Social security plays a vital role as the critical foundation of income security for the vast majority of people. Because of its multiplier effect, it is also an important contributor to the economic stability of different countries.
Most social security systems have been in existence for a long time and are very hard to optimize any further due to heavy bureaucratic and infrastructural limitations. A possible solution to the problem lies in switching from the traditional systems to the ones utilizing the latest technological advances including the Blockchain.
Below we will examine five possibilities of how blockchain can positively influence the social security systems.
1 — Global access to social security
In order to participate in nearly any contemporary social security systems, one has to be a resident of one country or another. Through the establishment of blockchain-based and therefore globally available social security systems, people all over the world have the opportunity to participate in systems that are open for anybody to access.
Blockchain-based systems lay the foundation for global use case related social security systems. Although they may be limited to a specific region or country, they do not have to be. The infrastructure is accessible to everyone.
All you need to become a member of blockchain-based social security is a smartphone. As a result of increasing digitalization, everyone will sooner or later have the necessary prerequisites.
2 — Transparency
As every transaction is saved on the blockchain, it is possible for everyone with the necessary skills, to make real-time statistical evaluations to analyze the flow of the premiums and payments. This is especially useful to analyze the blockchain with regards to fraudulent and corrupt behavior.
Although the transactions itself are transparent, the blockchain can be designed in a way that makes it impossible to link a specific transaction to a specific identity.
3 — Efficiency
Through the automatization of payment processes, as well as the reduction of bureaucracy, administrative costs can be lowered to a minimum.
The aforementioned transparency, as well as the available real-time data, allowing for high-grade process analysis. This way one can detect weaknesses of the system and fraudulent or corrupt behavior of the members. Such evaluations can then be used to make the system even more efficient and secure in the future.
In addition, the procedural integrity of the blockchain ensures that both the end-user and the authorities themselves do not perform any false or unauthorized actions.
4 — Synergy effects through globalization
Today’s social security systems are limited in their potential mainly to the country in which they are available. By including other regions, it is possible to further compensate for the weaknesses of one’s own region, thus strengthening the overall social security system altogether.
A good example is the impact of demographic change on today’s pension systems. By including regions with a higher birth rate, it is possible to make the system more stable in the long term.
Decentralization makes it easier for people all over the world to connect without regard to political borders. This opens up new opportunities for social justice in the world.
5 — Establishing global social security standards
Social security is a human right. Nevertheless, there are systems all over the world that do not function properly because they are abused by third parties or are subject to unstable financial systems as a result of local inflation and, in particular, hyperinflation.
Blockchain lets not only to prevent fraudulent or corrupt behavior from the outset. It also makes possible to establish globally uniform and transparent standards for social security systems that follow the Sustainable Development Goals.
People are free to decide which global and decentralized social security system best suits their needs and are therefore not forced to trust a central entity no matter where they are located.
A system that serves the public should also be audited and further developed by the public itself. Everyone is welcome to suggest improvements to the system and to prove their usefulness through statistical evaluations and mathematical models.
Most of the countries that will benefit from the blockchain-based social security systems will be the ones that have never implemented effective social protection. They can lead by example and promote blockchain projects such as Asure.Network. At the same time, the sometimes difficult political situation would also be calmed down, as blockchain creates transparency.
The tech is already there. It might not be the ultimate solution for all kinds of decentralized systems, but for our use-case, the current level of the technology is pretty good. Now it is up to us to make the most of our opportunities. By working together we can improve the services that affect our lives so much on a daily basis.
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