Blockchain: A Necessary “Opium” for Emerging Economies
STATUS QUO
Our present-day world witnesses the emergence of economies in different parts of the world struggling with the daily hassles of high rate of unemployment and underemployment, high rate of poverty, unavailability of quality jobs, instability of the economy, inflation/devaluation of her currency and low productivity/high consumption rate. These issues act as road block and hinder the progress of the Nation States in their quest to become a world-class developed economy.
While they strive to become like U.S.A or other Nations with developed economies, some of these growing economies fall short of the resources, personnel and administrative capacities/competence to become developed. Hence, they continue to wallow and end up in an infinite regress; a state of “developing” without any hope of being “developed.”
But, the 21st Century world has given birth to an “opium”; a medicine, to help alleviate the “sufferings” of these growing economies and assist them in solving some existential and perennial issues that hinder their growth status.
BLOCKCHAIN AS AN "OPIUM", A CURE
From its name, “Blockchain” means “block of chains” or “chains of blocks”; either ways, we refer to something that speaks of interconnectedness.
In technical terms, I will define blockchain as "a set of automated and encrypted system that serves as a digital ledger such that it records every transaction from both parties, and such transactions are time stamped without the possibility of amending or changing the records." - @ksam
Big Big Grammar, right?
Let me break it down with this rough example:
Let’s say, @onos-f and @magicfingerz intend to make a huge deal. They invited @ksam
(that’s me)
as a trusted agent to ensure that it’s a safe deal and that both parties will get a fair share of what they want. When they make the transactions, I act as the middle man and ensure that I have a record of the payment sent and payment received, as well as services rendered by both @onos-f and @magicfingerz. It all goes well, and ended like a happily ever after Cinderella movie.
This is what the traditional style offers you, but with blockchain, there will be a huge difference.
With blockchain the transactions will be done automatically, in other words, no need to invite a third party because the system is fast, secured, trusted and provides records that cannot be altered or tampered with.
Hence, if @onos-f and @magicfingerz were to use Blockchain to make this transaction, instead of looking for a trusted agent as a third party which will cost them time and extra money, they can simply make the deal using blockchain. They get a proof or record of the transactions made. This can be done at their convenience and without wasting much time.
Hence, from this little example of ours we can identify the features Blockchain offers and then we can relate it to how it can be useful to growing economies.
WHAT BLOCKCHAIN OFFERS
Before I continue, I would like to remind my readers
(especially those who are new to the world of Blockchain)
that Cryptocurrency is just a successful use case of Blockchain. In other words, the world of Blockchain is vast and it comprises cryptocurrency and many other amazing things. It is a world of its own.
So, let’s get back to the features of Blockchain, and these include:
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Transactions using blockchain are fast and quick unlike the traditional style. With Blockchain, you can send Money from India to Nigeria, U.S to Venezuela or Spain to China without facing the hassles of going to the bank, requesting a form to fill and waiting for 7 working days before the payment get delivered.
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The records of transactions on blockchain cannot be changed, modified, edited or tampered with once the transaction has been verified. Hence, this rules out the possibility of making a scam transaction with Blockchain. Thus, it promotes transparency and the account can easily be audited.
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The records and data on the blockchain are safe and secured.
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With blockchain, there is no need of inviting a third party to take record of the transactions; hence, it will be faster and it will reduce the cost to be paid when inviting a third party or agent.
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The transaction can be made at any time and at anywhere; it can be done at midnight or between people who are living in different continents. Thus, it is more flexible than the traditional means.
With these features of Blockchain that we have listed, here are ways which they can be applied to growing economies and help these growing economies improve.
BLOCKCHAIN AND GROWING ECONOMIES
Blockchain can indeed be useful to growing economies in the following ways:
BLOCKCHAIN IN GOVERNANCE
Blockchain can help in the reduction of the cost of governance of these growing economies; by doing this it will reduce the cost of consumption and there will be extra income to spend on productivity. Put differently, rather than employing third parties to handle certain contracts and spending millions or billions of dollars to hire a trusted party, blockchain can simply be used and the records will be kept.
Blockchain can also help in improving the transparency in the affairs of these government bodies. It is sad that some of these governing bodies use their position to mishandle government funds for their own benefit. With blockchain, there will be an open record of transactions and these transactions will be visible for both the politicians and the masses. Hence, it will increase accountability in office.
BLOCKCHAIN IN FINANCE
Blockchain has proven to be efficient in the financial world. With the emergence of Bitcoin in the early 2009’s and as a strong force in our world today, the use cases of crypto currency keep increasing on daily basis. From daily transactions buying and selling, to peer to peer transfer of currencies. We have also witnessed the move from a Centralized financial system to Decentralized Financial system (DeFi), all these are done in a way to improve the financial systems as a response to the defect in the traditional method.
Thus, in growing economies blockchain can aid to speed up transactions, bank payment, peer to peer payment model, bank shares, insurance and currency exchange, among other financial models. Thus, attracting external investors to her growing economy.
BLOCKCHAIN IN DATA SECURITY/STORAGE AND ANALYSIS
Blockchain is a secured and trusted system. Once records are transacted using the blockchain, these records cannot be tampered with. Hence, it will be relevant in storing data, analyzing data and managing data as well.
This method can be employed by growing economies to help with their data management. This will also reduce the cost of using third parties, it will reduce the stress in compiling the data, it will ensure correct data and it will be a faster method.
From this piece, I have been able to show forth how Blockchain can be an “opium” a “drug” that can help emerging economies in their quest of becoming a developed economy.
Have you read these posts by me?
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I AM KSAM
I may not be your favourite author, but you can journey with me to help me develop my writing skills. I am always open to criticism, correction and learning 🥰.
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