A multidisciplinary team at Georgia Tech has set out to explore the use of Blockchain as a tool for reducing transaction costs in African nations. The team consists of researchers from GTRI and undergraduate students from the Georgia Tech College of Business. The team is currently working with partners on the ground in Ethiopia and Blockchain Technologists in Silicon Valley to identify the challenges facing Blockchain transaction systems and determine potential solutions in an African context. In particular, they are working to develop an implementation plan for a Blockchain-based digital currency system to be used by women entrepreneurs in Ethiopia and other developing nations.

This project is characteristic of the kinds of work being pursued at the applied research arm of the Georgia Institute of Technology. The Georgia Tech Research Institute (GTRI) is focused on using innovative technology to solve some of the world's most challenging development issues. The UN describes these issues as the Food, Energy and Water (FEW) Nexus. Potential technological solutions exist to many of these problems but there are still barriers. GTRI has identified high transaction costs as a significant barrier to successful implementations of technologies. Blockchain based digital currencies and transaction systems could provide an open source solution. Successful implementation of a Blockchain-based, low-cost transaction system could help stimulate and accelerate economic and technological progress in developing nations.

Through a USAID grant, GTRI is already working on an innovative micro business project in Ethiopia that focuses on empowering vulnerable women to become more financially stable and food secure. Women eligible to participate are organized into groups that receive financial and technical training in order to start their own small-scale agricultural businesses. At first, all of the women will learn to produce alternative animal feed and raise poultry using that feed as their business. As they progress, the women will be able to specialize in feed production, poultry farming, egg production, and/or raising other livestock such as dairy cattle or tilapia. The women in this project participate in a matched micro-savings program in which weekly contributions to a group account are matched 2-to-1 by the program.

Digital currency, and the ability to perform micro-transactions, could help women entrepreneurs build sustainable agribusinesses. Women often lose savings due to theft or fraud and a digital currency account can provide greater security for their money. A virtual account, such as this, can also enable quick and direct transfers of funds to and from micro-finance or other entities in the local supply chain. This not only helps speed up commerce, but allows funding agencies and micro-finance institutions to track the use of donated funds. Further, global digital currencies such as Bitcoin could be used to ease cross border transactions, spurring increased trade.

Blockchain is the technology behind Bitcoin and other cryptocurrencies. It uses a distributed, global network of nodes which are capable of recording and verifying transactions without the use of third parties. This distributed system reduces the infrastructure costs of setting up digital transaction systems, such as those normally required for digital currency. It also enables low cost micro-payments which has the potential to speed up commerce in African marketplaces such as in Ethiopia.

As part of the research, the team was originally scheduled to travel to Ethiopia at the start of the project. Unfortunately, the team’s trip to Ethiopia had to be cancelled due to political unrest on the ground, highlighting the challenges of projects such as these. As an alternative, the GTRI team was able to visit Silicon Valley and talk with Blockchain experts about this particular use case. They met with Fold, Bitgive, BlockCypher, Blockchain Capital, Boost VC, Stellar and others who were able to provide valuable insights on the application of this technology in developing nations. The team will publish the results of their research in May of this year.

Contributers to this article :

Corbin Pon - Fold (https://foldapp.com/)

Robert Wallace - GTRI ATAS (http://www.gtri.gatech.edu/atas)

Funding for this project was provided by the Georgia Tech Research Institute.