Many people have heard about bitcoin, the cryptocurrency that has more than doubled in value over the past year. However, few are familiar with blockchain, the technology behind bitcoin. Blockchain creates a tamperproof public ledger of transactions, thus removing the need for a trusted third party between strangers. Because it is public and contains multiple nodes, the blockchain is practically impossible to corrupt. The potential applications for blockchain are promising and diverse. Blockchain could revolutionize the financial industry, as well as the healthcare sector. There are at least three ways blockchain can help the poor.
- Blockchain can be used to establish identity. According to UNICEF, there are more than 200 million children under the age of 5 that are unregistered. More than 80 million of these belong to the least developed countries. Lack of identification can perpetuate the cycle of poverty and increase the risk of exploitation. Children without birth certificates can be denied access to education and healthcare. Later in life, lack of identity can hinder employment or access to assistance programs. In some countries, failure to register is due to governmental red tape. Thankfully, groups like ID2020, BitNation and OneName are already working to use blockchain to help the unidentified poor.
- Blockchain can improve healthcare for the poor. Paper-based medical records are onerous, but especially so in developing countries where people frequently relocate due to economic or political instability. Also, it can be can be difficult to keep track of vaccination history, especially during the early years of life. Pediatric vaccines often require multiple administrations along a specified timeline. Blockchain technology would help maintain a more accurate record of which vaccines have been administered and are still due to be administered to a child.
- One of the ways blockchain can help the poor is by altering the flow of money. Most of the money pouring into developing nations is not from foreign aid, but rather from remittances. On average, more than eight percent of the more than $400 billion of remittances sent to developing countries each year is lost to fees. Because blockchain removes the middle man, the cost of sending remittances would drop significantly. Since more funds would be reaching their target recipient, senders would be motivated to send even more, thus further increasing the cash flow into developing nations. Just as blockchain would help to ensure remittances make it to their intended recipient, it would also help to ensure foreign aid is used appropriately. Since donations would be part of a public ledger, they would not be susceptible to diversion by corrupt individuals.
These are just a few of the many ways blockchain can help the poor. The technology also holds promise for improving access to credit and establishing land ownership among a myriad of other applications. It’s no wonder that more and more people are expressing interest in the blockchain.
– Rebecca Yu