Blockchain was started as an experiment.
Originally, the question was whether or not it could replace banks. But because data stored on the blockchain requires no third-party management or manipulation, the world quickly realized the answer to that question was, “Yes.”
Then blockchain was taken a step further. With the inception of Ethereum, we realized that blockchain technology could be used for much more than just financial transactions. In fact, we’ve realized that it has the potential to decentralize entire economies and to streamline democracy across the world.
Here’s how.
Why Blockchain Works as a Democratization Tool
One crucial thing about the blockchain is that it necessitates consensus.
The entities involved in a network powered by the blockchain must agree on its contents before it can be used. The same is true of any data adjustments or security upgrades users want to make to the blockchain later on. Unless there is a consensus, the adjustments can’t happen.
In that way, the blockchain requires democratic participation.
Interestingly, it is this same requirement that ensures the data stored on the blockchain remains secure.
The blockchain encrypts its stored data using cryptographic hash functions, which make it fundamentally secure.
But the data is also encrypted in such a way that users can track historical changes made to it.
Nobody can tamper with data stored on the blockchain without everyone else in the network noticing.
When the blockchain is extended to applications beyond financial transactions, this sense of transparent security becomes even more important.
Take, for example, the recent news that Cambridge Analytica, a data analysis firm linked to President Trump’s campaign, has used the personal information of 50 million users from Facebook without their authorization — a clear reason to push for blockchain technology for data democratization and decentralization.
In the future, governments could be using the blockchain to count votes.
Because the blockchain keeps track of historical changes to the data stored on it, we would be able to verify whether any given person cast their vote once, incorrectly, or not at all.
This would enable us to more purposefully combat voter fraud.
It’s the transparency allowed by the blockchain that makes it such a unique vehicle for democratization. By decentralizing data, the blockchain gives democracy a powerful weapon.
The Applications Of The Blockchain As a Democratization Tool
In addition to combating voter fraud and simplifying financial transactions, the blockchain can be used to hold governments accountable across the board.
If governments store data on the blockchain, the blockchain could serve as a source of truth, which would make it harder for our elected leaders to lie or be otherwise corrupt.
This is true of corporations, as well. The blockchain would make it easier to weed out embezzlement or other acts of fraud committed by executives because their actions could always be traced.
Potentially more powerful is the manner in which the blockchain could improve the lives of people in third-world countries — places where residents with money to invest don’t trust their financial institutions.
By giving those people a vehicle with which they can monitor exactly what is happening with their money and when, we could give them the confidence they need to invest.
This would not only be safer for them, but it would also benefit the world economy as a whole.
What Comes Next
You might be reading a lot right now about potential applications of blockchain technology in democratizing economies and institutions.
But examples of the blockchain already being used to these ends are available across the world.
Last year, Ukraine conducted trials of blockchain-based election platforms for votes at the municipal level. Estonian residents used the blockchain to self-notarize documents, like marriage licenses and birth certificates. A political party in Denmark is using blockchain software for internal voting.
The rapid shift to the use of blockchain technologies by institutions across the globe might seem overwhelming. But the main thing you need to understand is that blockchain technology possesses applications that extend far beyond financial transactions.
By decentralizing economies and lifting the cloak of secrecy from centralized corporations, the blockchain is already changing the world.