Introduction:
Blockchain is an innovative distributed ledger technology that was first introduced in the design and development of cryptocurrency, Bitcoin in 2009. Any tangible or intangible value can be represented and tracked on a Blockchain network that provides transparency, increases processing speed and reduces costs. Globally and nationally, various efforts are being made to implement Blockchain-based applications by carrying out Proof-of-concepts and pilot implementations. The National Blockchain Strategy was released in December 2021 by the Ministry of Electronics and Information Technology. This strategy document lays out the overall vision towards development and implementation strategies for a national blockchain platform covering the technology stack, legal and regulatory frameworks, standards development, collaboration, human resources development and potential use cases.
Blockchains:
- They are a new data structure that is secure, cryptographically based and distributed over a network. The technology supports cryptocurrencies such as Bitcoin and the transfer of data or digital assets.
- Led by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorization of transactions.
How does it work?
- The technology allows transactions to be anonymous and secure at the same time, peer-to-peer, instant and frictionless.
- It does this by distributing trust from powerful intermediaries to a vast global network, which through mass collaboration, smart code and cryptography, enables a tamper-proof public ledger of every transaction that has ever occurred on the network.
- A block is the “current” part of a blockchain that records some or all of the most recent transactions and, when completed, enters the blockchain as a permanent database.
- Each time a block is completed, a new block is generated. Blocks are linked together (like a chain) in proper linear, chronological order with each block containing a hash of the previous block.
The Potential of Blockchain Technology to Transform Public Sector Work and Citizen Service Delivery
- Governments around the world have established pilot projects to integrate blockchain technology into their operations. In developed countries, blockchain will help streamline public functions to make them more efficient.
- For example, the Illinois government is conducting five focused blockchain pilots across multiple government departments. The range of functions envisaged for the technology include record keeping (for properties and births) and an energy credit marketplace to track renewable energy credits.
- In emerging economies, blockchain has the potential to help governments achieve policy goals by skipping intermediate layers of technology.
- For example, it can help in social welfare goals by eliminating the need for credit cards or bank accounts to disburse funds to the unbanked.
- Building trust with citizens: According to the Pew Research Center, only 18 percent of Americans say they can trust the government to do the right thing most of the time. The reasons for this mistrust are many and complex, but there is potential for blockchain to contribute to a reversal of this trend.
- Protecting sensitive data: Blockchain technologies have the potential to revolutionize the way we manage online identity and access to the internet; this R&D project will help bring this potential closer to reality.
- Reduce costs and improve efficiency: Blockchain solutions can reduce redundancy, streamline processes, reduce the audit burden, increase security and ensure data integrity.
- To further illustrate how blockchain solutions can increase efficiency, consider the federal government’s ongoing challenge of reconciling internal transfers.
- A payment and accounting system that used blockchain could provide a permanent audit trail and facilitate faster reconciliation.
Regulation in India:
The current debate in India has unfortunately focused too heavily on trading and speculation, viewing cryptocurrencies as an investment tool, rather than understanding the potential of core blockchain technology and cryptocurrencies’ fundamental role as an incentive mechanism to secure decentralized transactions.
- Current Cyber Laws in India touching almost all aspects of transactions and activities involving internet, www and cyberspace (IT Act 2000 and amended in 2008, Section 463 of IPC and Section 420). But in today’s techno-savvy environment, the world is becoming more and more digitally sophisticated, and so are the crimes. India’s cyber laws are lacking in this regard.
- There are sufficient global examples of countries that have taken nuanced and careful steps to regulate technology, and that focus on stopping illegal activity without harming innovation.
Conclusion:
- It is the age of technological revolution where every technology is replaced by another better technology. Biotechnology and genetics in medicine, robotics and artificial intelligence and e-commerce in finance have dramatically changed conventional ways of working.
- The financial sector has been at the forefront of digitalisation. Blockchain can help reduce the need for intermediaries and increase more peer-to-peer contacts in the future.
- Steps taken by the Government of India like demonetisation, implementation of GST and e-way bill, BHIM app and RuPay card are aimed at bringing about a cashless society and transparency in governance.
