The coronavirus has impacted countries, communities and individuals in countless ways, from school closures to health-care insurance issues, not to undermine loss of lives. As governments scramble to address these problems, different solutions based on blockchain technologies have sprung up to help deal with the worldwide crisis.
What is Blockchain Technology?
Simply, blockchain is decentralized, distributed and public digital ledger. Blockchains is a new type of network infrastructure (a way to organize how information and value move around on the internet) that create ‘trust’ in networks by introducing distributed verifiability, auditability, and consensus.
Blockchains create trust by acting as a shared database, distributed across vast peer-to-peer networks that have no single point of failure and no single source of truth, implying that no individual entity can own a blockchain network, and no single entity can modify the data stored on it unilaterally without the consensus of its peers.
New data can be added to a blockchain only through agreement between the various nodes of the network, a mechanism known as distributed consensus. Each node of the network keeps its own copy of blockchain’s data and keeps the other nodes honest – if one node changes its local copy, the other nodes can reject it.
imagine a blockchain as a ledger—because that’s essentially how most blockchains function. Each block of data represents some new transaction on the ledger, whether that means a contract or a sale or whatever else you’d use a ledger for.
Interestingly, blockchains leverage techniques from a field of mathematics and computer science, known as cryptography, to sign every transaction (e.g. the transfer of assets from one person to another) with a unique digital signature belonging to the user who initiated the transaction.
Blockchains and Cryptocurrency – How it all began?
A cryptocurrency is a digital or virtual currency that uses cryptography for security. The Bitcoin protocol is built on the blockchain.
- Bitcoin is an example of electronic or digital currency that works on a peer-to-peer basis.
- Bitcoins can be sent digitally to anyone who has a bitcoin address anywhere in the globe. One person could have multiple addresses for different purposes – personal, business and the like.
- A bitcoin is not printed currency but is a non-repudiable record of every transaction that it has been through. All this is part of a huge ledger called the blockchain.
There’s also a new cryptocurrency called Libra rolled out by Facebook.
- Initially, blockchain technology was linked to cryptocurrency only but today it’s application are widespread.
Various uses of Blockchain in fighting COVID-19
Blockchain could be used to improve a variety of healthcare-related processes, including record management, healthcare surveillance, tracking disease outbreaks, management crisis situations and many more.
1) Tracking Infectious Disease Outbreaks
- Blockchain can be used for tracking public health data surveillance, particularly for infectious disease outbreaks such as COVID-19.
- With increased blockchain transparency, it will result in more accurate reporting and efficient responses.
- Blockchain can help develop treatments swiftly as they would allow for rapid processing of data, thus enabling early detection of symptoms before they spread to the level of epidemics.
2) Donations Tracking
- As trust is one of the major issues in donations, Blockchain has a solution for this issue.
- There has been a concern that the millions of dollars being donated for the public are not being put to use where needed.
- With the help of blockchain capabilities, donors can see where funds are most urgently required and can track their donations until they are provided with verification that their contributions have been received to the victims.
3) Crisis Management
- Blockchain could also manage a crisis situation. It could instantly alert the public about the Coronavirus by global institutes like the WHO using smart contracts concept.
- Not only it can alert, but Blockchain could also enable to provide governments with recommendations about how to contain the virus.
- It could offer a secure platform where all the concerning authorities such as governments, medical professionals, media, health organizations, media, and others can update each other about the situation and prevent it from worsening further.
4) Securing Medical Supply Chains
- Blockchain has already proven its success stories as a supply chain management tool in various industries; similarly, it could also be beneficial in tracking and tracing medical supply chains.
- Blockchain-based platforms can be useful in reviewing, recording, and tracking of demand, supplies, and logistics of epidemic prevention materials.
- As supply chains involve multiple parties, the entire process of record and verification is tamper-proof by every party, while also allowing anyone to track the process.
- ‘Certificates’ are a means of verifying the credentials of individuals across domains and geographies. A paper-based certification is fallible to manipulation and susceptible to fraud.
- The blockchain-based SuperCert promises anti-fraud identity intelligence blockchain solution for educational certificates.
- The immutability feature of blockchain ensures that tampering of certificate is not feasible – both the content of the certificate and the identity of the certificate holder.
- Blockchain integration in financial transactions will not only save time and money, but it will also make the transaction processing and authentication process much more seamless.
- Furthermore, Blockchain can be an excellent tool to monitor money laundering and black money accumulation – since all transactions are permanently stored on the Blockchain network, every transaction is accountable.
- Blockchain is also capable of dealing with issues like double spending and unauthorized spending.
- With Covid panic on use of cash currency, here one may find alternatives too.
Various Challenges in adopting Blockchains
Any transformative technology, in its initial stages of development, as it moves out of the research/development phase to first few applications to large scale deployment, faces several challenges.
- There is no confidence in the technology: It is still an innovation. Building trust in the network represents a challenge for blockchain.
- High costs and complexity of blockchain.
- Lack of understanding comes next as many executives have a vague understanding of blockchain and the changes it will bring. Many still connect it only with cryptocurrencies management.
- A general lack of standards is also a problem. Blockchain-specific vocabulary is insufficient; its terminology is both scarce and new.
- A lack of general regulation is a problem. The Supreme Court of India has ruled against a decision imposed by the country’s central bank nearly two years ago that stifled crypto trading in Asia’s third-largest economy.
- Vague data regulation in countries due to poor laws and policy is one more issue.
- Lack of blockchain talent: Whenever a groundbreaking technology emerges, the developer community needs time and resources to accommodate the new demand.
- Energy consumption The majority of blockchains present in the market consume a high amount of energy. It requires high amounts of computation power to solve a complex mathematical problem to verify and process transactions and to secure the network. Add to this the energy needed to cool down the computers, and the costs increase exponentially.
Blockchain: the India imperative
India has a unique strategy for the Government to take the lead in creating public digital infrastructure and allowing private sector innovation to leverage Blockchain for further development.
NITI Aayog has released recommendations to establish India as a vibrant blockchain ecosystem. The suggested recommendations include:
- Regulatory and policy considerations for evolving a vibrant blockchain ecosystem
- IndiaChain: Creation of a national infrastructure for the deployment of blockchain solutions with inbuilt fabric, identity platform and incentive platform
- India as blockchain hub: promotion of research and development in blockchain, in addition, to focus on skilling of workforce and students
- Procurement process for government agencies to adopt blockchain solutions
- Cryptocurrencies for India: Pegged stable coin for Indian Rupee for seamless exchange for blockchain solutions. This may be in conjunction with the need for re-evaluating cryptocurrencies.
- Although India is still at the nascent stage in exploring Blockchain technology, it holds is immense potential for Blockchain applications.
- The key lies in overcoming the challenges faced during the early adoption phase – if we can get past the obstacles in the initial stage, Blockchain tech can be put to good use to strengthen the Indian economy.
- The days of blockchain application have just begun and as with any new technology, blockchain will hit a few roadblocks especially with the government’s regulators across the globe.
- As the true essence of blockchain application is to take the power away from the hands of the powerful by decentralizing information and handing it over to the people- democracy in true sense.
- Nonetheless as with any movement, if people see the value the technology brings into their lives they will rally behind it and blockchain application will become mainstream in most industries in the coming years.
By providing help in the COVID-19 crisis and recovery, blockchain can play a pivotal role in accelerating post-crisis digital transformation initiatives and solving those problems highlighted in the current system.
However, at the present moment, blockchain is not the panacea of all the problems. While the promise and potential of blockchain are undoubtedly transformative, it is still in the nascence of its evolution.
Keeping a tab on this technology and our capacities is the right direction we can head towards.