Crypto Vs Corruption: Ending Mismanagement
Dec 29, 2021
The integrity of data flow in the network of cryptocurrency systems has the ability to alleviate, to some degree or another, the issues of corruption that exist in every country. Let's explore how:
Greater transparency with crypto transactions
Transparency is an important factor that could assist in alleviating some of the issues of corruption. In a number of ways, cryptocurrency has the ability to be more transparent than fiat currency. Cryptocurrencies, like Bitcoin, use blockchain technology to record and securely store every transaction, once a transaction has been recorded, it cannot be altered. The data for each transaction is publicly recorded and stored on the blockchain, this means that any person can access this information at any given time. The level of traceability that crypto offers is inconceivable when compared to physical cash.
However, this transaction record does not yet store any information about the users. Cryptocurrencies, like Bitcoin, are pseudonymous as they do not store any real-world identities. It is, however, possible to include personal information, such as names or ID numbers that would make cryptocurrency transactions completely transparent. A government or an organisation could adopt or develop a transparent cryptocurrency that could be pegged to a physical currency, this would help in reducing corruption as transactions could easily be traced. With the lack of anonymity and the tight traceability, corruption would be much more difficult, unlike with physical currency.
Blockchain as an anti-corruption tool
The blockchain is decentralised by nature and is the perfect place to store data transparently - the ultimate tool to fight corruption. There are various attributes that make blockchain-based systems more resilient to corruption. Transparency is arguably the most important factor. Any transactions or changes made are publicly recorded on the blockchain, this means that once the data has been stored, it cannot be manipulated or changed by bad actors. Another important factor is that there is no need for a third party to verify transactions, reducing the risks of corruption and bribery.
Some practical applications of blockchain that have the potential to reduce corruption at the government level:
The voting process, especially in developing countries, is often subject to extreme levels of corruption. Blockchain-based voting systems can help eliminate corruption in the context of voting, providing fair elections. There are already a number of blockchain-based voting systems currently being developed.
Financial transactions are often vulnerable to corruption. By making use of cryptocurrency, which uses blockchain technology, financial transactions will be publicly recorded and easily traceable. This will reduce corruption and hold those accountable for mismanagement.
Whilst there are many challenges in using crypto and blockchain to reduce corruption, the potential is there. Although it may be a number of years before blockchain and crypto are used to fight corruption, we are nevertheless excited to see it unfold.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of MultiBank io. No information in this article should be interpreted as investment advice. MultiBank io encourages all users to do their own research before investing in cryptocurrencies.