Blockchain: A saving grace for the third world?
Nearly half the world lives on less than $5.50 a day. That’s about £4.15. Just think about how easily we can spend £4.15 not even think about it, whether that’s on your lunch, a travel ticket or a beer after work. But for 3.4 million people around the world, that’s their days’ wages to feed themselves and their family, struggling to meet basic needs.
Looking at poverty in developing countries is, of course, overwhelming, and no one can ignore the enormity of the task in hand. Poverty can be caused by conflict, corruption, or scarcity of basic resources like running water and electricity… It’s an endless list of issues that no one’s had the ability to tackle yet–or perhaps not the means.
Technology can play a crucial role in alleviating poverty as we live in an age where technology enables huge opportunity and wealth creation. One type of technology that is making this possible is Blockchain. The decentralised, public ledger might be splitting opinions in the technology industry but it’s certainly moving in the right direction, slowly but surely. And Blockchain can help reduce world poverty in more ways than you think…
It allows for financial inclusion
Access to the banking system is one of the biggest causes of the gap between the rich and the poor and there is still a significant number of people in the world who are still without a bank account. This is where Blockchain can make a difference.
According to the World Bank, around 1 billion financially excluded adults own mobile phones and around 480 million have access to the internet. By combining Blockchain with mobile technology, we can put those without a bank on the grid since the cost of maintaining physical branches would be eliminated.
Some global economists are highly enthusiastic about Blockchain’s ability to create new value opportunities and level the playing field in developing countries as it opens up parts of the global economy that were inactive before.
It monetises the smallest of transactions
In the Blockchain, value can be assigned to items at increasingly smaller price points. You can cost-effectively compensate someone .0000001 of a cryptocurrency for even a small amount of data.
Service to customers below a certain threshold is not profitable for traditional banking organisations, but the Blockchain can enable poor farmers in developing areas to engage in global commerce by simply being connected to the internet. This also gives more people more access to goods and services that they never had before.
A huge advantage of the Blockchain is that it presents the chance to empower and connect people who may otherwise be overlooked by the conventional banking system.
It fosters micro-lending and micro-trading
Thanks to Blockchain’s ability to record the smallest of transactions, microlending offers a rope for many people to pull themselves out of poverty. It’s no secret microlending has a bad name around the world, due to its association with high-interest rates and loan sharks, but you can take these out of the equation with Blockchain.
The cost of administration can reduce hugely with Blockchain accounting and this would open up opportunities for microlenders to reach many more accounts, extending their services to a greater number of borrowers.
For people living in impoverished countries, particularly those working in the agricultural sector, microtrading opens up a world of economic possibilities. Individual sellers can actually reach the market and trade at a fair price, without unnecessary markups.
It’s completely transparent
Blockchain is built on a foundation of accountability, with every record in the ledger transparent and viewable to all. Corruption could be a thing of the past as not only would this ensure that individual traders get a fair deal, but it would also make it cheaper for the end user too.
All transactions in the Blockchain cannot be erased meaning there is no need for human interaction and therefore the possibility of falsification. And it’s not just monetary transactions that can be stored in the Blockchain, land titles and deeds stored in the public ledger could prevent the seizing of land, a historical cause of poverty, driving small-scale farmers and independent traders from their homes.
Another advantage of transparency in the Blockchain is it that it can help prevent voter fraud. In the Blockchain, once you vote is cast its tamper proof, meaning voters can make their choice without fear of intimidation or consequences.
In the future, this could help developing countries to obtain the free and fair elections they are promised, rather than ones marked by chaos and uncertainty.
It provides connectivity for everyone
Of course, it is not possible for absolutely everyone in the world to be connected to the internet and according to CEO of RightMesh, John Lyotier, almost 4 billion people in the world still don’t have continuous access to the internet, excluding them from the social and economic benefits that connectivity provides.
By harnessing Blockchain’s potential, RightMesh plans to provide connectivity worldwide, without the need for internet access. Their “mesh networking” system allows mobile phones to connect directly through the blockchain, without an ISP. The RMESH token works as an incentive in an attempt to encourage users to connect with each other.
The implications of this are far-reaching. Even those of us with internet access aren’t exempt from extenuating circumstances. Hurricanes, earthquakes, floods–should a natural disaster occur, constant connectivity could save countless lives.
It brings electricity to new places
1.2 billion people living in rural areas across the world still lack access to electricity, according to the International Energy Agency (IEA). But could Blockchain provide the answer?
Financing and distributing energy is currently funnelled by large, centralized government organisations and NGOs with an inefficient system that can take years to implement. Energy ICOs, like Ethereum-based ImpactPPA, allow private investors to finance and accelerate global clean energy production, dividing up energy generation.
They can provide energy where it’s needed most through a token model that allows its community to decide when and where projects should be funded, allowing more energy resources to reach those who would not necessarily have access in a centralised system.
Despite its critics, Blockchain could provide the answers we need to help alleviate poverty across the globe. It could enable struggling families and traders everywhere by connecting them to systems that they were previously excluded from.
Technology is a tool and what matters is how we use it. If governments and organisations in developing nations make smart investments in this technology while making it inclusive for everyone, Blockchain might provide our best chance at making this world more equal for everyone.
To find out how Blockchain can be beneficial in other areas, read our recent blog, ‘How can Blockchain shake up the buying experience?’ here.