We live in a world that had been become ever more digital and globalized, despite the best efforts of from cyber and terrorists’ attacks and the contoured ‘sabre rattling’ from the world’s superpowers. However, in less than three months a virus has managed to, in effect, confine 3.9 billion people (i.e. nearly 50 % of the worlds’ population) behind the front doors of their homes. In a desperate attempt to slow the spread of COVID-19, governments have asked their citizens only to travel only work if totally necessary, and to stay at home while their healthcare systems struggle to keep up with caring for the sick and, in many, cases the dying. As economies across the globe swiftly move into decline, the United Nations is predicting that the economic outlook could be the worst since the Great Depression in 1930 as 75% of work places around the world are closed.
The action that governments have taken has been bold and generous, to say the least, as detailed by the IMF. It has kept track of what different countries have done to help their citizens face a loss of income in an effort to minimize the severity of what looks like an impending global recession. While the intentions of those countries that can afford the hand outs and largess of printing money are laudable (as they try to reduce financial hardship today), what problems are they storing up for tomorrow? As we are shaken out of compliancy and are required to adapt to these desperate times, what lessons can we learn and how can we use Blockchain technology to improve our lives and business practices?
Here are just a few suggestions:
- Digital cash
- with the UN stating that 500 million people could be pushed into poverty and globally more than 1.7 billion are unbanked, the most vulnerable citizens will need help. It is hard to give cash to people who do not have a bank account, but easy to do it digitally via their mobile phones! The implementation of Digital Currencies can reduce the cost of transferring money, constrain the shadow economy and offer governments a new monetary tool to help control their economies.
1.1 billion globally do not have a formal ID, according to ConsenSys. Having an ID card is controversial and by no means universally popular. However, by using a Blockchain platform, personal data could be held much more securely and ‘hashed’ so that the information could be anonymised. This would give governments one database, thus cutting the costs of needing to maintain a multitude of numbers and references for its citizens. The ID2020 from the UN has recently been launched with two goals: 1.) define the parameters for a good and ethical digital identity system; 2.) be responsible for funding and implementing digital identity projeccts with a socially good mindset. Pause and think, how many ID’s does the Government have for you? Passport, driving license, National Insurance number, NHS number, Unique Tax Reference - the list goes on. Korea is trialling a project to put driving licenses on a Blockchain. In Zug, Switzerland, there eID system using Blockchain technology which allows residents to vote using their mobile phones. Meanwhile, Estonia has ‘e-identities’ and claims that, by having a digital authentication and signature system, this saves the country approximately 2% of GDP p.a. With the prospect of another recession, other countries may well now be looking a little closer at the Estonian model!
- otherwise called behavioural economics, or gamification, have been used by governments to change behaviour e.g. wear a seat belt or be fined, save money in your pension and earn tax relief. In the corporate world incentive schemes, such as airmiles or credit card reward points, are designed to encourage loyalty and repeat purchases. Last year, the OECD issued a report looking at how governments could use incentives/ tokens to change behaviour.
There has been considerable speculation and ‘hype’ about Blockchain technology and the potential it offers. As someone who has been studying who, how and why this technology is being implemented and writing weekly on its subject for over two years, for me the reoccurring word that stands out and is often cited as the most powerful reason for Blockchain’s adoption is TRUST. In a world where ‘fake news’, social media gossip and unverified chatter are the norm, there is not just a desire but a genuine need (one could argue) to restore TRUST in society, governments and many aspects of our day to day lives. Possibly, by being forced to spend time quarantined in their homes, it will give those people who work for organisations and companies the time to reflect on priorities and business plans? As our thoughts begin to focus on life post COVID-19, it will be interesting to see to what extent we will return to ‘business as normal’ and to what extent Blockchain technology will be more fully embraced!