Blockchain: Hope for the economy

Photo. Achieve/Radio Nigeria

The Nigerian federal government on Thursday, May 4, approved the use of blockchain technology to improve the efficiency, transparency and security of various sectors, including financial services, supply chain management, healthcare, identity management and the electoral system.

What is blockchain technology?

Blockchain technology is a digital system that records transactions in a secure and decentralized manner, meaning that no single person or entity controls the system. It uses a network of computers to verify and record transactions, which are stored in blocks linked together in a chain.

Once a block is added to the chain, it cannot be changed, making it very difficult to tamper with or falsify the records. This technology is often associated with cryptocurrencies such as Bitcoin, but it has many other potential uses, such as in financial services, supply chain management and identity verification.

Benefits to Nigeria

Blockchain technology has many potential benefits for Nigeria, including improving the efficiency, transparency and security of various sectors in the country. Here are some of the main benefits:

Financial services: Blockchain technology can provide access to financial services for the unbanked population in a cost-effective, efficient and secure manner, which can reduce the number of dissatisfied customers registered in the banking sector. This can also help to solve problems such as unresolved complaints and the threat to the use of e-payments.

Supply chain management: Blockchain can help companies find inefficiencies in their supply chains quickly and locate goods in real time. For Nigeria, which is an agriculture-based economy, the technology can be used to trace the origin, quality and safety of agricultural products to improve consumer confidence and prevent food fraud.

Healthcare: Blockchain technology can be used to manage data from clinical trials and electronic medical records in healthcare, to ensure regulatory compliance and maintain the privacy and security of patient data.

Identity Management: Blockchain-based solutions can be used for identity management in Nigeria, giving individuals control over their identity and improving the accuracy and security of identity verification processes.

Electoral system: Blockchain technology can improve the transparency and security of voting systems in Nigeria, prevent electoral fraud and ensure the accuracy of election results.

Worldwide rollout of blockchain technology

As online payments continue to grow, interest in blockchain technology has increased among retailers and wholesalers. Several countries have emerged as leaders when it comes to adopting and implementing this technology.

Japan was among the first adopters of blockchain technology, even before Bitcoin had any real value. The innovator of Bitcoin is rumored to be Japanese, given the name “Satoshi Nakamoto”, which resembles a typical Japanese name. The Japanese government also aims to lead global blockchain innovations.

Despite banning crypto mining and cryptocurrency, the Chinese government strongly supports blockchain technology and is one of the largest and most powerful promoters of blockchain worldwide.

Switzerland is another country that has made significant progress in blockchain. A small town in Switzerland called Zug, with a population of 29,000, is even known as the home of the Ethereum network. Switzerland has approximately 450 blockchain-based associations and businesses, and it provides liberal regulatory and tax treatment for newly established blockchain businesses.

Blockchain energy consumption challenge

One of the disadvantages of blockchain technology is the energy consumption. The complex mathematical algorithms used in blockchain require significant amounts of computing power, which in turn require large amounts of energy. This can lead to high electricity bills and contribute to environmental concerns related to carbon emissions.

Nigeria may adopt blockchain technology despite low electricity production. There are initiatives and projects aimed at increasing access to renewable energy sources, which can support the introduction of blockchain technology in the country.

Author of Chinasa Ossai; Editing by Annabel Nwachukwu and Saadatu Albashir

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