Blockchain technology is becoming more and more popular each day. Of course, this is not surprising as a result of the great impact blockchain is having on different nations of the world today. Major issues affecting some developing nations have been solved and even reduced to the barest minimum using blockchain technology. Therefore as a technology blockchain has a great role to play in the proper development of Pakistan.
WHAT IS BLOCKCHAIN TECHNOLOGY AND HOW DOES IT WORK
A blockchain can simply be defined as a structure or format of data that represents a financial ledger entry or a concise record of all transactions performed during a period of time. In other words, it is more or less an algorithm for managing electronic or digital cash among different individuals in different locations without a central administrator.
The most interesting feature of Blockchain is that these financial ledgers are shared among a deployment. Therefore, everyone on the block is aware of any business transaction going on at each point in time because they all have their own copies of authenticated ledger equally allocated amongst them. The mode of operation of blockchain is based on transparency.
In summary, blockchain technology is simply taking control and power from a source and distributing it among reliable individuals eliminating the need for third parties.
HOW BLOCKCHAIN CAN HELP IN THE DEVELOPMENT OF PAKISTAN
Blockchain technology can help Pakistan become a world class Country in so many ways. Let us discuss some very important ones.
SOLVE THE PROBLEM OF WEAK INSTITUTIONS
For developing nations like Pakistan, weak institutions pose a major threat to the growth of market systems and development of the economy. One profound cause for the weakness found in the various economic sector is corruption. In fact, it has been established that corrupt activities are centralized and prone to occur in developing nations. As usual, a select few wield authority over many and dictate the day-to-day running of the economy.
Another cause of weak institutions is lack of social trust and respect. This occurrence is typically high in Pakistan. The importance of social trust cannot be overemphasized. It is best described as a foundation on which economic growth and development are solidly built, hence, improving the standard of living of its citizens.
combat this problem of weak institutions, a blockchain-based property registry can be adopted. Here, property records are kept and are made official. People are given the legal status of ownership which opens the door of opportunities for one to even use properties as collateral. A budget tracking mechanism can also be used to collect governments information and decentralize it so that others can get firsthand knowledge on governmental spendings. This goes a long way to eliminate corrupt practice and to strengthen social trust and respect among individuals in Pakistan.
IMPROVE FINANCIAL INCLUSIONS
Citizens of Pakistan often lack access to essential financial services such as bank loans, insurance coverage, and the likes. No wonder most do not participate in important economic activities that could help improve and expand their businesses. The main reason for this financial exclusion where only the super rich benefit from basic banking services in Pakistan is a lack of proper documentation and ineffective credit markets.
With the introduction and utility of Blockchain technology in Pakistan, correct data and information regarding its citizens status can be collated with transparency by banks and used to monitor their customer’s financial progress. A microcredit ledger based on blockchain technology can be developed to also help financial institutions and banks overcome their fears of unrepaid loans and reduced risks to the lowest level.
In other words, a shared credit IT system would go a long way to benefit both the borrowers and the banking organizations.
The utilization of Blockchain technology in Pakistan stands as the solution to major problems facing the country. If this technology is fully implemented, it will accelerate the growth of the emerging Pakistani economy.