Streamlining citizen services delivery using blockchain | The Daily Star
12:00 AM, October 12, 2017 / LAST MODIFIED: 12:00 AM, October 12, 2017

Streamlining citizen services delivery using blockchain

In recent years, there has been a lot of discussion around the advantages of blockchain. Along with the financial services industry, other industries are also expected to benefit from its adoption.

But what exactly is blockchain? By definition, it is a single, shared, immutable write-only ledger of transactions that is updated when multiple, decentralised actors achieve consensus on the validity of a participant's new entries. Blockchain is not regulated by a central authority, making it the single, self-sustaining source of truth and thus removing the possibilities of bottlenecks in overall process flows. This can bring significant transformation opportunities for citizen services delivery in Bangladesh.

Blockchain combines four different elements that define its way of functioning: participating nodes, unavailability of transaction deletion feature, consensus ledger, and strong encryption technique. It offers many advantages, some of which include decentralised systems, automated audit trails, consensus ledgers, robust cryptographic algorithms and low risk of data duplicity.

This technology allows participating nodes to interact and transact with each other without referring to a central system. This eliminates the need for building a central transaction processing system with overheads in order to keep blockchain available at all times.

Blockchain technology does not permit the deletion of any transaction; it only allows the appending of the next set of activities into the created transaction. As a result, an entire set of activities can be found in a particular blockchain transaction, even after the expiry of the same. This ensures non-repudiation of any transaction in the system.

The technology builds a shared ledger using a distributed database system called a 'consensus ledger'. The consensus ledger is managed by a network of independent validation servers by using an accepted consensus process. This helps in building proof of work.

Blockchain offers strong encryption of data even while it is being exchanged between participating nodes. The technology also keeps decentralised databases encrypted, thereby securing data. Altering a transaction is prohibitively expensive since data gets stored in multiple participating nodes within the network.

The risk of creating duplicate data is also mitigated through distributed implementation. Each blockchain is assigned a unique chain name and chain ID. Since the chain name is distributed across participating nodes, the probability of having multiple records with identical chain names is miniscule.

With constant advancements in this technology, coupled with its low cost of transaction processing, several opportunities are arising to leverage it for serving citizens. Government agencies in many countries are considering building citizen services of the future using blockchain. As an emerging nation, relevant agencies in Bangladesh can also start exploring opportunities and identifying the most suitable cases for blockchain adoption. The relevant areas of blockchain technology adoption would be transferring ownership, issuing certificates, delivering financial benefits and managing financial transactions.

The ownership of any registrable asset can be implemented using blockchain. Typical examples of assets are land, houses and vehicles. Usually, respective government departments store their records in paper-based files across their offices in all districts.

While some of them may already have computer-based systems for storing records, conducting transactions might require multi-step offline processes. With the help of blockchain, the transfer of ownership can be recorded through the distributed systems of the respective departments. Other related transactions, including the mortgaging of assets for loans, can also be recorded through this system, thereby providing the most recent status of the asset. The system would also act as the reference database for affirming the present ownership of the asset and issuing titles.

Departments that are responsible for issuing birth certificates, education certificates, drivers' licences and death certificates to citizens can take advantage of blockchain. Further, recording the associated events on a blockchain technology-based platform will prevent errors and fraudulent data entries. It will also create an opportunity to connect municipal records that are spread across the country through a standardised technology. If this technology is implemented, it will become easy for other systems to access public-domain information for data verification purposes.

Using blockchain and digital identities of citizens will help in the efficient distribution of benefits. Since blockchain retains transactions once they are created, it would help in eliminating non-repudiation of benefits delivered up to the end beneficiary. This will provide an opportunity for effective tracking and monitoring of all benefit distribution programmes undertaken by different departments, including public distribution system for food distribution, seed funding for technology start-up companies and scholarship programmes for students.

The different departments of the government of Bangladesh collectively stand to be the biggest buyers of goods and services from private businesses. Ministries in Bangladesh have been implementing nation-wide frameworks for the efficient procurement of goods and services for all of their departments. As the technology of the future, blockchain may help in implementing a cost-effective electronic platform to process payments and keep records of full transactions, similar to an enterprise-wide procure-to-pay process.

Blockchain promises numerous benefits. At the same time, there are some risks that adopters should be aware of. The technology is quite complex and is still emerging. Moreover, knowledge of requisite software and hardware is limited, thereby increasing the risks that come with its implementation. To address the risks of cyber attacks, there is a need to devise appropriate mitigation plans. However, a pragmatic approach towards new technology adoption will help in reaping the potential benefits of an efficient citizen services delivery platform using blockchain while mitigating the challenges.

Blockchain can have a positive and transformational impact in an emerging country like Bangladesh. Steps taken in this direction may turn out to be pioneering and set an example for the rest of the world.


The writer is a partner at PwC. The views expressed here are personal.

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