Hype Aside, Blockchain Could Empower Developing World

Posted April 28th, 2017 at 11:35 am (UTC-5)
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If you believe all the hype, blockchain is the next revolution that will change the world as mobile technology did in early 2000. It might. But a few hurdles need to be cleared before this digital platform can potentially empower some of the world’s poorest citizens.

Simply put, blockchain is a data application or ledger that is permanent and can be shared without a central operator.

‘It’s a technology for audit trails,” said Ryan Singer, CEO of Blockchain Health Company, which uses cryptocurrency Bitcoin and the blockchain platform to make it harder to introduce fraud in clinical trials. “… For the first time ever, you have records on the internet that are more auditable than paper. And that’s crucial.”

But at the moment, the only two blockchain networks “in production use and with real money in large amounts are just Bitcoin and Etherium,” both of which are digital currencies.

Blockchain is the technology that underlies Bitcoin or, as Singer put it, the technology inspired by Bitcoin. And while there are plenty of initiatives looking to use blockchain, most of them, according to Singer, “seem to be more hype than substance.”

“And they seem to be in many ways a way of avoiding the conversation about meaningful disruption,” he said. That’s the kind of technology that “changes power structures, that takes formerly disempowered people and makes them more powerful, and takes formerly empowered people and makes them normal.”

The “disempowered,” according to Peter Nichol, CIO Healthcare Business and Technology Executive, are two and a half billion unbanked people, or three quarters of the world’s poor, by World Bank estimates – those who live on less than $2 a day, typically in rural areas. With this little money to live on, let alone save, they can’t afford a bank account.

“It really starts with identification and knowing how to provide that in the quickest way,” he said. “And a lot of folks who live in different rural areas, they don’t have the means to get there to provide – even if they had … an identification card. Many don’t even have a card.”

Proof of identity is key to accessing financial services such as savings accounts and microfinance. And it is the first step toward unlocking health care and other services. In countries like India, for example, an identity card is necessary for propane rations. “If they don’t have that identity, it’s very difficult to provide any services,” added Nichol, author of The Power of Blockchain for Healthcare.

There already are blockchain-powered economic identity systems in developing countries, such as remittance platform Oradian in Nigeria, where “over 300,000 people already can transfer money,” he said, 90 percent of them are projected to be women.

BanQu also provides unbanked individuals in Sub-Saharan Africa and other developing regions with economic identities to empower women farmers, for example, by making them visible on the supply chain and establishing their economic credentials so that they can get better prices for their goods.

Blockchain’s public ledgers make it easier to track these transactions and harder to falsify documents, said Dr. Adrian Gropper, Chief Technology Officer for Patient Privacy Rights, a Texas nonprofit organization. That makes it ideal for supply chain management and tracking identities when multitudes of people descend on a crisis scene, for example, where “it is a fairly significant problem.”

Gropper, who is part of an effort to mint a new model of decentralized identity called Rebooting Web of Trust, believes the technology can help indirectly as institutions and governments start to issue digital identities linked to the blockchain to citizens and refugees.

Having public documents on blockchain that help identify people across borders or in a developing country where they could be subject to corruption “can be a very big win,” he said. “And this issue of identity – standardized blockchain identity for refugees – is one of our primary use cases.”

A Syrian woman fills out a document as she waits to register at the United Nations High Commissioner for Refugees headquarter in Beirut, Lebanon, Jan. 30, 2017. (AP)

A Syrian woman fills out a document as she waits to register at the United Nations High Commissioner for Refugees headquarter in Beirut, Lebanon, Jan. 30, 2017. (AP)

Several countries have experimented with national identification systems, with varying degrees of success. In Britain’s case, for example, care.data, a program aimed at providing country-wide unified access to providers, ran into trouble because people were reluctant to sign up.

“They don’t trust that they will have a protected identity,” said Nichol. And as blockchain gets into providing this type of access, he said the challenge then will be how to “incentivize” people to get involved in the process. “It’s a very tough challenge.”

“Privacy is not an inherent property of a distributed ledger like a blockchain,” added Gropper. “Basically, what you’re doing is you’re taking information and literally spreading it everywhere, by definition. That’s what makes it work. So when you have situations where privacy is important, like health records, it’s much more complicated. … It has to be carefully privacy-engineered.”

But what makes blockchain effective at deterring manipulation also presents a “significant” downside” – the lack of a recoverability mechanism when mistakes occur in the official record.

“You can go to court or you can go to the government, or you can go to a group of companies, and they are responsible for making the change or correcting an error in a ledger,” he added. “But when you implement these systems, especially when the systems are based on public blockchains, you often give up the ability to have a … recovery mechanism or an error-correcting mechanism when something goes wrong.”

This is where blockchain application development is at right now for those working in this field, said Gropper. The key is “striking that balance between having recoverability when you want it or recourse to the courts if you can get it, and having systems which are inherently not subject to human corruption or intervention.”

Challenges aside, blockchain already has “changed a lot of the world” since it emerged in 2008, said Nichol. And he believes its “wave” will continue to grow even as awareness of what it can do lags behind the hype.

Recalling the early days of the internet, mobile technology, and cloud computing, he said people did not grasp the full potential of these technologies at first, but then they explored and experimented to learn more about their capabilities and business utility.

In the next 24 months, Singer expects blockchain to make “major inroads in some very important cases in the health care industry” and drive a ” lot of very important, very necessary change.”

And he believes developing countries will leapfrog to blockchain, skipping traditional systems and databases that often are owned or run by transacting parties, just as they did when mobile technology disrupted their world.

Aida Akl
Aida Akl is a journalist working on VOA's English Webdesk. She has written on a wide range of topics, although her more recent contributions have focused on technology. She has covered both domestic and international events since the mid-1980s as a VOA reporter and international broadcaster.

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