By Dias Nyesiga
Experts believe that blockchain technology is likely to facilitate collaboration and tracking of all kinds of transactions and interactions in Rwanda, a country that has shaped its ambition to leapfrog its economy to knowledge based.
With bureaucratic financial sector and a lack of innovative technology products that would match with the growing trends and innovations on making financial transactions easy, block chain technology can fill up the vacuum.
“What if there was a protocol, call it the trust protocol that enabled us to do transactions, to do commerce, to exchange money, without a powerful third party? This would be amazing,” said Michael K Nagenda the CEO Kipya – Bit2Big Rwandan local company
He adds, “If I’m going to send some money to somebody else, I have to go through an intermediary I mean a powerful bank, a credit-card company or a government to authenticate who I am and who you are.”
Accordingly, the underlying Blockchain Technology, is the biggest innovation in computer science — the idea of a distributed database where trust is established through mass collaboration and clever code rather than through a powerful institution that does the authentication and the settlement.
“For example, we have this great asset of data that’s been created by us, and yet we don’t get to keep it. It’s owned by a tiny handful of powerful companies or governments. They monetize that data and our privacy is undermined,” he added.
How the Blockchain works
The Blockchain is basically a distributed database. Think of a giant, global spreadsheet that run on millions and millions of computers. It’s distributed. It’s open source, so anyone can change the underlying code, and they can see what’s going on. It’s truly peer to peer; it doesn’t require powerful intermediaries to authenticate or to settle transactions.
It uses state-of-the-art cryptography, so if we have a global, distributed database that can record the fact that we’ve done this transaction, what else could it record? Well, it could record any structured information, not just who paid whom but also who married whom or who owns what land or what light bought power from what power source. In the case of the Internet of Things, we’re going to need a Blockchain-settlement system underneath. Banks won’t be able to settle trillions of real-time transactions between things.
Most Blockchain and Bitcoin are what you call permission less systems. We can do transactions and satisfy each other’s economic needs without knowing who the other party is and independent from central authorities. These Blockchains all have a digital currency of some kind associated with them, which is why everybody talks about Bitcoin in the same breath as the Blockchain, because the Bitcoin Blockchain is the biggest.
How disruption can occur
The financial services industry is up for serious disruption or transformation, depending on how it approaches this issue. For the research for Blockchain Revolution, they went through and identified eight different things that the industry does: it moves money, it stores money, it lends money, it trades money, it attests to money, it accounts for money, and so on.
What could go wrong?
There are showstoppers such as the energy that’s consumed to do this, which is massive.
Another showstopper, as experts say is that this technology is going to be the platform for a lot of smart agents that are going to displace a lot of humans from jobs.
“I think the future’s not something to be predicted—it’s something to be achieved. What we’re arguing is that this technology is revolutionary and holds vast potential to change society.” he said.
The biggest problems, though, have to do with governance. Any controversy that you read about today is going to revolve around these governance issues. This new community is in its infancy. Unlike the Internet, which has a sophisticated governance ecosystem, the whole world of Blockchain and digital currencies is the Wild West.
“Imagine each of us having our own identity in a black box on the Blockchain. When you go to do a transaction, it gives away a shred of information required to do that transaction and it collects data. You get to keep your data and monetize it if you want, or not,” he added.
Last year, $1 billion went into venture alone in this area and there is more hope that the power of the applications to disrupt things for the good rather than redistributing wealth, can change the way wealth is distributed in the first place.