Blockchain sure is a buzzword at the moment.
Business, media, science, finance, tech and more – everyone is getting involved in this exciting and disruptive bit of innovation.
But what exactly is it and what is it used for?
Most of the articles you read at the moment, whether online or in a newspaper, refer to applications for blockchain in the world of business and finance in a predominantly Western World.
But what about its uses beyond just a currency platform? And what benefits does it have for third world countries?
In this article, we will give you an explanation of:
- What is blockchain technology?
- Potential uses of blockchain technology
- Blockchain technology in developed countries
- Blockchain technology in developing countries
- Where should we put the focus on?
What Is Blockchain?
There is a little bit of confusion around exactly what the blockchain is, and many seem to confuse it with the digital currency.
Whilst bitcoin and blockchain are linked, they are not the same. Blockchain is the platform that bitcoin and some other cryptocurrencies work on, but it also has many other uses asides from just processing monetary transactions.
The blockchain is a list of digital records that are continuously growing.
These records are called blocks, and they are linked and secured through the means of cryptography and each block contains a cryptographic hash of the block before it, a timestamp, and data relating to the transaction.
The blockchain is entirely resistant to tampering, hacking and unauthorised modification of the data and it is an open, distributed ledger that can record transactions efficiently and permanently.
It’s managed by a p2p network that adheres to a specific protocol for inter-node communication and the verification of new blocks.
Once a transaction or data has been recorded in a block, it is not possible to alter it retroactively without the alteration of the blocks that went before it, and this requires the cooperation of the network authority.
The blockchain was invented in 2008 by the anonymous individual or collective known as Satoshi Nakamoto.
It was initially designed to support the cryptocurrency Bitcoin by functioning as its public transaction ledger, and it was the first digital solution to solve the issue of double spending without the need to a centralised authority or server.
Blockchain and Bitcoin have been the inspiration that fuelled a revolution in the world of FinTech.
As well as use as a platform for executing and recording cryptocurrency transactions, blockchain can also be used for record management, identity management, supply chain management, logistics management, and even voting.
Many believe that we have only begun to scratch the surface of the potential that this disruptive technology has.
Read more in our Guide to Blockchain Technology.
Blockchain Technology Beyond Financial Industry
So it can be used for other things, not just money?
Yes. The number of other uses of blockchain technology is pretty much endless, and as mentioned above, we haven’t even started discovering its full potential yet.
Many opinion makers have likened blockchain to the dawn of the internet and have suggested that its potential could be as far-reaching and explosive, if not more so.
Authorship and Ownership
When it comes to intellectual property, particularly in such a digital age, it can be challenging to keep track of ownership and stop infringements of IP rights.
With blockchain, each piece of intellectual property can be attributed its ID and a digital certificate which will stop counterfeiting or unauthorised use.
Companies and governments around the world will be able to use blockchain based-ledgers to simplify records management, record business processes and procedures, and to tackle issues of security and compliance.
The blockchain can maintain permanent, a time-stamped data record that can give companies the chance to reduce the complexity and cost of doing audits, managing files and complying with authority and governmental regulations.
Blockchain technology offers a superb solution for those looking for more transparency and increased trust levels when it comes to voting.
By using this technology, votes and results can be accurately recorded securely and transparently and they will also be immune to tampering. The fact that the blockchain is public means that the voters themselves can independently audit the ballot box and totals.
The Job Market
There are several blockchain based programmes that have enabled job applicants to provide their credentials and certifications without the need of having them verified by a third party.
Credentials and details of education and employment history can be securely stored on the distributed ledger and can provide quick access to employers as and when required.
Blockchain Uses In Developed Countries
At the moment, most of the primary uses of blockchain technology are limited to transactions via the Bitcoin blockchain, other cryptocurrency blockchains, or financial institutions.
There are also some rather superficial, “first world” uses for the technology that has cropped up such as preventing the counterfeiting of expensive wine, facilitating the sale of property, tracing the history and legitimacy of fair trade products, and ensuring diamonds and other precious gemstones are conflict-free.
The use of smart contracts is expected to infiltrate many other aspects such as loans and mortgages, processing insurance claims, creating employment contracts, and of course, protecting copyrighted content.
