According to Dean L. Kamen, the well-known American engineer and inventors of the present age, “Every once in a while, a new technology, an old problem, and a big idea turn into an innovation.” At present, blockchain is the technology which is converting big ideas into big innovations. The cornerstone of digitization is not just simplifying virtual banking, but it’s unlocking growth opportunities for almost all the vital sectors of an economy. Blockchain is rapidly superseding the other contemporary technologies because it is very much cost-effective and even countries with limited resources are capable of incorporating it in the majority of economic activities.
Blockchain – unblocking opportunities
Blockchain works on the principle of decentralisation, and due to this unique feature, it makes quick and easy information exchange and verification of the data. Earlier, the common perception of the masses was that blockchain technology is primarily useful for the development and transaction of cryptocurrencies. But, with the large-scale involvement of blockchain technology in telecom, retail, logistics, travel, healthcare, and of course, banking and finance sectors, it has been proved that this disruptive technology is playing a pivotal role in the growth and development of emerging economies. Developing countries such as India, Brazil, UAE, and Kenya are very smartly employing blockchain technologies for improving infrastructure as well as services.
Not only the tertiary sector, primary and secondary sectors are also utilising blockchain technology to improve their efficiency and productivity. The top-four beneficiaries of blockchain technology are tourism industry, e-commerce, supply chain, and banking & finance. In most of the developing countries, including India, travel companies are using blockchain for producing authentic and better booking experiences. Similarly, many e-commerce companies are now able to achieve high customer satisfaction and operational performance with best-in-class infrastructure and digital tools. The technology is instrumental in leveraging real-time data and demand predictions and reducing the lead time.
On the other hand, supply chain which is known as the life-blood of an economy graduates into a highly advanced phase which has increased operational transparency and curtailed shipment’s cost as well as delivery time. As FinTech companies are the pioneer in using blockchain, the technology has bestowed the banking & finance industry with innumerable advantages such as alternatives to judge a person’s creditworthiness, least TAT time, more transparency, speedily decisions, and above all improved security. In fact, the harmony of blockchain with AI, big data, and cloud computing is helping emerging economies in achieving financial inclusion.
Security is the basic need of societies in both real and virtual world as the two are turning into one with seamless integration of tools and applications. From citizens to corporates, everyone demands physical and financial security because it is their legitimate demand. Undoubtedly, blockchain has become the security benchmark for various developing countries and Dubai is the forerunner in this league. From roads to payment highways, security is the supreme need of smart cities and being the most smart security technology of all times; blockchain is the indispensable need of modern and sophisticated societies.
Challenges to deal with
Although emerging economies are doing better than developed economies with respect to adoption and exploitation of blockchain technology, there are many structural and environmental challenges need to be overcome for ensuring maximum benefit from the technology. Today, the foremost challenge of these countries is limited availability of reliable and verifiable data in the market. Another problem that developing countries encounter is their over-dependence on physical assets and hard cash. Gradually, it creates a parallel economy in the country and results in black marketing of various commodities. Eventually, this revenue goes unreported and affects the economic growth of the nation. Hence, to avail maximum benefits from blockchain technology, emerging economies must develop stringent measures and policies to deal with factors responsible for the growth of a parallel economy.