There are two tech words that make many heads spin. They are Blockchain and Bitcoin. Many find it hard to tell the difference between them, much less how to invest in them. Bitcoin is an anonymous currency. Think of it like a stock in the market.
Like stock, Bitcoin can be bought, sold, and traded on online exchanges. The more people have confidence in it, the higher the price goes — just like a popular stock.
A Blockchain is a mathematical technology on whose wings Bitcoin currency and other such currencies fly. It is a public ledger that is distributed to all Bitcoin owners around the world. Its use, however, goes beyond Bitcoin.
In fact, it is such an important arsenal to stem the terrible tide of corruption. Here is how. The shared ledger carries a history of all transactions of goods in circulation, including information of who owns them. All transactions are open to scrutiny: there is nothing to conceal.
Part of the reason corruption thrives is because crafty people have mastered the art of beating the system by manipulating or altering the records that represent transactions. In other words, they know how to cover their tracks, making it hard for law enforcement authorities to nab them.
Blockchain technology strength is in helping to certify records and transactions — or “blocks” — in a way that cannot be erased, altered or tampered with. It provides security of records and frustrates fraudsters.
It provides an unprecedented level of integrity, security and reliability to the information it manages. It eliminates the need for intermediaries, cuts red tape and reduces the risk of arbitrary discretion. It makes the work of auditors easy and seals the loopholes exploited by smart thieves.
The Kenyan government has set up a task force to advise the President on how to use the technology in various sectors, especially in land and education. The land sector has particularly been tainted by corruption such that property owners are never sure whether the title deed they hold is fake or factual.
With accurate digital data on land registry, Blockchain can clearly show the history of transactions for each piece of land and, therefore, authenticate its ownership and get rid of intermediaries or brokers who benefit out of the current confusion.
The removal of brokers reduces the price of goods and services and increases transparency and trust. There are many case studies on how Blockchain streamlines procurement of goods and services to ensure that there is an authentic and traceable “paper trail” from start to finish.
Bitcoin may or may not succeed but that’s a call for economists to make, but the Blockchain technology is an imperative innovation in our time. It can help to bring back trust in a country scarred by cheats and swindlers.
Blockchain is a technology owned by everyone and, therefore, shared by all. It is, therefore, a public good just like roads, communication and electricity lines; the infrastructure through which the blood that nourishes development flows. It removes the veil of secrecy that shrouds many important transactions, especially those often compromised by con men. It opens the doors to transparency.
But we should not assume that technologies like Blockchain alone will be a magic bullet that will wipe out corruption. It is one of the arrows in a quiver that the government and the private sector can tap into in shooting down corruption.
Blockchain technology alone will not solve all of our corruption-related evils. Governments must tackle the weaknesses underlying institutions, especially leadership and governance mechanisms.
Without accurate data for example on land registry, attempting to use Blockchain technology will be like blowing air into a suck; a fruitless effort often referred in tech jargon as garbage-in, garbage-out.