Total Transparency: How Blockchain and Cryptocurrencies Can Curb Corruption

Beginner’s Guide / 18.06.2020

The advancement in technology has improved transparency and accountability in many sectors to reduce cases of corruption.  These days, the money funded to steer development projects can be tracked up to the last coin, but has it been able to curb corruption? Criminals still find their way to carry out their illegal dealings. Blockchain technology provides an efficient way of curbing corruption in government institutions as well as private institutions alike. 

This article focuses on how blockchain technology can help curb the issue of corruption and improve people’s lives.

What’s Blockchain Technology?

Blockchain is simply defined as a decentralized, distributed ledger technology that publicly records transactions involving digital assets. The technology allows your digital information to be distributed, but not a copied-each individual piece of information has a single owner. Information is stored in multiple locations and updated instantly. This way, the information cannot be altered without being verified by the public. Also, a single block cannot be altered without the alteration of all subsequent blocks.  

Blockchain – A Solution to Corruption?

While there exist numerous anti-corruption policies in governments today, corruption is still an enormous menace. In fact, corruption is deeply rooted in government institutions, with the current generation perceiving it as an ordinary or normal vice. Blockchain offers an ideal solution to corruption. In a blockchain network, a subsequent block contains data regarding the previous block. Also, the information stores in a single block cannot be changed, or deleted-it can only be verified. Additionally, blockchain technology leverages the principle of decentralization and distributed databases without the existence of a central authority. All information is recorded in an encrypted form on computers of network users i.e., nodes. This feature enhances openness, transparency, and immutability of data – a vital feature in eliminating corruption in both private and public institutions. 

Blockchain technology is also versatile and universal. It can be applied in almost any field, including international economic relations, production, voting, trade, medicine, education, state administration and governance, the judicial system, etc.   

How can Blockchain Achieve Corrupt fewer Institutions?

Secure transactions

Adopting cryptocurrencies that use cryptography can help to ensure that payments are made securely. If it’s for a project, it allows every user to be identified, and the transaction is done successfully. The common digital currency like Bitcoin can be used anonymously; if the user shares their personal information like their ID number, the currency stops being anonymous. In this case, using cryptocurrency will encourage instant transactions beyond borders of ownership and, in turn, reduce the time it takes to transact. This will minimize any intermediaries that usually give space for corruption.

Transforms the government

As much as the new technology disrupts our lives, it can transform the government to go digital and embrace the digital innovations that come with it. Change in technology makes citizens expect more from the government, starting with modernizing its bureaucracies to keep up with digital citizens. It will have to improve on the speed, quality, and integrity of doing things because citizens deserve better services and accountability of the money. With technology, it has improved transparency and the potential of the blockchain to improve government operations.

Unblocking potential

Blockchain technology has brought so much hype because of its potential to streamline the government and create peace between parties. If it becomes the government’s backbone, main functions like identity verifications, transaction certification, and registering of assets would be done securely and faster. Cryptocurrencies call for more security because it handles information and that can easily be compromised. Data privacy is important because technology will have an unprecedented level of securing data that will guarantee authenticity. There will be no risks of falsification that will entirely reduce corruption.

Promotes transparency

With blockchain technology, there will be a decentralized way of doing things. All transactions are recorded, and one can easily track where every coin goes. The technology has attracted many development and anti-corruption organizations to help in the fight against fraud and corruption. The tools used in this technology will help to reach Sustainable Development Goals in which its activities will include financial and legal identities.  

The blockchain technology has displaced the traditional payment methods to reduce the costs of transactions and push for intervention in auditing of funds. If the technology is implemented, it will increase the efficiency of operations and, in the process, bring profits. In the process, it will improve traceability, promoting transparency in public services.

Gaining control

The digital currency has encouraged borderless transactions. The technology has been designed in such a way not to be restricted to countries. Many financial institutions in different countries are now adopting it to modify their operations. Libra, for example, it’s a digital currency that has helped companies and NGOs to launch projects and regulate their activities.

The blockchain links data in a chained structure, and through its tool, it has been able to establish trust among people. Some see this blockchain as “promising disruptive technology in the fight against corruption” since it uses different applications that have brought contradicting opinions to enthusiasts. It is reliable, especially in countries having a challenge with corruption and fewer developments. 

Reduced illegal activities

Corruption remains a major political and social problem. It has taken root in the government and has complicated ways of doing things. At some point, corruption is perceived as a normal thing that happens in our society hence losing sight of significant corruption schemes. Blockchain, as mentioned before, it’s a network and has a unit of measurement. It’s able to monitor participants through their network and their information. Blockchain technology guarantees that no illegal activities like extortion, blackmail, and corruption will take place. It is yet to resolve many problems in different fields.

Improve the voting system

Corruption starts with choosing the wrong leaders. Since voting is a daunting task, including blockchain technology will ensure hassle-free elections. The technology will help to conduct fair elections since it can count votes and accurately present data in the system. Since everything in a blockchain is recorded, the ledger can be accessed publicly, and it will show that the voting system is authentic and fair. 

Many companies, such as Democracy Earth, are working to improve this online voting system. It will be beneficial to citizens so that they can choose the right leaders. Countries like Argentina are starting to embrace it for identity verifications, tracking the government’s budget, and voter registration before elections. Using technology will uproot corruption from our systems and bring a ray of hope because corruption has caused many problems in society today. 

Final Words

Corruption has led to a lack of trust in the public sectors between citizens and the government. The points, as mentioned above, should act as a fundamental principle to encourage the use of blockchain technology. Its applications will benefit governments, which will bring a whole transformation in its operations in a country. It will exclude illegal activities and fight corruption to the core. The technology also promises secure transactions in financial institutions and prevents tampering of information by corrupt people.

It has essential features that will help to regain integrity in public sectors by: verifying identities, promote transparency by tracking funds, and help to register assets without falsified documents. Crypto technology will be here to procure contacts and increase the confidence of people towards the government. These digital tools are highly dependent on codes; hence it assures of security significantly.

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.