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Blockchain and Bitcoin as a Way to Lift a Country out of Poverty - Tourism 2.0 and e-Governance in the Republic of Moldova

nt. J. Internet Technology and Secured Transactions, Vol. 7, No. 2, 201
Copyright © 2017 Inderscience Enterprises Ltd.
Blockchain and bitcoin as a way to lift a country out
of poverty – tourism 2.0 and e-governance in the
Republic of Moldova
Marc Pilkington*
Laboratoire d’Économie de Dijon, EA,
COMUE Université de Bourgogne Franche-Comté,
2 boulevard Gabriel BP 26611,
21066 DIJON cedex, France
Moldova Blockchain Centre,
Academy of Economic Studies of Moldova (ASEM),
Strada Bănulescu-Bodoni 61,
Chisinău MD-2005, Republic of Moldova
*Corresponding author
Rodica Crudu
Academy of Economic Studies of Moldova (ASEM),
61 Banulescu-Bodoni str.,
MD-2005 Chisinau, Republic of Moldova
Lee Gibson Grant
Moldova Blockchain Centre,
Academy of Economic Studies of Moldova (ASEM),
61 Banulescu-Bodoni str.,
MD-2005 Chisinau, Republic of Moldova
Abstract: In this article, we explore the formidable yet untapped capabilities of
Blockchain technology and Bitcoin in order to alleviate poverty. We focus on
the Republic of Moldova, which has been plagued by endemic corruption and
persistently high poverty levels since her independence in 1991 following the
collapse of the Soviet Union. The transformative power of Blockchain
technology and Bitcoin are then evidenced through a dual analysis of
tourism 2.0 (with a real-world case study) and e-governance, which can
contribute to increased inward capital investment flows, and help fight off
corruption practices. Finally, we conclude that these new technologies
constitute a significant step in the right direction, in order to break away from
twenty-five years of disappointing socio-economic development performance.
Keywords: blockchain technology; tourism 2.0; e-governance; corruption;
Republic of Moldova; Bitcoin; poverty alleviation strategy; use case; Moldova
Tours 2.0; post-soviet economies; development; transparency.
. Pilkington et al.
Reference to this paper should be made as follows: Pilkington, M., Crudu, R.
and Grant, L.G. (2017) ‘Blockchain and bitcoin as a way to lift a country out of
poverty tourism 2.0 and e-governance in the Republic of Moldova’, Int. J.
Internet Technology and Secured Transactions, Vol. 7, No. 2, pp.115–143.
Biographical notes: Marc Pilkington is an Associate Professor of Economics
at the COMUE, University of Burgundy Franche Comté, France, where he was
appointed in 2012. Between 2015 and 2017, he was on entrepreneurial leave in
the Republic of Moldova. His business venture Moldova Tours 2.0 lies at the
intersection between tourism growth, poverty alleviation and digital
technologies. He has written two books, numerous peer-reviewed articles in
academic journals, and book chapters. He was appointed as Managing Director
of the Moldova Blockchain Centre, ASEM in June 2017.
Rodica Crudu is an Associate Professor at the Academy of Economic Studies
of Moldova. Since 2014, she has held the title of Jean Monnet Professor, being
the coordinator and member of several projects (Jean Monnet, TEMPUS,
Erasmus+) financed by the European Union. She is one of the founders
of DT Moldova, a non-profit organization bridging the gap between
blockchain-related initiatives and the Moldovan regulator. She has authored
more than 40 scientific papers, and is the executive editor of Eastern European
Journal of Regional Studies and CSIE Working Papers.
Lee Gibson Grant has been an entrepreneur in telecommunication and energy
efficiency, taking new technologies into the marketplace, and introducing LED
technology at government levels with carbon credit-backed projects. In
telecommunications, he worked with MNO, MVNO and wholesale services. He
then saw a natural fit in the Fintech space with mobile money harnessing crypto
currency and Blockchain technology to create a new breed of hybrid mobile
money services. He is currently working on DT X Blockchain Communications
4.0, Smart Cities 4.0, Banking 4.0, Education 4.0 Energy 4.0 and Industry 4.0
with a sizeable telecommunications infrastructure supporting the project.
This paper is a revised and expanded version of a paper entitled ‘Can
Blockchain technology and Bitcoin lift a country out of poverty? The example
of the Republic of Moldova’ presented at International Jean Monnet EUREM
2016 Conference ‘Modern Issues of EU’s Development and Relations Between
EU and Republic of Moldova’, Chișinău, Republic of Moldova, 24–25
November 2016.
1 Introduction
Digital technologies play a pivotal role in developing countries as they promote social
inclusion, efficiency and innovation [World Bank, (2016a), p.2]. It sometimes comes as a
surprise to observers that in seventy percent of developing countries, in households
lacking electricity or drinking water, mobile phones are nevertheless present
(E-Government Center, 2016). In this regard, following India’s Aadhaar (ibid.), the
Republic of Moldova is a pioneering country in digital identity protocols (e-government),
which is an integral part of blossoming e-governance schemes in developing countries.
Blockchain and bitcoin as a way to lift a country out of poverty 117
“Many governments use digital technology, but these did not manage to solve
two crucial problems: to improve the management of the relationships with the
public sector and to involve the citizens in the process. At the global level, the
transparency level of the governments is very low, though it can be improved
by means of digital technology (E-Government Center, 2016).”
As stated by Deloitte (Piscini et al., 2016), “trust is foundational to business, yet
maintaining trust particularly throughout a global economy is expensive,
time-consuming, and, in many cases, inefficient. Could blockchain applications become
part of the answer?”. In this article, we put forward the idea that trust is foundational to
tourism attractiveness as shown by the declining tourism figures in the aftermath of the
13.11.2015 and 14.07.2016 attacks in France (, 2016; Newsweek,
2016), and to efficient democratic governance. Both factors are conducive to
socio-economic development, and could help lift the Republic of Moldova out of
poverty: “Like the internet reinvented communication, blockchain may similarly disrupt
transactions, contracts, and trust – the underpinnings of business, government, and
society” (ibid.). By the end of February 2016, “[a]pproximately US$ 1b has been invested
in blockchain-related start-ups to date, half of that figure was in the last calendar year”
(Holmes, 2016).
2 Poverty and corruption in the Republic of Moldova
2.1 Links between corruption and poverty in Moldova: a review of literature
Corruption can be apprehended through the lenses of the country policy and institutional
assessments (CPIA), a tool developed by the World Bank (2016b) measuring the extent
to which policies and the institutional framework support sustainable growth and poverty
reduction, and the effective use of development assistance.
Transparency, accountability, and corruption in the public sector assess the extent to
which the executive power is held accountable for its use of funds. It also assesses the
results of its actions by the electorate and by the legislature and judiciary, and the extent
to which public employees within the executive power is required to account for
administrative decisions, use of resources, and the results obtained. The CPIA focuses on
the accountability of the executive power to oversight institutions, and of public
employees for their performance, access of civil society to information on public affairs,
and state capture by narrow vested interests [Measuring-Progress, 2015; Carasciuc,
(2001), p.8].
As explained in the Transition Report [European Bank for Reconstruction and
Development, (1999), p.117]:
“State capture commonly refers to the extent to which government policy-
making is unduly influenced by a narrow set of interest groups in the economy
who provide private benefits to politicians. Russia’ s governance problems, for
example, are often blamed on the so-called “oligarchs”, who urge the state to
grant them a range of special privileges and exemptions that undermine
market-oriented institutions at a high cost to the rest of the economy.”
Regarding the relationship between the low quality of governance in transition countries
and the state capture phenomenon, the European Bank for Reconstruction and
Development remains very cautious (1999, p.119, footnote):
. Pilkington et al.
“Of course, correlation does not necessarily signify causation. State capture
itself could be a function of weak governance overall. However, this begs the
question of what prevents the state from under taking reforms that would lead
to improvements in the quality of governance. The argument suggested above
is that high-capture states have weaker incentives and fewer constraints that
might lead them to make the necessary investments to improve governance.”
