In my article An Intro to Blockchain, I discussed the basics of blockchain technology for people that had not heard of it before. This article will expand on that and provide concrete examples of potential uses of blockchain technology, with a primary focus on how impactful they could be in the developing world.
You’ll recall that I define blockchains as incorruptible peer to peer public databases which can be used to permanently record transactions in a manner which makes them fully available for public view while simultaneously maintaining an extremely high level of private security around the originator and recipient of the transaction. The systems are maintained through robust incentive programs for anyone interested in being part of the permanent public record keeping process. Essentially, through the decentralization of the database, you heighten the security of the data by not concentrating it all in one place or relying on one party to protect it from the throngs of ne’er do wells trying to access it for personal gain.
Unless you have been living under a rock, I am sure you have heard about blockchain by this time. While blockchain…www.datadriveninvestor.com
The following concrete examples demonstrate how blockchain technology could directly impact people in the developing world.
Ѻ Close to 2 billion people in the world today are unbanked. Most of these people do not have bank accounts because they either do not have enough wealth to store or the costs of having a bank account are prohibitive and would deplete a significant amount of any revenues while adding little benefit. Also, banks typically do not want many of these same people as clients because the cost of having them as clients is greater than the revenue generation they bring to the bank. Blockchain technology allows for a system of value creation and peer to peer exchanges, providing a system to store funds, make payments or purchases, crowdsource invest, or transfer funds globally (even in small micropayment increments) all in a secure environment.
Ѻ The internet introduced many people to the ability to be part of a sharing economy. Unfortunately several layers of trust-generating middlemen, which initially made internet purchases feasible, came first. This middle layer can add a significant cost to any purchases made over the web. It includes payment processors, credit card companies and banks (which intrude themselves into every online transaction), and often do not fully resolve dealings for days after the purchase. It also includes aggregators which earn a much larger piece of the pie for developing the marketplace. Just think of AirBnB or Uber which charge 25% of every transaction for facilitating the use of or sharing of a residence or transportation. A blockchain based system would not only ensure complete payment finality within 10 minutes, but it could significantly reduce costs by eliminating the middle layers while still ensuring a trusted network. Imagine a peer-to-peer sharing economy where every asset that you have (vehicle, residence, tool, ability, etc..) could be offered to everyone around you without having to share a significant part of your revenue with middle layers and within a system based on trust. You would know that you would receive your funds if you provide the service and the whole system would be reputation based, meaning that people who provide poor service would get poor reputation scores and effectively would eventually not be called upon by potential clients. The system would be constructed to ensure that people who add the most value would be the best rewarded and everyone would maximize revenues and cut out many middle layers.
Ѻ After the earthquake leveled Haiti in 2010, the Red Cross raised over $500 million for relief efforts and claimed that much of that would be used for new infrastructure (housing, etc..). While they claim to have provided housing for over 130,000 people, it has been reported (www.npr.org among others) that the number of houses built by the Red Cross actually totals six. Much of the problem in a country where all of the infrastructure was ruined lies in the fact that there are very poor records of land ownership. It might be difficult to build homes if you don’t know who owns the land. Blockchain technology could provide a permanent and immutable record of ownership of land across the globe. Selling land title would easily be registered through a system such as this and allow for an organization such as the Red Cross to easily identify whose land they are building on without having to deal with miles of red tape and missing paperwork.
Ѻ The same type of registry system could be used for birth certificates, death certificates, marriage certificates and health records. In the developed world, there are instances of people dying because their family doctors could not be reached to release medical records to emergency room physicians. The question is why should one doctor own the records of their patient? Why should the patient not own their own medical record and be able to share it with whomever they want? If all medical records were stored in a blockchain type distributed application, then that information could be shared on a timely basis when a medical history is vital to present treatments. The same theory applies to the developing world. Proof of vaccinations or treatments could be vital to refugees whose villages have been destroyed or those from remote villages. The ability to have all medical information available at any time could save millions of people globally, and its availability would come through a quick iris scan or fingerprint based system of recognition.
Ѻ Elections in the developing world (and in many developed countries as well) are notorious for being less than an accurate representation of the people’s desire or actual vote. A Blockchain based system of one vote per person fed into an unchangeable system, with results automatically calculated and available immediately after the election is over, could dramatically increase voter engagement and would definitely be verifiable even without tying any particular vote to any particular voter.
I have only mentioned a few of the possible applications for blockchain technology in this article, and yet, even with these, you can gauge what kind of impact this technology will have moving forward. It is very exciting to witness and the next few years will lead to a more private yet more trusted decentralized system of connectivity for us all.
Derek Kopke is a senior business development executive and consultant. He has traveled to over 65 countries and negotiated and closed sales in over 80 countries across the globe. His Bachelor’s Degree in Education and MBA in International Business, and his unique world view and experience with cultures across the globe, provide the foundation he has used to benefit companies interested in growing overseas. Derek is based in Montreal, Canada where he lives with his wife and two teenage children.