The blockchain is a type of distributed ledger technology that functions as an open, immutable and secure ledger of records. Its architecture is implemented with software on top of computer networks where each link in the blockchain chain cooperates with neighboring pieces of the chain to confirm and record transactions made within it. Each resulting new transaction is added to a “block” and then connected to existing blocks, creating a chained network. Blockchain technology is known sorts from its use in the management of many digital currencies such as Bitcoin. But blockchain is not limited to cryptocurrencies and has applications in many other sectors such as the insurance industry, healthcare, supply chain, etc.
Its main features are transparency, security and decentralization of data.
One of the most talked about potential applications of blockchain technology is its use in the fight against corruption. To give some indicative examples:
- Transparency in public transactions: The blockchain can create a public distributed and immutable ledger system where public transactions, such as e.g. government contracts with individuals, employment contracts and public procurement, can be securely recorded. This could eliminate the potential for corruption and fraud, as transactions are available for scrutiny by all stakeholders and are fully shielded from external interference.
- Decentralisation of power: One of the key problems associated with corruption is the concentration of power in a few. The blockchain enables the creation of decentralised applications and organisations, where decisions are made by a network of participants instead of a single centralised authority. This can reduce the risk of corruption caused by centralized power.
- Combating false identity: The blockchain can be used to create identifiers that are immutable and secure. This can reduce the possibility of fraud and corruption associated with the use of fake identities and virtual transactions.
Blockchain in short is a technology that finds application in a wide range of sectors including financial services, supply chain, healthcare and pharmaceuticals and government services as we have seen above.
With the adoption of blockchain technologies, the aim is to increase transparency, security and efficiency in processes requiring transactions, data recording and contract execution, thus moving management away from outdated centralised structures and thus increasing public trust by providing functions based on an open to all and unalterable by third parties system.