What are the causes of corruption? First and foremost, one must distinguish between
social, moral, economic, political and institutional causes. Legal causes include outdated
and inadequate legislation; institutional causes include ill-conceived anti-corruption
strategies, lack of transparency, and rent-seeking practices. Economic causes include low
wages for civil servants, delays in wage payment, thereby giving rise to a personal
integrity versus survival trade-off. Political causes pertain to the pervasive interests of
oligarchs and the existence of a captive state [Carasciuc, (2001), p.6]. Social and moral
causes include the erosion of ethical values of government officials (ibid.), faltering
credibility of the mass media (ibid., p.7) and stubbornly high public tolerance of
corruption (ibid.). Corruption has often been compared to an epidemic or a spreading
disease (ibid., p.6). The contagion inherent in corruption-prone state structures has
characterised the Republic of Moldova for the last three decades throughout the transition
period (ibid.). Moreover, it is worthwhile investigating the boundaries between
informality and corruption epitomised by the system of blat (ibid., p.6). Ledenava (2014,
p.15) analyses the use of personal networks in Soviet Russia, what she calls the ‘economy
of favours’ referring both to the circulation thereof with access to the centrally distributed
goods, services and privileges, but also to the sociability of blat channels. The system of
blat transformed these favors into an alternative currency of ‘mutual help and mutual
understanding’ within a centrally planned nonmarket economy characterised by shortage
and sometimes frustration. A socio-historical and anthropological analysis will help put
back the phenomenon of corruption in perspective in post-communist countries:
“On the individual level, favors delivered by friends, acquaintances, and friends
of friends granted solutions to small-time problems. On a societal level, they
represented a way out for the Soviet system that struggled to adhere to its own
proclaimed principles. A discrete redistribution of resources within social
networks – an implicit social contract, known as the “little deal” – became part
of the solution […] A Russian phrase “nel’zya, no mozhno” (prohibited, yet
possible) offered a summary understanding of the Soviet society with its all-
embracing restrictions and the labyrinth of possibilities around them […]
Obtaining goods and services through blat channels provided just one example
of the many informal practices that made the Soviet regime more tolerable and,
at the same time, helped to undermine its political, economic, and social
foundations (ibid.).”
Rising inequalities in Moldova threaten social cohesion: “recent economic growth and
social progress has disproportionately benefited the bigger cities, while people in rural
areas continue to have fewer economic opportunities and only partial access services such
as health, education, water and sanitation at best” [National Human Development Report,
(2014), p.4]. The Republic of Moldova did not find itself plagued by corruption all of a
sudden after the collapse of the Soviet Union, as it existed under communism as well
(Kramer, 1977). However, it started flourishing after 1991, due to poor anti-corruption
practices, weakened state institutions, the lack of enforcement of existing laws, low
salaries in the public sector, unbridled privatisation under the impulse of unscrupulous
oligarchs, because in transition countries, politicians are directly dependent on oligarchs
Blockchain and bitcoin as a way to lift a country out of poverty 119
(Parmentier, 2016). Unfortunately, this depressing state of affairs has had an adverse
impact on Moldova’s socio-economic development performance since 1991 (Pilkington,
2017). The link between corruption and poverty in the Republic in Moldova has been
acknowledged by major international organisations such as Transparency International
(2016). Corruption and poor access to information are deeply interlinked (ibid.). For long,
Moldovan citizens have had very little access to common procedures such as the
registration of a private company, or even the payment of taxes. Bribes have often been
the missing link between citizens and state institutions in Moldova. Tax evasion and
money laundering have become commonplace, epitomised in 2015 by the gigantic
banking scandal or theft of the century (Pilkington, 2015).
Table 1 A brief history of the Republic of Moldova
1984–1994: initial phase of transition from a command system to a market system (hysteresis
effects, persistence of the soviet blat system, feeling of abandonment of the population…). The
country gains independence on 27 August 1991 following the collapse of the Soviet Union.
1995–2000: oligarchic capital accumulation, clanisation of the political life synonymous of
‘grand level corruption’ [Carasciuc, (2001), p.6], progressive impoverishment of the Moldovan
population. In 1998, the state nearly defaults in the aftermath of the Russian crisis. Adherence to
a political ‘clan’ was a kind of guarantee for their protection, and for barring legitimate security
authorities from having access to information on their activities, including criminal activities.
The stop-and-go approach to reforms, the development of powerful vested interest groups and
political instability prevented the creation of the functioning market economy conducive to
growth of private entrepreneurship and investments. Wrong microeconomic incentives, resulting
from neglecting structural reforms, proliferation of non-payment culture and corruption,
contributed to the slow pace of enterprise restructuring, lack of market orientation, scarcity of
new market entries, low level of investments and waste of recourses in non-productive or even
value-detracting activities. In this situation, sustainable growth could not take place.
2000–2009: acceleration of pro-market reforms under the mandate a communist president (!)
2009–2016: following the Twitter revolution and the demise of Voronin in May 2009,
succession of so-called pro-European parties forming fragile parliamentary alliances. After a
short-lived heralded success story of the eastern partnership (Rinnert, 2013), Moldova has been
marred with corruption scandals and street protests since 2013 reaching their paroxysm in
Government involvement in economic life is symbiotic with corruption trends. This is so
because government contracts (e.g. procurement), privileged market positions and credit
conditions can arouse the interests of the private sector that seeks to obtain favourable
taxation conditions and regulatory provisions by means of party financing, or the
nomination of specific individuals for some government positions [Carasciuc, (2001),
p.7]. However, drawing on the example of Scandinavian countries (ibid.), let us note that
the size of the public sector is not necessarily an indicator of the degree of corruption of
the country. A socio-historical and cultural analysis of the way the public sector operates
(and not its size) is paramount to validate the relation (ibid.). A parallel may be drawn
with the recent FIFA corruption scandal that led to the suspension of former UEFA
president Michel Platini. In this configuration, national federation financing ensures the
social reproduction of political elites who grant financial advantages to the people who
help maintain the electoral status quo (Le Monde, 2016). The same alas applies to
political party financing in Moldova. As Rinnert (2013, p.1) argues,
. Pilkington et al.
“Many local observers pointed to the incoherence of the success story
engineered in Brussels, referring to the lasting corruption among the highest
officials long before the crisis. In any case, it became quite clear that the elite’s
special interests were dominating the political system in spite of the
pro-European government.”
Let us note finally that although the Republic of Moldova can be objectively
characterised as a highly corrupt country due to idiosyncratic historical, sociological,
economic and political circumstances, corruption is indeed inherent in human nature, and
contingent on the universal effect of power on human beings: ‘power corrupts’. You can
read about that in the writings of the ancient Greek philosophers, and nothing really has
changed – only that scale of power, and the scale of misery that can be created when that
power is wielded to do bad things (Antonopoulos interviewed by Sparkes, 2014).
2.2 A unifying theme of the 2015–2016 protests
The stunning feature of the 20152016 street protests in the Republic of Moldova was the
unifying theme of corruption reuniting disillusioned citizens and transcending political
and ideological (pro-European vs pro-Russian) forces. The trigger of the protests in 2015
was the publication on Monday 4 May 2015 of the Kroll Report:
“After thousands of people rallied on Sunday, 3 May in the capital, Chisinau, to
protest against endemic corruption in the country, and demand recovery of the
missing billions in the so-called Ilan Shor group scandal. The Kroll Report
investigates the apparent theft of nearly one-fifth of the country’s annual GDP.
In a spectacular lender-of-last resort move, the Moldovan central bank was
forced to issue some 16 billion lei ($870 million) in emergency loans to keep
the economy afloat.” [Pilkington, (2015), p.252].
After other sporadic protests during the summer,
“On 6 September Moldova’s capital, Chisinau, saw the largest civic protests
since independence. These protests, where up to 100,000 people took to the
streets, were larger than the 2009 protests that brought about the ‘Twitter
Revolution’ and the fall of the Voronin government. The protests in the
symbolically important Piata Marii Adunări Nationale […], the historical site
of protest in Moldova, are the result of growing dissatisfaction among the
electorate since the revelation in November 2014 of the “heist of the century”
[…] through the country’s three main banks.” (Brett et al., 2015).
Pilkington (2017) argues that
“Moldova needs to consolidate the rule of Law, and move away from reform
inertia, which has characterized the country for so long. It needs to put an end
to the control of the judiciary power by politicians, thereby propelling judicial
nihilism and corruption in Moldovan society.”
In 2009, the demise of the communist regime led by Voronin sparked hope that Moldova
would embrace pro-Europe reforms, and move toward enhanced political transparency,
accountability and responsibility. Between 2009 and 2015, growing dissatisfaction built
up over the elites’ deemed corruption and arrogance (Brett et al., 2015), culminating in
2015 with the massive banking scandal (Pilkington, 2015). A unifying theme of the
2015–2016 protests is therefore the rejection of corruption by a wide range of citizens
representing eclectic cross sections of society (rural and urban, young and old, lower
middle class and intellectuals…). From September 2015 onwards, anti-government
Blockchain and bitcoin as a way to lift a country out of poverty 121
protests, structured around the truth and dignity platform (Moldovan Politics, 2016), were
led by notorious figures of civil society. After a stunning self-denunciation by Ilan Shor,
one of the main suspects in the massive banking fraud, former Prime Minister Vlad Filat
was arrested on 15 October 2015 over allegations of corruption (Foy, 2015).
Post-soviet republics are characterised by an authoritarian default political system and
a unified set of ideas endorsed by the elites tantamount to a Moscow consensus’.
