Can Blockchain Help The World’s Poorest?
That loss is common would not make my own less bitter, rather more: Too common! Never morning wore to evening, but some heart did break – Lord Alfred Tennyson.
Extreme poverty anywhere is a threat to human security everywhere – Kofi Anna, Seventh Security-General of the United Nations.
Since 2013, Venezuela’s currency –Bolivar– has lost almost all it values against US dollar –this has led many to be faced with food shortage, hyperinflation and put simply – poverty.
A little wonder of the 2.3 million Venezuelans a whopping figure of over a million has left the country for a neighboring country.
However, are Venezuelans the only one facing poverty and related crisis? Well, I’m sorry to burst your bubble, NO.
Here you go:
- In 2015, over 700 million people lived below two dollars a day
- Over 3 million people survive on less than $2.50 in a day
- Sadly 80% of world populations live on less than ten dollars a day
What this means is: poverty is a global challenge, and it needs to be dealt with—with a global blow—and one of the ways to better tackle it is—with Blockchain technological processes.
Then you ask, what is blockchain and how?
Blockchain is the technology that drives cryptocurrency father of all – Bitcoin. It’s an array of distributed ledgers that keep tracks of all transaction on a decentralized network.
Now the million dollar question is can blockchain help countries like Venezuela, South Sudan or put correctly world poorest? The default answer will be YES. Nevertheless, let’s see how.
Below are the ways blockchain can help the poor:
- FLEXIBILITY OF MONEY TRANSFER FOR REFUGEES AND IMMIGRANT
One of the major obstacle immigrant faces is the issue of – remittance. It’s not rocket science that global remittance is heavily based on citizens of developing countries. These individuals often at times send money to their families, friends for their financial welfare — and at times for businesses.
According to the figure released by World Bank in 2017, $441 billion was sent as remittance to developing countries. Mostly through one of the following intermediaries: Money Gram, Western Union, and Uni Transfer.
This process can be costly and not convenient most times — take for instance suppose you are sending $80 via are Money Gram from the US to say your loved ones in Ghana. Money Gram may charge as high as $10 meaning the receiver will only get $70. Again, according to the data from World Bank, it revealed that remittance fee for sub-Africa countries is an average of $20 (which is 9.39% making it the most expensive among others – isn’t this ironic for a region with high poverty rate?) for every $200 sent to that region, while the global remittance fee is at 7.14%.
However, the gospel for the people of this region is that with the advent of blockchain and cryptocurrency this hurdles could be eliminated, and cross-border transfers of funds would become more flexible.
Many platforms are already in place that offers zero cost fee and instant transfer of fund using the underlying technology of blockchain. We have SureRemit, a Nigerian blockchain-based platform, Rebit in Philippine, which allow its subscribers to send crypto fund from anywhere in the world to the Philippine at no cost and also Mpesa, a decade old mobile phone-based money transfer.
- ACCESS TO FINANCIAL TRANSACTION BY ALL
Financial inclusion is one of the crucial ways to eliminate world poverty. Also, one of the things hindering people in the emerging economies is the limited access to a financial institution like – banks. According to businessinsider.com, there are 2 billion people who are unbanked. They don’t have access to a bank or any financial institution via mobile phone or any other possible means.
With blockchain technology, this barrier could be overcome as the major challenge here is a physical branch for financial institutions – this blockchain doesn’t require.
What’s more, setting up a physical, financial institution like bank comes with a cost. This cost is often at times spread on customers in the form of bank charges and other hidden charges. This is where blockchain comes to rescue by eradicating all these boundaries and intermediaries.
The core of every society is its economy, and the soul of every economy is its businesses – either big or small. Financial inclusion includes the ability of small business to have access to fund to grow their business. In my country Nigeria, banks are reluctant and infamous to provide a loan to small businesses even though they passed all the means of qualifications.
With cryptocurrency, Platforms like Nebeus, BitPesa, and Mpesa, small businesses will now have access to crypto backed loan and for the first time will start thinking globally for their commerce as this will enable them to import and export—which is an essential tool for national growth.
- FIGHT AGAINST CORRUPTION
Corruption is the cankerworm that has led many Africa countries on a downward spiral. Even someone who has a basic understanding of economics will understand that corruption has driven most of the developing countries to inflation. Most of the government’s officers of developing countries suffer from the messiah complex and are corrupt—making life miserable and unbearable for their citizens resulting in abject poverty while they live a glamorous and fancy lifestyle.
With the advent of smart contract, blockchain is a viable tool to tackle corruption – with it tamper-proof—all transactions are recorded in a transparent ledger. Recording of all interaction in an immutable ledger means every operation leaves a footprint. This transaction could even include land titles and other essential documents.
Land grabbing is a big issue in most developing countries. Blockchain can be employed to keep an undeniable record of Landowners that have deprived small scales farmer of their land with fake and altered documents.
Again, blockchain could help developing countries and poverty-ridden nation choose and oust their corrupt leaders by giving them the free and fair election—which has become a myriad in most developing countries rather than the ones marked with rigging, uprising, and votes influencing.
In the end, a typically examples to show the effectiveness of blockchain is the cases of Venezuela and the Syrian refugees’ crisis. More than 10,000 Syrians were given vouchers cryptocurrency to pay for food items and other useful items. With over 4,000,000% hyperinflation rate in Venezuela so far, there isn’t any nation on earth that matches that figure in term of inflation. However, with the adoption of cryptocurrency tons of people have broken out of hyperinflation by mining Bitcoin.
Summing up, massive adoption of blockchain will surely help alleviate the poor and give them a strong foothold.
The article has been contributed by Saheed Hassan.