Can Blockchain Technology Reduce Third-World Poverty?

The 2017 Global Award for Entrepreneurship Research goes to Hernando de Soto

The Global Award for Entrepreneurship Research is the most prominent international award in entrepreneurship research with a price sum of EUR 100,000. De Soto’s analyses have had tremendous influence on policy throughout the world and were a main source of inspiration for the World Bank’s Doing Business program. Read More

2017 Award Winner

Hernando de Soto Peru Institute for Liberty and Democracy For developing a new understanding of the institutions that underpin the informal economy as well as the role of property rights and entrepreneurship in converting the informal economy into the formal sector. Read More

In The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (2000), Peruvian economist Hernando de Soto argued that the underlying cause of Third-World poverty is weak property rights. Citizens of poor countries can't securely develop plots of land or put them up as collateral because they don't have clear legal titles.

In a world "where ownership of most assets is difficult to trace and validate and is governed by no legally recognizable set of rules," de Soto wrote, "most assets, in short, are dead capital."

De Soto is now part of a new initiative to use the "blockchain," the technology that undergirds the digital currency Bitcoin, to solve the dead capital problem.

The San Francisco-based Bitcoin company BitFury announced last week that it was working with de Soto and the Republic of Georgia on a project to use blockchain technology to build a new land registry, as Forbes first reported. "By building a blockchain-based property registry," one Georgian government official said in a statement, the country "can lead the world in changing the way land titling is done and pave the way to additional prosperity for all."

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