Blockchain is rightly seen as a revolutionary technology for the modern economy. But how does this solution apply to developing countries?
Not so long ago we mentioned Akon 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 could bring to developing countries. How can it help solve various problems – both social and economic – that these nations are facing?
The first use in which blockchain technology can improve the situation of developing countries is the overall performance of the state. Blockchain could be useful in governing many areas of the country’s economy. Using a distributed ledger can reduce the number of middlemen in various business critical processes. And for a country that still has some catching up to do, such support could be a critical factor in shortening the development process.
An example of an area where blockchain could be used successfully is the voting system. National elections are the foundations of a democratic system and a main tool for citizens to influence state policy. But for that to happen, the country must avoid the potential manipulation, corruption and bribery that can occur during voting.
The implementation of blockchain technology in the voting system helps prevent abuse during elections, such as tampering or double spending of votes. In addition, this idea can also facilitate the vote of people who would have difficulty participating in this process. Such a project is already under development in India, whose main reason was to give people the opportunity to vote outside their place of residence.
Of course, one of the most notable implementations of blockchain technology in developing countries has to do with its most popular use around the world: decentralized money. The idea of a currency free from manipulation by third parties is well suited to any modern society – and those in less developed countries will particularly 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 go down at any time, people have turned to Bitcoin. In such cases, global money freed from national borders can significantly help to survive the economic crisis.
But the idea of using cryptocurrencies in developing countries doesn’t just come from the citizens’ initiative. Decentralized currencies are seen as a functional alternative to those that do not have a bank account, which is still common in African countries such as Nigeria, especially for women. This is a great opportunity for cryptocurrency companies to give them a reliable blockchain technology based solution that would help them use decentralized finance in their daily life.
Throw a coin for a charity
We must also not forget the potential of charity when it comes to providing support to developing countries. In a situation where the state is unable to help its citizens, acts of selflessness are the only thing they can count on. And blockchain technology can improve it dramatically. The transparency of the distributed ledger is important when it comes to donating money for lofty purposes, as it ensures that our funds will reach designated people.
Additionally, due to the tokenization of the cryptocurrency industry, charitable 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 the case of charity tokens, we have a complete picture of how our funds will be used to help achieve a defined goal.
The example of a successful implementation in this area is Binance Charity. This charity initiative of the famous cryptocurrency exchange has launched numerous charity auctions around the world. A notable example of their actions is the Pink Healing Token issued to address so-called menstrual poverty – a lack of basic health supplies for women, which is particularly common in developing countries.
However, we must remember that blockchain and cryptocurrencies are not always the best solution. The lack of a thought out idea for their implementation of new technologies can also lead to the aggravation of the situation. The most notable example of such a failure is the Petro – a Venezuelan currency, which was supposed to help the national economy in times of crisis. Unfortunately, instead of a reliable currency, it turned out to be a centralized government dependent currency with no particular value.
Failures similar to Petro can discourage governments and citizens from the idea of blockchain. And no wonder, since any technology, when poorly implemented, can turn out to be a fiasco, bringing even more chaos. This is why the importance of the use of blockchain in developing countries should rest on people who are already familiar with this idea. Only then can a satisfactory solution be introduced.
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