BlockChain Potential Adaptation in India
June 21, 2019
Blockchain technology is moving slowly towards mainstream from the PoC projects and proposals everywhere in the world. But, government and Financial Institutes play a significant role in adopting an immature yet potential idea massively. Same is the issue with India. With the government and RBI always throwing their doubts towards Blockchain, the penetration of this technology is still not deep.
Due to its transparent and decentralized nature, it makes the system secure and resilient towards manipulation. However, the cryptocurrencies that generate the profit and monetization are always seen with suspicion in India.
Potential of Blockchain in India
Being a big nation bustling with a huge population, the potential of all the emerging technologies is wide and high here. Black-marketing, money laundering, and corruption are mammoth among the issues in Indian democracy. People can tamper the system, rules, and policies in spite of the measures taken by the government. Such a situation needs a blockchain solution.
Initially, Aadhar—UID or the biometric-based identification of an Indian citizen—despite huge resistance thrived and is now in everyday use. People who cannot afford to understand its importance still miss on having a UID for themselves. However, the number is not high because of a massive effort from the government.
Thus, you can expect an upturn by the end of this decade because many state governments have already shown their interest and supported the distributed ledger technology. We will come to this in a while.
Industries under disruption
According to this report, there are around 100 startups in India aimed at discovering Blockchain technology potential. And most of these companies took the ICO route for fundraising. (ICO is initial coin offering just like IPO in the shares.)
A nation where most of the land deals struggle to emerge from litigation and disputes with no trace of proper ownership, a blockchain solution can eradicate the root cause by stamping each piece of land with the right claimant. Smart contracts can salvage the issue where piracy comes in picture. When a designer claims their rights on copied fashion designs or a composer or musician blames of plagiarism, we can only think of blockchain as a solution. The originality and origin of any copyright design, music or words can easily be traced.
With a country as large as 1.3 billion population, voting and conducting fair elections is so clumsy, the transparency of this nascent technology can be exploited to get the desired results. The supply chain and freight movement of the goods can be made faster, cheaper and better traceable so that lost and damaged products can be reduced. The pharma industry is a thriving sector. In spite of being the top manufacturer and exporter, the country faces a big problem with fraud medicines. If the manufacturing and distribution of drugs are backed by clarity and trust, definitely India can save itself from the blot.
With a huge population, India has realized the importance of data protection about the enormous personal information available at the government offices. These data are vulnerable to theft and misuse, and thankfully, we now have laws. If these data get a layer of a bulletproof jacket of immutability aka Blockchain, the laws can be executed meritoriously. Identity Management would be so smooth after this.
And what would be the auxiliary result of adopting Blockchain in various public and private sectors? Apart from data protection and a check on malpractices? The prospects of new jobs due to the need of blockchain consultants and developers.
States where Blockchain has been welcomed
States like Andhra Pradesh, Telangana, Kerala, Maharashtra, and West Bengal have shown a positive response towards the adoption of blockchain strategy.
Andhra Pradesh and Telangana, being the pioneers in Blockchain initiatives in India, have dug all their limbs in the dirt and are more than prepared to take the challenges of the blockchain. The two tech-savvy governments initiated various blockchain projects in the last couple of years. Most of them are based on land deals and registry, identification management, supply chain, and data protection.
In 2017, the CM of Andhra Pradesh, N. Chandrababu Naidu demonstrated the use of blockchain system in the transportation department. The aim was to seal the vehicle titles with the right authority. He also discussed the potential of this highly robust technology in resolving cybersecurity issues and handling land deals.
The twin states have many use cases ready to be implemented on the decentralized system. Backed by IT giant like Tech Mahindra—which has shown immense interest in their resourcefulness—and startups like Zebi, the governments, are assured of the success in their ventures.
Maharashtra government is also interested in implementing blockchain-supported solutions for the land registry and deals, the state being one of the hubs for real estate.
West Bengal, a state known for its fine arts, took an appreciative step by taking the birth certificate registration process towards smoother and transparent method. They have involved LynkedWorld—a Netherlands based company—to create identity management through blockchain.
Kerala government along with Kerala Development and Innovation Strategic Council (K-DISC) planned to implement blockchain in the supply chain of daily needs like milk, fish, and vegetables. K-DISC has taken the initiative to train the students in emerging technology too. Not just grocery, the state aims at implementing a secure and transparent method to deal with the crop insurance and help the suffering farmers by the faster settlement of claims. The IoT and blockchain technologies will help in determining the causes behind the loss and quicken the settlements by avoiding disputes. The causes of the disputes are mainly delay and intermediaries between the beneficiary and insurance firms.
With all these zones participating, the IT hub of India cannot stay behind. Karnataka, and more importantly Bengaluru has shown the enthusiasm for the evolving technology. Hence, the government has decided to move towards a distributed technology controlled e-Governance. To invite the talent pool, the government organized various hackathons and summits and brought students, startups and IT professionals under one roof. The aim was to get various ideas and develop a white paper for the eGovernance.
Hurdles towards wider adoption
India is one country that is bogged down in the technology arena in the world irrespective of the knowledge and talent it possesses. The reason is none other than the biggest democracy, which has most of its governing members on the lesser side of the education. And hence, Blockchain is no exception here.
The resistance this technology has received so far from the government and RBI—the financial regulatory body—is sufficient to bring the morale low. However, the startups are so resilient that they do not drop the hope to make it mainstream soon.
The startups raise funds using Initial Coin Offering—ICO. However, the government has more faith in fiat money and banking institutes. No wonder because if a blockchain system starts functioning in finance platforms, it will abolish the existence of Banks and FIs. RBI is the controlling authority to generate revenue and minting currencies. Once, the virtual money is adopted legally, the role and brand of government will lose its shine in finance control.
Nevertheless, more issues are stopping the technology from making a mark on the land of this country.
India is a land of talent with scientists, engineering solutions, medical pioneers and what not. However, Blockchain is a black hole as the students at technical and financial institutes lack the relevant courses. If the courses are there, they are vague or not sustaining the quality. Also, the experts or learners are moving outside the country for better opportunities making the talent pool thinner gradually.
To deploy a traditional and working model of software in any industry needs lots of time and money. The old model with a few flaws needs to be ported on the blockchain network where the issues are undetermined. That raises a simple question of ‘why do it anyway for the heck of enhanced security?’ Also, the cost vested on blockchain specialists and data scientists would always be higher than the developers of the old model software would. These are reasons enough to push back the progressive mindsets.
Another big reason: Blockchain is complicated when it comes to maintenance. Blockchain without a cryptocurrency is a financially deprived system. It is the cryptocurrency that provokes the miners for mining the blocks and solving problems. Who will bear the cost of the maintenance and cryptocurrency is a big question. Most of the banks and FIs do not reflect the idea of ICO, STO, and cryptocurrency.
It is no exaggeration that India has seen some development, and it is towards a positive journey. However, the pace has been slow due to lack of regulations and enthusiasm from a whole lot of people—central government, big investors, banks and public.
Any technology adoption in a country like ours where people still fear to adopt novel ideas, where the market is flooded with fraudsters and malicious practices, Blockchain will have to suffer its share of hurdles and ignorance.