Stephen DeMeulenaereJul 09, 2018 10:09:41 IST
Technology is known to have helped in curtailing corruption by bringing in transparency in the system. However, some people can easily figure out loopholes to overcome technology. But there's one technology that may make corruption harder than ever to break it.
Blockchain, a term often associated with the elusive cryptocurrency world, may have an answer to the country's problems where large sums of money spent by the government for citizen welfare is lost due to leakages in the system, making a select few beneficiaries of schemes funded by public money. The encryption-based technology can change that by bringing in transparency and creating a money trail. And we are not talking possibilities, several countries have already started testing it out.
But why would a country want to invest in a new technology to eradicate corruption?
Well, that’s because of the proven benefits of blockchain. Unlike traditional transaction mechanism where one person or a central authority maintains a track of transactions, data on a blockchain is stored in encrypted blocks that are managed by a decentralised global computer network. Essentially, this setup renders the data unalterable.
Corruption takes place when power lies in the hands of a few and when there’s a lack of accountability. Once things are transparent and there’s no scope for altering transaction records, it will become practically impossible for someone to play the system without getting caught.
Blockchain not only elevates transparency between the government, research organisations, and the public but also increases security. The permanent record of the flow of funds created through blockchain can easily be audited from anywhere by anyone.
What's more? With a blockchain, citizens will know that what they are seeing is accurate and not fake messaging that's often spread through digital channels.
Countries like the US, Canada and Australia are already starting to use blockchain to bring in transparency and cut down on corruption. United States government, for example, is already evaluating the use of blockchain in wide-ranging applications right from procurement to tracking appropriated funds to federal assistance and foreign aid delivery monitoring.
Australia is similarly beginning to use blockchain to clear and settle trades on its stock exchange, becoming the first nation to have a blockchain-based stock exchange.
Meanwhile, Estonia is exploring ways to use blockchain to support its e-residency program and is even considering the possibility of creating its own cryptocurrency.
And while India may appear to be shying away from blockchain, the truth is, it’s not. India is already working on creating its own cryptocurrency, the Lakshmi Coin, which highlights the government’s belief in the blockchain technology.
Once blockchain is widely implemented, it could represent the future of smart, legal contracts and how entire industries in partnership with the government conduct themselves in a transparent and streamlined manner. Thereby making people accountable for funds siphoned off, making leakages a thing of the past.
The author is a blockchain evangelist at Pundi X
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