Blockchain for Infrastructure: Two More Countries To Employ The Tech
This week, two different blockchain projects, Stellar and Factom, have announced their partnerships aiming at modernization of infrastructure in different countries with the opportunities inherent in the blockchain technology. While Factom works with technology consulting company iSoftStone on development of so-called ‘smart city’ strategy for several Chinese towns with the Chinese government as an end customer, Stellar partnered with a b2b company Oradian, a cloud-based financial software provider, to allow Nigerians easily and cheaply transfer money over Stellar’s network.
Developing smart cities in China
As China seeks ways of developing its semi-rural infrastructure to keep up the pace with the country’s rapid urban development, it will attempt building sp-called “smart cities” where the blockchain technology may be of certain use. Factom intends to delpoy its blockchain systems in 80 such smart cities across China.
Factom claims to run a distributed protocol on top of bitcoin’s blockchain, and uses its native cryptotokens, Factoids, to effect transactions through its distributed ledger.
Commenting the deal to IBTimes, Jack Lu, Factom CTO, said:
“Factom is heading back to China this month to work on more official contracts and define the scope of current and future projects. Sensor data will be stored; so things like pollution sensors, traffic sensors, etc. Factom will have a full scope of what exactly in the next 6- 8 weeks. We will give you an update. We are building a custom “Factom China” in order to accommodate a vast amount of data we will be putting in.”
Ye Yuping, executive VP & CTO at iSoftStone, added:
“By applying Factom blockchain technology to our financial services, smart cities big data services, and construction of data exchange, we will drive more innovation in China. By leveraging the advantages of both parties, we look forward to seeing a brighter future. We are sure that the integration of Factom and smart cities will bring more development opportunities for both sides.”
Factom has been subject to controversies following accusations of mispresenting information concerning their deal with the Honduran government. While media reported the company has effected the contract with the government, it later turned out that the cooperation never went any further than negotiating. Still, Factom has been maintaining the media fuss, and did not refute the notions in the media.
Building financial infrustructure in Nigeria
Stellar is a non-profit institution seeking to connect different financial systems on a global scale. Currently, the platform focuses on exchanging the existing currencies, and acts as an open-source counterpart of SWIFT.
While being an open-source payment network considered by many as Ripple’s main competitor, Stellar has announced its partnership with Oradian.
The partnership seeks to facilitate money transferring for MFI (microfinance institutions), a very demanded kind of entity in Nigeria, a generally rural country. The partnership will integrate Stellar’s transfer system into Oradian’s existing transactions platform. This will cheapen transactions for more than 300,000 Nigerians using the service.
“With the Oradian integration, communities that primarily relied upon cash for money transfer in and out of their villages can now transfer money instantly and safely, regardless of their location,” said Joyce Kim, Stellar’s Executive director.
The partnership is focused on transactions within the country, however, it may later be expanded to international transactions as well. However, in late 2015 local government issued an order prohibiting the country’s citizens to use plastic cards for international remittances or online shopping in foregin web stores. The prohibition became effective as of January 1, 2016. Some experts link the move to continuing devaluation of Nigerian Naira.
According to Oradian, current schemes imply that transacting funds between various MFI are expensive and risky, as they involve physical bussing of cash from the origination to destination points. The Stellar’s system will connect MFI’s making the remittances quicker and cheaper. However, the process will still remain time-consuming for the Nigerians, as they will have to come to their MFI affiliations in order to send or receive money.
Blockchain-related projects keep finding new uses in infrastructure projects involving big data and costly transactions. This is a burning issue especially for emerging markets as blockchain offers substantial cutting of expenses alongside with other benefits like technological renovation. However, its implementation may prove troublesome, as infrastructure sector is usually cumbersome due to bureaucratic issues.
Partnerships between private companies may allow the innovations to bypass red-tape obstacles and bring innovations to the markets that may desperately need them.
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