Blockchain is rightly considered as revolutionary technology for the modern economy. But how does this solution apply to developing countries?
Not so long ago, we mentioned Akon’s initiative to bring blockchain to Africa and use it to help the continent in technological development. Today, we take a closer look at the possibilities that blockchain might bring to developing countries. How can it help with various issues – both social and economical – which those nations face?
The first usage in which blockchain technology can improve the situation of developing countries is the overall performance of the state. Blockchain might be useful for governing many areas of the country’s economy. Using a distributed ledger may cut off the number of intermediaries in various processes crucial for functioning. And for a country that still has a few catching up to do, such support might be an essential factor in shortening the process of development.
An example of the field where blockchain might be successfully utilized is the voting system. Nationwide elections are the foundations of a democratic system, and a primary tool allowing citizens to influence the state policy. But for this to happen, the country need to avoid potential manipulations, corruption, and bribery which may occur during the voting.
Implementing the blockchain technology in the voting system helps to prevent abuses during elections, like forging or double-spending votes. Moreover, this idea may also facilitate voting for people who would have problems with taking part in this process. Such a project is already under development in India, where the main reason for it was to give people the opportunity to vote away from their place of residence.
Of course, one of the most noticeable implementations of blockchain technology in developing countries is related to its most popular utilization around the world: decentralized money. The idea of the currency free from manipulation of any third parties suits well for any modern society – and those from less developed countries will especially benefit from it.
The example of why cryptocurrencies might be needed in such places is clearly visible in Zimbabwe. This African country is currently facing hyperinflation, which makes the functioning of an ordinary citizen very complicated. In a situation where the value of the national currency can drop at any minute, people have turned to Bitcoin. In such cases, worldwide money free from national borders may significantly help to survive the economic crisis.
But the idea of utilizing cryptocurrencies in developing countries isn’t coming only from the citizens’ initiative. Decentralized currencies are seen as a functional alternative to those without a bank account, which is still common in African countries such as Nigeria, especially for women. It is an excellent opportunity for cryptocurrency companies to give them them a reliable solution based on blockchain technology that would help them to use decentralized finances in their everyday lives.
Toss a coin for a charity
We also shouldn’t forget about the potential of charity when it comes to providing support for developing countries. In a situation when the state is unable to provide help for its citizens, the acts of altruism are the only thing they can count on. And the blockchain technology may improve it significantly. The transparency of distributed ledger is important when it comes to donating money for noble goals because it ensures us that our funds will reach designated people.
Moreover, because of the tokenization of the cryptocurrency industry, charity actions are more likely to reach more people who could support the initiative. In the blockchain world, we are used to the existence of various coins. This makes us more eager to get involved in new blockchain projects and acquire new tokens. And in case of charity tokens, we have a full picture of how our funds will be used to help achieve a set goal.
The example of successful implementation in that field is Binance Charity. This charitable initiative of the well-known cryptocurrency exchange has initiated many charity auctions around the world. A notable example of their actions is the Pink Care Token issued to fight so-called period poverty – a lack of basic sanitary supplies for women, which is especially common in developing countries.
However, we should remember that blockchain and cryptocurrencies aren’t always the best solution. Lack of a thoughtful idea for their implementation of new technologies may as well lead to the worsening of the situation. The most notable example of such failure is Petro – a Venezuelan currency, which was meant to help the national economy in the time of crisis. Unfortunately, instead of reliable money, it turned out to be a centralized currency dependent on the government, without any particular value.
Failures similar to petro may discourage both governments and citizens to the idea of blockchain. And no wonder, since any technology, when it is poorly implemented, may turn out to be a fiasco, bringing even greater chaos. That’s why the importance of blockchain utilization in developing countries should rely on people who are already acquainted with this idea. Only then a satisfactory solution may be introduced.