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What is Blockchain technology?

Photo. Achieve/Radio Nigeria

The Nigerian Federal Government on Thursday May 4 approved the use of blockchain technology to improve the efficiency, transparency, and security of various sectors, including financial services, supply chain management, healthcare, identity management, and the electoral system.

What is blockchain technology?

Blockchain technology is a digital system that records transactions in a secure and decentralized manner, meaning that no single person or entity controls the system. It uses a network of computers to verify and record transactions, which are stored in blocks that are connected together in a chain.

Once a block is added to the chain, it cannot be altered, making it very difficult to tamper with or falsify the records. This technology is often associated with cryptocurrencies like Bitcoin, but it has many other potential applications, such as in financial services, supply chain management, and identity verification.

Benefits to Nigeria

Blockchain technology has numerous potential benefits for Nigeria, including improving the efficiency, transparency, and security of various sectors in the country. Here are some of the key benefits:

Financial services: Blockchain technology can provide access to financial services for the unbanked population in a cost-effective, efficient, and secure manner, which can reduce the rate of dissatisfied customers recorded in the banking sector. This could also help to solve issues like unresolved complaints and the threat to the use of e-payment.

Supply chain management: Blockchain can help businesses pinpoint inefficiencies in their supply chains quickly and locate items in real-time. For Nigeria, being an agricultural-based economy, the technology can be used to track the origin, quality, and safety of agricultural products to improve consumer confidence and prevent food fraud.

Healthcare: Blockchain technology can be used to manage clinical trial data and electronic medical records in healthcare, ensuring regulatory compliance and maintaining the privacy and security of patients’ data.

Identity management: Blockchain-based solutions can be used for identity management in Nigeria, giving individuals control over their identity, improving the accuracy and security of identity verification processes.

Electoral system: Blockchain technology can enhance the transparency and security of the voting systems in Nigeria, preventing voter fraud and ensuring the accuracy of election results.

Worldwide rollout of blockchain technology

As online payments continue to rise, interest in blockchain technology has grown among retailers and wholesalers. Several countries have emerged as leaders in adopting and implementing this technology.

Japan was among the first adopters of blockchain technology, even before Bitcoin had any real value. The innovator of Bitcoin is rumored to be Japanese, given the name “Satoshi Nakamoto”, which resembles a typical Japanese name. The Japanese government is also aiming to lead global blockchain innovations.

Despite banning crypto mining and cryptocurrency, the Chinese government strongly supports blockchain technology and is one of the largest and most powerful promoters of blockchain worldwide.

Switzerland is another country that has made significant strides in blockchain. A small town in Switzerland called Zug, with a population of 29,000, is even known as the home of the Ethereum network. Switzerland has approximately 450 blockchain-based associations and businesses, and it provides liberal regulatory and tax treatment for newly established blockchain businesses.

Blockchain energy consumption challenge

One of the disadvantages of blockchain technology is its energy consumption. The complex mathematical algorithms used in blockchain require significant amounts of computing power, which in turn requires large amounts of energy. This can lead to high electricity bills and contribute to environmental concerns related to carbon emissions.

Nigeria can adopt blockchain technology despite its low electricity generation. There are initiatives and projects aimed at increasing access to renewable energy sources, which could support the adoption of blockchain technology in the country.

Writing by Chinasa Ossai; Editing by Annabel Nwachukwu and Saadatu Albashir