Can Blockchain technology solve the crisis of countries like Venezuela?

Blockchain alone cannot solve the crisis that is currently plaguing the Venezuela. The reason for this is that no amount of technical and economic bolstering can fill the deficits created by a corrupt government. That being said, it is important to recognize that blockchain technology can be a big part of the solution to this crisis. I firmly believe that if the blockchain technology is used in a decentralized manner then it can prevent corrupt entities from accessing the wealth of people.

To answer this question properly we need to have an understanding of why the blockchain technology is so effective in context of this modern financial system. We have all heard that Blockchain is essentially a virtual ledger shared over a distributed database. This means that all the transactions that are being generated are continually being verified and stored on various nodes across the globe. So there is no one critical point of failure............kill one node and it'll survive in hundreds of others, even thousands.

Not only is a blockchain secure from being taken down but it is protected by encryption so un-breachable that we have a better probability of an asteroid taking down this planet than blockchain encryption being cracked open. There is a reason why hackers find a around this rather than through this encryption. That is why the hacks and security breaches are by compromised passwords, bug exploitation, phishing, etc.

Some features of an ideal blockchain

Blockchain is censorship resistant
Secure
Immutable
Decentralized and can even be peer to peer.
Borderless
All of these qualities make the blockchain an ideal solution for innumerable financial scenarios. Perhaps, this alone will not be the reason why blockchain can solve this crisis. The above mentioned qualities also allows for the creation of secure tokens that can be treated as money. So this combination of tokenization and decentralization can bring about the necessary change.

Allow me to visualize all of the above in points:

1. Tokenization economy will put the real world objects in touch with the tokens on the blockchain. Meaning that this token will now represent the ownership of real world objects and can be used for proving ownership or transfer of value/rights (fully or partially) and in the process taking out the interference of central governance.

2. Smart contracts and other similar protocols can remove the middle man from dealings. This boils down to the fact that you directly deal with the one you are doing business with. Remember that this is not just about being free from commission. The existence of a middle man basically means that you are not completely free to deal with who you are doing business with and governments exploits this fact to the utmost.

3. Also remember that crypto tokens on the blockchain can be fungible as well. This mean that you can trade them in for fiat and other kinds of money. Implication being that the blockchain has a direct line of connection with the financial system.

4. All of the above also boils down to the fact that if this revolution goes through, then banks will be out of business. If you can safely store your money on the blockchain, complete transactions on the blockchain, send and receive payments for good and services over the blockchain, form contracts without intermediaries ................ then why would you need banks?

These above points prove the kind of potential that the blockchain technology has. Not only can it be a part of the solution to the crisis in Venezuela but also for the world as a whole.

Picture of: Carlos Jasso/Reuters