Time for National Blockchain Strategy?

Blockchain is a disruptive technology which is strongly influencing the uprise of new business models, while undermining old ways and habits and bringing more convenience and national safety to people. Put simply,?blockchain?is a growing list of?records, called blocks,?with a?timestamp,?to state that?the transaction data existed.?Respective blocks contain information about each other forming a?chain, with each additional block reinforcing the ones before it.?This makes?blockchains resistant to modification because once recorded, data in any given block cannot be altered retroactively without altering all subsequent blocks.

The current rate of data creation has rendered key business and government decisions to depend heavily on the correctness and integrity of information. This need for correctness and integrity of information has given blockchain its place as the new darling of the technology world, with people harnessing it for everything from banking to food logistics.

Devised in 2011, very strong predictions were made regarding the strategic fit between blockchain and economic development. For many reasons, blockchain saw its first real application in virtual currencies, both centralised and decentralised. Economic forces drew further relevance of this already-hyped technology towards the financial sector.?

Not surprising that many decentralized currencies such as Bitcoin, Litecoin, and?Ethereum are based on blockchain. Though there has been plenty of speculation on whether cryptocurrencies are a bubble ‘ready-to-pop’ or something more significant and likely to pass the test of time, some countries still made important progress. With Ecuador launching its digital currency way back in 2015, the direction was set, and followed later by China, Senegal, Singapore, and Tunisia. Now, Estonia, Japan, Palestine, Russia, and Sweden are also looking to launch their own national cryptocurrencies[1].?

The volatility and adoption of virtual currencies attracted popularity, momentum and curiosity which cumulatively gave rise to the misconception that blockchain is meant mainly for Fintech. This misconception created a lost opportunity in the business value that companies, governments and citizens could have derived from this technology. In fact, blockchain has been conceived to work across all sectors of the economy.

The food sector is set to benefit widely from blockchain applications giving consumers the ability to track the authenticity of products. Certifiedorigins.com uses Oracle blockchain to track shipments of olive oil from bottling facilities in Italy to the port of arrival in the US[2].?This establishes the authenticity of the olive oil found on supermarket shelves. Luxury brands like LVMH, Prada and Cartier are joining forces to create the Aura Blockchain Consortium which will allow consumers to authenticate their goods. This will fight counterfeits while protecting employment, consumers and the production ecosystem by way of the information it will provide on product history, materials used and craftmanship[3].?

The adoption of blockchain in the public services arena is also worth a mention. In fact, the government of Estonia is using blockchain technology in public services through its common application interface called?X-Road?which acts as a decentralized digital record or let’s call it ‘ledger’ that contains information about all residents and citizens. Having a distributed ledger is very attractive to authorities that must maintain large data volumes.?

Currently, most government agencies in developing countries have disparate databases, demanding agencies to constantly request information about residents from each other. A preferred arrangement would be to access information as if it were located at one central place - this would bring remarkable convenience to citizens who could then start benefiting from end-to-end e-service delivery.?

Another simple example would be the registration of real estate property and all transactions to ensure proper and reliable tracking of transactions and ownership. Further, the registration of movable property such as vehicles on blockchain networks, could prevent any fraudulent modification of particulars of vehicles, for instance the engine rating, that may be intended to evade government taxation.

A very promising application for blockchain resides in execution of contracts, now commonly referred to as smart contracts which bring accuracy, transparency, security, and speed. A?smart contract consists of?a?set of agreement milestones, stored in a blockchain,?intended to automatically execute?according to?certain?terms. Simplistically, smart contracts follow the pattern “If this…then that….”. Meaning that if this term is met, then that payment can be released.?

The objectives are to?reduce?the?need?for?trusted intermediators,?and?arbitrators?together with?associatedenforcement costs. Agreements and contract milestones being stored in a blockchain imply reduced occurrence of?fraud?and?financial?losses,?and of course lowered possibility of litigation.?One of the key benefits lies in smart contracts being immutable; in other words, once contract terms have been agreed upon, they cannot be fraudulently modified.?According to Gartner, in 2023, organizations using?blockchain?Smart contracts will increase overall?data quality?by 50%[4].

Cloud adoption in Africa is on the rise, and this trend is enabling a faster adoption of blockchain technology. There are two closely related facts: 90% of world data was created in the last 2 years, according to the CIO of Switch, one of the world’s largest data centre operators and Gartner claims that by 2022, more than a billion people will have some data about them stored on a blockchain. These two facts could certainly constitute key ingredients to consider for organisations and governments while devising strategies around customer-centricity or citizen-centricity. The benefits of service accuracy, security and integrity will foster enhanced transparency, speed and reliability in service delivery across various sectors; a definite asset to attract FDI for an inspiring cyber state.

So, is it not time for a National Blockchain Strategy?

[1]?https://www.fxempire.com/education/article/the-next-cryptocurrency-evolution-countries-issue-their-own-digital-currency-443966

[2]?https://www.oracle.com/it/customers/certified-origins-1-blockchain-story.html

[3]?https://economictimes.indiatimes.com/magazines/panache/no-more-fake-copies-luxury-brands-to-use-blockchain-that-will-allow-consumers-to-verify-products/articleshow/82179049.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

[4]?https://www.gartner.com/en/newsroom/press-releases/2020-01-30-gartner-predicts-that-organizations-using-blockchain-