Ethereum was one of the worst cryptocurrencies of this year. But, as a technology, the project is going to places.
Joseph Lubin, the co-founder of the Ethereum project, recently said that Ethereum's blockchain ecosystem is gradually improving the financial and technological infrastructure of many developing nations. The Canadian entrepreneur, also known for having founded ConsenSys, a software production firm based in Brooklyn, has named Chile and the Philippines as the first to adopt.
Chile, for example, uses the Ethereum test blockchain to track energy data. The National Energy Commission stated in April that the reason they chose Ethereum was its ability to "increase the levels of safety, integrity, traceability and trust in publicly available information." The Ministry of Energy also appreciated Ethereum for data protection from hacking and manipulation.
The Philippines, on the other hand, saw their banking giant Union Bank collaborate with the ConsenSys of Lubin to develop Ethereum-based banking solutions for the country's rural sector. The project began at a time when 77% of the Filipinos remained stranded, according to a survey conducted by Bangko Sentral ng Pilipinas, the Philippine central bank. Justo Ortiz, the president of UnionBank, said Ethereum's blockchain technology would help them "open the door to financial inclusivity".
Developing nations are using blockchain technologies to bypass obsolete financial systems.
-The Philippines connects rural banks through an encrypted payment system
-Chile is using #Ethereum to keep track of energy data
-Cryptoassets are protecting millions against hyperinflation
– Joseph Lubin (@ethereumJoseph) December 1, 2018
In another event from the Philippines, the government has decided to offer the Manila residents prizes in Ethereum tokens Ether to clean up their polluted beaches.
Protection against hyperinflation
Lubin also noted the potential of crypto-activity as Ether, in general, to protect people from hyperinflation. The term refers to extremely rapid price inflation, especially when the value of a fiat currency falls by 50% each month against the US dollar, a universal legal reserve. The direct impact of hyperinflation is on the citizens of the countries that now have to pay more money to pay for the same commodity.
Zimbabwe, for example, had abandoned the local currency after years of hyperinflation that at some point had reached 500,000,000,000%.
Crypto-activity like Bitcoin, Ethereum and Dash, have seized the opportunities to help these newly hyperinflationary economies. These crypto-goods are ideal because 1) they are not controlled by any government or central bank, and 2) can be coined at home and then be exchanged or used as currency in the mainstream.
Venezuela became the first example of economy-gone-bad-and-tuned-to-cryptocurrency-for-comfort. Their hyperinflation began in November 2016, the highest in the world and the history of the country. Their state of hyperinflation this year has already reached 833.997%, according to the details available on Wikipedia.
The Venezuelans, meanwhile, switched to cryptic solutions to indicate the abandonment of their national Bolivar altogether. Dash, for example, launched into the paralyzed economy of the country and was adopted firsthand by his merchants and people. The crypto project has now launched a payment service in the region, finding customers also in global brands such as Subway and Calvin Klein.
Blockchain technology is gradually becoming a leading technology when it comes to solving financial and technological problems of economically disadvantaged nations.
"Blockchain is more than a market, it's a movement," wrote Lubin. "The blockchains are solving the problems of the real world, governments understand it."