Blockchain technology can be a disruptive technology in developing countries

Rage Review : After The DAO incident, we need to consider not only finding code vulnerabilities, but also who will be the beneficiaries of blockchain applications in the long run, and evaluate the infrastructure running blockchain technology, find reliable infrastructure and stable connections. The sharing economy in developing countries can benefit from blockchain applications, allowing people in these unbanked areas to sell handicrafts and grow crops through blockchain platforms that do not require transaction fees. At the same time, blockchain can improve the efficiency of the current system and enable the forest industry in developing countries to achieve a transition from logging to protection.

Translation: Nicole

Blockchain technology is being developed in almost every industry, from financial technology companies to the GLAM industry, with companies like Backfeed using blockchain for decentralized coordination through smart contracts. As with the recent DAO attack, blockchain-based innovations can also present some difficult to solve social problems if things go wrong. While platforms like Ethereum can slowly evolve to address these risks, in the long term, we need to consider who the beneficiaries of blockchain applications are. To gain insight into this question, we need to consider the infrastructure on which blockchain technology runs and evaluate it, rather than just looking at code vulnerabilities.

Originally developed to support Bitcoin, blockchain is essentially a public ledger. It is a giant spreadsheet that records asset information and can be applied to any form of transaction without a central controlling entity. Blockchain records transaction information by providing a secure distributed authentication and record keeping method, eliminating the need for a third party to verify transactions. As a result, blockchain technology can be used for autonomous machine-to-machine communication, bringing the Internet of Things and the sharing economy to a new level (for example, cars can manage their own rental and refueling services).

Currently, blockchain technology is being discussed in developing countries only in the areas of remittance payments and providing an alternative currency in unstable fiscal environments.

However, blockchain technology can also be applied to the sharing economy emerging in developing countries, and I discovered one such use case while conducting field research in Kedaya Telang Usan, Sarawak, Malaysia.

Sharing Economy of the Ulu Tribe

In a sharing economy, people want to make the most of their assets by charging people for their use of them — rooms for holiday accommodation, garage storage and cars for rental (with drivers).

During British colonial rule, the Uru people grew crops not only for survival but also for profit, thus the emergence of payment services that represent the characteristics of the sharing economy.

One of my research colleagues, Simpson Njock, who is from Kenya, said that before you had to share a wild boar with someone else, but now if someone wants a bit of wild boar, you ask, "How much do you want?"

Before the road was built a decade ago, it would take several days for the Ulu to reach the kampung (village) by longboat. Since only a small number of people in each village have cars, the Ulu have developed a carpooling system where you pay the owner of a ute to take you to your destination - it's like Uber, but without the internet platform. In another example, the chief's room also includes the rooms of upstream residents.

These systems have also been developed in unbanked areas (areas without bank accounts or credit cards) where people live to survive by making handicrafts and growing crops for profit. Some of these items are exchanged rather than sold.

Another form of international development

The use of emerging technologies in development projects has long been controversial, with studies showing that some projects can strengthen the economy and the political class while encouraging entrepreneurship from the so-called “bottom of the pyramid”.

Blockchain can’t necessarily solve the complex problems of the development industry, but it can help coordinate existing systems and make them more efficient, rather than rebuilding a system. For example, blockchain can enable a shift from a forest industry (such as logging and cutting oil palm) to a healthy forest industry,

In this way, natural heritage and culture can be preserved, rather than disappearing. In the vicinity of Barrio, Brazil, a technology project has been helping to promote local tourism since 1998, initially through the promotion of homestays on the website.

Technology has changed life in remote Sarawak, Malaysia, allowing people to provide ride-sharing services and sell handicrafts through messaging and social networks. Emerging peer-to-peer platforms can bring more economic benefits through more efficient and automated systems, without charging high fees like commercial platforms.

The most interesting and important blockchain transformation is built for economies that are not adequately served by established financial institutions. The current debate about blockchain focuses on disputes over law and automated management. What we need to understand is that there are many areas of interaction that are not well served by markets, regulators, and institutions, and blockchain technology can reduce the need to interact with these market institutions while providing simple trusted transactions.

Blockchain still has unlimited potential and its development cannot be stopped just because of code vulnerabilities. In order for blockchain technology to work, reliable connections and infrastructure need to be established. At the same time, some exchanges need to establish mobile broadband base stations, but we find that these base stations are not well maintained or are too crowded. The economic development possibilities brought by blockchain applications are nothing more than an idealistic and novel concept, which can only become a reality unless more basic digital infrastructure needs emerge.