Blockchain

Fighting Corruption with More Transparent Crypto and Blockchains

JP Buntinx | February 21, 2018 | 9:00 am
corruption
Blockchain

Fighting Corruption with More Transparent Crypto and Blockchains

JP Buntinx | February 21, 2018 | 9:00 am

Addressing corruption has proven to be a rather problematic venture. Both cryptocurrencies and blockchain may prove to be of great value in this regard. Their lack of anonymity and privacy will help establish a more secure ecosystem moving forward.

Cryptocurrencies Can Address Corruption

Corruption still thrives in this day and age of technological advances. Even though it became easier to hold individuals accountable for their actions, more efforts are needed. Especially when it comes to public financing, new solutions need to be created sooner rather than later. Existing technologies and countermeasures simply do not provide sufficient protection in this regard.

Two specific technologies stand out to make corruption a non-issue in the future. First of all, there are the cryptocurrencies. Bitcoin, Ethereum, and other public cryptocurrencies lack both privacy and anonymity by default. When these currencies are used to exchange value, users can effectively be identified through blockchain analysis. Users converting to and from fiat currency need to verify their identity with an exchange or broker accordingly.

Although these cryptocurrencies do not transmit personal data directly, it is an option worth exploring. Any cryptocurrency can include personal information if the protocol is modified to support such solutions. This can include ID numbers, names, business identification numbers, etc. Additionally, cryptocurrencies offer near-instant transactions and cross-border compatibility unlike any other form of money which exists today.

Making Blockchain Information Even More Transparent

All of this cannot be supported without having the right technology in place. Blockchain technology, which powers all of these currencies, will need to incorporate this additional information. It seems Ethereum may be in a better position to accommodate such changes in the future. It allows for new currencies to be created on top of its infrastructure while still benefit from native technology such as smart contracts and DAOs.

All of this show the current cryptocurrencies are not exactly suited to fight corruption either. Bitcoin is pseudonymous and Ethereum itself is incorporating privacy technology moving forward. New currencies will need to be introduced to fight corruption accordingly. A combination of a new cryptocurrency and blockchain can yield positive results over time.

All blocks on the blockchain store the personal information needed to identify users and create proper accountability. Creating a completely transparent financial ecosystem to fight corruption will not happen overnight either. It requires a completely different mindset, even though it has a lot of potential. Transitioning from fiat currency to cryptocurrency to fight corruption is an interesting idea, but its feasibility has yet to be determined.  

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