Blockchain technology is regarded by many as being a disruptive force that is equivalent to the Internet in the ‘90s. The minds that push this technology forward believe that in a few years from now, it will harness the power to change lives across a number of segments.
A possibility of this change is present in blockchain and its use in ending poverty around the world. The supporters of this disruptive technology believe that this is not a far stretch of the imagination, especially when accounting for the different connections presented by the Internet. The Internet has played a significant role in creating a variety of opportunities that were simply not present before.
That raises the question: Can a new, growing list of records linked together with cryptography end a problem as large and looming as poverty?
If so, how?
A Look at the Current Data in Global Poverty
Poverty has significantly decreased over the years with only about ten percent of the world’s population living in extreme poverty today.
That ten percent is a radical improvement to the dawn of the 20th century, where more than thirty five percent of the world’s population lived in extreme poverty.
Yet, the data mentioned above is related to population of the world who experience extreme poverty, a state where individuals live under $1.90 a day.
Despite these advancements, poverty is still present in many parts of the world today and more progress has to be made in dealing with the issue. Many economists, politicians and world leaders have put forth different ideas and solutions to ending global poverty, but these initiatives may not have received enough traction or may have fallen short due to a lack of support, roadblocks due to corruption, or abrupt stops due to various other causes.
Newer Technologies Could Be of Significant Help
To be fair, new technologies have always made it possible to achieve objectives that have fallen through in the past.
This is evidenced by in the modern use of airplanes, telecommunication, and smartphones, all of which were brought to life by an improvement in technology that made these far off concepts become a reality.
As such, it wouldn’t be a stretch of the imagination to think that newer technologies such as blockchain may provide ways to minimize issues that have occurred in past initiatives. The blockchain just might help and make significant strides in the eradication of poverty.
The fact that blockchain has already given a platform for rising concepts is a promising aspect. The most popular of those ideas has of course been Bitcoin or cryptocurrency, which is a prominent and infallible store of value.
However, blockchain technology has given birth to other aspects as well, including data sovereignty, decentralized autonomous organizations, and different other utilities that were not clearly present prior to it.
The Uses of Blockchain in Ending Poverty
Given these observations, the possibility of blockchain playing a major role in ending global poverty seems more likely than one would think at first.
To delve into this concept a bit more, here are a few use cases of blockchain that could help in the war against global poverty.
Disintermediation Allows for Direct Reception of Aid
The primary use of blockchain technology in ending poverty revolves around the fact that a blockchain can successfully eradicate the role of intermediaries from a process or operation, thus eliminating potential inefficiencies.
This key aspect of disintermediation allows for the minimization of corruption. Aid transfers can be sent directly from one individual to another without a third party involved within the process. This prevents such third parties from blocking the aid, or gaining ungodly for profits through means such as levying excess fees on the transaction.
This ensures that the transferred funds reach the intended recipients directly, which goes a long way in making sure that the aid is used towards the cause it was raised for in the first place.
Banking the Unbanked Through Open Decentralized Banking
Reports estimate that more than two billion individuals remain unbanked in the world today. This lack of access to normal banking operations can place a roadblock in their path out of poverty as they may not have ways to preserve or grow their value due to a lack of access to modern financial solutions.
Blockchain technology allows for individuals to store their value with Bitcoin and utilize different open and automated infrastructure platforms to manage their local economies.
They can obtain loans against their Bitcoin or turn to projects such as Ethereum and MakerDao to obtain loans against their assets in an automated fashion. There are no bank tellers and no loan officers involved. The process is taken care of by pre-defined algorithms. All the individuals need is access to internet connected devices and knowledge of the practical uses of the blockchain.
Open banking will open up more opportunities to individuals who may be connected to the internet but are currently unbanked today to store their value, grow their wealth, speculate with trades, and send value in a streamlined manner.
Open banking through blockchain technology also allows for the addition of financial products that may not have been available to the unbanked in the past, including but not limited to optimal options for health insurance, life insurance and other forms of financial products as well.
Enhanced Potential for Earnings Through Decentralized Applications
Another use case of blockchain technology in ending poverty will stem from the fact that it allows for more potential ways for individuals from all over the world to earn in a more meritocratic and open manner.
This open way of earning is evidenced in underlying systems such as Bitcoin and Ethereum where miners can obtain the right hardware and software while contributing to hash power to the respective cryptocurrency’s ecosystem and earning the respective cryptocurrency for doing so.
Different applications such as the Brave Browser, Steemit, Cent, and Lympo allow individuals to earn by producing and viewing ad content or by conducting grueling activities such as exercising.
New freelance platforms such as Storm, CanYa, and trade platforms such as OpenBazaar also allow individuals to have more control over their potential earning power by providing services and selling items for minimal to no fees.
Sovereign Identity and Property Rights
Data sovereignty becomes more increasingly important as companies such as Equifax, hotels, gaming entities and more face issues stemming from cyberattacks.
Applications such as uPort and others are working toward letting users control their data flow by utilizing blockchain technology. Individuals will be able to control who and what has access to their data while being able to earn from it as well.
The maintenance of property rights is another crucial aspect of elevating people out of poverty. A large percentage of developing nations lack an effective property rights tracking system. A lack of proper tracking of who owns what makes for significant complications for property owners.
In such regions, property owners have increased risks of losses of private property, which greatly decreases their wealth and their chances to grow and increase their overall net worth.
A loss of hard assets and private properties eliminates their ability to borrow against their property to expand their micro ventures. The loss of opportunity for property owners is significant and it is one problem that blockchain technology would be useful in solving through its immutable records.
Communities and organizations are taking notice of this problem as well. Blockchain based ledgers are springing up across different continents, helping to solve the problem of property rights.
Projects such as BigChainDB allow for the creation of a land registry through the utilization of blockchain technology. Aspects such as ease of access and data immutability make the maintenance of property rights records and acknowledgement of ownership to be easier, while also making them safer against alterations.
The blockchain technology would then allow individuals to preserve their wealth and perpetuate it through passing it on to the next generation.
Blockchain Holds Great Promise in Ending Global Poverty, But There’s More Work to Do
Blockchain technology does have what it takes to tackle something as crucial and massive as global poverty. However, due to a lack of awareness and overall infrastructure, the technology has a few long years ahead of it before it can start making change on a global scale.
The future looks bright but we have a long way to go.