However, since the end of the Cold War, the active promotion of ideology has not played
the pivotal function that once sustained Marxism and Leninism; rather, these post-soviet
regimes aim to pursue their strategic interests, which are compatible with illiberal or low
democracy ideas, tactics and strategies (Eurobelarus, 2016). These post-soviet republics
are characterised by a Hobbesian political order that promotes a strong state and
hierarchical political elites:
1 a defiance toward western influence
2 a quest for international respect and acceptance
3 a form of contempt toward the masses
4 the endorsement of structural reforms conducive to economic growth and
modernisation that goes hand in hand with the integration of the domestic elites into
a global financial elite
5 a reluctance to allow a genuine market economy at home.
All in all, political leaders of post-soviet Republics are not opposed to business as long as
they can control it, which raises the issue of the amalgamation of money and power into a
single system, what Alena Ledeneva labels the sistema, blurring the line between the
public and the private sectors, and questioning the effectiveness of regulation and the
judicial system (ibid.).
3 Poverty alleviation and tourism 2.0 in the Republic of Moldova
3.1 Links between tourism and poverty alleviation
In spite of the fast growth in the run-up to the global crisis, and the brevity of the
recession that started in 2009, Moldova remains, as it is oft-quoted, a poor country
(International Monetary Fund, 2014).
Table 2 Effects of the global crisis on per GDP capita in Moldova
2005 2006 2007 2008 2009
Nominal GDP 10,488 12,497 14,955 17,649 16,260
Real GDP per capita (MDL,
price index in 2000) 6,294 6,613 6,828 7,379 6,542
GDP per capita (USD) 832 952 1,232 1,699 1,463
Source: Stratan (2010)
. Pilkington et al.
With a 4.5% GDP contraction, the Republic of Moldova suffered in 2015 from the
downturn in Russia, Russia trade’s embargo and the resulting shrinking exports to Russia
(by half) not to forget the decreasing remittances from Russia (–30%). However, the
main factor for Moldova’s disappointing economic development is bad governance and
corruption, which renders the institutions that, should hold political actors accountable
for their behaviour ineffective. For World Bank’s representative to Moldova Alex
Kramer (cited by Nato Parliamentary Assembly, 2015), the country should have been ‘the
tiger of Europe’ because of its geographic proximity to the European Union, its low wage
level, and its very good overall performance after the financial crisis of 2008, it is still a
‘tiger in a cage’. Despite a sharp decline in poverty in recent years, Moldova remains one
of the poorest countries in Europe, and structural reforms are needed to promote
sustainable growth. An interesting measure is the global multidimensional poverty index
(Alkire and Santos, 2014) taking into account three dimensions and ten indicators, with a
person identified as multidimensionally poor if (s)he is deprived in at least one third of
the weighted indicators.
If a person is deprived in 20–33% of the weighted indicate, they are considered
‘vulnerable to poverty’, and if they are deprived in 50% or more, they are identified as
being in ‘severe poverty’. The Oxford Poverty and Human Development Initiative (2016)
displays the results for Moldova.
Figure 1 The multidimensional poverty index methodology (see online version for colours)
Standard of living (1/3)
3 dimensions
Education (1/3)
Years of
Health (1/3)
Cooking fuel
Source: Oxford Poverty and Human Development Initiative (2016)
Table 3 Multidimensional poverty in Moldova (urban and rural areas)
Region MPI
(H × A)
to poverty
In severe
Moldova 0.003 0.8% 35.9% 4.2% 0% 100%
Urban 0.001 0.3% 42.2% 1.4% 0.1% 36.1%
Rural 0.003 1.0% 34.7% 5.7% 0% 63.9%
Source: Oxford Poverty and Human Development Initiative (2016)
Blockchain and bitcoin as a way to lift a country out of poverty 123
Moldova has made progress in poverty alleviation over the last decade, and should be
given credit for her accomplishments according to the International Monetary Fund, and
the World Bank. It is still the case that many people live under the poverty threshold.
Although tourism in Moldova is embryonic, it could follow suit countries that have
used tourism as a development engine with the implementation and monitoring of
projects, which have contributed to the enhanced welfare of local populations. The link
between poverty alleviation and tourism was first acknowledged in 1999 by the United
Nations Commission on Sustainable Development (CSD-7) which set the objective to
“maximise the potential of tourism for eradicating poverty by developing appropriate
strategies in cooperation with all major groups, and indigenous and local communities”
[CSD7, (1999), p.39]. Pro-poor tourism has been a flourishing research area ever since
[Ashley, 2006; Ashley and Goodwin, 2007; Ashley and Haysom, 2008; Organisation
Mondiale du Tourisme (OMT), 2002, 2005; Pro-Poor Tourism Partnership, 2004, 2005a,
2005b). SNV (i.e., Netherlands Development Organisation) is an international not-for-
profit development organisation that works on poverty alleviation schemes and
sustainable development in twenty countries and five regions of the world. SNV has been
active in the tourism sector since 1994 [OMT and SNV, (2015), p.xv], in order
to alleviate poverty through the increase in production, income and employment
opportunities for underprivileged populations. SNV supervises field work and conducts
ground-level studies to assess how financial flows that circulate in the tourism sector
eventually reach the poor. Tourism projects in developing countries set the stage for
innovative public-private partnerships. Tourism is paramount in the rural development of
the country, and its poverty reduction strategy [United Nations, (2008), p.25]:
“Rural tourism plays an important role for the economic, social and cultural
development of the rural areas. It is closely related to agricultural production,
regional development, natural environment, and rural way of life showing
traditional lifestyle, ambience, cultural and historical traditions.”
Table 4 Tourism and poverty alleviation mechanisms
1 All aspects and types of tourism should be concerned about poverty alleviation.
2 All governments should include poverty alleviation as a key aim of tourism development
and consider tourism as a possible tool for reducing poverty.
3 The competitiveness and economic success of tourism businesses and destinations is critical
to poverty alleviation.
4 All tourism businesses should be concerned about the impact of their activities on local
communities and seek to benefit the poor through their actions.
5 Tourism destinations should be managed with poverty alleviation as a central aim that is
built into strategies and action plans.
6 A sound understanding of how tourism functions in destinations is required, including how
tourism income is distributed and who benefits from it.
7 Planning and development of tourism in destinations should involve a wide range of
interests, including participation and representation from poor communities.
8 All potential impacts of tourism on the livelihood of communities should be considered,
including current and future local and global impacts on natural and cultural resources.
9 Attention must be paid to the viability of all projects involving the poor, ensuring access to
markets and maximising opportunities for beneficial links with local enterprises.
10 Impacts of tourism on poverty alleviation should be effectively monitored.
. Pilkington et al.
It is unclear whether tourism should somehow help the underprivileged fringe of society.
More particularly, how should it benefit the poor, households who lack access to
education and basic health care or people who suffer from disabilities or other health care
problems? The latter are likely to be unable to participate directly in tourism activities.
However, they might benefit from spill-over effects on other activities as well as from
investment in social infrastructures promoted by tourism. Moreover, these weak segments
of society should be protected from the adverse consequences of tourism. The UN has
acknowledged the link between tourism and poverty alleviation in a context of
sustainable development (CSD7, 1999). The following principles for pursuing poverty
alleviation through tourism take into account previous, longstanding and relevant
principles for ‘pro-poor tourism’ (Pro-Poor Tourism Partnership, 2005a).
Tourism has some characteristics that make it attractive to low-income countries and
underprivileged communities. Tourism puts emphasis on certain characteristics common
to developing countries, such as warm weather, rich cultural heritage, beauty of
landscapes and biodiversity. In this respect, Orheiul Vechi Archaeological Landscape
meets all these, and is part of the tentative list, in order to qualify for inclusion in the
World Heritage List by UNESCO1. These characteristics are often found in rural areas,
which is a competitive advantage for tourism, while a drawback for most other sectors.
Tourism is accessible to the poor, as it is relatively labour intensive, and often composed
of small and medium-sized enterprises, and micro-enterprises. Tourism activities lend
themselves to women, young people, and underprivileged groups, such as ethnic
minorities. The poor can find employment in the tourism sector, as the required skills
need not be discouraging, and part-time work is often the norm. Tourism services are
made of a wide array of activities and factors. Tourists spend their money on different
types of goods and services, which benefit agriculture, craftsmanship, and transports.
There will be a multiplier effect, as economic agents benefiting from the consumption of
tourists, make additional expenses in the rest of the economy.
Tourism bridges the gap between producers and consumers. The interaction between
tourists and underprivileged communities gives rise to mutually advantageous exchanges
between the two groups, such as enhanced awareness of social and environmental issues
or benefits from improved social infrastructures. Social work can be consolidated by
tourism enterprises, which are in a position to bridge the gap between an informal
configuration wherein revenues barely cover the costs of a micro-enterprise, and a more
formal and better-structured entity that attracts further investment potential.
