Among the many challenges that blockchain technology is poised to solve, is ending poverty.
While technological advancements have significantly reduced global poverty over the past century, it is still not gone. There are still more than 1.3 billion people in the world living in extreme poverty (defined as having less than $1.25 to spend each day).
General causes for poverty include lack of access to banking facilities and lack of legal property ownership. Both of which are major issues in developing countries and can be solved with blockchain technology.
According to the World Bank’s global financial index, there are about 2.5 billion unbanked or underbanked individuals across the globe, which represents a quarter of the world’s population. Due to the lack of proper identification or lack of credit history, people are unable to open bank accounts.
Additionally, many organizations that try to help the poor operate in silos, running their own databases. A centralized system would allow people in need to build up information and credit history to improve their situation.
Blockchain-powered digital identity could be used across organizations and eventually even across borders to help those who don’t have proper identification. Blockchain could create access to financial systems and transactions to secure potentially life-changing resources.
Many developing countries don’t have a working system of tracking property rights, or they are fragile and incomplete. Around the world, land registries are inefficient and unreliable, or even alarmingly corrupt.
“Blockchain is a powerful tool to solve these structural issues, which are some of the principal causes of poverty and conflict,” says world-renowned Peruvian economist Hernando de Soto Polar. He believes that property ownership rights are vital for a strong market economy. Poverty is difficult to overcome without an information framework that records ownership of property and other economic information.
Blockchain-based land registries could give many of the world’s poorest people their first real asset. This allows something safe to invest in and will improve their properties, thus helping to lift themselves out of poverty. Using blockchain technology for property ownership registration protects the rights of the owner in the case of theft. It also enables easy resolve of disputes, prevents fraud and makes correct transfer of ownership after sale possible. Once owners have been able to document ownership, they can prove their existence, in turn increasing access to banking facilities. Blockchain-based land registries have already started up in Bermuda, Brazil, Georgia, Ghana, Honduras, India, Russia and Rwanda.
The emergence of blockchain may be a major contributor in the United Nations’ quest to end poverty in all its forms by 2030. To make sense of the blockchain revolution and see how it could benefit your organization, check out a new 3-course program: IEEE Introduction to Blockchain Technology.
Pepijn, Daan. (25 July 2017). Here’s how blockchain can potentially end global poverty. thenextweb.com.
Kshetri, Nir. (28 June 2018). Blockchain-Based Property Registries May Help Lift Poor People Out of Poverty. Government Technology.