While these uses are all of the incredible importance regarding simplifying our lives and increasing the efficiency of our business and personal experiences, they are hardly essentials.
But there are some applications of blockchain in already developed, Western countries that can help society.
Once such instance is in the healthcare sector.
Patients records can be stored on a blockchain, all in one place so that they can be viewed by any medical professional that needs to do so.
This means that up to date eye, dental, blood, physical, and even psychological records can be kept in one place, thus eliminating the chance for error or a medical professional not having a clear view of the whole picture.
Blockchain Use In Developing Countries
Blockchain is incredibly useful in undeveloped or developing countries.
One of the key benefits of it is that it is immune to fraud, tampering, and deception meaning that it is pretty useful in the fight against corruption.
With almost 1 billion people living in so-called undeveloped countries, there is hope as new technologies can offer significant changes to these countries by improving their institutions, governments, and even living conditions.
Blockchain technology has been put forward as a technological solution to many problems that plague developing countries, but getting the ball rolling is a bit of a challenge.
One of the leading issues in underdeveloped countries is their weak institutions, and this often leads to the failure of various development programmes that are suggested for implementation.
Corruption, for example, is more likely to occur in impoverished parts of the world where a lack of law enforcement is an issue.
Another issue is the lack of social trust, such as a lack of faith in legal institutions and social heterogeneity.
The concept of social trust supports economic growth, and it improves overall living conditions through more education, better investment rates and improved governance.
Possible solutions include offering loans to people in undeveloped areas (where they are not easily able to access regular financial institutions), a blockchain based property register, monitoring government and institutional spending, implementation of digital identity documents and records, and even voting in general, local, and council elections.
Budget tracking mechanisms that use the blockchain for record keeping and verification will be integral to stamping out miss-spending and corruption in developing countries.
Because the ledger is public and cannot be changed or tampered with, every penny that is spent must be accounted for and is open to scrutiny.
This means that all expenditures can be tracked and analysed and issues such as embezzlement and the funnelling of money can be eradicated, or at the very least, significantly decreased.
The fact that blockchain is decentralised, not controlled by any one entity and is unable to be tampered with means that it is perfect for use in countries where transparency is not one of their strong points.
By increasing trust in society and forcing institutions and governments to act appropriately and with accountability will benefit these jurisdictions in a big way.
By forcing these countries to be transparent and to do what they say they will do with funds, votes, and documents, significant steps can be taken towards developing into a first world country.
Where Should The Focus Be and Why?
While most of the excitement around blockchain is happening in the Western world, its real potential for the benefit of humanity lies in undeveloped or developing countries.
Trust is such an essential part of a functioning society, and in these types of countries, trust is something that is practically non-existent.
By using the blockchain which provides immutable trust and confidence in the transactions that are put on its ledger, these countries can start to build trust in every aspect of government and its institutions.
From tracking government spending or projects from agencies such as WHO, UN, and EU, to regularising the voting process, there is an untold number of ways that blockchain technology will make a massive difference to these countries.
Whilst, of course, it is important and profitable to understand how blockchain can impact our lives in the Western world, and the benefits that blockchain will bring us are quite astounding, there is more need for this technology in developing countries.
By implementing a variety of blockchain based projects in these jurisdictions, we can bring these countries up to the standards of Western nations and give them a chance to develop their economy, democracy and society further.
This plan is not without its challenges though.
Whilst it might look good on hypothetical paper, we must consider that there are still many countries where government departments and institutions don’t even have computers and records are always kept in paper format.
As computers are often too costly in some areas, this means that implementing blockchain technology would be a little bit difficult.
By encouraging the implementation of all types of technology in developing countries, steps can be taken towards implementing blockchain which will significantly improve the quality of life for people living there, as well as society as a whole.
The first step, however, is to convince all the naysayers that blockchain is what it says it is, and also to enable these countries to gain access to the technology and resources that they need to improve their economy and society.
Blockchain is without a doubt the future; it is just how we go about implementing it that will decide the level of its adoption and success.
In case of blockchain in developed vs developing countries, there’s also another issue that many seem to be forgetting about – developed nations don’t see the need for improvement as desperately as those in developing countries.
Being used to the society working efficiently, we rarely question what else could be done. Hence, the developing countries are likely to see benefits first.
Read more about the impact of blockchain technology.