How Will Blockchain and 5G Change the Developing World?

Over the last several years discussions in the mobile industry revolved around 5G. In the industry that has been craving for innovation in this gap period between the introduction of the iPhone and the implementation of next-generation technologies, like augmented reality, artificial intelligence and blockchain, the launch of the 5G network is a sort of new beam of light for carriers and handset manufacturers which now can be sure that the future is on the horizon.

Qualcomm President Cristiano Amon believes that 2020 will be the year of 5G mass adoption, suggesting that some 200 million 5G smartphones will appear next year. Amon also stated that:

“5G [would] become broadly available across major metropolitan areas in 2020, then spread thoroughly throughout developing countries in 2021.”

While this year may be promising for carriers and handset manufacturers who will happily sell the latest models of the iPhone or Samsung Galaxy, the more important year for 5G may be 2021, when the respective products will hit the market.

Amon also added that he expects mid-band 5G to come to Peru, Nigeria, smaller European and developing Asian countries (last ones being Cambodia, Sri Lanka and others). Speaking about real practicality, this might be the time for 5G technology to show real progress.

The mobile payments alpha test: M-Pesa

In spite of all the sci-fi promises such as self-driving cars or enhanced AI-based decisions, the most immediate promise of 5G is change it may bring to the technology at hand: mobile phones. Putting aside significant improvements in automation, artificial intelligence, computer graphics or video processing, we can see that 5G will bring the most tangible benefits to the mini-computers we carry in our pockets, and the ways they communicate with each other. In developing world, 5G might be the most ground-breaking innovation ever.

Thus far, the developing world has mostly missed the smartphone boom, though it remains a significant part of the global mobile market. Though about 24% in India and just over 50% people in Brazil have smartphones, the millions in the developing world still use feature phones — more people have access to a mobile phone than they do to electricity.

When the developing world will fully embrace 5G, it will be mostly used for what will probably remain a limited infrastructure. Maybe the most crucial thing? The future of payments.

Let’s consider how something like M-Pesa can influence the world. Introduced in 2007 in Kenya, M-Pesa is a profound and diverse mobile money transfer service which allows users to pay for a different services through technology that is compatible with feature phones. M-Pesa is so widespread that 96% of Kenyan households have at least one M-Pesa user. The technology has also assisted many Kenyans in getting out of extreme poverty, with rural households increasing their incomes by as much as 30%.

M-Pesa managed to gain such popularity in Kenya due to several factors, such as intense marketing, relaxed regulation and the lack of other viable options. Maybe it is best described as ”viral” — by attracting people M-Pesa attracted even more people.

The same situation may happen in 2020s, but it will need 5G to get those strong, localized networks running, together with enhanced front-end interfaces for different mobile devices to support those networks.

5G and blockchain: secure mobile banking?

On the front end, it is difficult to confront SMS and text as a means of communication in developing, especially with regard to messengers such as WhatsApp gaining more attention. SMS is a grandfather of modern communication, familiar to billions of users, and is quick and agile enough to work on modem networks without large data load. It is an easy, secure, quick and safe way to pay merchants, buy goods and services, make deposits or send remittances. It presents a convenient form for banking, especially for the world’s almost two billion unbanked: Your identity, and the associated number, can be used as both bank and clearinghouse.

On the back end, 5G and blockchain can be a powerful amalgamation. Blockchain can secure mobile banking networks on a very deep level, while 5G itself will make sure these complex networks will withstand the weight of blockchains.

If crypto networks will provide payments solutions to unbanked and underbanked, it will be a major breakthrough. This change may be the first in the line of other changes for developing world, such as providing better and more reliable access to electricity and high-speed internet, reducing the high fees associated with transactions and remittance payments, and restricting government corruption and general economic volatility.

If 5G achieves all of that, it will be much better than was promised by mobile industry players.