Is Blockchain the Solution to Corruption and Fraud?

blockchain against corruption

The tech world has given us a lot and has advanced humanity to new frontiers. Most of the tech industry is located in the west, which is fine aside from the fact that it creates a problem – most of the solutions that the tech industry comes with are for the west as well. This isn’t because they are stupid or that they don’t want to help other people – it is just easier for a person to create solutions for problems they have seen firsthand. Most of these CEOs and startups have never even set foot in a third world country, so it is unreasonable to expect them to focus on solving third world problems. The same is happening with blockchain.

Another big problem is that the third world is not a good market because the people there do not have as much money as other countries. Aside from a few outliers, most countries in the third world do not have a population that can afford high-tech gadgets and technology. This is another reason that investors also like solutions and products that apply to the west.

Even simple things like the Xbox and Playstation gaming consoles aren’t very common in third world countries because they cost so much. The cost of an iPhone or a PS4 is often 3-4 times of the monthly minimum wage in these countries! You will see all these products in these countries but only in the hands and homes of people who are in the Upper or Upper-Middle socioeconomic class. This isn’t a problem with blockchain, because it doesn’t have prohibitive costs attached to it.

One thing which most of us do not realize is that corruption is one of the biggest problems in the third world. Corruption permeates each and every part of the government and institutes in most of these countries. There are many exceptions, many countries that do not have a corruption problem, but those are the exceptions. You have government officers taking bribes, police taking bribes, judges taking bribes, and so on. You have sons of politicians becoming influential businessmen, and earning millions of dollars through fraudulent means.

This is a big, big problem, and not just because corruption is bad. Corruption is like a cancer. Not only do these people steal money, they also impede any progress in these countries. You can’t implement any program that increases the level of healthcare or education, because the corrupt government officials will just end up pocketing the money. However, things may be changing soon. Why are they changing? Well, we finally have a tool that we can use to fight corruption, and this tool is Blockchain.

How Corruption Happens

In order to understand why blockchain will be so revolutionary for the third world, you first need to understand how corruption happens in the third world. In countries with a good law and order system, there isn’t much of an issue with records that the government keeps. Your land records, financial records, police records – all this stuff is most probably genuine.

This is because, well, who’s going to change them? If someone wanted to have your property transferred to their name, they will need to have the government change its records. They will have to go to the department where the records are kept and ask the person to change them. The person can simply make a call to the authorities that they are being asked to do something illegal. Then a committee will sit down to investigate and will end up complaining to the police, who will then arrest the person who was trying to steal your land. Then there will be a court case at the end of which the guilty party goes to the jail.

Here’s how the same scenario works in a third world country. You have a great piece of land which you grow crops on, and the value of the land is increasing. Someone shows up and tells you to sell the land to them at a low price or they will just take it. You say no. The person who showed up is the relative of a local politician. He calls up the local politician and complains about you. The local politician calls up the government department which keeps land records and tells them to transfer the property to your name quietly. The politician doesn’t even need to bribe the person at the government department – just doing a favor for the politician is going to be very helpful for that person in the future.

Now, if that person is honest (which is not likely – these departments are intentionally filled with people that will do what is needed) they can call the authorities. Except, in this case the local politician is directly linked with the authorities. The person can also call the police, but guess what, the local police answers to the local government, and they will listen to the politician. If you are the luckiest person in the world and you somehow end up finding an honest government employee, an honest police officer, and an honest investigator in a corrupt country maybe the person pressuring you to sell the land ends up getting arrested. Then they just bribe the judge and get out of jail the next day.

The whole problem lies in the fact that so many people are corrupt that you cannot keep data safe from them. You can keep accurate land records but some corrupt person will just end up changing them.

How Blockchain helps

You can see how the blockchain can help with this, right? Imagine all land records being stored in the blockchain. Now it will be impossible for the person in the land record department, no matter how corrupt he/she happens to be, to change the records. If they attempt to do anything it will be recorded.

Blockchain is needed in countries where the local institutions are not strong enough to be dependable. The land records in the USA and Europe are safe – the ones in third world countries aren’t. That is why blockchain will be a much bigger deal for the third world than it will be for the first world.

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