The Effect of Blockchain Technology on individuals and Businesses.

Economists all over the world have been exploring people’s behaviour for hundreds of years,  how we make decisions, how we act as individuals in groups and how we exchange value. They have studied institutional systems that facilitate our trade like legal systems, businesses, governments and the market place.
 

There is a new technological system that will fundamentally change the way we exchange value, its known as Blockchain this is a bold statement, Blockchain is  relatively new, it’s also a continuation of our human story, and the story is, as humans we find ways to increase trust  about one another so that we can exchange value.

Now, one of the first people to really explore the idea of institution as a tool in economics to increase trust and be able to do trade was Douglas North a Nobel winner in Economics. He pioneered what is now called new institutional economics, and what he meant by institution is not just formal rules like the constitution or the informal constraints like bribery, these institutions are really like the grease that allow our economic wheels function and we can see this play out in the cause of human history.

If we look back during the hunter and gatherer economies, we really just traded within our village structure. We also had some informal constraints in place but we enforced all of our trade with violence or social repercussions.

As societies grew more complex and our trade routes became more distant we started to build more formal institutions such as banks, governments, corporations and currency these institutions helped us manage our trade with trust as complexity grew, our personal control reduced in the  running of business.

Eventually, with internet we put all these same institutions online, we built platform market places like Jumia, OLX, ebay, amazon, and Alibaba, just faster institutions that act as middlemen to facilitate human economic activities.

As Douglas North saw it, institutions are tools to increase trust so that we can connect and exchange all kinds of values in the society.

 I strongly  belief we are now entering a further and radical evolution of how we interact and trade, because for the first time we can enhance  that trust  not just political and economic institutions like banks and governments but we can do it with technology alone, yes with  technology alone.

So, to a layperson what is this thing known as Blockchain Technology?

Blockchain technology is a decentralized database that stores a registry of assets and transactions across peer-to-peer network; it is a public registry of who owns what, and who transacts what. The transaction is secured through cryptography and over time that transaction history gets locked in blocks of data that are cryptographically linked together and secured, this creates an immutable and unforgeable record of all transactions across the network. This transaction record is replicated to every computer that uses the network.

Blockchain is not an application; it is not a company, in simple terms it is close to something like wikipedia. Wikipedia is a free online encyclopedia, created and edited by volunteers around the world and hosted as an open platform. Those who know wikipedia can confirm that, we can see everything in wikipedia and we can create our own wikis in the same infrastructure with the  use of words, images and keep changing these data over time.

Blockchain uses the same concept, it’s an open digital  infrastructure that stores many records of assets, history of custodianship, ownership and location of digital assets like bitcoins, title of ownership contract, intellectual property it can be a certificate or even personal identification information.

At its core, that is how it works, a secure and decentralised temper proof database of transaction records.

How does Blockchain increase the level of trust or promise to transform our economic activities?

Imagine  three levels of managing  trust, first not knowing who to deal with, second not having visibility of the item or commodity being traded, thirdly not having recourse if something goes wrong in this exchange of value.

First take this for example, if i decided to buy a mobile phone from an online platform like  Jumia, OLX, ebay or amazon, how do i confirm who among these companies have  the best  reviews and trusted ratings? How do i assess the level of quality of products supplied by them? they are all fragmented with no open global database that can verify this claim. How does the government issue an Identification card to a new applicant, that individual must possess unique attributes that reveals cryptographic proof that one is over 18 years and  therefore can be trusted to trade.

Secondly, not having visibility or transparency of a good being  traded. Phone companies deal with different vendors along the horizontal supply chain that do not use the same database. How then will I know the phone I bought is the same phone I will receive in my mail.

By using Blockchain you can use shared reality across nodes and these nodes do not need to know each but monitor each other like Wikipedia works. It’s a shared database with one  single truth, we can create a database that all the vendors can use in real time,  as my phone travels across the world i can see a digital identification of the vendor.

Thirdly, what if you don’t sent me the phone?

Blockchain has the capability of smart contracts without third party enforcer. You don’t have to release the phone until all conditions are met.

