Caribbean Export OUTLOOK 3rd Edition

BLOCK CHAIN TECHNOLOGY AND THE POTENTIAL FOR THE CARIBBEAN

BY STEPHEN PHI LL I PS

T

he concept of blockchain technology is so revolutionary that many of the world’s leading companies and governments have invested

the internet has seen the introduction of new decentralized and distributed networks where the proliferation of mobile computing and the power contained in everyday mobile phones can now provide the resources necessary for everyone to participate in the decentralized web. Blockchains are a type of decentralized or shared ledger that is spread across multiple sites in a peer-to- peer network of computers. All transactions are recorded, and each participant owns a copy of the same ledger. The term blockchain refers to the underlying technology for many popular cryptocurrencies like Bitcoin and Ethereum where "blocks" of new transactions are added to a “chain” containing a sequence of blocks amounting to all transactions from genesis. The appeal of Blockchain and other distributed ledger technologies (DLTs) is that, by virtue of a shared peer to peer network, they enable multiple parties to store and transfer information in a secure and easily accessible manner, removing the need for rent seeking intermediary parties such as commercial banks which facilitate transactions in centralized networks. The converging technologies of blockchain and mobile

billions of dollars into blockchain-related initiatives in an effort to explore and realize its full potential. With no end in sight, this trend has the potential to change the fabric of Caribbean societies resulting in greater financial inclusion, lower costs, streamlined processes and increased efficiency, which could impact the region’s key economic sectors from professional services, trade and commerce to agriculture and tourism. For persons still unfamiliar with the concept of blockchain technology and why it presents a phenomenal opportunity for nations in Latin America and the Caribbean, it is useful to begin with the ancient foundation of accounting - the ledger. Maintaining ledgers as a permanent summary of all financial activity has been the task of bookkeepers the world over for millennia. More recently, in the digital age, the introduction of computers has seen databases become the new ledger, recording both transactions and meta data. Over the last twenty (20) years, in particular, the transition to

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