Forget artificial intelligence and the Internet of Things. What governments, businesses and civilians are really waiting for, is blockchain. Its potential uses are endless: ranging from logistics and real estate to food and health care. Yet, it remains an obscure term for many. What added value does blockchain offer? Prof. Dr. Maka De Lameillieure, director of the Business Design & Innovation Expertise Center, indicates the success of blockchain in Georgia and blockchain initiatives in Flanders.
Today governments, businesses and civilians make use of centralized services that keep track of personal information. Think of identity data that are used for driver’s licenses, pensions, vaccines, etc. There is a database for all sorts of personal information. These databases are often located on a central server, safely sealed from the outside world and controlled by governmental authorities.
"The current systems for centralization of information have their disadvantages as well."
Confidence plays a pivotal role in this: we trust that our data are in good hands and that they are carefully managed. However, a centralization such as this has its disadvantages as well. For example, you depend on the data manager to gain access to your data or to carry out financial operations. This may lead to unpleasant situations, such as not obtaining certain documents or third parties (unintentionally) gaining access to the data. This way, cyber criminals are able to break into important digital archives and sell the data.
Cyber Crime Fighter
Using blockchain, data are saved in blocks that are connected to each other via a chain. Aside from the data, these blocks contain information about the transactions as well. Each of the following blocks is linked with the former block via a complex, mathematical algorithm. These data are saved on millions of computers worldwide, and each computer has to ‘approve’ of the transaction. This way, data that are saved in blockchain (based on the current state of technology) cannot possibly be stolen or changed.
"Data that are saved in blockchain, based on the current state of technology, cannot possibly be stolen or changed."
We decide ourselves who will obtain information and when. If an unauthorized person tries to obtain your data without permission, they will have to break into millions of computers at the same time. However, all computers on the network will automatically block each attempt to suspected manipulation of certain data. You are the only one who will receive a certain key (hash) to your data, and you alone can make it available to third parties. This way, you will gain control over all your data, ranging from business records to medical files or deeds.
Blockchain can offer fundamental advantages when it is applied sensibly, but, as with any other kind of technology, the roll-out is only useful when there is a need for this specific technology. Blockchain has little to no added value when the speed of the transaction is important, when you are not ready yet for high development costs, when the recorded data are the subject of many quick modifications, or when you do not want your data to be saved at all.
Best practices from Georgia
Once the decision has been taken to regulate applications via Blockchain, it is vital that all parties involved play by the rules. Georgia is one of the first countries that has understood this well. The Georgian government started using Blockchain technology for the registration of cadastral properties. One condition to make this successful, was a well-developed IT infrastructure for the National Agency for Public Registration (NAPR).
The NAPR is a judicial entity that falls under the department of justice of Georgia and was founded to develop a new system for the registration of rights of, among others, real estate, enterprises and non-commercial judicial entities. Crucial for the success of the NAPR was the decision not to outsource the required IT developments, but to insource them. The NAPR IT team moved all documents to specific digital subdivisions and developed its own registration software for properties, named NAPReg.
"Georgia’s Blockchain-based land register had been operational since February 2017, and more than 1,000,000 deeds and excerpts have been saved since then."
The developments in Georgia were of interest to The BitFury Group. Soon, the registration of real estate would be carried out via the worldwide Bitcoin network. Via the integration of the registration services in this strongly secured network, the authenticity of property deeds will be controlled, and it will become impossible to delete, change or illegally manipulate data. Furthermore, new updates are automatically saved.
Blockchain in Flanders
Georgia’s Blockchain-based land register had been operational since February 2017, and more than 1,000,000 deeds and excerpts have been saved since then. The evolutions in Georgia have not escaped The World Bank Group either. In 2017, Georgia ended ninth in their ‘Doing Business’-rankings, in which Belgium ended 52nd. This yearly report studies the influence of the regulations of 190 countries on those countries’ business activities and protection of property rights.
In spite of Belgium being the "new kid on the blockchain", a few Flemish companies and governments have definitely immersed themselves in the blockchain technology. Although Blockchain’s efficiency and security would be much appreciated by many businesses and civilians, other organizations still view it as a potential danger for their (commercial) activities.
"In spite of Belgium being "the new kid on the blockchain", a few Flemish companies and governments have definitely immersed themselves in the blockchain technology."
Banks, for example, often see the development of Blockchain as a disruptive factor. BNP Paribas has joined forces with a number of other banks on the R3-platform, a worldwide collective that investigates the opportunities of blockchain technology in the financial sector. In turn, KBC developed, in cooperation with Cegeka, a blockchain app that allows SMEs to better track, manage and secure foreign transactions.
"In the coming years, the Flemish government and the City of Antwerp want to realize concrete projects with blockchain technology."
In the coming years, the Flemish government and the City of Antwerp want to realize concrete projects with blockchain technology. Recently, they started Blockchain on the Move to create a “digital safe” for civilians, in which transactions with the government can safely be carried out. Furthermore, the City of Antwerp plays an inspiring role for other Belgian governments. In addition, authorities, such as the Local Government Agency and the Agency for Nature and Forest, roll out their own specific projects.
Antwerp Management School would love to play a role in the (digital) transformation of businesses and organizations. Are you curious about the development of these initiatives? Do you want to know which opportunities blockchain and other technologies may offer your organization?