Understanding Blockchain

Blockchain

Much has been made of the potential for blockchain technologies to open up new vistas for business and society. But is there a way for this revolutionary technology to empower the rich and poor alike? We argue that, like previous revolutionary ideas, blockchain has the potential to help developing nations leapfrog more-developed economies.

leapfrogging

The most visible example of leapfrogging today is in nations like Kenya and South Africa, which have rolled out near-universal telephone access using 3G networks instead of laying down copper cables, and provided internet access by smartphone rather than with desktop PCs. But it’s not just physical infrastructure that can be leapfrogged.

One of the 20th century’s most celebrated examples of leapfrogging happened in Japan, when the country recovered from the ravages of World War II by embracing sophisticated new manufacturing techniques.Quality control revolutionized Japanese manufacturing in the 1960s and 1970s.

Quality control became a cornerstone of industry in Japan, reshaping the country’s national brand around companies known for manufacturing excellence, such as Toyota, Canon, and Nikon. European and American companies had to play catch-up for decades.

Where are the opportunities for developing economies to leapfrog now?

India’s Aadhaar biometric ID card system is a great example.The system currently serves a billion people.This is by far the largest and most comprehensive adoption of biometrics technology by any government in the world.

Transactional security extends beyond biometrics, which only secure the last link in a financial transaction; blockchain could secure the entire transactional process. For developing economies, this security is vital for ordinary people who want to trade.
Even better, blockchains can spur local high-tech innovation.

The natural decentralization of blockchain means that distance to infrastructure like data centers doesn’t matter. Developing nations can build their own technology hubs, and any code created there would be as secure as services created anywhere else in the world. Everywhere is the same to blockchain, which could support home-grown technology industries in many developing countries.

Nations that already have somewhat efficient systems might lack the incentive to adopt blockchain technologies at this time, but the rest of the world may well see an opportunity to innovate on internet time.
If they do, the many ways they might leapfrog developed nations are limited only by the imagination of billions of people whose first real access to governance and trade infrastructure will look entirely 21st-century. Those are big dreams, and we should not be surprised if some of the world’s next leading megabrands and global platforms are born far away from the traditional centers of technology development. The future is global, and so is blockchain innovation.

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