Blockchain technology is at its infancy stage but there tonnes of people working on this breath-taking  innovation and a science of creating a technological institution in a decentralised way.

By converting uncertainty to certainty by enhancing trust in our exchange of value.

We need to be prepare ourselves for this game changer.

The Author,

Ekaale Ekuam

Chair, Turkana Professionals Association (TPA)

ekaale.ekuam@gmail.com

https://ekaaleekuam.blogspot.co.ke/

Why technology is an enabler of Government and business efficiency.

Professor Bitange Ndemo in his book Digital Kenya: An Entrepreneurial Revolution in Kenya  has brought out  a number of  keys issues that are fundamental in nature for any organization gearing towards efficiency and effectiveness in its internal operations.

He takes us back to the Kenyan internet journey critical was the laying of the first fiber-optic cable on the Eastern Seaboard of Africa, the TEAMS cable, was first crucial step that heralded a new chapter for cheaper telecommunication access. With it, opportunities to mainstream Internet access were created, such as subsidizing broadband more Internets Service Providers (ISP)  sprung up to take up the internet access journey for all. Our institutions of higher learning benefited immensely and this created start-up hubs where entrepreneurs had access to high-speed Internet.

 Web applications (apps) such as  M-PESA, the money-transferring app was created, it capitalized on the fact that only 5 percent of the Kenyan  population by then had access to bank accounts and created a solution that revolutionized citizens’ financial freedom.

The post-election violence of 2007–2008 also brought some unexpected innovation when a small group consisting of a few individuals  began to collect eyewitness reports of violence from emails and text messages and uploaded them to Google Maps, giving rise to Ushahidi (Swahili for “testimony” or “witness”),   a groundbreaking information-gathering, visualization, and interactive mapping tool that is now used around the globe.

Ushahidi, along with M-PESA, changed the minds of even the best-known doubters that it was possible for innovation to stimulate a world-class entrepreneurialism in Kenya.  Financial institutions did not see how MPESA application would cause a disruption in the way of doing business but banks had no choice but to embed clients’ accounts to this new application, the effect was reduced queues in the banking halls. The Mpesa developers went further to automate business transactions through introduction of Pay bills and Till numbers making it even easier for individuals and organizations to transact business.

It is therefore critical for Governments and business organizations to focus on the development of ICT infrastructure, leverage on  mobile platforms to build innovative applications, creation of local content, enhance human resource capacity, develop  public–private partnerships (PPP), and creation of employment opportunities for our young  growing youth population with the result that Kenya’s policy environment has slowly become a conduit for successful ICT development locally.

The ICT revolution is a global and competitive phenomenon that is heralding a new paradigm of creativity and innovation in virtually every part of the world. Almost every business is forced by technological advancement to relook the way of doing business in the ever-changing world. Governments want to collect more revenues through efficient tax collection by adopting integrated systems to propel accountability.

Demand for online services is increasing day by day, digitization of government records at all departmental levels to improve data visibility.

The approach of customizing a complex technology to local environments makes it even simpler and more relevant even in the most unexpected areas. Imagine a scenario where a herdsman from a village in Turkana is able to access information on the weather patterns and plans grazing for his animals   based on some free data available through the mobile phone.  Today, even the poorest citizens in shantytown areas participate in social media, which has given rise to new approaches to communication.

 Today through ubiquitous connectivity, digitization of content and processes, crowdsourcing, collaborations tools, knowledge networks, sensors, data capture and sharing, artificial intelligence, and analytics that ICT can help build innovative enterprises.

 Let us mobilize local knowledge and problem solving, and make global knowledge accessible to all. ICT can network actors and organizations across sectors and regions, build collaborative platforms to co-create development solutions, and enable client-centric service delivery.

We must all embrace technology and keenly follow Innovations that change the way we operate as individuals and organizations. Technology is ever changing.

Author,

Ekaale Ekuam

 Chair, Turkana Professionals Association (TPA)

ekaale.ekuam@gmail.com

https://ekaaleekuam.blogspot.co.ke/