Blockchain will save the world! Or at least improve social inequality

There has been a surge of excitement regarding Blockchain. With people speculating about its applications to a whole host of industries and depicting it as a panacea — it raises the question of whether Blockchain can solve one of our society’s most pressing issues: social inequality?

I say, it can.

Firstly, let’s start by considering the social inequality of income distribution. Currently, the richest 1% of the world owns half of the world’s wealth and over 80% of the world’s assets. Take a second to let that statistic sink in. But it doesn’t end there, analysts at the House of Commons are predicting that if we don’t act upon this soon, the top 1% will own two thirds of the world’s wealth by 2030. Imagine being in a room with one hundred people and one person owns almost 70% of the total wealth! Research analysts in the UK have attributed this vast disparity to the fact that “the wealthy have invested a larger amount of their equity in businesses, stocks and other financial assets, which have handed them disproportionate benefits”. But it isn’t just that the wealthy have invested more money into financial assets: a large proportion of the globe simply isn’t able to participate in such transactions at all. According to the World Bank, there are currently 2 billion people on the planet without access to a bank account. Imagine how tough it would be to live without a bank account? Saving, borrowing, starting a business, transferring money or buying property would be immensely difficult! However, Blockchain may offer a solution.

A big obstacle preventing people from signing up with a bank are the KYC and AML procedures involved. Anyone who’s signed with a bank knows the lengthy, tiresome process of onboarding and all the documents that are required to open an account. Therefore many people, especially those living in rural areas, are discouraged from signing up as they either do not have these documents available, may not live in close proximity to a branch or find it too cumbersome to carry out with this process. A simple solution to this could be a KYC/AML shared ledger powered by Blockchain technology. This would store all the information about the person on an immutable chain allowing for all transactions related to the person to be documented and when he/she wants to transfer banks or open a new account–the bank can immediately gain access to a person’s documents through the ledger. No lengthy processes or waiting times and no need to be physically present.

But the benefits of Blockchain go further. They can also address another major inequality particularly affecting women–the gender pay gap.

It is not new information that there is a significant difference between what women and men are earning. Not only is this phenomenon psychologically damaging and demotivating to women, but according to recent reports from the World Bank, the gender pay gap costs the world over $160 trillion in earnings globally. Therefore addressing this issue not only benefits females, but the entire population as a whole.

So how can Blockchain help? Well, one of the biggest issues with the gender pay gap and why it has been difficult to track this data is due to the lack of transparency. How can you actually tell that a man and woman are producing equal output, yet have an imbalance in earnings? This is very difficult to calculate. Utilising Blockchain, companies can see everyone’s salary information in a clear and honest way. Such a system would provide the much needed transparency to payment schemes by indicating how much males and females are earning in relation to their performance, hours worked, etc. which would lead to corporations to implement more fair payments and make it easier for unfair payments to be noticed.

Furthermore, in relation to my previous point about the unbanked economy, women are even less likely than men to have access to a bank account. Globally, 72% of adult men have an account compared to 65% of women. Therefore, Blockchain technology will especially play an important role for women as it will promote their empowerment by increasing their economic participation.

I have only touched upon two of the main ways that Blockchain can help reduce the social inequality that exists in our world; focusing on income inequality and the gender pay gap. However, the benefits of Blockchain go far beyond the points I’ve mentioned and could even reduce corruption and improve ethnic diversity, critical variables of social inequality. Even if implementing the Blockchain technology within our infrastructures will still take time and resources — I strongly believe our society is ready for a more equitable world where everyone is rewarded fairly for their contributions. Don’t you?