3.2 A real-world example: Moldova Tours 2.0
Moldova Tours 2.0 is a start-up company of a new kind in the field of tourism 2.0 aimed
at foreigners with a thematic approach to its product-offer, to take into account the
aspirations and needs of visitors travelling to Moldova. The startup plans to offer a blend
of entry points to discover beautiful Moldova so as to fill personal aspirations and
objectives. The Republic Moldova is a young country in its current form, following
notably the collapse of the Soviet Union and its independence in 1991. Its people are
welcoming and often multilingual with a vibrant and dynamic culture, and a sense of
openness to the world. The country, bordered by Romania and Ukraine, was voted by
readers of Lonely Planet in 2013 the number two off-the-beaten-path destination in the
Blockchain and bitcoin as a way to lift a country out of poverty 125
Table 5 Prospective tours offered by Moldova Tours 2.0
1 The monastery tour
2 The wine tour
3 The history tour (art, history and culture)
4 The outdoors tour
5 The linguistic tour (Romanian/Russian): stay in host families
6 The academic tour
7 The social business tour
8 The corporate tour (for potential investors)
9 The geopolitical tour (guided tour to Transnistria)
10 The freedom tour (entirely customised)
4 Bitcoin and blockchain for tourism 2.0
Olson and Wessel (2016) explain that, “the blockchain is a perpetually updated record of
transactions independently saved by users across the internet”, in other words an
immutable distributed ledger. Following Brokaw (2014), Swan (2015) and Hayes (2015),
Pilkington (2016a, p.225) sketches out “a list of important applications, bearing in mind
the most recent developments”. Blockchain technology solves the old double spend
problem (Chaum, 1983) through the use of modern cryptographic techniques. Each
network participant is assigned a private key, and a public key shared with all other
agents. A transaction is a representation of an atomic change to the system state, and
entails an exchange of encrypted data between two network participants. A transaction is
initiated when the future recipient of data (cryptocurrency units, medical records
(Tak Shing Liu, 2016), or any piece of information that can be digitally represented)
sends his/her public key to the data sender [Pilkington, (2016a), p.226]. Blockchain
technology thrives in a decentralised and trustless environment enabled by integrating
cryptographic hash, digital signature, and distributed consensus mechanism. On the
ledger, each node is involved with all the operations including transaction initiation and
verification, key signing, and mining. A blockchain ledger is a modern way to map out
the transfer and ownership of digital assets (ibid, p.232). KYC platforms (Parra-Moyano
and Ross, 2017) may help combat fraud, and provide dispute resolution mechanisms.
Guaranteeing trust is precisely what the Moldovan tourism ecosystem needs today.
Lubarova et al. (2000, p.22) had already emphasised this argument at the dawn of the
new millennium from the viewpoint of a country taken as a whole. Trust is paramount, in
order to attract foreign direct investment and international trade with Moldova, to reduce
the attractiveness of permanent emigration, notably the most skilled individuals, and
capital flight (ibid.). Trust also reduces uncertainty, thereby improving the business
climate for investment decisions and start-up initiatives; it also discourages fraud, thereby
enhancing the reputational capital of the country (ibid.). Trust is contingent on the
existence of a legal framework protective for citizens and entrepreneurs, and ensures that
contractual obligations are enforced. The reconstruction of the State as the guardian of
the legal order is a necessary condition for fighting off corruption. The prosperity of
Moldova depends on the success of the latter endeavour (ibid.). In this respect, it is
. Pilkington et al.
worthwhile noting that the blockchain is an unprecedented purveyor of trust
(The Economist, 2015). We are now way past the stage where bitcoin and the blockchain
are being confused in the eyes of the public [Mc Kinsey, (2015), p.5]. Financial use cases
include the issuance of digital assets (e.g. coloured coins [Seijas et. al, (2016), p.12]),
remittance and online payments. Non financial use cases pertain to the next generation of
internet interaction systems, such as smart contracts, public services, internet of things
(IoT), reputation systems and security services (Shrier et al., 2016; Pilkington, 2016a).
The emerging blockchain landscape is still fragmented (Macaulay, 2016), while the
global data infrastructure is characterised by insufficient interoperability of blockchain
ledgers with a resulting shortage of harmonised standards (Open Data Institute, 2016).
Pilkington (2016a, p.244) emphasises the untapped potential of the blockchain in
terms of social inclusion, and explicitly refers to the Republic of Moldova with the
weight of remittances in per capita GDP that could be facilitated by blockchain-based
mobile applications (ibid., p.245). He concludes that “more blockchain applications will
emerge in the near future in areas as diverse as art, tourism and sports” (ibid., italics
Blockchain technology could enhance accounting for travel companies, which have
complicated ledgers to track and payments to settle in multiple countries and currencies.
We draw hereafter on the example of the Drachmae project that targets live use cases in
Greece to establish the viability of blockchain solutions outside the realms of
cryptocurrencies. Although the latter were first presented as a way to circumvent capital
controls at the peak of the crisis (Fletcher, 2015), the same outcome can be achieved
through token-free blockchains, smart contracts or child chains. Drachmae project has
already implemented several use cases already in the Greek travel and tourism industry,
which accounted for 18.6% of GDP in 2016, and is forecast to rise to 22.4% of GDP by
2026 [World Travel and Tourism Council, (2016), p.3].
Figure 2 Total contribution of Greece’s travel and tourism sector to total GDP (see online
version for colours)
Source: World Travel and Tourism Council (2016, p.3)
Blockchain and bitcoin as a way to lift a country out of poverty 127
Moldova has experienced a period of turmoil and instability since the disclosure of the
massive banking scandal (Pilkington, 2015), thereby raising fear for tourists of being
stranded. Credit card payments to Moldovan travel agencies might also have raised
suspicion. Tourism could be promoted in Moldova by using loyalty programs based on
loyalty cryptographic tokens (Asatryan, 2016), near zero % fee booking systems, and a
blockchain-based voting system, in order to vote for the best hotel or tourism destination,
by using the Nxt blockchain technology (Lombardo, 2016), so that votes are immutable,
public, and transparent (ibid.).
Moldovan tourism destinations undoubtedly have a lot of potential (Pilkington, 2017).
Key both to tourism growth and company success are loyalty reward programs [Deloitte,
(2016a), p.1] that can be instantaneously and securely created, redeemed and exchanged
in a trustless environment across specific schemes, vendors or even industries (ibid., p.5).
Chain of points is a loyalty platform drawing on digital token issuance and
crowdfunding. A cryptocurrency called points is used to transfer and redeem loyalty
rewards between merchants and customers (Mizrahi, 2017). Israel-based Fintech
company Codu recently launched a cryptocurrency aimed at data collection for
improving customer loyalty and reward programs in the city of Liverpool (Ball, 2017).
From digital identity management (World Economic Forum, 2016b), to the
tokenisation of frequent flyer programs (i.e. airline miles) and item custody-change
tracking (Goudarzi, 2017), the tourism and travel industry is replete with promising
blockchain 2.0 applications. Loyyal has developed a smart contracts platform and a
tourism incentification program targeting Dubai tourism (Mizrahi, 2016). AiSpot, a
Norwegian government-backed company, provides a similar rewards program to
incentivise and promote tourism (Loyyal, 2016).
The introduction of blockchain-based smart contracts can help assess the potential
future revenues derived from tourism growth. Smart contracts could be used for tipping
workers in the tourism sector and for loyalty rewards. This innovation amounts to
endogenous blockchain-driven growth of the tourism sector.
Table 6 Capabilities of the Nxt blockchain-based for the 2.0 platform in Moldova
Asset exchange. Issue and trading of Nxt-based tokens (digital assets), a crypto-security
issue, which has been used for crowdfunding, a reputation system, and as a form of shares
issue in businesses, both new and established. These Nxt-based to-kens could be used as a
medium of exchange in the Moldovan Tourism 2.0 sector.
Monetary system. Subsidiary currencies could be created on the Nxt blockchain, for the
purpose of circulation within the 2.0 tourism industry in neighboring and similar countries
(Romania, Belarus, Ukraine), utilising either PoS or PoW, with all parameters under the
control of the currency issuer.
Voting system. A fully customisable blockchain-based voting solution, the VS allows polls
to be created and voted upon in a secure and non-manipulatable environment. This could be
used to establish an immutable ranking of the best hotels, restaurants, agropensions in the
Republic of Moldova, thereby boosting competition, enhancing efficiency and promoting
tourism destinations.
The Nxt core code is written in Java, drawing on Blockchain technology based on the
proof-of-stake paradigm, rather than proof-of-work (Pilkington, 2016a). Nxt is a second
generation cryptocurrency with a block-generation time of one minute (against ten for
Bitcoin) that draws on the Curve 22519 algorithm (Whitepaper:Nxt, 2016). Nxt is a
token-based blockchain wherein account holders identify themselves with near full
. Pilkington et al.
certainty with the help of encryption techniques (Whitepaper:Nxt, 2016). It incorporates a
modular system with additional features on top of the first generation cryprocurrency
features of bitcoin. By leveraging functions and core elements of the blockchain space
(Ethereum-based smart contracts, Nxt token authentification etc), the use cases allow
decentralisation to cross over permissionless and permissioned ledgers, thereby
enhancing regulatory compliance, protection against digital theft and regulatory control.
