Blockchain, the flagbearer of the upcoming fourth revolution has seen resounding success in the world’s developed countries. Despite being a largely nascent and emerging technology, blockchain has been able to make forays into a large number of fields: supply chain management to healthcare, art to entertainment. However, for all it’s worth, can blockchain help the demographic that truly needs it? Can it uplift the world’s poorest? Simply put, the answer is yes. Let’s see how.
Blockchain, in brief:
Blockchain is nothing but a digital ledger composed of blocks chained to one another by virtue of the fact that each block carries an imprint of its preceding block’s hash value as well as its own. This ledger, originally developed to support Bitcoin transactions, can now do more than simply updating and validating cryptocurrency transactions chronologically, immutably and transparently. It can help monitor and track supply chains and healthcare information, and can use smart contracts to make deals more convenient through the application of pre-set deal stipulations.
How can blockchain help the world’s poorest?
There are quite a few areas where blockchain technology can transform the lives of the poorest people in the world. These are just a few of them:
1. Cheaper and Easier Foreign Remittance: A great number of families in the world’s poorest countries bid goodbye to one or a few members who go to other countries as economic migrants. They naturally wish to send some money for their families back home and given these people are already quite poor, the high amounts of transfer fee charged by traditional avenues such as Western Union often turns out to be too high for them. The percentage of remittance amount incurred as fee takes away from the little they can manage to save and send. As Wall Street honcho Bart Smith said earlier this year, blockchain can really make “cross-border money transfers” a breeze and help out the poorest families with sons and daughters away as economic migrants.
In fact, blockchain-based services such as BitSpark of Hong Kong charge extremely low amounts, such as about 1% for hefty amounts, which is sufficiently lower than traditional rates.
2. Humanitarian Aid: Often, the poorest people of the world are the ones stuck in areas of conflict. Living in war-torn states with borders dissolving around them, they get little from the state governments as in conflict situations, rule of law is often done away with and corruption is rife. Even when international organizations like the UN step in, funds often get misdirected in the hands of local officials or sometimes even in the hands of aid workers themselves. Blockchain can help manage these issues by transparently recording and tracking fund usage and channelising aid efforts. For example, the UN World Food Program’s “Building Blocks” project in Pakistan’s Sindh utilizes blockchain to validate, record and support food and cash aid to poor people. In addition, the Jordan refugee camp is also powered by blockchain.
3. Healthcare and Insurance: The poorest of the world are the ones who often fail to secure good healthcare facilities for themselves as they are frequently quite expensive. They also lack access to insurance facilities since these companies charge a substantial amount to cover administrative costs. Use of blockchain can bring down these costs and subsequently the fees too. Blockchain, by using smart contracts, can make it possible to disburse insurance amounts upon producing relevant documents and meeting certain criteria. This eliminates the need to use officials and employees to pore over documents and have the approval process go through levels of authority. As a results, costs are significantly brought down and insurance policies can become more accessible to the poor.
4. Financial Inclusion: As per World Bank data, over 2 billion people around the globe have no bank account or access to banking services. Blockchain technology can help bring financial services to these unbanked and underbanked and use of cryptocurrencies such as Bitcoin can help develop token economies that empower SMEs (small and medium enterprises).
These are only some of the most basic ways in which blockchain can enable and empower the poorest in the world. If utilized effectively, blockchain has massive potential to bring about a sea change in how the poor live their lives and how they consume goods and services.