The Roman historian Tacitus once famously quipped "the more corrupt the state, the more numerous the laws".
Every year, roughly 2 percent of global GDP is lost to public sector corruption alone – at a hefty $2 trillion this equals to Italy's GDP.
The total cost of corruption stands even higher, at 4-5 percent of global GDP. Countries across all continents lose substantial parts of their budgets to corruption. Some African nations see up to a third of their budgets go down the corruption drain.
After thousands of years of fighting against corruption, blockchain might just be the answer everyone was searching for.
In Africa, where contract procedures are either non-existent or highly opaque (and can lead to the most unpredictable outcomes), Blockchain can streamline business deals by rendering the manifold middlemen obsolete.
In Latin America, where changes to public registries are impossible to track, hence by virtue of a hefty bribe land parcels might discreetly change hands in a matter of minutes, blockchain could sanitize whole clusters of corrupt public authorities.
But it's not solely confined to developing countries – numerous Western conglomerates routinely hand out bribes to lock in deals, just as politicians regularly represent the interests not only of their constituents.
Blockchain seems to be on the verge of radically transforming the way we vote and our trust in the ballot: We would no longer need to stand in queues and be physically present at the ballot box—we could simply vote from home, or anywhere at all. More importantly, by creating immutable ledgers, blockchain would make it impossible to tamper with our votes – proxy voting, ballot destruction and ballot stuffing would become mere anachronisms. This would also alter people's perception of political power. Now, around a third of voters in both developed and developing countries do not trust the outcome of elections. If voters were given a fully transparent voting process, trust in public authorities would rise.
Some countries are already taking their first steps in this direction. The city of Moscow intends to use blockchain in a city management platform where inhabitants could track voting on city projects in real time. From there, it takes only one step to implement it in nationwide voting mechanisms. And from there, just one step to implementing transparency across myriad political processes that are in everyone's best interest.
Increased transparency in political processes reduces the risk of tax evasion, thanks to which the risk that short-received government revenues will be rerouted from investments in infrastructure or education towards to band-aiding state finances ought to be nullified.
"We understand that the assimilation of blockchain-based voting technology and disintermediated governance tools will take place at variable speed," Rik Willard, CEO of Global Blockchain Technologies Corp. (TSX.V:BLOC), told Oilprice.com.
BLOC is hoping to radically confine the space for corruption by eliminating unnecessary intermediaries and rendering political processes as transparent as ever, and as Willard says: "We are ready for that and intend to spearhead this much-needed transformation."
Blockchain-based voting mechanisms would ultimately lead to the demise of dictatorships which maintain the superficial appearance of a democracy – decentralized technology is the exact opposite of what repressive regimes can survive under.
Of course, military dictatorships would steer clear of blockchain: It is very difficult to imagine North Korea, for instance, having a go at it. Yet the manifold quasi-democratic countries which exteriorly hold regular elections, claim to follow market mechanisms and hold democratic ideals dear will be forced to become more transparent under the weight of blockchain technologies.
Documents will be no longer owned by one single party and stored on a single server; document forgery would not be validated due to consensus protocol. Russia is a pertinent case in point as applying blockchain in a society where corruption has pervaded all spheres of life will bring palpable results in the very near future, to the surprise of many.
Evidence shows that the implementation of blockchain mechanisms can not only cleanse a given country's political system, but could also spur economic growth.
Should public land registries across Africa be made fully transparent, land might be used as collateral for loans, thereby allowing millions of entrepreneurial Africans to leverage their property. This is supported by academic evidence; namely, that any reduction in corruption levels bolsters domestic and foreign investment as the fears of economic actors that the allocation of resources is disproportionally skewed gradually subside.
International organizations might also put blockchain to good account.
The international football association, FIFA, has been bogged down in myriad scandals with regard to its decision-making mechanisms. With blockchain, voting procedures would be as transparent as crystal, massively narrowing down the potentiality of another bribery scandal.
Even greater gains could be attained in international aid, the sphere where misappropriation reached its full zenith. Blockchain would allow to track down all financial transactions which followed the assignment of humanitarian or development aid – this is sorely needed as the history of World Bank development loans is replete with stories when the allocated funds were misused by a third-world country tribe chief to build a football stadium even though the declared objective was to build a school or hospital.
Some might perceive blockchain as a direct threat to the way governments exist nowadays, yet one could hardly find a better tool to dramatically increase the efficiency of public authorities with little to no transition roadblocks.
Big banks and major corporations are already taking advantage of this technology.
At the center of the blockchain boom in banking is the R3 Consortium. Since its inception in 2014, the consortium has been joined by a number of the world's top banks, including Goldman Sachs, JP Morgan, and Citi. In addition to its impressive list of members, the consortium is also partnered with the likes of Microsoft, Intel, HP and InfoSys.
Immutability of data and process transparency will become key concepts of the 21st century and blockchain will prove that our past understanding of transparency was just a pale version of what can be achieved. As demonstrated by Global Blockchain Technologies, moving towards blockchain is not a question of 'if'--rather of 'when' – and that 'when' will happen very soon.
