TACOMA, Washington — Although Latin America and the Caribbean (LAC) are leading emerging nations in start-ups and women-owned businesses, these countries are still struggling to end poverty. People in impoverished regions are victims of fraud, corruption and legislative efforts to secure land titles for farmers who were illegally stripped of their land are finding success, but efforts are still ongoing. Global technology solutions have helped Latin America and the Caribbean fight back poverty with Blockchain Technology.
Blockchain Technology was developed more than 10 years ago and is “the transparent, trustless, publicly accessible ledger that allows people to securely transfer the ownership of units of value using public-key encryption and proof of work methods.”
Corruption and Fraud
The effects of exploitation have a monumental impact on communities struggling with poverty. This unfair treatment makes it almost impossible to have access to services that they need for daily survival such as just treatment, education and health services. Corruption also negatively affects the economy as it limits the country’s ability for growth and self-sustainability. Transparency International Survey found that more than 55% of LAC’s population are not satisfied with the government’s handling of corruption and more than 55 million of the people who used a public service in a 12-month period were blackmailed.
Blockchain Technology will address dishonest methods because the technology detects corruption as it is decentralized and financial transactions that are input into a system cannot be manipulated, which allows for accountability of all financial transactions.
Financial Impact of Blockchain Technology
Impoverished populations are often met with discriminatory practices. Additionally, some lack a credit history or do not possess appropriate identification, declining their chances of financial inclusion. Access to bank facilities and the products offered is nearly impossible, which in turn limits their income and growth possibilities.
Blockchain, and the use of cryptocurrency tokens as “fungible digital assets that can be used as mediums of exchange (traded) inside of the issuing blockchain project’s ecosystem,” has promptly changed some situations of the disadvantaged, especially since the massive penetration of mobile phone and internet technology in the LAC market.
The United Kingdom start-up, Humaniq Ethereum, whose main audience is developing the nation’s poor and unbanked populaces, crafted a blockchain-based app user profile system that uses facial and voice recognition with the identification process. This method takes less than 30 seconds and can be completed with a smartphone, which 70% of LAC communities have.
Land Registry in LAC
For countless years, LAC agriculturists were treated as indentured servants and unfairly stripped of their land. Dating back to the early 1900s up until the early 2000s agrarian and land reform laws such as the Columbia Institute for Agrarian Reform and the Landless Workers Movement laws were passed and met with some success.
Despite the achievements of these land reform laws, not all of the impoverished farmers were able to obtain their land registry information, which hindered their economic progress. As the Fourth Industrial Revolution began carving a place in emerging nations, digital innovation helped Latin America and the Caribbean fight back with Blockchain technology.
The Inter-American Development Bank, business and technology conglomerates formed the LAC Chain Alliance and partnered with Swedish start up, Chromaway. The group which began collaborating in 2019 is in the second phase of ongoing efforts to secure proper land registry using Blockchain. The inner workings of the project are that the bank collects the legal and technical information from the customer (farmer and non-farmers) and creates exact proof of land title.
Other advantages associated with this technology, which were not strictly adhered to in past land reform efforts, is transparency, security and accountability. With Blockchain’s irrevocable safeguards, rural poor farmers will be able to borrow against their land assets and invest in businesses or communities, which will help achieve economic sustainability.
Blockchain Technology Vulnerabilities
Blockchain Technology is a significant component of the Fourth Industrial Revolution, while this imperfect system offers clarity, culpability and safety measures, there are a few concerns.
To begin, Blockchain is not eco-friendly as it relies on encryption to ensure its security features, which uses massive amounts of computing power. Also, this digital juggernaut lacks supervision on market manipulation. Thus, scams are the norm.
Lastly, not all powers embrace Blockchain, meaning banks might not be too thrilled to see Blockchain become successful. Blockchain eliminates the middleman and banks profit handsomely in this role as the banks spread costs to their numerous customers. If this no longer happens revenues would shrink because end-users costs are very little. Since banks can be very influential with the government and political sectors, it’s not a stretch to say these entities could run interference with Blockchain.
Blockchain Technology solutions are still evolving and have limitless potential. It is a system that has proven to help LAC’s vulnerable communities in financial and non-financial sectors. If the government continues to purposefully utilize Blockchain’s distinctive features, LAC’S imperiled populations will be able to experience economic and societal freedom.
Kim L. Patterson