Drawing on Nxt technology, Ardor (2016) is the latest blockchain-as-a-service (and not a
currency) platform designed with unlimited scalability, safe smart contracts, and
customisable child chains.
The Moldovan blockchain ecosystem is a nascent one, and it is therefore crucial to
neutralise malware (CCN.LA, 2016), by securing the blockchain infrastructure, a sine
qua none for future growth. Blockchain technology provides novel mechanisms to seal
corruption loopholes, and track illegal activity (ibid.). Created by Grant (Cuthbertson,
2015), and first sponsored by SuperNet, an association of various cryptocurrencies
(Lombardo, 2016), Drachmae project used the NXT blockchain technology in its tourism
2.0 use case implemented on the Greek island of Agistri. The latter builds upon the
token-based Nxt monetary system, and the Drachmae money payment gateway (Galt,
2015). Drachmae money is a multi-currency wallet featuring SMS and NFC interfaces2.
Our proposed project Moldova connect resembles the use case of Drachmae connect,
a “business-to-business and business to consumer social platform that will not only allow
merchants to exchange services, but also enable tourists to book vacations at a discount
using their mobile phone” (McLeod cited by Galt, 2015). By creating social engagement
via social media, Drachmae project compensates users in points, used to pledge to
crowdfunding projects, in order to support local businesses, thereby bringing the sense of
community to unprecedented levels (Drachmae, 2016). A similar scheme could be
developed with Mdcoins3, the native currency of the future Moldova connect
blockchain-based travel portal. The latter could grow into a decentralised equity and
crowdfunding platform, inspired by the WIR business group (Simon, 1994; Migchels,
2012) and alternative currency project developed in Switzerland in the 1930s, building on
the legacy of Gesell (1958).
These discount tokens confer substantial discount potential for tourists that choose to
use the platform, up to 90% in some cases (Cuthberson, 2015). Grant (2016) explains that
Drachmae functions with a permisioned blockchain called DT chain (Drachmae, 2016)
akin to a private blockchain with known validators (Pilkington, 2016a) that removes
some of the drawbacks of public blockchains, such as blocksize limit, and slow
transaction speed (Grant, 2016). The Drachmae blockchain:
“relies on the definition of trust roles enforced by cryptographically verifiable
identities, secured in hardware modules. All nodes – servers upon which the
blockchain runs are therefore permissioned and immune to network
manipulation. Performance is exceptional and the platform scales in a near
linear fashion as nodes are added.” (Grant, 2016)
DT token, the native currency of the DT chain, served to boost the Greek tourism
ecosystem by functioning as loyalty tokens, and offering the following services: hotel and
flight booking, prizes for the travel app game, and the blockchain travel money service
connected to a branded prepaid card (Drachmae, 2016). Permisionned blockchains
constitute the next phase in blockchain innovation for private sidechains (Grant, 2016).
Drachmae Project proposes a limited tokenised and smart contract-based membership
Blockchain and bitcoin as a way to lift a country out of poverty 129
scheme to a private blockchain travel portal called Drachmae Travel Club (NewsBTC,
2016) supporting multiple currencies (Grant, 2016). A similar scheme shall be developed
in the future by the Moldova Connect portal.
5 Blockchain for improved e-governance
5.1 E-governance in Moldova
The rapid technological change makes the world more prosperous and inclusive. ICTs are
seen as tools and mechanisms to stimulate sustainable growth, improve service delivery,
and promote good governance and social accountability. The usage of ICTs in the
government process refers to two notions that are sometimes confused, although they
ought to be distinguished. On the one hand, according to the World Bank (2015):
E-Government refers to the use by government agencies of information
technologies (such as wide area networks, the internet, and mobile computing)
that have the ability to transform relations with citizens, businesses, and other
arms of government.”
Therefore, e-government is the use of ICTs for improving the efficiency of government
agencies, and providing government services online. Later, the e-government conceptual
framework has broadened to include use of ICTs by the government for conducting a
wide range of interactions with citizens and businesses as well as open government data,
and the use of ICTs to enable innovation in governance. On the other hand, according
UNDP (2016):
E-Governance involves a public investment in information and
communication technologies (ICTs) to strengthen governance processes.
Access to and use of ICTs can provide new and innovative communication
channels that empower people and give voice to those who previously had
none, while allowing them to interact via networks and networking.”
As a result, e-Governance is a broader term than e-Government since the former is
applicable to the governance of corporations or non-profit organisations, while the latter
is strictly about government.
The Government of the Republic of Moldova has acknowledged the use of ICTs as a
crosscutting enabler of sustainable growth, competitiveness and improved governance.
The Republic of Moldova is ranked 65th out of 193 countries [United Nations, (2016),
p.57] in the UN e-Government Development Index (i.e. high EGDI), and is one of the top
50 performers on e-participation (ibid., p57). Moreover, Moldova has emerged in the past
few years as one of the top ten countries in Europe with the highest internet speed and
one of the cheapest in terms of price per megabit (Mocan, 2015). In 2015–2016, Moldova
was ranked 68th (out of 167 countries) in the ICT Development Index (International
Telecommunication Union, 2016), and 71st (out 143) in the network readiness index
(World Economic Forum, 2016a). All these performances have contributed to the ICT
infrastructure deployment for its citizens to better communicate, engage, and interact
with the government through digital channels.
. Pilkington et al.
Table 7 E-services provided by the Moldovan Government
N. Type of service Description
E-Government for citizen
1 e-Traffic Allows users to receive notices on the breaches committed in the traffic. The application may be downloaded and used freely.
2 e-Civil Status Services
Allow requesting online duplicates of civil status certificates, civil status extracts and changes or rectifications to civil status documents.
The e-Civil Status services can be accessed on the government portal using the mobile digital signature and can be paid
through government’s electronic payments service MPay. These tools make the e-civil status services also available to people who are
abroad. Using these tools is completely safe for the users.
3 Mobile signature Allows accessing electronic services with a mobile phone. ‘Mobile signature’ works as an ID in the virtual world, which allows users to
authenticate themselves in the cyberspace in order to prove the identity with the cellphone. According to Decision No. 264 from July
15th 2004 regarding electronic documents and digital signature, electronic documents are equivalent to documents signed by hand.
Citizens can easily obtain the mobile signature from mobile operators.
4 Normative
e-Documents in construction
Launched in 2013, this service simplifies the access to construction documents for citizens, public officers, industry experts or
economic agents. The normative e-Documents in construction offer its users a number of benefits: database searching is greatly
simplified, free access to online discussions and public debates about standards in construction, access to copyrighted documents in
electronic or traditional format.
5 Local documents registry
A free public e-service, which offers many opportunities and benefits for three categories of users of the web portal: local government’s
office, state chancellery and the citizens. By accessing the website of the municipality, anyone can view normative acts adopted by the
local government, learning their provisions and the date they entry into force.
6 e-Record ( With this new service, citizens can submit applications for the record online, anywhere and anytime, 24/7.
7 Open data platform
The government offers citizens and businesses access to public data sets. Citizens can easily consult data sets, require useful
information, express their opinions and propose manners of improving the platform. This way, citizens’ voice can be easily heard by the
ministries and the dialogue between authorities and citizens is particularly important for useful open data.
8 The special water use
Aims to establish a unique electronic counter (one stop shop), exempting individuals and legal entities from the complicated and time-
consuming procedures as well as from the need to appear before the competent institutions. In order to submit online for the application
for the special water use authorisation is needed to be logged in through MPass and own an electronic or mobile signature.
9 MPay ( A governmental service for electronic payments, is an informational tool by which various services can be paid online. Although MPay
is primarily targeting electronic services in the public sector, it can be successfully used for commercial services. MPay can enable
payment services through multiple payment methods such as credit cards, payment terminals, e-banking and cash payments. For cash
payments, people who do not have Internet access can contact the bank counters or post offices from Moldova for internet connection.
The special water use authorisation is available for business too.
MPay and State Register of Inspections are available for Government too.
4 platform functions as an electronic catalogue for public services also for all citizens from abroad.
Blockchain and bitcoin as a way to lift a country out of poverty 131
Table 7 E-services provided by the Moldovan Government (continued)
N. Type of service Description
E-Government for business
1 Enterprise content
management platform
A joint platform, launched in 2014, for implementing the electronic services such as online programming, registry and issuance of
2 State register
of inspections
A common online platform allowing authorised control bodies to automotise the process of planning controls and registering planned
and unplanned checks as well as publish them on the public portal
3 e-Invoice
A software solution designed for the economic agents from Moldova in terms of bills and invoices’ development and electronic
circulation. The electronic invoice has the same legal value and is as safe as the traditional one, on paper. In addition, the system
provides data accuracy and reduces the risk of invoices’ counterfeiting.
