Blockchains are digitized, decentralized, public ledgers of cryptocurrency transactions (investopedia.com). These continuously-growing transactions are recorded and added to the blockchain in chronological order, allowing users of blockchains to keep track of digital currency transactions without the involvement of a third party.
Popularized by the phenomenon of Bitcoin and other cryptocurrencies, blockchain technology is a relatively new idea in the technology realm. Blockchain technology was first described in 1991 but was only conceptualized in 2008 by an anonymous person or group known as Satoshi Nakamoto. It has now presented an opportunity to revolutionize the functionality of secure financial software platforms across various industries, such as infrastructure, finance, and real estate.
It is no secret that there is a substantial economic division across the globe, with several countries unable to improve their positions regarding financial growth and assets. One instrument that can be seen as a means to alleviate this disparity is technology. Blockchain technologies can bring substantial changes to impoverished communities, widely seen as a potential to offer solutions to many problems in developing countries.
The populations of many of these impoverished nations have no way to record their property rights due to the formal development of their countries. Imagine what happens when there is no formal way to record properties. In an article entitled How Blockchain Can End Poverty, authors Phil Gramm and Hernando Soto discuss the impacts of the financial hardships that sweep through these nations, such as the devaluation of wages and assets, and the poor credit situations of the users. (wsj.com/articles/how-blockchain-can-end-poverty-1516925459)
But we must keep in mind that financial hardships can further impact the populous in more ways than just materialistically. In 2010, Mohamed Bouazizi lit himself on fire in the Tunisian city of Sidi Bouzid in an act of protest about the lack of property rights and the rule of law. This act would trigger a series of protests and demonstrations across the Middle East and North Africa that is known as the Arab Spring. This event is just one of many caused by a lack of a formal property right recording system.
Blockchain technology is a promising technology capable of preventing rioting events, such as the Bouazizi protests, as it gives the impoverished an opportunity to track what properties they own. The nature of blockchain technology gives it an encouraging level of record-keeping capacity needed for this kind of endeavor. Since it is constantly and automatically recorded when property ownership changes hands through the internet, it has the ability to provide access to transactional records of billions of people around the world. If implemented by impoverished countries, blockchain technology can empower them with the ability to register property rights on a single computer platform, allowing access to essentially a private-property registration system for everyone in the world.
Property registration is just one of the potential benefits of blockchain technology. (shapingtomorrow.com) Cyber risks may be reduced because identity authentication is observable through a visible ledger. Smart contracts or self-executing contracts between two parties can be further utilized, allowing easier, more efficient, and faster transactions compared to traditional contracts. For example, take the movie industry where producers and production companies could tie their movies to smart contracts specifying how it is to be used and the cost involved. The smart contract acts as the avenue by which to purchase the movie automatically: if a school wants to purchase the right to broadcast a movie for a class, the cost implemented could be significantly lower than if a movie theater wanted to purchase the rights to broadcast the movie in its theater.
These are just a few possible uses of blockchain technology. Imagine if everyone had a tether to the internet. Imagine the potential of giving individuals the ability to sell their own products through smart contracts at a much cheaper price than hiring a middle man. Imagine a world where your donations don’t go through a processing service and goes straight through a smart contract into your organization’s funds. Imagine never having any more disputes about who owns what or how much anything is. Blockchain technology can still be considered in its infancy, as can be seen with the very recent explosion of Bitcoin and cryptocurrency. We have only scratched the surface, and there is even more potential yet to come.
Ed.’s Note: the writer can be reached at [email protected].
Contributed by Samuel Alemu