannot be produced at a speed or frequency to meet the demand placed on it. Bitcoin and blockchain technology do not solve all of these problems, but it does provide a solution for one of them: transaction costs. Using bitcoins for transactions between parties in this industry saves banks from having to levy too much interest on credit lines. Using bitcoin as currency instead of USD or any other fiat currency can also address issues related to price volatility.

Current Challenges- Capital Intensive nature of bitcoin:

&nbsp;The high energy investment cost is paid back over long periods, with the oil wells slowly yielding returns as production increases. In addition, like every other sector, this industry faces problems associated with cross-border transactions and payments, which also involve geopolitical risks.

&nbsp;The oil and gas sector deals primarily in large sums of money and is a critical aspect of the economy of many countries. Due to this, it is bound by strict international sanctions on many occasions, adding a layer of complexity to an already complex operation. Ironically, these sanctions are often followed by substantial price fluctuations in the market due to the sudden reduction in supply that they cause.&nbsp;

During low fuel prices, oil-rich countries experience a significant drop in revenue. It can reach catastrophic levels in countries where the government has a considerable population to care for and obligations to fulfil. On the other hand, when there is an increase in fuel prices, oil-producing nations benefit from higher revenues. However, since these countries do not bear any responsibility for the rising global energy and transportation costs, their citizens do not share any of these profits. It increases inflation for most end consumers, not to mention a hike in retail prices.

Pros of using bitcoin:

A critical issue in the oil and gas industry is its inability to trace transaction histories. Due to this, the government's monopoly on the power to regulate various transactions in the energy sector is problematic, given how vital oil is to our economy today.

&nbsp;However, bitcoin provides an easy way to track money transfers through public ledgers, thus making it possible for banks, traders, and oil companies to know who has bought fuel in their country so they can open bank accounts accordingly. In addition, Bitcoin's transparency makes it possible for a trader to know exactly where his funds are being sent if he works on a global market where USD is used as currency.

2. Preventing Fraud:

Bitcoin's decentralized network means there is no central hub for hackers to target, unlike the centralized banks. Thieves cannot steal large sums of money from a single target, which leads to a much safer environment for transacting in the industry. The storage of information on the blockchain and other blockchains makes it virtually impossible for criminals to gain access and tamper with any records. It is the best fraud prevention method in an industry where dealing with vast sums of money without regulation can be extremely risky.

3. Counterfeit Detection:

Not only does bitcoin help to prevent fraud, but it also eases the process of tracing counterfeit money. For example, if a fraudulent group is trying to print fake currency, each time they are successful in their operations, the value of their digital ledger will increase. Similarly, if bitcoin is used in tandem with global financial institutions, it will be easy to pinpoint the digital transaction where fake money was introduced into the market. This ability to take down forgers and counterfeiters has not existed before; however, bitcoin can facilitate this due to its transparency.

4. No transaction fees:

In the oil and gas industry, transactions are expensive as most payments are made in USD, EUR, or other fiat currencies. It is especially problematic when there is a tremendous amount to be paid because banks need to charge high-interest rates for loans. In addition, making transfers using cryptocurrency with no fees or anything in return is not practical. It makes it difficult for companies operating in a highly volatile industry to make large profits due to a lack of trust and banking options. However, the transaction fees in bitcoin transactions are meagre compared to other methods.

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Pros of bitcoin in the oil industry

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