“Blockchain? We need to fix the roads first. Now is not the time for new technologies.” Whenever I hear statements like this, I do not know whether to laugh or cry. In reality, there has never been a better time or place than today’s Ukraine for the introduction of innovations like blockchain. If competently implemented, this technology could help repair the country’s roads and solve many of the biggest challenges facing Ukrainian society.
Competitive Advantage for Emerging Economies
It is wrong to think that only the world’s most advanced societies can benefit from blockchain. On the contrary, this technology can offer developing countries a serious competitive advantage. Implementation does not require huge investment and benefits manifest themselves virtually immediately. Why? Because the essence of this technology is decentralisation, and one of the main obstacles in developing economies like Ukraine is typically the notorious power vertical. Stubborn state machines, bureaucracy, and corruption are exactly what blockchain can overcome. Although the essence of this technology is not limited to crypto currencies, the example they provide demonstrates that it is possible to build effective interactions unencumbered by state control.
International organisations are already talking enthusiastically about the advantages of blockchain for young economies. The World Food Program (WFP), one of the UN’s key units, is using blockchain technology to distribute humanitarian aid to refugees more efficiently, particularly to refugees from Syria. Moreover, within the framework of a project in Pakistan called “Building Blocks”, the UN is testing this technology by organising deliveries and conducting all financial transactions through a blockchain-based platform. Representatives of the organisation are now arguing that these innovative new solutions can play a crucial role in overcoming global hunger.
Blockchain Beats Bribery
A key component of all corruption is the human factor. The temptation to get rich quick is, at times, so great that even the possibility of severe punishment does not stop bribes from being paid or accepted. Take China, for example, where corrupt officials can even face the death penalty. Despite these draconian measures, there are still regular corruption scandals. In Ukraine, corrupt practices are deeply rooted in society. This makes blockchain a potentially game-changing solution to what is an ingrained problem.
Crucially, blockchain technology works without human participation. This effectively removes the key weak point from the equation. Data related to blockchain is not stored in any one place but distributed among a variety of devices in encrypted form, reducing the possibility of accessing and manipulating this data to a minimum. Potential anti-corruption applications of blockchain technology in Ukraine include an open blockchain property registry (which would act as insurance against raiders), the automation of simple workflows (including obtaining things like business permits), and digital control of public expenditures (for budgets of all levels). These three tools alone would suffice to tackle some of the top priorities in the fight against corruption. Similar technologies are already in use in the EU, but they generally aim to streamline processes. In Ukraine, the goal would be to help control processes.
From Healthcare to SMEs
Healthcare is another area where blockchain technologies offer potentially significant advantages. Most people tend to turn to their doctors rarely, so medical records are often lost. It can be difficult to replace these records. This can have a negative effect on the efficiency of treatment. A nuance to consider here is the spread of wearable electronic devices like fitness bracelets. Today, many treat these devices as mere toys or, at best, as a way of providing information for coaches and fitness trainers. This may be overly dismissive. The creation of unified databases containing online files and information from fitness bracelets provides an opportunity for physicians to work in a more personalised manner. Blockchain is capable of keeping such detailed medical secrets while also preventing the manipulation of data. This solution is already undergoing testing in the US by IBM in conjunction with the US Food and Drug Administration (FDA). Doctors are combining accumulated clinical research data, information on genetic features, and case histories together with information from smart gadgets in order to combat cancer by detecting the disease in its early stages. In the future, this experiment will expand to cover other kinds of medical considerations.
Another area where blockchain-based solutions can improve the automation of processes is the entrepreneurial world of Ukrainian small businesses. Blockchain technologies can help by simplifying the flow of documents, reducing the risk of fraud through smart contracts, and making it more convenient to complete payments without bank commissions. Meanwhile, larger IT companies and international banks are also paying attention to the integration of blockchain-based solutions. The reason for this interest is simple: they are looking to secure their place in a world where the rapid rise of new technologies is threatening to make their traditional roles redundant.
Blockchain-related technologies are already beginning to transform the international business climate. There is huge scope for the innovative adoption of these technologies in Ukraine. The question now is how quickly Ukraine will embrace these processes. Blockchain technologies offer emerging economies like Ukraine the opportunity to catch up with the world’s most developed societies, but failure to adapt also means falling behind. If Ukraine fails to seize the moment, the mantra “now is not the time” could well become the epitaph of the entire Ukrainian economy.