National Strategy on Blockchain: A Step in Right Direction and Timely Too

When a new technology develops and is understood for its potentials, many more emerge and new directions open up for researchers. Cryptography is one such area that developed more rapidly in recent times moving from closed military domain to open R&D when focus/need of security of information broadened from military/strategic applications alone to other not-so-strategic public as well as the private sector. With the development of various cryptographic concepts, Cryptographic Hash Functions were also proposed primarily for ascertaining the ‘integrity of information’ which have now become an integral part of many ‘protocols’ developed for storing and exchanging information in Networks. Hash Functions also provide an authentication mechanism to ensure the right entities are exchanging the information. Today, Cryptographic Hash functions have become so versatile a technology that these are being used in almost all financial transactions, banking, and all payment platforms including cryptocurrencies and other mobile apps.  

Cryptography and Hash Functions got yet another direction of research when Satoshi Nakamoto developed the concept of Crypto Currency - Bitcoin in 2009, which was visualized by the proposer as a universal currency, an alternative to physical currency, where trading could be done in digital form through Networks. But that required an alternative to physical ledgers and a way to keep records of transactions on electronic media securely without any need of a third party like banks or other financial Institutes, and that could be trusted. This need gave birth to Blockchain technology, which is the core of all the cryptocurrencies developed to date and has a lot of promises for many other applications.

Blockchain is a ‘Distributed Ledger’ technology, where ‘Data’ and ‘Transactions’ are stored in ‘blocks’ linked to the Blockchain that are secured against tampering using Cryptographic Hash Algorithms thus enabling a layer of trust and eliminating the need for a third party to validate the transactions. Blocks are linked with each other with proper security using Hash Functions.  The distributed ledger is stored at various nodes in the network and keeps on growing in size with each transaction. Each ‘block’ contains details of transactions, the hash of the previous block, timestamp, etc.

Though Blockchain developed as a tool for the management of Bitcoin and other cryptocurrencies, it has become globally famous and known to most people. It is growing fast and is being adopted in various sectors due to its characteristics such as tamper-evidence; consensus-based transaction validation and secured data storage in a distributed manner. Globally, many countries have assessed the value proposition of Blockchain technology in different domains.

Blockchain technology is an emerging area and growing very fast globally. It is predicted that by 2022, many new innovative companies will start using Blockchain technology and it would be adopted to many new diversified areas. For example, this kind of technology can bring significant changes in e-governance where several services have a societal impact.  

Various challenges need to be identified and addressed to adopt and effectively use them in different applications. There is a need to have a clear roadmap for the development and adoption of blockchain technology with short-term as well as long-term goals defined. Efforts are to be made in identifying the domains/applications and formulating the approach to use this technology as it may not apply to some particular domains. Prototype implementations and pilot deployments for specific applications have to be demonstrated. To effectively utilize the technology, there is a need for scaling up the deployments, exploring other domains, and developing it as a shared infrastructure for cross-domain applications.

With all such promising scope and applicability of Blockchain technology and its acceptability internationally as a hot current area of research and development with direct applications in various domains, it is high time to think and plan to foster R&D in this area involving multiple organizations in a collaborative and participative manner. A national-level strategy is required to create a National Blockchain infrastructure that can be used to experiment with solutions developed and latter used for providing services as well.

The ‘National Strategy on Blockchain’ as brought out by the Ministry of Electronics and Information Technology (MeitY), Government of India, is the move in the direction towards enabling trusted digital platforms creating blockchain framework for the development of applications based on this technology.

The document introduces Blockchain technology in simple terms, giving the international scene on its adaption, highlighting national initiatives, and projecting various directions in which developmental work needs to be done. A survey has been presented on the adaption of this technology in different countries and the predictions/forecast on the Global Blockchain Government Market. The document also describes SWOT analysis, the challenges ahead, the concerns – technological as well as regulatory - and the mechanisms for the creation of the National Blockchain Framework and implementation of the strategy in a coordinated manner. 
Introducing popular blockchain platforms and models, the ‘Strategy’ also includes a roadmap for Blockchain Technology Adoption in the country highlighting outcomes targeted for the next five years.

The document rightly gives illustrations, presents data and graphs to give a clear picture of its R&D Status globally and the future forecast in its development in various domains.

With a broad vision and mission as articulated in the ‘Strategy Document’ and its well-defined objectives, the challenge ahead is to implement it at the national level with strict monitoring/overseeing at appropriate levels. As the Government is quite serious and fully supportive, funding should not be a concern. It is the research and development community, startups, and academia that have to come forward and develop the technology with a commitment to exploiting the full potential of Blockchain technology.

Download the complete National Strategy on Blockchain by the Ministry of Electronics and Information Technology, Government of India.

Disclaimer:

The views expressed in this piece are of the author and do not necessarily represent the views of the Office of Principal Scientific Adviser to the Government of India.