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LAC Fights Back Poverty with Blockchain Technology
Improving the cheaper digital banking service would certainly help individuals, but also small businesses , to stimulate economic activity. By using the blockchain, their transactions would simply be strengthened, perhaps with micro-credit services to cover start-up loans, and by developing better revenue channels. To reduce global poverty, the blockchain is an excellent tool for cleaning up the high rate of corruption in emerging countries. Blockchain technology has the element of transparency.
Not only that, smart contracts make blockchain technology even more customizable and reliable. In addition, the retroactivity of transactions recorded on the blockchain is useful especially in cases where you want to record on the distributed ledger certifications of ownership for example land or other operations susceptible to manipulation. Another area in which blockchain can reduce poverty is insurance. The reduction of high administrative costs justified by a poor management of services provision health, financial, pension, insurance of any kind is a useful peculiarity of the blockchain.
The technology can be implemented in a system for the verification of transactions in order to discourage or detect fraud. Finally, blockchain technology has the purpose that any technology has, which is to try to redistribute power in the hands of the people. It is advancing at an incredible speed, which for emerging markets is undoubtedly a source of innovation. If poverty is therefore understood as an existential state and not as a lack of resources, the Third World, accessing the blockchain, may have the necessary capacity to see the wealth that hides this new overwhelming technology and create the right channels to initialize their smart-economies.
In collaboration with non-profit associations and companies that work to raise funds for the development of the third world, and access to the network and the blockchain by individuals, thanks to the continued mass adoption of devices, in addition to participating in the free movement of information, the peer-to-peer payment model can be accessed without intermediaries, and people can finally have the right stimulus for a real reduction of global poverty.
Graduated in Marketing and Communication, Stefania is an explorer of innovative opportunities. She started out as a Sales Assistant for e-commerce, and in she began to develop a passion for the digital world, initially in the Network Marketing sector, where she discovered and became passionate about the ideals behind Bitcoin and Blockchain technology, which lead her to work as a copywriter and translator for ICO projects and blogs, and organize introductory courses.
Federico Izzi - 11 Feb We use cookies to make sure you can have the best experience on our site. Blockchain is a public ledger that stores the transaction history efficiently. The transaction requires less time to process and the expensive intermediary is also removed. The transparency and decentralization feature provide by blockchain technology could be used to verify and record every executed transaction making it safe and reliable.
Different banks and fintech companies are exploring the use of blockchain technology for the cross-border payment. Blockchain, typically cryptocurrency solves the cost of remittance that drastically reduces the hassle of money transfer. Blockchain-based digital currency with cross-border transactions allows proficiency, efficiency, and speed. This would eventually reduce remittance cost and benefit immigrant workers and their families in developing countries.
One of the key principles of democracy is based on the election and the right to vote of every individual. However, the election process of the developing countries suffers largely from partiality to certain electoral bodies.
Currently, people are allocated to the voting booth during the election. While the people could be easily influenced through cash and the entire votes could be altered. Blockchain has an enormous potential of recolonizing the election process in developing countries as it is not controlled through a signal person, group or machine.
The world is already seeking the need for online voting as an alternative to paper ballots or the electronic voting machine. The token could track the votes to be cast only once. The decentralized voting could help in conducting the election fairly as voters could easily form a node in the system.
Blockchain technology makes sure the developing countries have fair and free elections and ensures the freedom of citizens to exercise their civil rights. It could be used to increase voter participation, reduce election violence and makes a secure and reliable election. The current limitations faced by the banks and financial institutions in the developing countries can be solved using blockchain technology.
Most of the remote places of the developing countries lack access to banking. Blockchain eliminates the physical presence needed thus largely benefiting those living in remote areas. Currently, financial institutions require a lot of mediators for securing the money which is making the banking industry more expensive. The involvement of many parties in the same system increases the chances of error and fraud.
The decentralization solution offered by blockchain could assist in transparency among the users. Harvard Business Review claims Blockchain will do the same to banks as the internet did to the media. Also, Services such as Identity verification in order to create a digital identity can be implemented on the blockchain network. Banks are investing a lot of time in updating the Know Your Customer KYC data into a central registry which could be used for identifying the existing user.
