Blockchain is fundamentally a cutting-edge database. It uses cryptographically linked networks of peer-to-peer nodes, or blocks, to store transactional records.
Every transaction in this ledger is validated and protected against fraud by the owner's digital signature, which also serves to authenticate the transaction. In practical terms, new information is added to a new block as it comes in. The data is chained together in chronological sequence once the block has been filled with information and is attached to the block before it. In other words, this technology enables the distribution and recording of digital information but not its editing. It makes financial transactions more safe, affordable, and effective than current procedures, thereby changing the role of banks, governments, and enterprises.
Blockchain has innumerable benefits, especially for the developing world. According to the most recent Findex figures, nearly one-third of adults — 1.7 billion – are still unbanked. Blockchain technology offers the opportunity to change that. It circumvents financial institutions to decentralise banking and give those who are shut out of traditional financial instruments access to investment, credit and digital currencies. By substituting transparency built into a decentralised network for trust, it enables the delivery of financial services through the internet. In addition, it lowers transaction fees, which is crucial for most of the unbanked population.
Southeast Asia may stand to gain the most from blockchain's potential for development compared to any other area. It has a high internet penetration rate of 58 percent as a region. Additionally, it is a region that is underbanked, with a startling 73 percent of its people still unbanked as of 2020. In addition, Southeast Asia has a sizable population of migrant workers who would profit from blockchain. According to estimates from the International Labor Organisation, 20.2 million of the world's migrant workers are from Southeast Asia. Finally, blockchain technology is crucial in enabling online shopping, supply-chain tracking, and data storage in a manufacturing hub with a significant e-commerce presence.
Appropriately, Southeast Asian governments have supported this nascent technology. Countries like Thailand, Malaysia, Singapore, Vietnam and the Philippines have invested in blockchain education programs to promote its development. Singapore, for instance, launched a $9 million program, the Singapore Blockchain Innovation Program (SBIP), to facilitate and research blockchain applications which deserves further attention.
This national initiative intends to coordinate blockchain technology research with business requirements to speed up the creation, commercialisation, and adoption of more extensive real-world applications. Within the next three years, 17 blockchain-related projects in sectors starting with trade and logistics and supply chain will be conceptualised by close to 75 organisations. To facilitate the deployment of blockchain in settings with large transaction rates, SBIP will focus on blockchain scalability in addition to research translation. In order to facilitate value transfer between blockchain systems and address the problems with compartmentalised blockchain networks, SBIP will also offer blockchain interoperability. To help ICT companies better tap into the talent pool for blockchain technology, SBIP will also strive to generally expand the applications of blockchain technologies.
Ambitious goals, but if achieved, it could promote dialogue between the government and the civilian populations, especially technology experts, allowing both sides to identify their particular needs and the areas where a new technology has the greatest potential to be useful. State-funded research will always promote the development of the country as a rule.
We are only beginning to understand how blockchain is opening new doors and changing the course of history. This is yet another case study of how different countries are starting to implement this technology in their infrastructure and operational systems and – if supported by appropriate regulation and policy – we may see new exciting initiatives being created in the not-so-distant future.