The pursuit of value: Using blockchain to help create better public services

It is a common belief that most decentralized use cases require blockchain technology, not crypto. It is important to note that by including crypto solutions, blockchain usage can be amplified several times. These assets have another critical role in stimulating long-term governance participation in public blockchains.

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The new block (crypto) chain technologies are expected to create a wave of new use cases. If incorporated into multiple operations such as digital governance, MSME financing and public services such as food distribution, sanitation, grid stability, power transmission, education, jobs, etc., by government agencies, it can remarkably improve public services, make services efficient and transparent.A recent example of a use case is Firozabad Police using blockchain technology to register police complaints to support them in their investigation.

A well-known use case, for example, is the tokenization of property registries for land and real estate. The self-executing smart contracts enabled by blockchain can be an excellent substitute for traditional legal contracts, since the former process is very economical and efficient. The Swedish Land Registry has used such a blockchain-based solution for property transfers. Removing notarization through smart contracts has helped them reduce transaction time by more than 90 percent. Smart contracts are publicly available and secure.

Closer to home, several state governments in India are also looking to enable land records on blockchains. Interestingly, one of the most popular solutions comes from NFT or Non-Fungible Tokens, a subset of virtual assets based on token-based blockchains. Andhra Pradesh introduced a blockchain system to record land holdings.

Multiple stakeholders, including governments, companies and users, can benefit from token-based digital identities so that the user can have self-storage of the identification symbols in a Self Sovereign Identity (SSI)-based approach. This enables a powerful combination where users are responsible for their identities, and regulators can set the rules and enforce control in the environments.

The Digital Life Certificate for Pensioners Scheme of the Government of India, known as Jeevan Pramaan, can address the logistical issues faced during the self-identification of pensioners. By digitizing the entire process of securing the life certificate, it can be done more seamlessly and efficiently. Tokenization of the digital life certificate combined with use of Zero-Knowledge proof and UIDAI based Oracle services can ensure no hurdles in seamless transfer of pension amount to the pensioner.

Tokenization is used by RBI to enable secure credit card payments. Similarly, tokenization is also used with Crypto Wallets to verify digital credentials or identities. For example, MIT created Blockcerts, an open standard on which apps can be built to issue academic certificates and other documents via blockchain. Development work continues to make Blockcerts work across public chains and easily scale for private chains.

The Maltese government also used this standard to implement a system where the Ministry of Education and Employment can verify any academic credentials using token-based blockchains. Closer to home, Etapalli, a subdivision of Gadchiroli district in Maharashtra, will issue caste certificates to its 65,000 residents via LegitDoc – a polygon public blockchain-based platform.

The government can vastly improve transparency by tokenizing the supply and disbursement of the Public Distribution System (PDS) on the blockchain. Token-based systems can be created, so that everyone can access their share of rations, regardless of socio-economic background, without mobile devices and internet access. Secure paper wallets can enable this, which PDS recipients can use to sign the transactions every time they use a PD service. If encouraged, this system can ensure final distribution along with end-to-end and real-time tracking of payouts.

Another area where Block(crypto)chain can be useful is Agri-Commodity Financing. For example, Bru Finance is working with the Polygon blockchain to provide farmers with a line of credit based on the tokenization of real assets such as surplus crops stored in warehouses.

Ongoing research projects are looking to fractionalize shares listed on stock markets in the form of tokens. Since the tokens will be part of the blockchain network, the tracking of share issuances and transfers can be performed securely on a distributed ledger. Furthermore, if shares are registered on a distributed ledger, investors and issuers will be able to interact directly, 24/7, with instant settlement and guaranteed finality.

Allowing decentralized networks to flourish alongside centralized networks can do wonders. At the basic level, to create and adopt public goods or centralized services, the central authority must build, maintain and extend the infrastructure requirements of any application. With Web3, this entire layer of infra requirements can be on blockchains instead of central servers.

A future-back approach must be adopted to harness the potential of revolutionary blockchains, the success of which will depend on our ability to harness and deploy it properly. India has always been at the forefront of technology adoption. This time there will be no exception!

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The reader is further informed that crypto products and NFTs are unregulated and can be very risky. There can be no regulatory recourse for losses from such transactions.

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