The Author, Abhishekh Sharma is a 2nd Year, BCom.LLB student at Chandigarh University.
Introduction
Since the arrival of Univac-1 which was manufactured by Remington Rand who used around 5,200 (Five Thousand Two Hundred) vacuum tube that weighed around 14,000 kgs (Fourteen Thousand) and priced at $1 million each. Yes, this was the first invention of commercial computer that attracted widespread public attention. TCP/IP protocols which is the core technological layers of the Internet technologies allow the computer to communicate and many technologies thereafter allows smooth functioning of the web activities. The Same revolution which happened in the 70s has been brought by the Blockchain technology that has the capacity to not just transform India but everyone around the world. Blockchain can simple be defined as a collection of records linked with each other, strongly resistant to alteration and protected using Cryptography. India will be one of the leading countries in the world in innovation, education and adoption of this beautiful technology in both public and private sectors by the end of 2025. The mission is to integrate this technology into the existing Indian ecosystem.
The Blockchain technology was in full glare as a priority topic at the World Economic Forum, Davos in 2018 and 2019. Around 10% of the world’s global GDP will be exchanged on this technology by the end of 2027. Leading technology firms has more than $200 million investment and over 1,000 staff in the blockchain powered Internet of Things. It is more likely that the healthcare, education, banking and insurance, other financial services will be the front runners in getting hold of this technology.
Why is Blockchain preferred over other technologies?
A lot has already been discussed about the ability of blockchain technology to increase privacy of users, enhance trust and restricts the hackers by removing friction within a business. Blockchain makes it clear who puts the data onto the ledger and when. The special things are that once the data has been added in this ledger or block, it is not possible to change the data by any node in the network. The main thing is that once the data has been added, one can trace the data and the entire history of that record. Blockchain technology uses complex algorithms which cannot be hacked and is the safest option on the planet.
Blockchain Initiatives in India
- Some states have already started coming up with the tender notices for blockchain based land records especially for farmers. Andhra Pradesh was the first state to implement this technology.
- Tech Mahindra along with other technological giants Microsoft and IBM has implemented a DLT solution which shall be used to register and track customer complaints about the UCC. In India all the telecom companies and TRAI are sharing the data of the preferences recorded & Violations as per complaints by the customers.
- Trade finance and letter of credit applications have stared growing
- APCRDA is implementing DLT for recording land registration. This s being implemented by ZEBI, a Hyderabad based company
- Zebi is implementing blockchain based certificate management for 35 universities/ colleges in Karnataka & Andhra Pradesh
- Telangana is Government is exploring blockchain for Motor Vehicle Department applications to track the vehicle lifecycle from manufacturing to end of warranty period & is evaluating.
Challenges in Adoption of Blockchain Technology
Bitcoin arrived in 2009 and is regarded as the ‘biggest disruptive force’ after the World Wide Web and Internet. In the initial stage, Bitcoin was the first pathbreaking innovation which was built on blockchain technology to create digital money which can store and transfer value just like any other fiat currency. Current technology giants such as Google, IBM, Microsoft, Amazon and Facebook are looking forward to use this technology but the adoption of this technology has not been adopted on a large scale by the government services applications. It is important to note that blockchain technology is built on the top of the internet technology. The internet technologies such as e-commerce and other related business took almost more than 3 decades before them became successful.
Even a new technology which comes into picture has to go through the trial and error phase where enterprises and government come together and address implementation challenges. The technical scalability is also one of the issues associated with the blockchain networks. There are no standards that allow different networks to talk to each other. Moreover, the speed at which blockchain works has cost complications which impacts the usefulness and effectiveness of these systems.
Legal Challenges in Adoption in India
RBI hasn’t really supported the idea of cryptocurrency in India. If we carefully look at the Information Technology Act, 2000 provides that, “nothing in the act apply to transactions involving immovable property, wills, and negotiable instruments. Privacy under section 43A of the IT Act, 2000 currently do not provide adequate safeguards for blockchain. Blockchain automatically stores the data across all nodes on a network, the technology may hit with localization requirements. The Draft Personal Data Protection Bill 2008 allows the citizens of the country to modify and amend their personal data. This will serve as a point of friction with this technology that doesn’t allow to change the data once uploaded. Blockchain is currently in its infancy, as a result of which community needs time and resources to fully adopt this technology. World Economic Forum in 2017 released a paper which showed that bitcoin’s network energy consumption was similar to the nearly 700 average American homes. That’s mor Ethan 4.409 billion kilowatt- hours. This is one of the major challenges in a country like India.
Role of Government
Currently there is a need for greater vision and leadership which is needed regarding the adoption of this new technology to make India a global leader in the world economy. There is a greater need regarding the development of technology for a digital blockchain economy.
The government needs to closely collaborate with all levels of management and clearly communicate the hidden potential of this technology. Industries needs to come up and demonstrate real production examples of blockchain technology deployment across various segments of the economy. More recently need to be allocated towards this blockchain technology, much in the way US government funded research into the internet in the 1970s and 1980s. The support from the government is crucial.
Conclusion
Large Technology workforce that has been the knowledge backbone of the world can quickly reskill for leadership. The strong identity management system across the country in the form of Aadhar and UIDAI. The government should allow for competing technologies and platforms to emerge and to the extent possible not hard-wire its strategy for policies or programs to any specific technology. The policy and framework at the national level should be encouraged to promote the adoption of this technology. This shall also promote private sector to invest into this technology. The private sector in US was the leader in developing internet in the 1900s and 2000s.
New policies and framework should be seen to reduce known risks. And not future perceived risks. The important thing to note is that India’s ability to attain global leadership role in blockchain technology will happen on investment in research and human capital. The government should support this technology in various public departments. Central Bank Digital INR (CBDR) can be a good concept to facilitate innovation. We look forward to adopt this technology in India to immensely benefit from blockchain technology.
