Blockchain: why should we care?

ECOSpediaWhat is

When we talk about the blockchain, we tend to associate it with finance, or cryptocurrency, to be exact. Surely, in the very beginning the blockchain technology was used as the general ledger for all Bitcoin-related operations, but the developers are currently searching the ways of its implementation in other spheres.

A brief crash course. The blockchain is a distributed ledger for data storage without any core unit. All the network participants have equal rights, without any privileges. The main idea is that the database is stored on all the computers within the network. Each block is encrypted basing upon the data in the previous one. Any attempt of hacking one of the blocks will corrupt the chain and will be terminated before any data are affected. That’s why the blockchain has managed to resolve one of the main issues in financial operations and data storage – the trust issue.

Identity Verification and Private Information Storage

Just imagine that you don’t have this bunch of documents anymore, you don’t need to carry passport, driving licence, medical insurance card or any other documents with you – all this information will be secured by a cryptographic algorithm and stored on your smartphone.

In 2007 the servers belonging to the government, mass media and banking organizations of Estonia were attacked by hackers. As a result the operations of some of the companies were paralyzed for approximately two weeks. For that reason Estonia has become one of the first countries which applied the blockchain in public services. The technology is currently used for data protection in healthcare, instant and secure funds transfer, on stock exchange and notarial activities.

Financial Operations

Currently The Government of the Republic of Belarus is actively developing the legal framework for the blockchain introduction into the banking system. It is expected that smart contracts will be used to ensure security and validity of the financial transactions and agreements.

Smart Contract is a program allowing to minimize the risks of human error and frauds. For example, when a cargo arrives at a destination the amount due is automatically transferred to the consignor.

The regulation of financial operations with cryptocurrency involved is way more tricky. According to the legislation of The Republic of Belarus cryptocurrency doesn’t equal to any kind of assets, which means that The National Bank and any other government bodies doesn’t control their circulation. But the necessity of such regulation is evident: it is crucial that we eliminate fraudulent schemes with cryptocurrency.

Government technologies, e-document flow, register of properties, business registration, elections

The possibility of the blockchain implementation as a basis for government e-document flow is currently considered in many countries, including CIS-countries.

In 2016 BitFury, The National Agency of Public Registry of Georgia and Hernando de Soto, a world-famous peruvian economist, announced the launch of pilot project for property registration in Georgia based upon the blockchain technology. In early 2017 the implementation of the project was started. For BitFury, established in 2010 and successfully operating since that time, this is the first project outside mining and mining equipment production markets.

The government of the Republic of Armenia has different vision of blockchain implementation prospects. Currently the officials discuss the initiative of creating an IT-hub for startups developing products based upon the distributed ledger technology, artificial intelligence, machine and deep learning. It is also planned to launch an acceleration program for innovative startups from all over the world and set up a data-center for their needs. This initiative will help to raise funds and form the basis for human capital assets growth.

‘This initiative implementation will aid the development of high-tech projects in the country and will give Armenia an opportunity to become on of the technological leaders on the global stage, raise funds and create employment. No doubt, it will give an additional impulse to the country’s economy’, stated the Minister of Economic Development and Investment of the Republic of Armenia Suren Karayan.

As a part of the initiative the first Armenian Blockchain Forum was held on April 22nd, 2018. The event convened more than 30 speakers from 20 countries and the representatives of investment funds with an overall capital amounting to $10 billion. The experts discussed the strategic development of the blockchain industry in Armenia, presented the case studies of how innovative technologies contribute to setting up sustainable economies in small countries and brought to light the breakthrough opportunities they bring.

The further educational initiatives include a series of meetups, workshops, hackathons and many other events to increase the level of awareness in the fields of hi-tech and innovations.