{"id":8009,"date":"2020-05-18T12:40:35","date_gmt":"2020-05-18T07:10:35","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=8009"},"modified":"2020-05-18T12:40:35","modified_gmt":"2020-05-18T07:10:35","slug":"role-of-blockchain-technology-on-economic-upliftment","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/role-of-blockchain-technology-on-economic-upliftment\/","title":{"rendered":"Role of Blockchain Technology on economic upliftment"},"content":{"rendered":"

Relevance: Prelims\/mains: G.S paper III: Indian Economy<\/strong><\/span><\/p>\n

\"Blockchain<\/p>\n

Context:<\/h3>\n

\u2022 Fuelled by the unceasing hype around Bitcoin and cryptocurrency, blockchain has been regarded as the silver bullet solution for everything\u2014hacking, threats to democracy, poverty, and world hunger.<\/p>\n

\u2022 The moment the COVID outbreak became a pandemic with its ensuing lockdowns, blockchain started to be bandied about as the cure that could miraculously bring the world back up on its feet.<\/p>\n

\u2022 While it is apparent that no one technology can \u201csolve\u201d a pandemic, blockchain, along with a slew of others, could definitely help manage the post-lockdown situation.<\/p>\n

\u2022 Taking a clear-eyed view, here are five ways in which it could help mitigate the COVID crisis.<\/p>\n

\"The<\/h3>\n

Building more resilient supply chains:<\/h3>\n

\u2022 Perhaps the biggest blow to industry and agriculture has been the abrupt disruption of supply chains, making it hard to get raw material to factories and finished goods to customers.<\/p>\n

\u2022 Usually, it is not the entire supply chain that is disrupted, but one critical link: say, insufficient drivers, to drive trucks along a certain route in the chain, or a specific warehouse not being accessible.<\/p>\n

\u2022 While no blockchain can produce drivers for trucks like wine from water, an end-to-end supply chain on blockchain, combined with digitization and Internet of Things, can make the chain transparent and traceable, and tell us quickly where any problem lies.<\/p>\n

\u2022 That blockchain use could offer transparent, traceable, and cheaper supply chains have been known for a while, but cost, data sharing hesitation, and a lack of incentive have kept managers from setting them up.<\/p>\n

\u2022 A crisis like COVID can change these mindsets to build supply chains that are far more resilient for the next big crisis of this kind.<\/p>\n

\"Uses<\/p>\n

Universal basic income and digital currency:<\/h3>\n

\u2022 This is also an idea bandied about for long, and its time has finally come. Universal basic income (UBI) has been discussed by multiple governments, and COVID has made that discussion more urgent.<\/p>\n

\u2022 UBI would have been a welcome relief for migrants, farmers, and the destitute, whom COVID has disproportionately hit.<\/p>\n

\u2022 A blockchain-based digital currency (Bitcoin-like, but more stable and backed by the government) is an apt UBI solution for the millions who are unbanked but have some mobile or internet connectivity.<\/p>\n

\u2022 This has health benefits too, especially now that paper currency is seen as a virus-carrier.<\/p>\n

Tokenisation and fractional ownership:<\/h3>\n

\u2022 Blockchains have brought in a great innovation: asset tokenization, which converts rights into an asset and then into a digital token. So, a \u20b910 million apartment can be \u201cliquefied\u201d into, say, a million tokens of \u20b910 each.<\/p>\n

\u2022 This can enable fractional ownership and sale. In cash and capital-starved post-covid society, tokenization could enable liquidity and fractional ownership of the real estate, industrial and farm equipment, etc.<\/p>\n

\u2022 Of course, good laws and a regulatory framework will be needed.<\/p>\n

Global health record repository:<\/h3>\n

\u2022 There has rarely been such a pressing need for universal electronic medical records (EMRs) as now.<\/p>\n

\u2022 Health records on blockchain have been the Holy Grail, with their security, transparency, and privacy benefits, but this has been excruciatingly difficult to do.<\/p>\n

\u2022 The hope is that a crisis like COVID will create the right incentives for this to happen at a national level (say a health stack or an Aadhaar card for health), and at a global level as well. After all, a pandemic knows no national boundaries.<\/p>\n

Fundraising:
\n\u2022 The much-reviled initial coin offerings (ICOs) had emerged as an alternate way of raising money, through the blockchain-enabled crowd-sourcing of funds.<\/h3>\n

\u2022 In their first avatar, they became a playground for fraudsters and con artists and died a necessary death.<\/p>\n

\u2022 However, the concept that underlies the decentralization of venture capital is even more relevant now, and hopefully we will see the emergence of authentic and safe ICOs as an alternate mechanism for startups to raise funds.<\/p>\n

\"Blockchain<\/h3>\n

Conclusion:<\/h3>\n

\u2022 Blockchain, not just as a technology but also as a philosophy, can act as a great decentraliser and distributor\u2014of money, assets, data, records.<\/p>\n

\u2022 While it is not the mythical silver bullet for all our troubles, it is clearly a technology whose moment has finally come.<\/p>\n

 <\/p>\n

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