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Blockchain, Featured

Benefits of Blockchain Technology in Combating Corruption

Corruption is an international issue and it persists in all countries to varying degrees. In some countries, corruption may range from bribes and kickbacks, while in other countries it may lead to the misuse of public resources. With the advancement in technology, corruption has become more sophisticated and transnational. Therefore, combating corruption has become harder. However, the proper utilization of blockchain technology can indeed help in minimizing and combating many instances of online corruption, thereby, providing relief to several sectors in the world.

Benefits of Blockchain Technology in Combating Corruption

Corruption is a major issue as it causes social conflicts, undermines the credibility and inefficiencies of governments, and institutions, and increases the possibility of risks and failures. Fortunately, blockchain technology offers a wide range of benefits in battling corruption and therefore it is necessary to highlight some of those.

Smart Contracts

Smart contracts are an essential part of blockchain technology. These contracts are self-executing in nature and the contents of the agreements are usually between the prospective buyers and sellers. It has an alert system that notifies the respective authorities, whenever any transaction is made beyond the stipulated business hours. The alert system becomes active, once the transaction volumes exceed the limit. 

Blockchain Ledger Is Immutable

Corruption in the cyber world happens regularly because most applications do not have the ability to spot and prevent fraud. Fortunately, blockchain technology has an immutable ledger feature which helps in both spotting and preventing fraud. It is impossible to alter or erase any data after the blockchain system saves it. 

Transparency

Corruption becomes more prevalent when systems lack transparency and there is no proper traceable mechanism in place. Blockchain technology largely erases opaqueness in transactions and has reliable traceability features. This is because any modifications in the ledger get recorded making it easier for investigators to detect fraudulent transactions. The transparency feature of Blockchain can be a turning point in combating numerous types of corruption in the cyber world.

Authentication

Corruption thrives in the digital world, because of identity thefts. Unethical hacking, ransomware, and other cyber security threats have disrupted the operations of many firms and have inflicted losses. Similarly, most credit card thefts also happen to be instances of deliberate identity theft. In such a scenario, blockchain technology has the potential to provide respite by creating a robust authentication and permission system. This system helps to ensure who has access to the service and how much access is permissible at a given point in time. All recording of actual data and transactions is done by blockchain to prevent instances of theft.

Also Read- Positive Role of Decentralized Finance in Women’s Financial Freedom

Bottom Line

The growing complexity of corruption is a worrisome trend. Since corruption adversely affects almost every sector in the world, therefore only a comprehensive system can reduce corruption as much as possible. It is also worth noting that corruption thrives in identity theft, but blockchain can detect fraud and prevent it. In this regard, it has features like transparency, traceability, immutability, smart contracts, and authentication that can comprehensively combat corruption and reduce its adverse impact. 

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