When blockchain came to be in 2009, everyone was as skeptical about it as they were with the internet.10 years later, the technology is fast gaining momentum. Blockchain is a technology that lets digital information pass to the adjacent block, but cannot copy it. Cryptography acts as the security between the links and makes it impossible to destroy or forge the data. The collection of data is in a database, is stored in various locations, and then updated instantly.
Developing countries’ problems
When China banned blockchain technology, a Taiwanese entrepreneur/legislator- Jason Hsu, took the opportunity to make Taiwan a blockchain hub for all blockchain developers. Blockchain can be very useful in developing countries to improve their economic growth and better the lives of its citizens.
Developing countries are faced with many problems, the most common being poor infrastructure, conflict, famine, poverty, among others, all caused by bad governance and corruption, fuelled by lack of transparent systems. Blockchain can effectively change this trend by providing transparency, decentralized transactions, and immutability.
Blockchain can change the narrative of these developing countries by changing how it tackles several things.
The top contributors to developing countries’ corruption problems are bad governance and political upheavals. Amidst all this instability, there is usually no way to trace transactions. Corrupt government officials take advantage of and steal from the public coffers.
With blockchain, any citizen can easily track how government officials use public funds for development. With the transparency generated from the use of blockchain, the building of trust between citizens and their governments would be a big boost in the fight against corruption.
In developing countries, the election process is a source of major conflicts. Politicians scheme and plot to steal votes and blockchain has great potential in these scenarios by decentralizing the process. Technology has seen the world moving towards voting online as opposed to paper balloting, or the biometric voting machine.
Blockchain can determine if an authority is eligible to vote. The voter can then get a token based on the individual information. The token would then act as a tracker for votes which can only be cast once. This decentralization would greatly help in running fair elections as data cannot be forged or duplicated. This would mean more voter participation and less election based violence.
Citizens of developing countries are immigrants in developed countries. They form the bulk of the global remittance system’s remittances. There are intermediaries in between such as MoneyGram or Western Union through which the money is remitted. All the intermediaries make some profit from the remittances, pushing the transaction costs higher.
Blockchain acts as a public ledger that efficiently stores the transaction history. The process takes a significantly shorter time, the intermediary is eliminated and the transaction costs reduce. With blockchain’s decentralization and transparency, every process is recorded and verifiable.
Blockchain is a definite possibility explored by various fintech companies and banks for cross-border transactions. Using cryptocurrency reduces transaction costs and hastens the process of remittance.
Developing countries have a problem accessing affordable and reliable sources of energy. Countries across Africa and Asia have a problem accessing reliable energy. They depend on their utility companies to enter into agreements with adjacent countries for power supply.
Blockchain eliminates this dependence on others and makes it easy to access energy. The cost of energy can be reduced greatly by utilizing energy ICOs. The decentralization of power supply eliminates the need for external power suppliers and benefits both the consumers and energy producers.
Blockchain technology is the future. The technology has not fully spread, but it is growing fast. Initially, there was a reluctance to accept the technology, but mindsets are changing. It is an innovation that can be of great advantage to many around the world.
Developing countries are riddled with problems caused by poor governance and corruption. Blockchain is a long-lasting solution that will see growth and development in their world countries.
If the developing countries embrace blockchain, it will see them improve on corruption, electoral processes, money remittances, and reliable power supply.