Blockchain technology could substantially reduce cost of transactions in different schemes run by the Centre, says a joint report by industry body Ficci and professional services firm PwC.
“By removing the need for third parties to manage transactions and keep records, blockchain technology can massively reduce transaction costs. Leveraging blockchain technology for social benefit schemes will support the government’s wider policy objectives of sustainability, thus reducing poverty and generating value for money in public expenditure,” PTI said, citing the Ficci-PwC report.
A blockchain is a continuously growing list of records, or blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
As a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
The joint report showed that the new technology could be used in managing land records, smart cities and tackling air pollution, among others. The report also said that India loses 1.3% of its gross domestic product (GDP) because of unclear land titles.
“Putting land records on a blockchain would make them immutable and tamper-proof, thus securitising them and building a firm pillar of trust in the system. All land deeds and their associated records would be immutable and irrefutable, thus saving a lot of money on land-related litigation,” PTI cited the report.
The Ficci-PwC report said the new technology can also be used in agriculture and food supply to make it more transparent. “Blockchain solutions, if implemented, may lead to the elimination of intermediaries or middlemen, thereby leading to improved pricing, decreased transaction fees, thus eliminate issues of hoarding.”