4 E-Procurement By means of modern technology, the procurement process will be conducted electronically, online, 24 hours a day, seven days a week.
In November 2016, a memorandum on the initiative of the Ministry of Finance and representatives of local NGOs and the business
community, was officially approved, to develop a transparent and efficient public e-procurement process and, in particular, to pilot
public e-procurement of small value contracts for 12 months, from the date of entry into force of the above mentioned memorandum
5 E-Reporting ( Allows economic agents the possibility to present online annual and quarterly reports.
6 e-CNAM Allows replacing manual procedures with automatic ones in receiving and processing report forms for medical insurances. The e-
CNAM service is part of the reporting Platform, integrated in the M-Cloud system and hosted by the Center for Special
7 e-Licensing Provides a full range of specialised functions to optimise submission and review of license applications from the Licensing Chamber.
Licenses can be requested electronically, with no need for the economic agent to travel to Chisinau. The authenticity of the information
submitted by applicants or license holders will be verified through the electronic networks of the public authorities concerned.
8 Fast electronic statement An automated method for filling in and submitting fiscal reports, by using latest bi-dimensional (bar code) coding technology. This
service offers tax-payers the possibility to create fiscal reports, eliminating calculation errors while filling the application. The service
offers a tool to create, verify and print fiscal reports which are in line with formats in use at the moment.
9 Electronic fiscal record A method of concluding and sending fiscal documents online (
The special water use authorisation is available for business too.
MPay and State Register of Inspections are available for Government too.
4 platform functions as an electronic catalogue for public services also for all citizens from abroad.
. Pilkington et al.
Table 7 E-services provided by the Moldovan Government (continued)
N. Type of service Description
E-Government for government
1 MConnect Facilitates the exchange of data between the authorities to increase the efficiency and quality of delivery of public services
2 SIGEDIA The pilot-project Management System of Documents and Authorities Registrations APC (SIGEDIA) is part of the action plan for the
initiative implementation ‘paperless government’ (2011). The purpose is to identify and implement an effective and efficient documents
circulation system throughout the Government, that would simplify and, in the same time, accelerate the decision making process.
3 M-Cloud Launched in 2013, the Claud technology allows many institutions use common applications stored in a single data centre. The platform
capitalises on government spending and consolidates data centres in a joint management form.
4 Register of personal data
Ensures the implementation of the protection of personal data law. According to the law, personal data controllers must notify the
national authority for the protection of personal data before starting the processing of personal data.
5 M-pass ( The national service which allows authentication and access to digital public services. The service offers different authentication
mechanisms: mobile signature, digital certificate, user name and password.
6 Through this platform citizens can be consulted on various draft laws
E-Government for international
1 e-Visa The electronic service allowing applicants to request and receive visas for Moldova on-line. This service is also available for citizens
and business on
The special water use authorisation is available for business too.
MPay and State Register of Inspections are available for Government too.
4 platform functions as an electronic catalogue for public services also for all citizens from abroad.
Blockchain and bitcoin as a way to lift a country out of poverty 133
According to the National Regulatory Agency for Electronic Communications and
Information Technology of the Republic of Moldova, there were 1.185.756 subscribers to
fixed broadband internet services and 548.572 subscribers to mobile internet services in
the third quarter of 2016 [ANRCETI, (2016), p.4], and the number of internet users is
increasing year by year (mostly mobile internet users). Over 70% of the respondents have
declared their willingness to use online public services rendered in the online regime, via
computer and over 58% via mobile phones (CBS-AXA, 2015).
Recent policy developments (e-Moldova 2020, EU Digital Agenda 2020,
EU e-Government action plan) showcase the rising interest of Moldova’s government in
fostering ICT development and use in the government process. Therefore, in August
2010, in order to support the country’s e-transformation agenda, the E-Government
Center (EGC) was established. The experiences of Estonia, Finland Austria and Belgium
have served as best practice examples for EGC Moldova, in charge of the development
and implementation of the e-Government agenda, aiming at sustainable development.
The main objective of the EGC is to support the public sector, enhance the efficiency of
authorities, increase the transparency of state institutions, ease the access to information,
and promote e-services, thereby making all public services available by 2020 through a
single government platform. E-services translate into transparent decisions,
straightforward communication, help fight corruption, increase the quality of public
services, and enhance competitiveness. E-government as a platform of public services
delivery in Moldova revolves around four axes: e-Government for citizens,
e-Government for business, e-Government for government and e-government for
international purposes. In 2012, the authorities launched a single public service platform
for (, which functions as an electronic catalogue for public services
aimed at the citizens and the business environment. Its main purpose is to offer concise,
accurate, accessible and complete information on the public services available. Table 7
describes all the services provided electronically by the Moldovan Government (as of
January 2017).
In order to determine and monitor the level of understanding and support of the
e-Transformation of governance reform by citizens, their awareness of the benefits, and
their eagerness to uptake and assimilate the e-Governance products, a survey is
commissioned every year by the EGC Moldova. In 2015, it was carried out by the Centre
for Sociological Investigations and Marketing ‘CBS-AXA’, and assessed the use of
e-government services by Moldovan citizens.
Yet, e-governance in Moldova faces several challenges:
Culture, institutional legacies, vested interests, and risk aversion tend to resist
change. Governance e-Transformation requires political and administrative
leadership, and a strong delivery team to transform the way government is organised,
and how it functions.
The challenge lies with the public administration in order to ensure that ministries
are re-using the e-service infrastructure to speed-up digitisation. Any transformation
effort faces resistance, and requires innovative capacities in the systems under
. Pilkington et al.
One of the difficulties in launching open government data initiatives lies in low
public interest. Moldovans are not demanding disclosure of government data, in
contrast with most other countries where government data was released under strong
public pressure (United Nations, 2014).
Clearly, no transformation can succeed unless it is built upon strong political leadership
and commitment, engagement and partnerships with citizens and business, both inside
and outside the system, ready and eager to support change.
5.2 Why blockchain technology can help
As stated by BitHub (cited in McGlauflin, 2016), “blockchain solutions will make
substantial contributions to rethinking existing structures in the […] political, social and
economic sectors”. Drawing on an experiment conducted in Honduras with land
registries, blockchain solutions could be implemented in many other similar government
ledgers and databases (Prosser, 2015). Thanks to its three distinct advantages, namely
distributed architecture, immutability and transparency, blockchain applications and
systems may help combat fraud and corruption in the Republic of Moldova, while at the
same time rendering her e-governance programs more efficient. Introducing a bitcoin
payment network would amount to “an associated ecosystem of blockchains, sidechains
and altchains” (DTCC, 2016), which would constitute a ‘generational disruptive force’ at
the societal, economic and political levels. Although there exists a solid literature on
private, hybrid, and token-free blockchains [Pilkington, (2016a), pp.228], we consider
that there is a symbiotic relationship between bitcoin, and its underlying technology, and
we refuse to endorse the blockchain-without-bitcoin view (Young, 2016). The core issue
with Moldovan political and administrative organisations is their inherent inefficiency
due to their “top-down centralised coordination and hierarchical structures… based on
coercion… [lacking] flexibility and capacity to evolve, providing inadequate
responsiveness to challenges and to the growing societal demands” [Atzori, (2015), p.6].
Of utmost importance in post-communist countries, we find “small groups of
super-wealthy oligarchs captured the state and dominated its economic decision making”
[Havrylyshyn, (2007), p.1]. With billionnaire Vladimir Plahotniuc exerting his pernicious
influence on the power structures of the country (Pilkington, 2016b), the debate on
democratic governance and centralised vertical authority as the main organisational
model in society [Atzori, (2015), p.6] becomes “Quis custodiet ipsos custodies” (Who
will watch the watchmen?)” (ibid., p.6). The objective is to depart from a governance
configuration characterised by a central locus of power defined in computer terms as
single point of failure (SPOF) that, if dysfunctional, negatively affects the whole system
and its participants: “decentralisation aims to reduce or prevent such concentration of
power and it is a fundamental condition for citizens to achieve political efficacy, equality,
transparency, and freedom” (ibid., pp.6–7). In this sense, the blockchain has great
potential insofar as it helps bypass the need for the traditional gatekeepers of trust
(Coletti, 2015): “corruption appears when you have a monopoly, somebody with
discretionality to decide, and when you have opacity”, (Alejandro Sales, Transparency
International cited in ibid.)
Blockchain and bitcoin as a way to lift a country out of poverty 135
“[F]or the first time in history, citizens can now reach consensus and
coordination at global level through cryptographically verified peer-to-peer
procedures, without the intermediation of a third party […] Blockchain
technology ushers in a new era of decentralization on large-scale, in which
human factor is minimized and trust shifts from the human agents of a central
organization to an open source code.” [Atzori, (2015), p.7].
