The economy has currently functioned in such a way that the eight richest people in the world control more than 50% of its wealth. Change is needed and it can come in many ways, with wealth redistribution seeming to be the most obvious course. But, instead of re-distributing wealth, could it be democratized so wealth is distributed differently? The answer is yes. Blockchain technology can catalyse it. Applications of this new technology include new ways for data to be stored and transacted; creating a true peer-to-peer sharing economy; and creating a more secure method for land-title registration. All of which lead to new avenues of wealth being created. Each and every one of these applications of blockchain technology leads to an incredible difference in lifestyle in developing and developed nations.
Monetising Personal Data
Data is currently stored on servers at Google or Microsoft, yet these servers are easily hacked due to their centralised nature. Data on these servers can also be bought, sold or stolen. So, data has value and can even be monetised. There are blockchain companies starting projects that put data on decentralised platforms where only a certain person, and those he or she allows, have access to their data. This allows one to keep their privacy and also sell their own data. This affects both developing and developed nations in the sense that data, even as a monetary asset, is universal.
The growth of data is already having an effect on global affairs. Policies can be enacted to nurture this. However, there are first a few things to consider. One, that data being too private can be a threat to national security. With the current population and projected growth, governments need access to data in order to actively defend against threats using that gathered intelligence. It is human nature to plan ahead, and by collecting harmless data now, governments are thinking about threats in the future. Society is at an impasse now, though, torn between two ideals. One, that it is a human right to have control of one’s data. And two, that governments having access to data is necessary for national security.
Data and National Security
Society strives for equality, including economic equality. Allowing one to sell their data gives one a sense of autonomy and security. However, blockchain technology, specifically the ability to construct smart contracts, makes it so that third parties do not need to exist in the transfer of data. Currently, private companies are collecting data and selling it, but what if data could be completely collected by the owner and the government only? So, by removing privately controlled centralised servers full of data, data can be on the blockchain and governments can put in place policies which incentivise people to allow their data to be used as part of a board national security agenda. Furthermore, it would cause less strife if people would be willing to hand over their data freely or for monetary compensation, than for their data to be harvested by companies and sold without their consent.
The sharing economy is essentially a peer-to-peer system that, contrary to popular belief, foregoes third-party applications like Uber and Lyft. Some already think that Uber is a company that is part of the sharing economy. Well, the sharing economy can be defined in a variety of ways, and it is, in fact, a misnomer. The Harvard Business Review and Financial Times have stated that the correct term for what is popularly seen as the sharing economy, which has at its heart companies like Uber, would be the access economy. It is the access economy because consumers are paying to access another persons’ services. When a company is in-between two parties, it is not considered sharing, only access.
Drivers are being under-compensated and Uber is raking in the profits. By removing the third party here, drivers and passengers on both sides would realise more gains and would be compensated fairly. The key factor in play here is trust. We trust third parties to let transactions go through safely and security because those third parties have credibility and take the blame when needed. However, smart contracts can provide the same services while removing trust from the equation.
If a true sharing economy can be created then it would remove the need for many large multinational corporations, open up more jobs, and distribute more income to drivers, if Uber were used as an example, while saving money for the customer.
Land Title Registration
The final outlet for income comes in the form of land title registration. In many countries, land title registration comes in the form of physical deeds. These forms of documents can be easily lost or stolen. In fact, India has had numerous problems with land title registration; either the government would seize property or gangs would declare that property their own. Without any proof, there is no way to get one’s land back. But, with public key cryptography, ownership can be proven to authorities, with no chance of forgery or manipulation.
Many governments in developing countries are currently using blockchain technology to secure land title registration for its people, and this is a big step in the future development for land rights. Andhra Pradesh is just one example of a government implementing blockchain based land title registration. There are massive economic benefits to increasing access to deeds and proof of ownership. Doing away with the notion of dead capital, land held informally, would open up borrowing to a large number of people. Right now many people, who can not prove ownership of land, cannot secure borrowing against it. A blockchain based land title registry would greatly increase the economic potential that these people have. It is difficult to implement policy changes, but there are enormous positive implications for doing so.
Blockchain, as a new technology that is taking the financial institution sector by storm, can also be applied to many other areas. This type of new technology will need regulations put in place to transition smoothly from one process to another if or when large institutions decide to adopt this technology. As the Australian, Indian and Japanese governments are already using it, blockchain technology will play a central role in the technological and economic revolutions of the near future. Proper policymaking is still necessary.
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