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Tuesday, November 29, 2022

A brief Guide on Blockchain and its Practical Applications

Uganda is set to host the Africa Blockchain conference 2019 from the 4th to the 5th of July 2019 and a number of dignitaries and enthusiast from all around the continent and the globe are expected to attend including the President of Siera leone, HE Julius Maada Bio.

The conference is being held under the auspice of the fourth industrial revolution whose activities where launched by the President of Uganda HE Yoweri Museveni last year.

We attempt to breakdown the key aspects of the technology and highlight how it can be used for development.

Blockchain is broadly based on the need to walk away from centralized authorized to control financial transactions in the wake of the 2008 global financial crisis that proved that these central entities cannot be blindly trusted to do the right thing all the time. Decentralization of control also obfuscates inefficiencies and introduces trust as means to guarantee correctness of transactions.

The promise of blockchain is that it could drastically reduce the cost of trust by means of a radical, decentralized approach to accounting—and, by extension, create a new way to structure economic organizations.

Blockchain in short is an electronic ledger—a list of transactions. Those transactions can in principle represent almost anything. They could be actual exchanges of money.

What makes a blockchain a special kind of ledger is that instead of being managed by a single centralized institution, such as a bank or government agency, it is stored in multiple copies on multiple independent computers within a decentralized network.

If any of them tries to add an entry to the ledger without this consensus, or to change an entry retroactively, the rest of the network automatically rejects the entry as invalid.

Two billion people around the globe are denied bank accounts, which locks them out of the global economy because banks don’t trust the records of their assets and identities.

It’s that the computers executing the contract are monitored by a decentralized blockchain network. That assures all signatories to a smart contract that it will be carried out fairly.

Programmable money and smart contracts constitute a powerful way for communities to govern themselves in pursuit of common objectives.

GainForest, is now developing a blockchain-based system by which donors can reward communities living in vulnerable rain forests for provable actions they take to restore the environment.

Regulators in China, South Korea, and the US have cracked down on issuers and traders of tokens, viewing such currencies more as speculative get-rich-quick schemes that avoid securities laws than as world–changing new economic models.

They’re not entirely wrong: some developers have pre-sold tokens in “initial coin offerings,” or ICOs, but haven’t used the money to build and market products.

As we prepare to embrace Blockchain technology we need to be wary of players that may want to unlawfully gain from the interest of people through fraud, however to avoid being left behind in this rapidly changing global economy we need to learn and adopt. Its commendable that government through the Ministry of ICT and Bank of Uganda have taken steps to encourage it’s adoption.

Steve Mungereza
Steve Mungereza
Sociopolitical Analyst. Coverage of National and Regional news stories.

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