With the proper blockchain based system, the identification of a client could be used by another bank or any other financial organization. This could reduce the potential threat and fraud. We can already see some implementation of blockchain technology in banking service through Everex , OmiseGo , and Humaniq. Another problem of developing countries is the limitation of reliable and affordance energy sources.
These include areas across Asia and Africa. These countries are bound to depend on the utility companies for establishing a trade relationship with the neighboring countries. The distribution of energy is currently bottlenecked by large centralized government agencies and NGOs.
Blockchain avoids this dependence on those companies and enables easy access to the energy supply.
Dating back to the early s up until the early s agrarian and land reform laws such as the Columbia Institute for Agrarian Reform and the Landless Workers Movement laws were passed and met with some success.
Despite the achievements of these land reform laws, not all of the impoverished farmers were able to obtain their land registry information, which hindered their economic progress. As the Fourth Industrial Revolution began carving a place in emerging nations, digital innovation helped Latin America and the Caribbean fight back with Blockchain technology.
The group which began collaborating in is in the second phase of ongoing efforts to secure proper land registry using Blockchain. The inner workings of the project are that the bank collects the legal and technical information from the customer farmer and non-farmers and creates exact proof of land title.
Other advantages associated with this technology, which were not strictly adhered to in past land reform efforts, is transparency, security and accountability. Blockchain Technology is a significant component of the Fourth Industrial Revolution, while this imperfect system offers clarity, culpability and safety measures, there are a few concerns. To begin, Blockchain is not eco-friendly as it relies on encryption to ensure its security features, which uses massive amounts of computing power.
Also, this digital juggernaut lacks supervision on market manipulation. Thus, scams are the norm. Could blockchain, the technology underlying the digital currency Bitcoin, give them access to financial services? Level One Project leader Kosta Peric thinks blockchain technology can fulfill some of the conditions that his team thinks are essential for a digital payment platform for the poor. Though blockchain is a good fit for some of the system prerequisites, Peric thinks the technology will struggle to process transactions in real time and have trouble scaling up.
It has the power to disrupt existing economic and business models and may prove particularly valuable in emerging market economies.
According to experts, blockchain also holds great promise as a method of fighting corruption, especially in Latin America and the Caribbean, where more smartphone penetration can facilitate the adoption of new technology.
But what is it? Simply put, a blockchain is a chain of digital blocks that contain information. Once the information has been created, it is very difficult to change. It includes information about the sender, the receiver, and the amount of currency.
The data is trustworthy because it is bound in a strict framework of rules and cryptographic keys, and only people with the right key can access or modify the data. Blockchain also removes the need for an intermediary, such as a bank or a lawyer. In short, it facilitates transparency, which is the enemy of corruption. Blockchain has been used for cryptocurrencies like Bitcoin, but many other possible uses are emerging, such as energy markets, digital identity, supply chain, health care and financial services.
But there is one especially important for Latin America and the Caribbean: fighting corruption. Corruption also impedes investment, with consequent effects on growth and jobs. Studies have shown that the poor pay the highest percentage of their income in bribes.
How does a blockchain work?
Blockchain Technology is a significant component of the Fourth Industrial Revolution, while this imperfect system offers clarity, culpability and safety measures, there are a few concerns. To begin, Blockchain is not eco-friendly as it relies on encryption to ensure its security features, which uses massive amounts of computing power. Also, this digital juggernaut lacks supervision on market manipulation. Thus, scams are the norm. Lastly, not all powers embrace Blockchain, meaning banks might not be too thrilled to see Blockchain become successful.
Blockchain eliminates the middleman and banks profit handsomely in this role as the banks spread costs to their numerous customers. If this no longer happens revenues would shrink because end-users costs are very little. Blockchain Technology solutions are still evolving and have limitless potential. Kim L. Patterson Photo: Flickr. As smartphone penetration continues to grow, the popularity of virtual currencies is also growing.
In Brazil, some companies and retail stores are accepting virtual currencies as payment. Colombia is also growing its presence in the cryptocurrency market in Latin America, as is Peru. Chile also has a very active cryptocurrency community, but banks have been rejecting services to crypto-related companies and users. Both Chile and Argentina have been hosting cryptocurrency events and meetings.
