Guest Post – Anujith
Union Government of India (GoI) is intensifying its already spectacular anti-corruption drive, which has so far seen impactful actions such as using technology to minimize subsidy leakage, and demonetization of high value currency notes that were aiding accumulation of black money. GoI is also investing a premium on technology that enables transparency, to prevent corruption from creeping into the system going forward, and to improve governance in general. GoI is seriously evaluating blockchain technology, with both objectives in mind.
National Institution for Transforming India, or NITI Aayog, the premier think tank of GoI, is building the largest blockchain network in India, called IndiaChain. IndiaChain will be linked to IndiaStack, which is essentially a set of APIs built around AADHAR, allowing diverse stakeholders such as governments, businesses and developers to utilize this digital infrastructure. For the uninitiated, AADHAR (literally meaning “Foundation”) is the unique identify issued to Indian residents, and is based on biometrics technology. It’s overseen by a statutory body called Unique Identification Authority of India (UIDAI). It’s the largest biometric identity system in the world, with 1.19 billion Indian people enrolled as of November 30th 2017.
Blockchain is a technology that ensures immutable record and complete audit trail, because a network of computers maintain a shared, verifiable, and permanent record of data. In this distributed database each node is considered as a ledger, and the entire database is maintained by all nodes. Changing or deleting an existing block is not possible, hence, to update a blockchain, a new block has to be created. To create a new block, each “Miner”, i.e. the combination of powerful software, specially designed hardware, and their user, has to provide proof of work (POW) for the last recorded block in the blockchain, using a massive number-crunching operation done at high speed. This is in an environment where many other miners are also doing the same, which makes it more difficult for any miner to provide POW. This makes updating blockchain very hard, i.e. only when a miner provides proof of very significant number-crunching work done, he/she gets to create a new block. Hacking blockchain is, hence, not economically viable. It’s also the underlying technology of Bitcoin and other cryptocurrencies like Ethereum. Incidentally, Reserve Bank of India (RBI), which controls monetary policy in India, does not yet recognize cryptocurrencies as valid tenders, and has issued multiple warning to Indian citizens that anyone trading in cryptocurrencies will need to do so at their own risk. Given this context, it is indeed heartening that GoI is viewing blockchain on its own merit, and not through the prism of Bitcoin.
Key use cases being considered by NITI Aayog, and current status of the project:
NITI Aayog is starting with low-hanging fruits such as e-signatures, in addition to exploring the following key use cases:
- Tracking of soil health card using blockchain, which will help in identifying fertilizer requirements for different patches of land, and in keeping track of the crop cycles on these farm lands. Since this will accurately prescribe the right kind of fertilizer for the patch of land in question, it will have significant positive impact on agriculture. Crops can be tracked once they reach the market.
- Managing of property records using blockchain can significantly aid disposal of pending land dispute cases, currently exceeding four million. Considering that overall there are several million cases pending disposal in the Indian courts, speedy disposal of land dispute cases will markedly help the overburdened judicial system. Once a land record is on blockchain, no forgery is possible, and a new buyer will receive every document concerning the land in an assured manner.
- Using blockchain, forgery in school and college leaving certificates can be stopped.
- Managing documents and evidence records related to a litigation is the other use case that will help the judiciary in speedy disposal of cases.
- Presently, AADHAR-based verification is done for every transaction using multi-factor authentication, and the individual needs to participate in the process every time. This can be done on blockchain without the individual having to participate each time.
NITI Aayog has already conducted a hackathon in November 2017 on blockchain technology, partnering with USA based blockchain start-up Proffer. The meetings between various stakeholders are moving fast, and conceptualising of the common infrastructure for this blockchain seems to have gained pace. Work on the necessary legal framework will be done after the Proofs of Concepts (PoC’s) are done. A senior official in NITI Aayog who spoke on condition of anonymity declined to give projection on timescale and budget, however, once implemented, IndiaChain could be the largest blockchain implementation in governance anywhere in the world.
