Poverty still remains one of the many unsolved problems of man. It is estimated by the UN that about 800 million people still live in extreme poverty. Why? Because they live on less than 1.25 USD/day, adjusted according to 2005 purchasing power parity (PPP). A piece of cheering news is that every day, around 250,000 get out of poverty – exciting. This means by the time you read this post, the number of poor persons around the globe would have dropped further. Please wait, you haven’t read it all; every day 42,000 people abandon their homes due to conflicts – this is not good news.
The UN and governments proposed the MDGs (Millennium Development Goals) now replaced by SDGs (Sustainable Development Goals) whereby in 2030, extreme poverty would be a thing of the past. One way it is hoped this could be achieved is by ensuring people everywhere enjoy a basic standard of living. The inception of Bitcoin and it’s underlying technology the blockchain, many people have been able to change their situations utilizing cryptocurrency.
How Blockchain Technology Could Play A Role
A report from the United Nations Development Programme (UNDP) showed that limited progress was made in sub-Saharan Africa and South Asia in the fight against poverty. On the flip side, internet penetration continues to grow at an unprecedented rate. In Nigeria, Internet penetration hit 50.2%. This means that over 98 million Nigerians could access the internet while 48.7% in Asia representing over 2 billion users as of December 2017 have access to the internet. The blockchain can play a role in alleviation in the following ways;
Banking and Financial Services
Blockchain is an internet technology and can be accessed by these burgeoning internet users for banking with little or no hidden charge or administrative cost. The nearly 2.0 billion unbanked adults reported in a research by McKinsey and Financial Access Initiative are spread in the regions (Africa, Asia, Latin America and the Middle East) most plagued by poverty. Recently, the UN experimented with blockchain powered vouchers with 10,000 Syrian refugees, the vouchers were redeemed for food items in local markets. Their finding revealed faster service delivery in the use of blockchain technology compared to international financial institutions.
Many economies rely on Micro-Small and Medium-Scale (MSME) Enterprises for employment creation. MSMEs require capital not only to grow but also to build capacity. With Banking density very low in many of these countries, and high bank charges, blockchain can provide an immediate solution. Taking advantage of the rapid internet growth, blockchain technology can be leveraged on by financial institutions to reach these businesses as against building branches – a slow, costly process that would take decades.
“The poor don’t lack capital; it’s that they can’t monetize it. Fixing that, is the most important thing you could ever do to foster economic growth.”– Hernando de Soto
Lack of access to financial resources is one of the basic causes of poverty. Financial institutions require collateral before granting loans. However, non-availability of property records has severally been a challenge to accessing these loans. Blockchain as an immutable digital ledger can provide timely records that can be used as collateral. With a decentralized ledger of property rights, a formal record of property rights with which property owners can value their assets can be created. Such records can be utilized in town planning, business development, agricultural development initiative and land dispute resolution
Poverty is a friend to corruption and bad governance. Blockchain, on the other hand, has an element of anti-corruption – transparency. Corruption thrives with secrecy in financial handlings. Contrarily, blockchain technology provides a public record of financial dealings, allowing citizens unhindered access to government spending records. Armed with this knowledge, corrupt government officials, bankers, and others can then be questioned over any discrepancies with approved budgets.
Sub-Saharan Africa has the highest prevalence of hunger. It is estimated by the Food Aid Foundation (FAF) that one in four persons is under-nourished. Under-nourishment accounts for almost 45 percent childhood mortality in children aged 1-5 years in sub-Saharan Africa. Sadly, a third of the global food produced is wasted annually.
A major challenge in hunger eradication is a lack of accurate and timely data, especially in Sub-Saharan Africa. In a report published by WFUNA (World Federation of United Nations Associations) on MDGs, the lack of quality data was described as ‘problematic’:
“Monitoring the process of poverty reduction has been a difficult task, due to the lack of quality data taken at steady intervals. This is especially ‘problematic’ in Sub-Saharan Africa where the tools needed to collect a full set of data on MDGs are available in less than half of the countries in that area.”
Adoption and implementation of blockchain even alongside other technologies will enhance performance measurement, and facilitate the synergy between sister Charity organizations. It will also reduce the cost of fighting poverty.
Bad governance breeds poverty. Contrastingly, good governance cannot be achieved in climes where citizens are not allowed the inalienable right to vote-in democratically elected leaders. The all too common methods of electoral fraud frequently engaged in by political parties, strongmen and cabals would be mitigated in a blockchain election. Incidents of falsifying figures, under-age voting, result manipulation, voter intimidation, vote buying would all be reduced, courtesy of the decentralization, anonymity and transparency of blockchain networks.
It has been stated that blockchain is a disruptive technology, nowhere would this disruption be more profitable than in achieving SDGs’ poverty reduction targets. As the clamor for blockchain adoption falls on listening ears, the fight against poverty will receive added impetus from the implementation of the blockchain technology in critical areas of poverty alleviation.