Photo by William Bout on Unsplash

Blockchain is an ingenious technology that seems quite straightforward in hindsight. It is an online database which by design is not only decentralized, but also distributed. It is also by design public and verifiable. It is created in a way that it reduces the risks of fraudulent data manipulation to virtually zero as records of any operation carried out are immutable and hard to hack. You can add new information and you can verify it, but you cannot alter the past records.

Well, if you are like me, you have probably read or heard similar descriptions of blockchain many times by now. This is still quite abstract, but it sounds like blockchain is all about ensuring trust and transparency. That said, despite some cyclical economic shocks, the western world, on average, maintains the trust in the system. According to Gallup, only 27% of the Americans express low confidence in the American banks. 32% of the people express great deal of confidence.

Coming from a country where I could not withdraw my money from a system-forming bank for over 3 years and after experiencing the seemingly unshakable stability of the German banks, my mistrust of the financial system has significantly minimized. Despite all the contentions, I, for example, also generally trust Google and use its bundle of services without a second thought — google docs, google photos, google slides, etc. Perhaps, I should be wary of my privacy, especially after reading the stickers all over Berlin that urge “not to feed the dictator” with the Google logo in the center. I regularly change the passwords though.

Given such a status quo, I believe that the blockchain technology may not seem so urgent in the Western economies at this point. However, blockchain might be revolutionary for less developed countries where corruption and nepotism are rampant. The application of technology could mitigate weak institutions, facilitate financial inclusion, and empower the people. Let’s look at 2 promising use cases of blockchain targeting the developing countries.

Use Case: Financial inclusion | Trestor Foundation

Trestor is a non-profit organization that established the Trestor Netowrk or T-Net to “help under-developed or developing countries to uplift their economies”. It is a decentralized peer-to-peer payment network that anyone with the internet connection can use. In countries where identification can be a problem for a myriad of reasons, T-net allows to send and receive Trests virtually to anyone without paying high fees or going through the bureaucratic nightmare.

Just imagine — according to the WorldBank, the amount of remittances received by the Central Asian countries from migrants abroad reaches up to 50% of the annual GDP. Using services like Western Union, these people pay millions of dollars every year in transaction and currency exchange fees. Most of these people do heavy manual labor often in horrible conditions. Yet after working for months without any social protection or breaks and being frequently subjected to unlawful and racist treatment by their employers, they must pay hefty fees to be able to send money home to feed their families. Systems like T-Net (and Everex, Impak Finance, etc.) could radically change this.

Use Case: Identification | ID2020

Did you know that there are more than 1 billion people in the world without an officially recognized identification? These people are essentially disconnected from the rest of the society and are deprived of many opportunities and rights. Moreover, such a disconnect acts as vicious cycle — as it makes economic uplift very hard so a child born to such a family is very likely be trapped in this cycle. Without proving who we are, we cannot access most of services and products which are critical for economic and social well-being.