For Moldova’s former minister of education Sandu (2016, our translation),
“[c]lear criteria ought to be elaborated for candidates, as well as predictable
procedures for the competitive exam (written test, interview, integrity
check…), and indicators of meritocratic assessment of professional skills. All
this will help avoid harmful practices when the final decision of the committee
is made by a mere vote of the members of the selection committee.”
The nodes of the blockchain network are not owned by anyone, which confers a
decentralised nature to the governance system [Pilkington, (2016), p.232].
Neutrality, immutability and auditability ensure that frictions and failures inherent in
decision-making process of centralised organisations (lack of transparency, corruption,
coercion…) are eliminated. It is time for Moldova to experiment with a range of
decentralised governance models (Swan, 2015), offering new governance services in an
efficient and decentralised way without relying on coercion or force. Blockchain
technology paves the way for a new approach to governance wherein empowered
individuals are the source of legitimacy for the horizontal and distributed diffusion of
authority. Citizens will start interacting by means of self-enforceable smart contracts
wherein ‘the code is law’ (Lessig, 2000). The same goes for the collective relationship
between the population and the state that will be automated by “a series of instant atomic
interactions” (Buterin, 2014):
“Instead of a hierarchical structure managed by a set of humans interacting in
person… via the legal system, a decentralized organization involves a set of
humans interacting with each other according to a protocol specified in code,
and enforced on the blockchain.” (ibid.)
Blockchain technology increases the effectiveness of the delivery of public
services (Mougayar, 2016; Deloitte, 2016b), serves as an official registry for land,
government-licensed assets or IP rights, facilitates e-voting procedures, and streamlines
back-office operations (tendering and public procurement, inter-government agency
purchases etc). Governance-related data is time-stamped and irrefutably proven; one can
audit who was in possession of given information at a given moment in time, thereby
providing an irrefutable ‘proof of existence’ (Prosser, 2015). Blockchain technology will
evolve into a commonly used protocol to secure both data and transactions, leading
Moldovan citizens to live in a more honest and transparent society. Beyond
proof-of-existence, blockchain solutions will tend toward the proof-of-integrity concept
(Pilkington, 2016b), thereby improving democratic governance.
6 The role of the diaspora
In 1991, Moldova became an independent and sovereign state. Her citizens enjoy
freedom of expression, to travel and explore the world. But numerous Moldovans have
left their homeland in search for a happier destiny. This mass of people scattered
throughout the world, forms the Diaspora. Throughout history, many Moldovans were
. Pilkington et al.
forced to enter the Diaspora, voluntarily for political, economic, social, or religious
reasons. For Rusu (2012, pp.103–104):
“[The] diaspora population may consist of people living permanently in the
country of origin or country of destination, and migrants who work abroad
temporary, people who hold double citizenship, ethnic diaspora, citizens of the
host country or second generation groups. In the contemporary context, with
the acceleration in international mobility, the term diaspora has been used more
broadly to encompass expatriate populations who are living outside of their
home countries or contemporary diaspora linked with issues of
transnationalism and globalization.”
Moldovan authorities first took the diaspora into account in 2000 with the issue of a
Presidential Decree (2000). Analytical attempts to tackle the subject were later made by
Morozan and Margarint (2006) and Cabacenco (2006) with the emphasis on respectively
the importance of labor migration and the role of internet in the development of
transnational migrant networks. Moldovans living abroad feel the need to create
organisations designed to close and unite the Moldovan diaspora, strengthen its economic
and spiritual potential, contribute to the effective integration of its members into society.
Currently, the Moldovan diaspora is well implanted in 31 countries of the world4. Public
associations set up by Moldovans abroad aim to better organise the diaspora structurally
to support a new level integrating newcomers. This is part of their concerns to strengthen
relationships between community members, through mutual aid, by initiating various
activities, maintaining spiritual ties with the homeland. The diaspora has great
importance, and forms an adequate representation of Moldovans in dealing with
government bodies and NGOs in countries of residence or in Moldova. Diaspora plays a
major role in promoting a positive image of Moldova abroad. In this context, it becomes
particularly important effort to institutionalise the Moldovan diaspora, which has
potential to contribute significantly for enhancing bilateral relations, to find ways to
support their home country with the experience gained abroad.
How can the blockchain benefit the reintegration of the diaspora in Moldovan affairs?
We have alluded to improvements in democratic governance allowed by e-government
services already implemented by the government in the Republic of Moldova. Another
source of progress is that thanks to blockchain technology, governance services can
acquire a true transnational dimension, and become borderless [Atzori, (2015), pp.8–9],
with the creation of a global cloud [Swan, (2015), p.32] within an overall governance
system (ibid., p.49). Blockchain technology can improve the democratic participation of
Diaspora members through a model called liquid democracy (Swan, 2015;
LiquidFeedback, 2016).
7 Conclusions
We are going through times of transformative significance marked by a shift within
capitalism. Since 2015, “organisations throughout the public and private sectors have
begun exploring ways that blockchain might profoundly transform some of their most
basic operations” (Piscini et al., 2016).
The immutability of the blockchain could spur an unprecedented breakthrough in the
fight against corruption in developing countries, such as the Republic of Moldova, where
information is often opaque and subject to manipulation. With blockchain technology, we
Blockchain and bitcoin as a way to lift a country out of poverty 137
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2 “Near field communication […] is a form of contactless communication between devices like
smartphones or tablets. Contactless communication allows a user to wave the smartphone over
a NFC compatible device to send information without needing to touch the devices together or
go through multiple steps setting up a connection”.
3 Mdcoins were coined by Dr Marc Pilkington at a Fintech conference in India in May 2016
4 Austria, Azerbaijan, Belarus, Belgium, Bulgaria, Canada, Estonia, France, Germany, Greece,
Hungary, Ireland, Israel, Italy, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Norway, Poland,
Portugal, Czech Republic, Romania, Russia, Spain, USA, Sweden, Turkey, Ukraine.
... If wisely implemented, many of the remarkable features of the new digital advancements can optimize operational efficiency in HT firms. The conventional business culture of HT companies has been based on the centralized structures that have slowed down innovation growth for these companies (Pilkington et al., 2017). Thus, several HT firms have recently begun to place more importance on the implementation of the new technological advancements, systems and applications, especially after the COVID-19 pandemic. ...
... Most of the research related to the new digital movements has been clustered around the blockchain technology and its application to operations. For example, Pilkington et al. (2017) studied how blockchain technology could contribute to the growth of medical tourism in Moldova. Sun et al. (2016) articulated an implementation framework for blockchain technology in particular application to smart tourism and destinations. ...
Purpose This study aims to critically review the emerging technological developments and digitalization efforts in the hospitality and tourism (HT) industry and discuss the implications of digitalization on various stakeholders (e.g. consumers, employees, companies and operators) with reference to value creation. Design/methodology/approach This paper is a conceptual, critical reflection paper. Thus, the study reflects the authors’ assessment and reflection of the current digitalization efforts in the HT industry with a particular interest in value creation. Findings The study suggests that digitalization is still in its infancy state in terms of adoption and value creation in the HT industry. Yet, there are various opportunities for all stakeholders to benefit from existing and emerging digitalization applications. Practical implications This study can be used by industry professionals and scholarly researchers as a reflection of past and current digitalization efforts in the HT industry. Moreover, the study offers directions regarding the future digitalization movement in the HT industry and how such a movement might create important value propositions for various stakeholders. Originality/value The study is uniquely positioned as a critical reflection paper on the digitalization effort of the HT industry and offers new practical insights regarding how digitalization could create value for industry stakeholders as it finds more application areas. In this regard, it differs from prior review studies that focused solely on the use of new and emerging technologies in HT operations.
... The microlending landscape benefits immensely from a clear set of incentives provided by the blockchain. Instead of being managed by a central authority, online systems are delegated to the constituent elements, making corruption much more costly (Pilkington et al. 2017). Furthermore, blockchain verification only necessitates the signature of other network users on a transaction. ...
... This is no doubt of strategic value to many tourism-dependent SIDS. Certainly, this move will enable many travellers now financially challenged by the Pandemic, to be able to use cryptocurrencies for their vacation to book hotels; access attractions, and participate in all the training activities normally associated with destination experiences (Pilkington et al., 2017). Unarguably, the applications appear to be endless as this could also be extended to restaurants, spas, and other amenities of interest to travellers. ...
... The blockchain-structured occupational therapy uses the pointto-point transmission mode and utilizes the characteristics of decentralization to speed up the turnover of funds and commodities and strengthen the resource allocation chain. The mechanism of this information symmetry lies in the fact that scientists use mathematical principles to establish machine credit in the system, which fundamentally subverts the information asymmetry drawbacks of the traditional centralized and centralized management model [15]. This information asymmetry of any other subject other than the transaction subject is the source of various irregular transactions. ...