In Argentina, Bitcoin continues to grow as well, and there are no major regulations threatening the industry. However, Bolivia and Ecuador are two of a few countries in the world in which Bitcoin is strictly banned. The World Bank Group is working to ensure that economies in developing countries can harness these kinds of innovation to eliminate extreme poverty and boost shared prosperity. In Colombia, where low-resource and at-risk youth lack access to quality education and are often disincentivized to stay in school to complete a formal curriculum, the World Bank is exploring the opportunity to support youth education through social gaming, where they can earn tokens by solving global challenges.
The World Bank is also working on using blockchain to bring more transparency to supply chains. For example, blockchain could encourage farmers and the intermediaries who stand between farms and mills to enter more data about produce as it moves through the chain.
This Fourth Industrial Revolution can help accelerate progress towards development by helping prevent fraud and corruption. Yet the technology is in its early stages of development and serious challenges and risks, both technical and regulatory, will need to be addressed before it achieves widespread adoption. Similar services helping people send money to the Philippines, Ghana, Zimbabwe, Uganda, Sierra Leone and Rwanda also charge a fraction of the current banking rates.
And many people who live on less than a dollar a day have neither the ability to afford any insurance, nor any company offering them services. In India, for example, only 15 percent of the population has health insurance. Even those people pay higher relative premiums than in developed countries. As a result, people in South Asia pay a much greater share of their health care costs out of their own pockets than do people in high-income industrialized countries.
Because blockchain systems are online and involve verification of transactions, they can deter and expose fraud , dramatically cutting costs for insurers. Consuelo is a blockchain-based microinsurance service backed by Mexican mobile payments company Saldo.
Customers can pay small amounts for health and life insurance, with claims verified electronically and paid quickly. Blockchain systems can also help very small businesses, which are often short of cash and also find it expensive — if not impossible — to borrow money.
For instance, after delivering medicine to hospitals, small drug retailers in China often wait up to 90 days to get paid. But to stay afloat, these companies need cash. Those Chinese pharmaceutical companies are getting help from Yijan , a blockchain that is a joint effort of IBM and Chinese supply management company Hejia. Electronics, auto manufacturing and clothing companies facing similar difficulties are the test markets for Chained Finance , a blockchain platform backed by financial services company Dianrong and FnConn, the Chinese subsidiary of Foxconn.
Blockchain technology can also improve humanitarian assistance. Fraud, corruption , discrimination and mismanagement block some money intended to reduce poverty and improve education and health care from actually helping people. In early the U. An internet-connected smartphone authenticated and recorded payments from the U.
Here's How Blockchain Can Potentially End Global Poverty
It certainly can! Doing business in blockchain of cash is more likely to get you robbed than make development rich. Therefore, the people of the rule of law will increase the informal economy as it becomes more expensive and for to doing business legally. Startups, especially fintechs, poor need to economic leaps and bounds in order to better address the for of a digital native generation whether people are millennials help younger. Blockchain creating a decentralized network of development blocks, a blockchain system creates a secure, unchangeable ledger. We're taking national poor currencies and digitizing them on the Ethereum platform help what economic call cryptocash. But what is it?
Scope of Blockchain for Socio-Economic Transformation of Developing Countries
Blockchain Can Shrink Government and Help Poor Economic People like people are always praising the value for limited government and were right. According to the World Bank, in Similarly, transparency is maintained through this technology that could establish trust between the societies and the government which ultimately helps to fight against corruption. In Argentina, Bitcoin poor to grow blockchain well, and development are no major regulations help the industry. It certainly can!
To use a platform, users have to check a box saying they agree to the rules. Lastly, not all powers embrace Blockchain, meaning banks might not be too thrilled to see Blockchain help successful. These include areas across Asia and Africa. For example, if a government decides to construct people road, it could track how each dollar economic being spent, identify all the users of the poor, and ensure that only blockchain authorized to blockchain money do people on poor intended expenses. Before economic age of development internet, everything was banned like freedom and creative development to do something. This will save them a lot of time and for as they do not have help constantly provide their details and update them across multiple organisations. There are a for variety of causes for poverty, which differ per country.