How the Blockchain Brings Social Benefits to Emerging Economies
Developing countries such as India, Kenya and others in East Africa are discovering an increasing array of applications for blockchain, the decentralized ledger technology that promises a secure, peer-to-peer mechanism for verifying information. Blockchain is finding innovative uses in banking and financial services, supply chains, agriculture and in managing land ownership records (land titling) in those countries, according to panelists who spoke at the Wharton India Economic Forum held recently in Philadelphia.
However, many laws in both developing and developed countries have not kept pace with digital advancements, and they continue to require paper-based documentation, preventing participants from taking full advantage of the technology, they said. Although a decade has passed since the blockchain’s invention, its technology is still evolving and being tested.
Blockchain is essentially a growing list of so-called “blocks” (a record of transactions in a decentralized ledger), which form a “chain” in a peer-to-peer network. Participants in the network verify or validate the blocks, eliminating the need for a trusted entity like a regulator or an accounting firm to authenticate the information in them. According to experts, the blockchain is secure and tamper-proof by design because transactions cannot be changed once the network has verified them. The technology promises to speed up and reduce the cost of transactions, and boost financial inclusion by providing more opportunities to farmers.
Photo courtesy of Christian Ditaputratama.