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With distributed ledgers, bureaucracy will never be the same again!

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By Sumit Sood, Managing Director APAC, GlobalLogic

Civilization is a direct consequence of humans settling down. As Yuval Noah Harari notes in the iconic bestseller “Sapiens”, what distinguishes humans from the other animals is our ability to collaborate at a large scale. Billions of us across continents intertwine in a collaborative socio-economic tango of sorts!

Record keeping is characteristically human…

The Sumerians of ancient Mesopotamia invented writing around 3,000 BC. They recorded quantities on clay tablets in rows and columns uniquely as a pictographic representation. Sumerian scribes kept records of the number of sheep, goats, cattle, and grain owned/produced. Records meant that taxes could be calculated &collected, and disputes could be settled easily. Royal seals and signatures made them legitimate and established trust.These tablets were arguably the world’s first accounts and contracts. All modern transactions – insurance,banking, government bonds, stocks, mortgage, and salaries – are but written contracts.

…As is bureaucracy

Around 1340 A.D., Jewish merchants, and traders of northern Italy, devised the ‘double-entry system’.Essentially an algorithm, it created two independents, yet correlated, records of the same event. Disputes were settled looking at ledgers with the same record entry. With time, ledgers became tedious paperwork giving rise to bureaucracy – a time-consuming and costly affair. It meant identifying, classifying, storing, securing, retrieving, updating, tracking, and destroying or preserving records. Bureaucracy made it painful to access records: inertia and inefficiency are shocking gold standards of government offices the world over. Confidence in bureaucracy to solve problems and provide services is poor; not to mention the risk to the safety and security of public records. Distributed ledger technology (DLT) offers the opportunity to tackle problems of record keeping andbureaucracy.

Distributed Ledgers offer a chance to simplify…

Underlying the distributed ledger technology is blockchain, which is the technology that underlies bitcoin as well. Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time.

A distributed ledger can be described as a ledger of many transactions or contracts maintained in decentralized form across different locations and people. All the information on it is securely and accurately stored using cryptography and can be accessed using keys and cryptographic signatures. Any changes or additions made to the ledger are reflected and copied to all participants in a matter of seconds or minutes. Once the information is stored, it becomes an immutable database, which the rules of the network govern making the records resistant to malicious changes by a single party (76% of India’s judicial workload can be eliminated if disputes around property ownership disappeared!)

Imagine a world where every transaction (land records, taxes, contracts…) gets recorded in a secure, accessible and widely available manner and does not need multiple rounds of government agencies and offices to ratify, validate and approve transactions!

…If we give the technology a chance!

DLT application is incremental and it has the ability to reduce bureaucracy on a broad scale. Regulations, resistance to change, its inherent complexity, and costs of technology will prove to be a daunting challenge.
As barriers of implementation subside and the technology matures, DLT’s significance through shared ledgers of trust will accelerate current processes and become more efficient. It is the key to architecture vast amount of secured records and address issues of transparency, accessibility, and security in a pragmatic way.
Adoption is global and accelerating

In China, DLT is a national priority: it is looking to harness the power of public-private in healthcare data, supply chain and other applications. Two-thirds of all DLT related patents are Chinese. In the U.K., the government agency HM Land Registry is exploring how distributed ledgers and smart contracts could revolutionise land registration and property buy-sell processing.  The Baltic state Estonia has been pioneering DLT since 2008. It uses DLT to register businesses and online taxpayment – cutting bureaucracy and saving public money. Their blockchain, called KSI, connects all government’s services on a single digital platform. It integrates vast amount of sensitive information from healthcare, judiciary, legislature, security, and business registries.

Closer home, in India, about 50% of the states are involved in DLT related initiatives, driving publicsector adoption in the country. Telangana and Andhra Pradesh lead the pack. The top three use cases are land registry, farm insurance, and digital certificates.

Since ancient times, ledgers have been at the heart of economic transactions – to record contracts, payments, buy-sell deals or movement of assets or property. The journey, which began with recording on clay tablets made a big leap with the invention of paper. Over the last couple of decades, computers have provided the process of record keeping and ledger maintenance great convenience and speed.

Just like the humble Sumerian tablet, DLT can potentially transform and commoditize how society agrees, trusts, and transacts.


If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]

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