Using blockchain tech can improve governance

Subrata Chakraborty | Updated on January 20, 2020 Published on January 20, 2020

Automation, transparency, auditability and cost-effectiveness are among the many benefits of using blockchain in governance

According to a recent news report, the government is preparing a strategy for nationwide use of blockchain technology with the aim to scale up and deploy the distributed ledger solution to improve governance. That said, it is important to discuss some of the key points of blockchain-based decentralised governance..

It is well-known that blockchain is the core technology of Bitcoin and other cryptocurrencies, which has now emerged as a disruptive innovation with a wide range of applications. In the blockchain economy, agreed-upon transactions would be enforced autonomously following rules defined by smart contracts.

The essence of blockchain is ‘blocks’ of information linked together in a ‘chain’. With these links, you’re creating a perfect audit history. You can go back through time and see a former state of the database.

Blockchain technology can help in many ways. First, the two key costs affected by this technology are the cost of verification, and the cost of networking. The former relates to the ability to cheaply verify the attributes of a transaction, while the latter helps in bootstrapping and operating a marketplace without the need for a traditional intermediary.

Second, the shared data can represent exchanges of currency, intellectual property, equity, information or other types of contracts and digital assets, making blockchain a general purpose technology that can be used to trade digital property rights and create novel types of digital platforms.

Third, immutability is a characteristic of blockchain technology — the ability to declare a truth, globally and without a centre of authority, immune to what anyone else does to change it.

The network is able to correctly verify the transactions and protect the ledger from tampering through a mathematical mechanism called ‘proof-of-work’. This protocol represents a shift from ‘trusting people’ to ‘trusting mathematics’.

Because of the remarkable advantages related to automation, transparency, auditability and cost-effectiveness, the use of blockchains in governance is an attractive proposition. According to Jurgen Habermas, the father of the public sphere concept, two conditions are necessary to structure a public space: the freedom of expression, and discussion as a force of integration. The architecture of the “network of networks” seems to articulate these two conditions.

The dimensions of political valence for algorithms that may have public relevance are:

Patterns of inclusion: What is included and excluded, and how data are prepared for algorithms.

Cycles of anticipation: The consequences of attempts by those creating the algorithms.

Evaluation of relevance: The criteria by which the algorithms determine what is not only relevant, but appropriate and legitimate.

Promise of objectivity: The way the technical nature of the algorithm is presented as a guarantee of impartiality.

Entanglement with practice: The processes by which users reshape their practice to suit the algorithms they depend on.

The above dimensions bring to the fore two main consequences of the ‘computation’ of our information society. Delegation of a number of tasks to algorithms and the process of submitting data to analysis are both automated. This double automation, in turn, poses questions of agency and control: Who are the arbiters of algorithms? Is algorithm design an assertion of authority? What is the autonomy of algorithms, if any?

It is hoped that the Ministry of Electronics and Information Technology — tasked with the development of an approach paper on a national-level blockchain framework — will take note of the above.

The writer is former dean and director-in-charge, IIM-Lucknow

Published on January 20, 2020
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