Blockchain is something that is all set to revolutionize the shape of global trade and finance as we know it. It is gaining popularity even though many people do not know how it works or haven’t heard of it at all. The World Economic Forum is of the view that by 2027, a tenth of the world’s GDP will be in the hands of blockchain technologies. It’s no surprise then, that more than 3 quarters of global banks will have started blockchain projects in some form by the end of this year.
Uses of Blockchain
Though many people don’t know what blockchain is, almost everyone has heard of the cryptocurrency called bitcoin. Bitcoin uses blockchain technology to store and transfer value. Blockchain can be used in the settlement of accounts, and to store records of property to ensure contract validity and implementation.
Another possible use, one with far reaching implications, is that blockchain can be used in the prevention of procuring weapons of mass destruction and any other goods or technologies that can be used for harming humanity.
Implications of Blockchain
Many systems like mobile banking often make use of cost intensive middlemen like payment processors and clearing houses. There is also an element of trust that both transacting parties need to place in them.
The traditional intermediary services, especially for export-controlled transactions, need to be regulated and that is a tremendous challenge given the present scenario. Be it manufacturing, sales, shipping, or financing export-controlled goods, they needed intermediation. Banks had to deal with financing and legalities involved as well as shipping and insurance agreements between buyers and sellers.
This is a tedious process as it involves verification of documents, multi-layered checks and much more. Even worse is the fact that export licensing and verifying the end user still happen on paper, which makes it more vulnerable to fraud. Back in 2016, a Chinese intermediary by the name of Sihai Cheng, was sentenced to 9 years in prison. The reason being the falsification of import and export documents. When transshipping goods with nuclear applications, Cheng falsified the documents for the goods, which counted as violation sanctions against Iran.
Blockchain eliminates these middlemen (thus the issue of trust and many other problems) through its decentralized distributed ledger system, making peer-to-peer transactions of any kind, more visible, transparent and verifiable. It keeps the identities of the parties hidden but the detailed nature of the transaction itself is clear and apparent. Once a transaction takes place and is recorded, cryptographic protocols make sure that the transaction cannot be altered. In the case of WMD’s, it means curbing the spread of WMDs.
Is Blockchain Really the Solution to Controlling WMDs? What Needs to be Done?
The simple answer is “no” for the most immediate future, but it will happen in due time. It is difficult to ignore, however, the fact that blockchain will play a significant role in establishing a long broken trust in global markets really soon.
Nuclear Supplier groups and similar coalitions should start working and thinking of how blockchain can help them with controlling WMDs. They should begin understanding how its implementation happens in both public and private sector. They need to understand how it works. They need to develop a regulatory framework to incorporate blockchain to understand how authorities can intercept illegal activities, which may potentially have dire consequences on a nuclear scale.