Adopt Blockchain To Rein In Greedy Lenders

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Use of blockchain although not highly publicized, has already helped the credit reference bureaus establish digital identity inexpensively. FILE PHOTO | NMG

By Business Daily Editorial

As the country grapples with whether to artificially regulate interest rates of give a blank cheque to the bankers to draw from the public and thereby exploiting them, Kenya is at the threshold of using blockchain.

Blockchain is a distributed ledger technology commonly known for cryptocurrency famous for Bitcoin and Ethereum. However, defining it this way is just like saying that the Internet is the technology behind email, although this is true, it simply ignores the much we know about the Internet.

According to Marino Nefolos writing for the World Bank, this technology may prove to be a radical innovation similar to the steam engine or the Internet that triggered previous industrial innovations. This is because it has the power to disrupt existing economic and business models through disintermediation because it improves transparency and increases audibility.

Established companies particularly those in the financial industry are gradually adopting private distributed ledgers for internal use as well as for conducting transactions with trusted partners attempting to experiment with the new technology while maintaining data confidentiality.

Blockchain has the ability to deploy a cryptographic mechanism to reach consensus across parties in the distributed ledger. This eliminates the need for a central authority or intermediary thereby creating a distributed test system of value transfer…

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