Companies to keep an eye on in this space:
The Descartes Systems Group Inc. (TSX: DSG) (commonly referred to as Descartes) is a Canadian multinational technology company specializing in logistics software, supply chain management software, and cloud-based services for logistics businesses. The company is making waves in the tech industry with its futuristic products and visionary leadership.
As a key stock in Canada's tech boom, Descartes Systems is a smart choice for investors. The company has a huge market cap of $2.6-billion and the stock has grown by nearly 20% YTD.
Mogo Finance Technology Inc. (TSX:MOGO): This is a new spin on unsecured credit, which is a burgeoning sub-segment of FinTech. Providing loan management, the ability to track spending, stress-free mortgages, and even credit score tracking, Mogo is at the forefront of an online movement to assist users with their financial needs.
Mogo's software analyzes borrowers instantly and greatly reduces the traditionally cumbersome underwriting process for loans. It's online only, so there's very low overhead and a ton of cash to spend on marketing. Labeled as "the Uber of finance" by CNBC, Mogo is definitely turning heads.
With increasing membership growth and revenue lines continuing to improve, and a platform which many banks have failed to offer, Mogo could well become an acquisition target in the near future.
EXFO Inc (TSX:EXF): EXF isn't new to the Canadian tech sector. The company was founded in 1985 in Quebec City, and its original products were portable testing products for optical networks. Since then, the company has acquired and build 3G, LTE, protocol, copper/xDSL, IMS, and VoIP test and service assurance products.
Recent developments from EXF are promising for long term growth potential. The new baseband unit emulation technology which is sure to be adopted on a large scale, as the tech offers operators a reduction of costs and a faster revenue stream.
EXFO Inc is a model in the telecommunications industry. With a market cap of $273-million, EXFO is strong, but still growing.
Pure Technologies LTD (TSX:PUR): Pure technologies is all about critical infrastructure including water and wastewater pipelines, oil and gas pipelines, and bridges and structures. One of Pure Tech's biggest achievements in this space is its SoundPrint acoustic monitoring technology, which is set to revolutionize the industry.
Though PUR dipped to CAD$3.95 in March this year, it has climbed to CAD$4.47 since then. Investors are watching Pure Technologies closely and the company is sure to be a valuable addition to numerous portfolios going forward.
Power Financial Corp (TSX:PWF): Montreal-based Power Financial Corp has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.
Focusing its investments in the emerging FinTech industry, Power Financial stands to benefit by riding this wave into the future. The company's forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied.
We like PWF because it owns 60 percent of Wealthsimple, a leading robo-advisor for investing in ETF portfolios.
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" "intends" or variations of such words or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the rate of cryptocurrency and blockchain technology adoption and the resultant effect on the growth of the global cryptocurrency and tokens market capitalization; Global Blockchain Technologies Corp.'s ("BLOC") anticipated ability to reduce risk for investors and give investors exposure to a broad cross-section of the blockchain ecosystem; BLOC's projected asset allocations, business strategy and investment criteria, including the anticipated contributions of BLOC's incubator program; the expected strengths and contributions of BLOC's management and advisors; and the rate of cryptocurrency adoption and the resultant effect on the growth of the global cryptocurrency market capitalization. Readers should be aware that BLOC has no assets except cash from a recently completed financing and its business plan is purely conceptual in nature: there is no assurance that it will be implemented as set out herein, or at all. Forward-looking information is based on certain factors and assumptions about BLOC believed to be reasonable at the time such statements are made, including but not limited to: statements and expectations regarding the adoption and growth of the global cryptocurrency and tokens market capitalization; BLOC's ability to reduce risk for investors and give investors exposure to a broad cross- section of the blockchain ecosystem; BlOC's ability to acquire a basket of cryptocurrency assets and pre-ICO and ICO financings on favorable terms or at all, successfully create or incubate its own tokens and ICO's, and execute on future investment and M&A opportunities in the cryptocurrency space; BLOC's ability to capitalize on the skills and expertise of its management and advisors; and such other assumptions and factors as set out herein. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of BLOC to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks related to changes in cryptocurrency prices; the estimation of personnel and operating costs; that BLOC will receive required regulatory approvals; the availability of necessary financing; permitting of businesses that BLOC intends to invest in; general global markets and economic conditions; risks associated with uninsurable risks; risks associated with currency fluctuations; risks associated with competition faced in securing experienced personnel with appropriate industry experience and expertise; risks associated with changes in the financial auditing and corporate governance standards applicable to cryptocurrencies and ICO's; risks related to potential conflicts of interest; the reliance on key personnel; financing, capitalization and liquidity risks including the risk that the financings necessary to fund continued development of BLOC's business plan may not be available on satisfactory terms, or at all; the risk of potential dilution through the issuance of additional common shares of BLOC; the risk of litigation; the risk that BLOC's management and advisors may not contribute as much as expected to the company's success; the risk and the risk that cyber crime may severely damage the value of any or all of BLOC's investments. There may be many other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. We undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements. BLOC has no assets except cash from a recently closed financing and this article is based on the business plan of BLOC which at this point is purely conceptual in nature. There is no assurance that the business plan will be implemented as set out herein, or at all.
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