Blockchain is almost a decade old now. But it has readily impacted the lives of many industrial and technological sectors worldwide that have adopted it. However, most people are still struggling to understand its potential, due to which it is hard to reap its full benefits. One of the major areas where blockchain technology can be effectively employed in achieving the Sustainable Development Goals (SDGs) is its advantages.
Is Blockchain Limited to Cryptocurrencies Only?
The name of blockchain technology first emerged in 2009, when Bitcoin was introduced as a new digital currency. But today, this technology is not limited to cryptocurrencies only. Although the top uses of this technology are related to DeFi (Decentralized Finance) applications and cryptocurrencies, it is now being used for storing computer codes and intelligent contracts. The technology is also helping with innovations in all the relevant areas.
Blockchain and its Evolution
Since its inception, blockchain has come a long way forward and has faced continuous cycles of evolution in various areas. Although a decade old, it is still considered a new technology in a wide array of multiple technologies. Still, it has heavily influenced the economic sector, social sector, public institutions, and the interaction methods of human beings with their environment. Not only that, but blockchain has also helped various countries in pursuing multiple ways to attain sustainability.
The Installation Period
When considered in the light of the new technological paradigm, blockchain is going through the installation period of the technological revolution. While in the installation period, various factors, such as supplier-led innovations, experimentations, new technological solutions, different standards, and various technical specifications, dominate the blockchain technology.
The Impact of the Installation Period on the Financial Sector
While blockchain technology is going through the installation period, it benefits the financial sector by helping it learn various innovating methods to facilitate the new entrepreneurs. With the help of blockchain, the financial industry will prove to help ensure sustainability. Also, as the impact of the blockchain increases on the financial sector, the chances of “money creating money” schemes will emerge more, with the spontaneous decoupling of the economy and the financial sector.
The End of the Installation Period
It is expected that at the end of the installation period, the blockchain technology may come across financial bubbles, and this process can be expedited by a series of installations, crises, ad blockchain innovation-specified deployment. It can be thus speculated that all of these factors can heavily affect sustainability.
The Evolution of Blockchain and Its Various Stages
The blockchain 1.0 period was strictly confined to the induction of cryptocurrencies. It involved
- The foundation of blockchain technologies
- Cryptocurrency blockchain
- Decentralized and peer-to-peer crypto transactions
- PoW (Proof of Work) protocol.
This phase of blockchain evolution saw the involvement of intelligent contracts. During this period
- The blockchain technology saw more financial functionality
- The blockchain technology saw the incorporation of programmable language-based DApps (Decentralized Applications)
- It came across autonomously executing algorithms
- The PoW (Proof of Work) protocol kept its place during this phase.
Blockchain 3.0 is more functionally enhanced as it has the following features.
- The more extensive scale of applications of non-cryptocurrency-related DLT (Distributed Ledger Technology)
- Enhanced performance that allows more scalability and interoperability
- PoS (Proof-of-Stake) protocol.
Garnering Opportunities from the Blockchain
For developing countries looking forward to sustainability, blockchain is the best tool to help them diversify their economies strategically while keeping up with the newest technological paradigm. By remaining in contact with the latest technology, the developing countries can increase incomes and finances, which will help them achieve their SDGs much faster.
National Capacities and SDGs
In order to reap the full benefits of blockchain technology, governments should look forward to rectifying their innovation systems and position themselves accordingly. However, developing countries will have to improve their digital infrastructure, regulatory framework, and other skills.
Example of Blockchain Employment
The United Nations Conference on Trade and Development (UNCTAD) has recently tried to incorporate blockchain technology to improve its custom modernization program, ASYCUDA.
Blockchain Regulations and the Challenges for Developing Countries
In order to establish and enforce the exclusive benefits of blockchain technology, the developing countries will have to consider two challenges in their mind:
- They should emphasize ensuring their participation in the internationally recognized and developing blockchain regulatory frameworks to learn from the process
- They should look forward to developing and enforcing their national capabilities to implement their blockchain regulations successfully.
Maintaining close ties with the corporate sector is also crucial in this regard. Similarly, another initiative that must also be included in implementing blockchain technology is a whole-of-government approach. This means the combined efforts of central banks, regulators, ministries of ICT, trade, finance, and science and technology regarding the complete enforcement of blockchain for sustainability.
Alysidia can Help with Sustainability
As a technological establishment that fully comprehends the importance of blockchain, Alysidia can help developing countries and other institutions by producing blockchain applications that will allow such countries to ensure their sustainability in the long run.