Opinion.. How can social and economic reforms be achieved in the region through "blockchain" technology?

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What is Blockchain Artificial Intelligence?  New technology in cryptocurrency

This article was written by Meedo, Vice President of Communications,  and the views below are those of the author and do not necessarily reflect those of our website.

Blockchain technology is rapidly gaining momentum in the MENA region despite the fact that there are relatively low levels of public awareness and knowledge of this type of application regionally. The region's increasing reliance on this technology depends to a large extent on the availability of regulatory frameworks and the enabling ecosystem, as well as confidence in the added value and security that this technology provides.

New economic activities, cost reduction, transparency and security are among the most prominent benefits that encourage institutions within the public and private sectors to adopt the “blockchain” technology. While many expect this technology to revolutionize many sectors, it is still in the “proof-of-concept” stage and on its way to “mainstream”. 

However, this is encouraging news for our region, which faces many long-term social and economic challenges, where a revolutionary technology such as "Blockchain" can provide a valuable opportunity to effect positive change.

Blockchain

The blockchain revolution and its applications across sectors

Globally, blockchain technology continues to impact key sectors with pilot projects in place to assess its feasibility. Countries like the United States, Canada, China, Japan, and countries in Western Europe are seeing an amazing growth in Blockchain investments.

In persevering to develop a global supply chain platform, enterprise software giant SAP was among the first to establish a blockchain consortium that includes companies such as HP, Intel, UPS and Airbus. Today, there are dozens of such associations worldwide, bringing together businesses from various sectors such as banking, transportation, hospitality and more.

Blockchain solutions have not yet expanded to provide comprehensive and feasible applications in the region or even globally. However, our region has begun to embrace transformative technology which may have a positive impact on local communities and economies.

We are currently seeing the spread of blockchain technology in the region primarily within the digital currencies, non-fungible tokens (NFTs) and the financial services sector. Being an early adopter of this technology, the financial services sector is taking advantage of the "Blockchain" via banking transactions, remittances, securities and investments.

In the coming years, massive spending on blockchain is expected to be concentrated in the manufacturing, retail, and professional services sectors. Business and IT services will also benefit from the majority of this year's technology spending. Other sectors such as food and healthcare could benefit from this technology.

The potential of the “Blockchain” in facing the social and economic challenges in the region

Poverty, conflict, unemployment, poor quality of education and scarcity of resources such as electricity are among the most common social and economic issues facing a number of countries in the MENA region. Against these challenges, there must be opportunities, as there is no doubt that a number of sectors will benefit from so-called Web3 applications.

Governments and supply chains

For example, governments can use blockchain to keep records such as real estate transactions, budgets, student loans, and track humanitarian aid. These use cases may reduce corruption, fraud, and cost by eliminating ambiguity and confusion around typical government transactions and paper use.

 In another example, port authorities in some parts of the world are using blockchain technology to track shipments by developing tamper-proof methods. The goal is to ensure that payments reach the parties involved and to eliminate fraudulent accounts and money laundering.

Giving

Corruption is a pervasive problem in many Middle Eastern countries, particularly those in conflict, which despite the willingness of donors to support their humanitarian efforts, they are often reluctant to do so for fear of misuse of their donations. 

Blockchain provides donors and charities with a high level of transparency about how their contributions are distributed among the beneficiaries. Technology is likely to play a pivotal role in ramping up donations such as food, medical supplies, education and infrastructure. This step can alleviate poverty and improve the quality of life in marginalized communities.

Property rights

Hacking is another form of corruption. Anti-piracy organizations and local authorities work hand in hand to crack down on counterfeit music, movies, and more.

 Purchasing songs and music with cryptocurrency can eliminate copyright infringement. As a result, a favorable environment can emerge for emerging artists, allowing them to reach their audience directly without incurring the cost of distributors and the loss of piracy.

Healthcare

The blockchain can also serve as a global platform for patients' medical records, eliminating the risk of security breaches, deletion, or data tampering. Availability of decentralized constraints on medical data could help generate ideas for disease control, while supporting the allocation of humanitarian aid in countries experiencing conflict or war.

real estate regulation

Land ownership records in our region are shrouded in mystery and are vulnerable to bribery tampering. Blockchain technology allows for the tracking of land ownership history, verification of registrations, background checks for parties, payments, title deeds and taxes. In more developed markets such as the UAE, some real estate developers mark up properties as a means of commerce. 

Owners can now issue blockchain-based tokens, which represent the value of their shares in a specific asset. In addition, many developers and real estate agencies have started selling virtual land and property in the form of NFTs.

Energy and the “sharing economy”

Another major challenge in the region, particularly in countries that are in or emerging from turmoil, is the lack of a regular energy source. But with the help of the blockchain, consumers can share their energy with their neighbors for an on-demand fee. This is a useful option not only in unstable environments but within developed regions as well, where the "sharing economy" model of modern consumption is becoming increasingly popular, particularly among millennials.

 With the increase in short-term rents for some products and services and their gradual replacement for the full ownership of one person or entity, the use of “Blockchain” can achieve positive results for companies and individuals in the region in terms of addressing pollution and conserving resources.

Reducing the unemployment rate

Any new technology can make a huge impact if it can provide financial inclusion. Blockchain technology has proven useful for lenders who want to provide small loans to people in marginalized communities who do not have access to banking services. For example, street vendors require minimal financial support to set up food stalls. 

Blockchain allows small business owners to borrow money without being subject to the comprehensive and complex credit assessments that banks currently require, thus reducing unemployment.

According to the World Bank, there are 1.7 billion people around the world without a bank account. And for those who live in remote areas or conflict areas, where there are no banks, blockchain can offer a useful solution. Technology also facilitates faster and more cost-effective transactions, such as the remittances that many families across the region rely on to secure a decent living.

food sector

Moreover, consumers can track their food from farm to kitchen through blockchain technology. For our particular region, consumers may be able to tell if a food is halal based on the food source and preparation methods. They can also check various aspects of food security and quality or the source of food contamination.

Lots of benefits and a long way to go

The potential benefits of blockchain technology are quite clear. Although this technology has been around for nearly 15 years, we need to be patient in order to perfect the applications it offers across all sectors.

When a new drug is produced or an innovative treatment is developed, it undergoes a series of rigorous testing and approvals before it is given to patients. It may take months and even years before tangible benefits are realized. Even the most promising innovations face hurdles throughout their pilot phase. 

The nature of the “Blockchain” is no different from a pioneering drug that is on its way to achieving its full potential, and this technology appears to be a promising panacea for a range of social and economic issues facing our region.

digital technologyscience and technology

Spread Thuesday , 07 June 2022

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