“Every new economic age in modern history has been driven by an explosion of technological innovation that results in increased efficiency, throughput, and coordination. The result has been sharp and steady growth in global GDP (Gross Domestic Product) and wellbeing… As humans have marched from revolution to revolution, we have built out systems and technologies that have raised the quality of life for so many. But all these developments have rested on a single, somewhat flimsy foundation: the base trust layer of our societies. People need trust between one another in order to perform even the most rudimentary transactional tasks. Thus far, all the base trust layers in our societies have been founded on subjective trust, including:
- trust in a single individual, or
- in interpersonal social networks, or
- in platforms like businesses and institutions, or
- In large centralized authorities, like governments.”(Joseph Lubin | Founder of ConsenSys, et al., April 2019).
Because of this trust level, we have built up centralized systems that controls virtually all aspects of transactional behavior and human interaction. We have come to build adept reliance on centralized trust and built up systems, infrastructures, and a whole lot around it, that should it fail, we are often left reeling in shock and disappointment with no apparent solution in place. So, there is now a need to have a better system that rests on improved technology, on which political, economic and commerce systems can run and function effectively without fear of failure nor system compromise.
The Nigerian Capital Market is an institution that has been built on a centralized system, which essentially governs its operations and provides a framework on which it works to fulfil its mandate. The Nigeria Capital Market has over the years, made remarkable progress but it’s not at the peak of its performance based on global best practice, which necessitated exploring avenues and means that the operations of the market can be better improved, and better quality service delivered. With the speed at which technology is evolving, there is the need for it to be positioned and in league with Capital Markets across the world has they seek to improve their operations and activities with the use of Blockchain Technology.
In essence, the concept of distributed ledger, which epitomizes the Blockchain Technology is being adopted by various industries across the world, and several researches are being carried out exploring the potential benefits and ease that it brings into workflow and day to day corporate activities. Therefore, for the Nigerian Capital Market to be of global reckoning on the world stage, there is the need to explore and conduct a research on the potentials of Blockchain Technology and exercise patience with its development and investment in infrastructures that would lead to its full utilization.
WHAT IS BLOCKCHAIN TECHNOLOGY
The world is constantly evolving and innovating. And technology has been at the forefront of this change. Technology was at the forefront of industrial revolution, all the way to the dotcom era and to the present age of smart technology. Technology is forever bringing about a change, to the way things are done. Blockchain Technology has been posited as the future of financial transactions and a whole lot more of different transactions as the technology gets unraveled and its application across different sectors and industries is discovered. The fact that this Blockchain Technology is encrypted, secured and transparent out of the many numerous benefits makes it a technology worth researching on for its varied applications.
Blockchain technology was first described in a Bitcoin whitepaper circulated online in 2008 by a pseudonymous name, Satoshi Nakamoto in which he described a peer-to-peer electronic cash system of financial transactions that does not need a network of banks nor financial institutions to operate. He described it as,” a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power (Nakamoto, October 2008 Bitcoin: A Peer-to-Peer Electronic Cash System, https://bitcoin.org/bitcoin.pdf). (Joseph Lubin | Founder of ConsenSys, et al., April 2019) defined it as “a next-generation database technology through which trust can be automated and established on a peer-to-peer basis”. He stated further that, Blockchain technology takes away the concept of subjective centralized trust which world systems is built on and replaces it with automated objective trust, “in which Blockchain and distributed ledger technologies allow us to improve upon the extraordinary scale, efficiency, and processes that modern industries have built.
To be Continued.