Can Blockchain empower the poor?

“As we look ahead into the next century, leaders will be those who empower others” – Bill Gates

Some Facts:

More than 3 billion people live on less than $2.50 a day.

More than 1.3 billion live in extreme poverty less than $1.25 a day

1 billion children worldwide are living in poverty.

According to UNICEF, 22,000 children die each day due to poverty.

Is Blockchain answer to these questions?

Is Blockchain the answer for future leaders?

Will Blockchain help empower the poor and give the world a new face?

The answer to these questions is yes, but how? Let’s find out.

The blockchain is a distributed ledger technology that comprises blocks chained to one another by virtue of the fact that each block carries an imprint of its preceding block’s hash value as well as its own. This ledger was used to support Bitcoin transaction but now can do much more than simply updating and validating values. It can help monitor and track supply chains and healthcare information and can use smart contracts to make deals more convenient through the application of pre-set deal stipulations.

Blockchain technology has been a resounding success in the world`s developed countries and it has been implemented in various sectors such as:

Supply Chain, Hospitality, Tourism, art and Entertainment, and various others. But can it accomplish the fact that can it help the world’s poorest?

These are some problems of poor people that can be solved by Blockchain

Cheaper and Easier Foreign Remittance -

Many people from poor countries migrate from underdeveloped countries to other countries with a better opportunity. These migrants have to send money to their families or friends. So foreign remittance and money transfer is a huge problem.

The World Bank estimates that officially-recorded remittances to developing countries alone in 2018 will increase by 10.8 percent to reach $528 billion in 2018. These are transferred mostly through following intermediaries: Money Gram, Western Union, and Uni Transfer.

This process of sending money can be inconvenient as well as expensive. The global average of remittance fee for sending 200$ is 7.14%. So for sending 200$ one has to pay remittance fee of approximately 14$. Which can be very costly for poor people.

With the introduction of Blockchain and cryptocurrencies, it can eliminate hurdles and ease the process for poor people. Many platforms already offer zero cost fee and instant transfer of fund using the blockchain technology. Example: Bitspark- Hong Kong has transaction as low as HK$15 for remittances less than HK$1,200, SureRemit- Nigeria, Rebit –Phillipine also are some examples of the same.

Humanitarian Aid -

Poor people around the world need the most help in times of distress. This distress can be caused due to various natural reasons such as floods, earthquakes, Tsunami or by political reasons such as War. These people get very little help from the state government, and sometimes help in form of money or any other resources is not reached to the right people, practices like corruption kick in.

Blockchain can help manage these kinds of problems by tracking the money flow and its usage which can ensure the money is reached into the right hands.

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United Nations has also launched a program called Building Blocks, which provides food and cash support to needy people. The Agency is expecting a to use Blockchain system that would reduce the overhead charges from 3.5% to less than a percent. It would also speed aid in emergent areas, where it would be difficult to transfer money.

Blockchain can also help individual contribute overseas, for example, Usizo: South African based Blockchain Platform allows anyone to pay for electricity bills for community schools. Donors can track the use of electricity in school and also calculate how much their donation will buy and transfer credit using Bitcoin.

Healthcare and Insurance -

Poorest people of the world are not accessible to insurance as well as healthcare facilities. As companies charge a very high amount of money to cover the administrative cost. Blockchain will help to reduce these costs and which also would reduce the fees. Using smart contract documents need not be checked and verified by each and every level of authority. As a result, costs will reduce which would help poor people a lot. Which would make insurance accessible to all the poor people as well.

Financial Inclusion -

According to stats provided by the world bank, 1.7 Billion adults around the world does not have a bank account.

To overcome this barrier Blockchain technology can be used as Blockchain does not require a physical branch or financial institution.

One can also save construction cost for setting up a financial institution. That cost can be spread on customers as well and this is where Blockchain will come into the picture by saving all this cost.

Business either big or small are very important for building an economy.

Blockchain enables Financial Inclusion which is the ability of small business to have access to fund to grow the business.

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Platforms like Nebeus, Bitpesa enables small business to access crypto backed loan, this can help small business think globally and disrupt the economy in a better way. It would also increase the import-export of the countries which would help countries to better their GDP.

So these are the uses of Blockchain for poor people. The best example would be in Syria. More than 10,000 people were given cryptocurrency vouchers to pay for food items and other useful items.

There are only some basic ways in which Blockchain can help poor people and empower them, but if there is proper and correct utilization of this technology, it has a potential to bring change in the world and empower the poor.

So to sum up things, I think Blockchain cannot eradicate poverty or bring many people above the poverty line, but surely massive adoption of Blockchain will reduce problems of poor people and give them some advantage in society.

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