The Blockchain is a decentralized ledger of transactions across a peer-to-peer network. Blockchain technology is built on three main concepts:
Decentralized: There are many copies of the blockchain data and it is distributed geographically across the network, therefore there is no single point of failure or point of attack
Consensus: Transactions created between two parties require validation and verification by applying a mathematical algorithm to ensure its authenticity before being committed to the blockchain, no human interaction is required
Trustless: It does not require a central authority or a trusted third party to manage its network, it performs these transactions autonomously based on a transparent set of rules
Transactions in the blockchain can only be either READ or WRITTEN. Once a transaction is committed into the blockchain, it cannot be manipulated, edited, updated or changed in any way. The transaction exists in the blockchain network… forever. A blockchain implementation creates a ‘trusted environment’ since these transactions are transparent but anonymous. Which means that anyone in the blockchain network can view a transaction, but it is encrypted except to those individuals that are participating in the transaction.
A simple analogy of a blockchain transaction is akin to using a permanent marker to write an encrypted message on a whiteboard. Everybody will be able to view it but nobody is able to change or tamper with your message. However, only those with the keys to decrypt your message is able to make any sense of your writing.
These concepts work together to create immutable blocks of data that cannot be tampered with, making it an extremely secure technology platform.
The blockchain can be further enhanced by the use of ‘Smart Contracts’. A blockchain Smart Contract is a set of programmed code which uses blockchain identity encryption and digital signature technology to self-execute and self-enforce a set of instructions. A smart contract is deployed within the blockchain architecture itself, thus it inherits the properties of a blockchain transaction making it immutable and tamper proof.
Smart contracts within the blockchain are able to utilize the same set of data within the blockchain platform which enables for a high level of interoperability; the ability for different software systems to make share and make use of the same set of information.
The ‘Trust Machine’ is then an interoperable data platform that is built using blockchain technology to record, store or execute transactions that require security, authentication and traceability.
Everything in the blockchain begins with an identity. Participants in a blockchain network are called ‘assets’. These assets can be in the form of persons who participate in the network or objects such as documents. A blockchain identity is created using a private and public key cryptography and is extremely secure.
Each entity interacting with the Trust Machine can be allocated an identity in the blockchain. When they participate in a transaction, the record of their participation is committed to the blockchain forever, it cannot be edited or changed in anyway. The potential utilization of this feature can be applied to many areas industries and even governmental or civil services.
In a country’s civil service environment for example:
Example #1: Asset Security and Authentication
The Trust Machine can be used to encrypt assets (such as documents or agreements) between two or more parties without the use of passwords. These documents are encrypted by using the participants’ blockchain identities and accessing these assets require identity authentication.
Specific rules can be created to allow access to encrypted assets, such as approval workflows, audit logging and notifications to specific authorities.
This creates a secure asset management process because even the participants in the transaction cannot share their information with unrelated or unlawful parties without giving away their own identity.
Example #2: Civil servants and government employee asset declaration platform
In many countries, corruption and bribery is prevalent in it government and civil service.
A gift registration system can be setup to manage and track gifts or donations given to any government linked asset. This allows for greater transparency on the process but also opens up opportunities for the public to show appreciation to their civil service officers without crossing any lines or boundaries. These transactions are then recorded on the blockchain and accessible to the government. This would potentially reduce cases of bribery or fraud as true intentions of such donations or gifts are recorded in a proper process. If such donations were not recorded on the Trust Machine, it never happened or was done out of the books. At the very least, such disputes can be muted immediately.
Civil servants are also able to declare their assets from their inheritance, or investments so as to be totally transparent in their dealings. Being a civil servant should not hinder a person from being a savvy investor.
Example #3: Monetary aid
Blockchain technology is also the key technology that is powering the cryptocurrency movement. Currently worldwide, cryptocurrencies today have a market cap value of over USD $100 billion.
A different approach to cryptocurrency in this aspect would be to utilize the same concepts to create a financial token infrastructure for those in need of monetary aid.
The benefits of such an implementation would be great indeed as the government would be able to control many aspects of the whole financial token infrastructure deployment. Such as:
Distribution Control: This allows for monetary aid to be distributed to citizens who actually meet the legibility criteria. Smart contracts can be written and integrated to national identification records. Application approvals, identity and legibility conditions can be performed in almost real-time.
Approved vendor ecosystem: The government can control which vendors are able to accept these financial tokens in exchange for necessity products (such as food or clothing) or services (such as civil services or counseling). This could potentially reduce waste of government funds where such funds are given out to people who do not qualify or misuse it to buy unnecessary items. Vendors are able to either claim these tokens for cash directly from the government, or provide their services for free in return for a tax incentive.
Track monetary utilization: In the digital age, ‘information is king’. With the data recorded on the Trust Machine, it can be used by the government to trace expenditure and know the actual utilization of such funds. In the future, this information can be used to further tweak and improve such programs to provide more benefit to the rakyat in the long run.
Many countries are beginning to adopt blockchain technology to power a new generation of government services and are accelerating their adoption of this technology in to areas of focus which are beneficial to their own environments. The is a vast potential of adoption of blockchain technology and we should not be insular when thinking about it. It is a technology that if designed and implemented properly is able to change the way a lot of incumbent processes work.
The questions or comment I get the most when talking about blockchain technology is that is no different than any other normal database environment and adopting it into their systems is not worth the effort. Well, there are many ways to get from point A to point B. There is a time, place and opportunity for change. Henry Ford once said, if he has asked people what they wanted, they would have said… faster horses.
