Blockchain technology and bitcoin currency
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The document discusses the impact of blockchain technology and digital currencies, particularly in Bangladesh, and highlights the shift from paper money to digital transactions. It covers the potential benefits of blockchain for public services, financial inclusion, and remittances, while also noting challenges related to regulatory inconsistencies and the need for a supportive policy environment. The author argues for increased adoption of blockchain to improve economic participation and reduce reliance on cash transactions, especially for the unbanked population.
Blockchain technology and bitcoin currency
- 1. Sunday, January 21, 2018 https://dailyasianage.com/news/104827/blockchain-technology-and-bitcoin-currency Blockchain technology and Bitcoin currency M S Siddiqui The present advancement of technology has changes the financial sector rapidly and the century old paper money is under challenge due to introduction of digital money. The electronic transfer of money through credit / debit cards and some other transaction platform like PayPal are replacing the paperless currency transactions. The latest invasion of virtual currency (VC) is another step of replacing paper currency in local and overseas transactions. The technology base of this soft money and with rapid spread of Internet- based commerce and mobile technology facilitate the use of VC. The overseas media reported that Bangladesh has decided to go for advanced technology and plans to work with a Zurich-based company to develop a system based on blockchain technology (BCT) for public services. Blockchain technology holds the potential to reduce the time and cost required to access public services online, including financial services and digital identification. A BCT focused on Fintech start-up in Australia recently demonstrated their remittance platform to a leading Bank in Bahrain. They have converted Bahrain Dinar to Bangladesh Taka (BDT) and transferred to a digital cryptographic DTD wallet account. The money has been withdrawn as cash from Taka wallet. The platform called PaySHATM digital commerce platform is integrated with Bitcoin's Blockchain.
- 2. United Commercial Bank Ltd in Bangladesh introduced Upay, a digital payment system. Upay has been implemented to promote cashless and universal i.e. anytime-anywhere payments using mobile phones in Bangladesh. Customers can use Upay to make payments for goods/Services from physical/online merchants. S/he can also make consumer, corporate and government payments e.g. electric bill, gas bill, mobile recharge, money transfer, ticketing, loan repayment, inward remittance, insurance premium, payment of salaries, social benefits etc. Bangladesh is under UN financed program. UN has announced the first five start-ups to receive investment through its $9 million innovation fund. Unicef, the UN's children's charity, will be giving seed funding to companies working to create affordable mobile connectivity, blockchain in childhood development, data collection in maternal care, and technology to help improve literacy skills to some countries including Bangladesh. Blockchain is a safe and open method to store data for facilitates transaction of VC through maintaining records like a ledger. The process allows storing data in consecutive blocks, like a chain, and the data ownership is secured. Blockchain, or distributed ledger technology, underpins many virtual currencies, but can also be used within private, permissioned ledger systems. The Harvard Business Review describes it as "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". Blockchains are potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability or voting. There are opportunities for blockchain in land record management in our country. Blockchain is a safe and open method to store data. The process allows storing data in consecutive blocks, like a chain, and the data ownership is secured. It is a highly secured distributed system and an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value and Internet of things (IoT). IoT is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. Blockchain can help alleviate security concerns, enable third party verification and avoid multiple inputs of the same information across devices. When paper money was introduced several centuries back, it took a long time to accept the true power of money and how this can be utilized as a tool to help people in sharing and trading their resources among themselves. One of the disadvantages of paper money is verifying the basis of its value. The way we know someone has money is generally through a statement kept in a bank ledger. But by now we know that information can be manipulated in those ledgers, making private transactions with money or titles on an asset vulnerable to frauds. As BCT is built on the concept of sharing information across parties and consensus during transactions, it saves on reconciliation cost between banks and prevents losses because of documentary frauds. Blockchain technology can fulfil some of the conditions that his team thinks are essential for a digital payment platform for the poor. Such systems would be more inclusive and useful than the mobile money platforms that currently exist in emerging markets, such as Kenya's M-Pesa and Bangladesh's bKash. M-Pesa is hugely popular in its home market and has successfully linked many unbanked people to the formal economy, but it restricts users to sending money to other M-Pesa users. The Bill & Melinda Gates Foundation only wants to foster the creation of these systems, not operate
- 3. or manage them. These platforms must be regulated so they will be accepted by governments and banks and can be monitored to prevent things like money laundering and terrorism financing. At present two billion people worldwide don't have bank accounts and must conduct their transactions in cash?which can be difficult to manage and presents safety issues. Blockchain technology can provide banking services through mobile phone and other devices. Experts have opinion that blockchain technology underlying the digital currency Bitcoin, give them access to financial services. The Bill & Melinda Gates Foundation thinks so, and it is modifying blockchain, which is essentially a secure, reliable digital record-keeping system, to bring the poor into the formal economy. A project from the Bill & Melinda Gates Foundation aims to use distributed ledger technology to help the two billion people worldwide who lack bank accounts. The initiative is part of the Gates Foundation's Financial Services for the poor program?specifically, its Level One Project, which gives governments and central banks a framework for creating national digital payments systems that anyone can use, even those who live on a few dollars a day. Bangladesh also attains knowledge and technology of BCT. In a recent seminar attended by Minister of ICT on the context a local company developing software of Blockchain for a overseas company. It has started developing artificial intelligence and blockchain-based digital investment platform for the Dubai-based Smartcrowd. BCT provides tamper-evident recording of the linked transaction history in a distributed network, and has the potential to disrupt the ?nancial business applications. Sound theoretical underpinnings of BCT such as fault-tolerant distributed computing and consensus have been studied for the past two decades. Bangladesh has huge potential in BCT as the country stepped into the world of artificial intelligence (AI) technology. The question un-answered whether Bangladesh can adapt Blockchain technology and whether the regulators are ready to accept it? There are opportunities for blockchain in land record management in our country. Bangladesh authority refused to be connected through undersea cable in 1990 and missed out on the internet and technological boom and thus fell behind many other countries. The digital Bangladesh initiative of present leadership created a better atmosphere but the management level is far behind the expectation. Bangladesh is currently one of the few countries in the world that is yet to embrace this efficiency-enhancing technology. Recently Bangladesh authority has banned Bitcoin transaction and reminded the user of possible violation of Foreign Exchange Regulation and Anti-money laundering laws but the policy maker may think the potential of the technology and develop a customised Blockchain technology for non-bank poor people to bring them into formal economy facilitating remittance and other transactions. There is inconsistency of policy and action of government over Blockchain technology and digital money - Bitcoin transactions and the law and rule also not favourable for high technology financial transactions. The issue need due attention to facilitate development of BCT and facilitate widely used for remittance of many from expatriates and small e-commerce service exporters. The writer is a legal economist. Email: mssiddiqui2035@gmail.com