Blockchain technology is being used in a growing number of applications by developing countries like India, Kenya, and other East African nations. It promises a peer-to-peer secure mechanism to verify the information. Blockchain is being used in a variety of areas, including banking, financial services, supply chain management, agriculture, and land titling.
Many laws in developed and developing countries have not kept up with digital advances and continue to require paper-based documentation. This prevents participants from fully taking advantage of the technology. Although the invention of the blockchain has been a decade ago, the technology is still being developed and tested.
A blockchain is basically a growing number of “blocks” that record transactions in a decentralized ledger. These blocks form a “chain”, which can be used to create a peer-to–peer network. The network’s participants verify and validate each block, so there is no need to have a trusted entity such as an accountant or regulator to verify the information. Experts believe that the blockchain is secure and tamperproof because transactions can’t be altered once they have been verified by the network. This technology is expected to increase financial inclusion and speed up transactions.
It is crucial to remove misconceptions regarding the potential benefits of blockchain in order to manage expectations. Another myth is that blockchain is a fraud and it is over.
Bitcoin is a prominent application of blockchain technology, but it’s not the only one. There are far more potential applications.
Crypto is the first application of blockchain technology on a large scale.
India Embraces Blockchain
India is one of the most prominent emerging economies to embrace blockchain technology.
ConsenSys’ blockchain project for managing land ownership records in Chandigarh (the capital city of Punjab and Haryana state) has two main benefits. It allows the monitoring of all state-level financial services on one platform. Second, it prevents corruption once records have been entered. Thanks to this technology, it is not possible to bribe someone to alter the records. People had the ability to alter land records earlier by bribing someone, but that background checks are not a government responsibility. The buyer was responsible for performing background checks. However, there was no system or method to do so. ConsenSys is creating a project that allows you to track the history of land ownership over time and verify land titling registrations with background checks on who [the property] taxes were paid.
Mumbai and Visakhapatnam ports use blockchain to create tamper-proof methods to track and trace incoming shipments.
These systems can also ensure that shipping-related payments reach their intended recipients.
In many cases, blockchain is also showing visible social impact. India’s northeastern states of Assam, Sikkim, and Sikkim use it to help their tribal people obtain ownership titles to the lands the government promised them when they became independent in 1947. The tribals wanted to stop mineral mining and other industries from taking over these lands.
IBM-led projects using blockchain and artificial intelligence in India have helped improve the yield of Indian agriculture companies as well as helping them transition to the unified goods and services tax (GST), which was launched last year. The Research Lab at IBM has conducted three pilots in India with companies that deal with pest and disease prediction, yield prediction, and improving yield on India-specific crops, such as potato and sugarcane.
How Blockchain Is Bring Changes In Africa
IBM and Twiga Foods have partnered in Nairobi, Kenya. Twiga Foods is a business-to-business logistics platform that allows kiosks and food stalls to sell their products. IBM also extends micro-finance loans to vendors to help them purchase more inventory. IBM created a blockchain-enabled lending platform in order to solve the problem of determining the creditworthiness and creditworthiness for food vendors.
IBM used machine-learning algorithms to predict creditworthiness by analysing mobile purchase records. According to an IBM post, the blockchain was used to manage the entire lending process, from the application, through receiving offers, to acceptance of the terms, and repayment.
Sensors could be used to ensure pharmaceuticals are kept at the correct temperature in climate-controlled trucks. It is possible to ensure that the medicines are only logged in the blockchain supply chain, and paid for, if they are delivered on-time and under the correct conditions. This prevents poor products from reaching the market.
Blockchain Is Still Suffering From Trust Deficit
These examples of blockchain applications share a common thread. These are use cases that aim to overcome trust gaps. This is where there’s not enough trust in existing institutions or government agencies. Blockchain provides a way to bridge trust gaps by recording information on a shared ledger.
However, the trust factor in blockchain does have its limitations. The blockchain can report incorrectly entered information and will verify it immutably. However, it does not inherently verify its accuracy. It is an infrastructure to trust, but not an infrastructure for truth. Although there are many ways to create systems and processes around implementation that ensure accurate and truthful information, blockchain does not automatically do this.
Despite blockchain technology making inroads into developing nations like India, there are still significant obstacles to overcome. But, more than that, outdated laws and regulations are the greatest obstacles to unlocking blockchain’s full potential.
For example, Chandigarh’s state government did a wonderful job digitizing land ownership records. Some of these records can be traced back to 17th century. However, federal rules prohibit the posting of those records online. You will still need to visit the title registry office, meet three people, and then show the documents to them and get their signatures. This doesn’t allow for blockchain to be extremely efficient. It is not possible to use a self-sovereign identification (a blockchain-era innovation in online identity verification), an online payment method, or digital signatures for reference checking.
Many pieces of a process, such as a supply chain, for example, are not completely digitalized. Blockchain allows users to pinpoint the areas they need to digitize “non-blockchain” aspects of the process. IBM, for example, is helping Walmart to use blockchain to connect with its suppliers in order to meet food safety regulations. IBM created a simple app that allowed farmers to scan and send information about the products they shipped to Wal-Mart.
Quality of the user interface (user interface), as well as the UX (user experience), is often a key factor in the adoption rate of blockchain.
“Keep People Safe”
The government’s role is to “keep people safe”, and this maxim also applies to India. Clearing the way for innovation is important, but you also need to prevent people from being exploited in unethical ways and stopping bad actors from causing damage. This is the philosophy of government in the blockchain.
India’s legal system is extremely complicated. There are even more problems with that area [relating to] Blockchain. The majority of legal changes required for blockchain are also being made in the U.S. Most of the necessary changes are to make way for technology.
Every business should follow the rule of “Don’t use Blockchain when you don’t have to”. Blockchain technology is still in its infancy, so businesses that are considering it should be aware of this fact. It is essential to be agile in order to keep up with regulations. This approach reduces the likelihood of regulators pursuing the company for fees and fines.
Although it has been a decade since the Nakamoto whitepaper on blockchain was published, the technology has not developed at a steady pace. Many of the recent advances have been made in recent years. These networks will take time to scale up. There are still fundamental questions.