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In order to explore the public administration and resource allocation based on blockchain and structured occupational therapy, this paper takes the public affairs in the prevention and control of the Corona Virus Disease 2019 (COVID-19) epidemic as an example to conduct research. On the basis of summarizing and analyzing the previous published literatures, this study expounded the research status and significance of public administration and resource allocations; elaborated the development background, current status and future challenges of blockchain, and structured occupational therapy; introduced the methods and principles of data quality collaboration model and multiparty collaboration standard management; analyzed the case background of public administration and resource allocation in the prevention and control of the COVID-19 epidemic; discussed the public administration mechanism based on blockchain and structured occupational therapy; established a resource allocation method based on blockchain and structured occupational therapy; fathomed the role of the distributed ledger established by blockchain to increase the information symmetry of public administration activities; proposed a blockchain-established special machine trust for resource allocation; and finally, anatomized the data security sharing and access control mechanism based on blockchain and structured occupational therapy. The research results show that the public administration and resource allocation in this paper can effectively realize the data integration of the whole process and all departments and show the whole data and realize the traceability of the whole process. The blockchain revolutionizes the hierarchical leadership method of traditional resource allocation, shortens the distance between superiors and subordinates, makes information dissemination more fluent, and handles things more efficiently, making resource allocation ultimately form a flatter organization structure. In the original trust system of resource allocation, the blockchain and structured occupational therapy realizes the reconstruction of the trust system by preventing information tampering, using information encryption technology, and using information traceability technology. The results of this paper provide a reference for further research on the public administration and resource allocation based on blockchain and structured occupational therapy.
... This is no doubt of strategic value to many tourism-dependent SIDS. Certainly, this move will enable many travellers now financially challenged by the Pandemic, to be able to use cryptocurrencies for their vacation to book hotels; access attractions, and participate in all the training activities normally associated with destination experiences (Pilkington et al., 2017). Unarguably, the applications appear to be endless as this could also be extended to restaurants, spas, and other amenities of interest to travellers. ...
... Cryptocurrencies have become more prominent as the current COVID-19 landscape has propelled more and more countries accelerating digital commerce towards a cashless society (Klumov, 2021). The entry of cryptocurrencies to tourism and hospitality has also gained momentum, with emerging studies alluding to their roles in aiding emerging economies raise necessary finances and stimulate greater multiplier effects (Kwok and Koh 2019;Pilkington et al., 2017). In addition, Other studies have postulated that the rise of cryptocurrencies in tourism and hospitality is attributed to heightened levels of financial security, with several layers of authentication required by different stakeholders to conduct the transaction (Capar 2021; Nuryyev et al. 2021). ...
This research note explores the under-investigated assumption that cryptocurrencies are a panacea to stimulate regional tourism demand. Through the application of Rogers’ Diffusion of Innovation Theory, a case study was designed to examine the cryptocurrency effect on two adjacent towns of Agnes Water and 17 70 in Central Queensland, Australia. The findings revealed three major factors that led to merchant receptivity for adopting cryptocurrencies - First, a novelty effect perceived as a good strategy to induce consumer spend. Second, the low entry barriers for merchants adopting cryptocurrencies to conduct transactions. Third, cryptocurrencies incurred zero overhead costs. Nevertheless, the favorable attitudes of these merchants towards cryptocurrencies require a demand-side intention to use such tools during tourist visits to these regional destinations. Other regional tourism destinations will need to consider other ways of integrating such digital innovations to their landscapes.
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Dijital ekonomi hakkında bilgi vermek, Dijital ekonomi ve gastronomi ilişkisini açıklamak, Dijital ekonominin gastronomiye yönelik kullanım alanlarını örneklendirmek, Gastronomide dijitalleşmenin önemini vurgulamak, Dijital ekonomi ve gastronominin geleceği hakkında bilgi vermek.
Conference Paper
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این مقاله مروری به تشریح کاربرد های فناوری بلاکچین در صنعت گردشگری می پردازد
Purpose The purpose of this study is to empirically evaluate the potential of the blockchain technology in tourism. The blockchain technology (BCT) holds potential to contribute significantly to tourism policy and practice. Academic interest in the BCT is rapidly growing with studies looking at the opportunities and challenges of its application. The shortcoming of research on the BCT in tourism has however been in its conceptual nature. The lack of empirical investigations hinders an understanding of how the BCT can be more broadly adopted in tourism, especially from the viewpoint of minimizing its risks. Design/methodology/approach The initial screening of the opportunities, challenges and risks is undertaken via a systematic literature review. The Delphi study is subsequently applied to empirically confirm what opportunities, challenges and risks can be attributed to the BCT use in tourism. Twelve industry and academic experts have contributed to the Delphi study. Findings The risks identified have been categorized as societal, technical, financial and legal. Propositions have been made on how these risks can, at least partially, be overcome. Originality/value To the best of the authors’ knowledge, it is the first known attempt to study the BCT from the perspective of academic and industry experts. This research is also one of the first to evaluate the risks of the BCT use in tourism. Most risks are identified as not critical and can be addressed as the BCT develops.
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The know-your-customer (KYC) due diligence process is outdated and generates costs of up to USD 500 million per year per bank. We propose a new system, based on distributed ledger technology (DLT), for reducing the costs of the core KYC verification process for financial institutions and for improving the customer experience. In the proposed system, the core KYC verification process is only conducted once for each customer, regardless of the number of financial institutions with which the customer intends to work. Thanks to DLT, the result of the core KYC verification can be securely shared by the customers with all the financial institutions that they intend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, customer data ownership, and transparency throughout the process of onboarding a customer.
Technical Report
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We give an overview of the scripting languages used in existing cryptocurren-cies, and in particular we review in some detail the scripting languages of Bitcoin, Nxt and Ethereum, in the context of a high-level overview of Distributed Ledger Technology and cryptocurrencies. We survey different approaches, and give an overview of critiques of existing languages. We also cover technologies that might be used to underpin extensions and innovations in scripting and contracts, including technologies for verification, such as zero knowledge proofs, proof-carrying code and static analysis, as well as approaches to making systems more efficient, e.g. Merkelized Abstract Syntax Trees.
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This paper presents the Multidimensional Poverty Index (MPI), a measure of acute poverty, understood as a person’s inability to meet simultaneously minimum international standards in indicators related to the millennium Development Goals and to core functionings. It constitutes the first implementation of the direct method to measure poverty for over 100 developing countries. After presenting the MPI, we analyse its scope and robustness, with a focus on the data challenges and methodological issues involved in constructing and estimating it. A range of robustness tests indicate that the MPI offers a reliable framework that can complement global income poverty estimates.
We investigate the biggest banking scandal ever in the History of the Republic of Moldova, based on the Kroll Report published in 2015, which focuses on three commercial banks that account for a third of the country's banking sector. Firstly, we present a brief synopsis of the 2015 Moldovan banking scandal. Secondly, we investigate the under-explored issues of corporate governance structures of both lenders and borrowers as well as the impact of transnational financial engineering practices in the context of endogenous money theory. Finally, we sketch out the implications of the 2015 Moldovan banking scandal for post-Keynesian monetary theory by, on the one hand, rehabilitating the concept of endogenous finance, and on the other hand, by demonstrating how the scandal is best conceptualised by elaborating a new framework focusing on the interface between transnational financial elites and the shadow banking system in transition economies.
La versione italiana di questo documento e disponibile al seguente link: core technology of Bitcoin, the blockchain, has recently emerged as a disruptive innovation with a wide range of applications, potentially able to redesign our interactions in business, politics and society at large. Although scholarly interest in this subject is growing, a comprehensive analysis of blockchain applications from a political perspective is severely lacking to date. This paper aims to fill this gap and it discusses the key points of blockchain-based decentralized governance, which challenges to varying degrees the traditional mechanisms of State authority, citizenship and democracy. In particular, the paper verifies to which extent blockchain and decentralized platforms can be considered as hyper-political tools, capable to manage social interactions on large scale and dismiss traditional central authorities. The analysis highlights risks related to a dominant position of private powers in distributed ecosystems, which may lead to a general disempowerment of citizens and to the emergence of a stateless global society. While technological utopians urge the demise of any centralized institution, this paper advocates the role of the State as a necessary central point of coordination in society, showing that decentralization through algorithm-based consensus is an organizational theory, not a stand-alone political theory.
Handbook of Research on Digital Transformations edited by F. Xavier Olleros, and Majlinda ZheguA paraitre
Soviet commentators traditionally have associated political corruption with public officials in decadent capitalist systems. Such commentators generally attribute instances of corruption among Soviet officials today to "vestiges of the past" that will wither away as the socialist system becomes ever more firmly established. Yet an examination of the actual behavior of Soviet public officials undermines this hypothesis, and demonstrtaes, in the words of one western observer, that "corruption may be as integral to Soviet life as vodka and kasha." The opportunities and incentives for corruption within and among political systems help explain why some public officials engage in corruption while others do not and why some political systems seem to have more corruption than do others. An analysis of such factors in the U.S.S.R. suggests that, despite Soviet claims, they are similar in kind, if not degree, to those found in many other societies.