The blockchain technology. How and where can it be implemented?

07 feb 2018

written by: theodor spadeson

Starting the article about the blockchain and its perspectives, it would be logic to define the blockchain itself.

Literally, it is a chain of transaction blocks, where each of the blocks carries the information about its predecessor (the forerunning block). There is no single chance to obscurely change the information they contain. It is counted to be technically impossible. For those living under the rock, we will clarify why.

All the information about transactions in the blocks and its credibility is sealed with a unique key and it means that everyone in the network agrees upon this information. When the block gets sealed, the registers in it cannot be changed. The copies of the information have been put away in network members’ folders. Once the sealed info is placed in the folder - it always stays there - sealed.

The process of sealing the information is complex - it is quite a difficult calculating process. If one individual from the network tries to cheat the system and change the information contained in the Blockchain, he would have to set new sealing numbers for the transaction pages.

The creation of a fraudulent information in the network leads to the emergence of a new chain, a dishonest chain, and everyone in the network will see it - the information in the chain will not be agreed by them.

In the blockchain, you can not simulate a transaction by displaying a fake payment obligation or fake, that the payment was on time, but money transferred longer than earlier. They say that it is possible to come to an agreement even with a bank, but it's impossible in the Blockchain. All actions are recorded and sealed forever. And, what is specific about blockchain - all actions are performed without the intermediary of governmental authorities.

Moreover, the cumulative efforts and speed of one dishonest person will never beat the cumulative efforts and speed of the rest.

The question that has to be answered is what if not one person, but, for instance, a hundred of network members turn to be dishonest?

The answer is obvious. If the majority of network members turn to be dishonest, the protocol fails - the blockchain collapses. The essence of the Blockchain is that it is built on the assumption, that the majority of network participants is always righteous and fair.

The blockchain, or the distributed ledger, dramatically decreases the transaction time and means, that there is no need of dozens of people representing dozens of authorities and bodies doing paperwork. In the Blockchain network, these operations are limpid and rapid.

At a glance, all fine and dandy, but there are domains, where it is impossible to conduct a transaction without a Big Brother. Imagine a situation: Peter agreed to sell a service to John on a post-payment basis and conduct the transaction in the blockchain. Peter provides John with the desired service, but John does not pay for it. Peter gets frustrated and angry. He decides to take a legal action.

This was where the problems begin. The court needs a legitimate argument binding the deal between Peter and John. The fact, that the deal was conducted in the blockchain does not say anything to the court.

The represented example highlights the fact, that the Blockchain technology is not ideal for the domains where the role of a sheriff is vital.

It would be consistent to represent the global situation - where the blockchain is already successfully implemented or being on the stage of introduction.

According to the study undertaken by IBM and the Economic Intelligence Unit, government commitment in blockchain and distributed ledgers are quite high:

  1. Nine out of ten government organizations map out investments in blockchain to be implemented in financial transaction management, asset management, and regulatory compliance;
  2. 14% of respondent government bodies and organizations expect to utilize blockchains in production and at scale in 2017;
  3. Seven out of ten government executives predict blockchain will dramatically discompose the area of contract management.

Now let us represent the spectacular examples of how to use blockchain.

Georgia is one of the countries using blockchain technology in the domain of Land Registry. The custom digital ledger system is introduced into the NAPR (National Agency of Public Registry) of Georgia and anchored to the BTC blockchain via a distributed digital timestamping service. This allows the government of Georgia to verify, approve, and sign the document containing the inhabitant’s essential information and authority of his/her property ownership. The main idea of this approach is to bring cost and time savings, transparency, and fraud protection to the registration process.

The United States of America. Two years ago, in 2016, Delaware became the first US state to implement distributed ledger technology. Blockchain in Delaware will be used to store agreements and other business information on a distributed ledger, allowing companies and agencies to store their “paperwork” at a number of locations simultaneously.

This method of data storage will make the documents more secure and provide an automated access to shareholders, employees, etc. In addition, the use of blockchain provides a better option for recovery in an occasion of technical collapse and cutting the cost of an external physical storage.

Great Britain. Blockchain-as-a-service is available for purchase through the UK government’s Digital Marketplace. The essence of BaaS is in the fact, that the public authorities are free to experiment, develop and launch digital services in the framework of a distributed ledger technology.

In 2016, the UK Department for Work and Pensions (DWP) started a probation of the blockchain technology. Claimants can receive and spend their pensions and benefit payments through a mobile application. Additionally, upon the agreement of the claimant, his/her financial operations are recorded on a distributed ledger in order to support financial management and control.

Sir Mark Walport, the UK Government Chief Scientific Adviser, has highlighted how blockchain can help in reducing benefit fraud, protecting critical infrastructures, registering assets, and ensure the integrity of government records and services in his report.

Estonia. For many people, it would be a surprise, but Estonia is a leading country in the adoption of blockchain technology. Experts state: “If you want a glimpse at the future potential of the blockchain, visit Estonia.”

Today, almost all public services in Estonia are digitized and accessed through secure digital ID cards provided to every citizen and powered by blockchain infrastructure. Estonia residents and citizens can verify the integrity of the records held by them in government databases and control the access to them.

Moreover, Nasdaq successfully completed probations which are to enable company shareholders in Estonia to use a blockchain voting system.

Specifically, Estonia uses blockchain and distributed ledger to secure the health records of citizens and residents. Every update and access to healthcare records are registered on the blockchain, preventing frauds, losses, and making it almost impossible to hack. For an occasion, if the cybercrooks are gravely concerned to hack the system, it provides real-time alerts, enabling the government to respond immediately.

Dubai.Dubai government has established the Global Blockchain Council with the purpose to investigate the application of blockchain in a row of domains and the perspectives of the technology in the long run.


The council consists of 47 members from both the public and the private sector. There are already seven operative blockchain-based concepts launched in Dubai towards healthcare and medical records, diamond trade activity, business registration processes, digital wills, tourism and recreational activity, freight transportations, and the passing of the ownership.

IBM is the official partner of the government helping to try and test the use of blockchain in the spheres of commercial activities and logistics of the country.

The solutions elaborated and tested by IBM transmit freight information, providing the stakeholders with a possibility to receive the data about the state of goods and the status of the shipment in an online environment. This approach allows replacing obsolete paper contracts with new smart contracts.

Hamdan bin Mohammed Al Maktoum, The Crown Prince of Dubai, has also announced a digital strategy that looks ahead at the securement of all government paper trails via a blockchain technology by 2020. The UAE government foresees the capability of their blockchain program to save ~ 25.1 million hours of economic efficiency annually.

Danish shipping giant Maersk jumped on a bandwagon by involving IBM in the utilization of blockchain for the freight services, as they navigate the globe.

Maersk said:

The projects we are doing with IBM aim at exploring a disruptive technology such as blockchain to solve real customer problems and create innovative business models for the entire industry. We expect the solutions we are working on will not only reduce the cost of goods for consumers but also make global trade more accessible to a much larger number of players from both emerging and developed countries.

There are numerous examples of how blockchain technology can bring benefits and help to cut off the outdated and obsolete systems and methods. The blockchain is a fairly strong future. While companies hesitate about the blockchain and digital future, we lead it, we render assistance in digital transformation.

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