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Blockchain as a Tool for Developing Countries

Taming the Beast: Harnessing Blockchains in Developing Country Governments

Blockchain as a Tool for Developing Countries

Hughes, L. This revolution challenges the limits among physical, digital and biological spheres and, for the first time in history, human developing and creativity — things that were considered unique — could be, developing time, substituted pdf robots with artificial intelligence. ALCs resemble well-known software gateways that allow communication across different platforms at the application layer. Blockchain, M. Blockchain technology is not entirely immune countries cybersecurity and software bugs, because human programmers are central pdf the development and deployment of blockchain systems [49], in addition blockchain known flaws associated with encryption algorithms [1] and the frequent cyber-attack on bitcoin blockchain systems. The cases discussed in the country countries subsection yielded essential insights for deploying blockchains within governments.

The trust is achieved by the way blockchain is working. Any attempt to modify records in the Blockchain will fail because copies of the recorded data are stored in many other servers called nodes.

One of the key ways to removing central control while maintaining data integrity is to have a large distributed network of independent users. This means that the computers that make up the network are in more than one location. These computers are often referred to as full nodes. Furthermore, they are interconnected, and they are constantly transmitting information about the validity of the block records.

It may refuse to transmit any sort of data at all. Hashes are extremely complex mathematical problems that require significant computing power to be resolved, and timestamps are a digital method to mark in time the production of a particular event in the present case the building of a block of information.

It is a database that you can trust in, because it is decentralised and literally no one can control it. Meanwhile, Blockchain is consuming a lot of resources during the encryption process. Except Bitcoin, the most famous Blockchain project, there are many other coins based on this technology that can provide useful tools for developing countries.

On Ethereum for example, there are such things that should be mentioned: decentralised applications DApp , decentralised autonomous organisations DAO and smart contracts. Decentralized applications DApp may be one of the most revolutionary aspects of Ethereum. They can manage decentralized autonomous organizations and digital assets through decentralized management. For those who are fearful of losing control, this type of structure has massive implications. To become an organization more formally, a Dapp might adopt more complicated functionality such as a constitution, which would outline its governance publicly on the blockchain, and a mechanism for financing its operations such as issuing equity in a crowdfunding.

It is important to note that participants in a DAO blockchain can remain anonymous. Smart contracts within Ethereum are similar to any contract in everyday life, except that there is no central authority to ensure compliance with that contract. Ethereum may require the application of a specific provision in a smart contract, because through Ethereum it can be proven that certain conditions have been fulfilled or not.

Thus, if I will prove that it can also deliver some part of the international development agenda in a developing country, Blockchain is going to be entirely part of the ICT4D study field. Blockchain in developing countries In the previous chapter I argued that Blockchain is a new technology that can generate trust in electronic transactions or in online social organisation. Excepting the part that it can produce added value by eliminating third parties in the financial transactions, Blockchain can also be used to reform state apparatuses wherever the state cannot provide a trust model.

Developing states could be the best laboratory for this technology. Renewing a business license would likely require getting on a bus, going into town and standing in a queue for hours.

This will generate economic growth. Besides keeping records on property, the state can provide other services based on this feature like citizenship or other forms of identity that are stored in a centralized database to securely preserve them [K. Cryptocurrencies, such as Bitcoin or Ethereum, proved in time to be safe and secured.

The lack of technology let people in many poor regions of the world out of banking infrastructure and consequently, out of capital to start new businesses. Nicaragua, one of the most beautiful states in Latin America, is also one of the poorest.

Here we have 7 bank branches per , inhabitants while in the United States there are 34 branches per , inhabitants. More and more companies are experimenting with this technology in order to ensure food safety throughout their supply chain.

Also, the simultaneously use of Smart contracts and DAO could have a great impact in the services industry by enabling services transaction to happen in a fast, secured and decentralised way. At the same time, Blockchain could reshape even the borders of the humanitarian aid. Billions of dollars ale transferred annually to developing countries and, as Don and Alex Tapscott state, an important part of that money was stolen by intermediary parts. First, by disintermediating the middlemen who act as conduits of large aid transfers, it can reduce the chronic problem of outright misappropriation and theft.

Second, as an immutable ledger of the flow of funds, it compels large institutions, from aid groups to governments, to act with integrity and abide by their commitments. The coins are then exchanged for a notepad and pencil. The program is currently private and used only by the WFP, making it more of a database project than a real blockchain. Trying to face those hostile conditions, local people turned to cryptocurrencies. In order words, it is a way of deciding who in the community of computers has a right to add the next block onto the blockchain through arriving at a mathematical solution on supercomputers, to avoid chaos on the chain.

The whole idea is to have a ledger forming a fine single-chain as blocks are added to the blockchain, rather than a chaotic tree-like blockchain, which results to a massive amount of wasted energy on computation and no consensus attained.

This chaotic treelike occurrence is technically referred to as forks. The specific technical challenges include high computational cost, massive energy consumption, scalability, transaction throughput and speed, security and fairness in reaching a consensus. In the following subsections, we shall discuss the major distributed ledger consensus protocols and approaches.

The drawbacks of this approach are the high computational cost associated with reaching a consensus and the massive amount of electrical energy needed by the supercomputers in the processes.

There is also the issue of scalability and transaction throughput per second. With this bitcoin-based protocol, only seven transactions per second are feasible. On the order hand, some experts are of the opinion that the slowness is for security reasons, to allow all nodes verify all transactions and allow time to agree on a consensus, in the process ensuring fairness and averting a fork.

But with transactions such as in financial markets or stock exchanges where thousands of transactions occur per second, there is the need to scale up the transaction throughput from what is obtainable with this bitcoin protocol. Even though security experts believe that a combination of PoW with nonce value and SHA hashes translate to high security, there remain other problems associated with PoW systems, such as improving scalability and better consensus reaching mechanisms.

These challenges inherent with PoW motivates researchers to find new consensus approaches [37]. However, there are security challenges with this approach. Scenarios could be a deliberate distributed denial of service DDoS virus attack on the designated leader, which will lead to total system collapse.

It is an approach where the community of nodes vote based on what they think the consensus would be, by voting with the majority. The idea here is to observe carefully voting patterns of other nodes on the network and vote with the majority to reach consensus. It is called economy-cased system because it is likened to Adams Smiths theory of moral sentiments in economics, as voting judgement is inspired by sentiments merely observing how the majority are voting.

It is more like sympathy voting. This raises the question of how secured the system is. Its main drawback is nothing at stake problem. Hence, it has found very little real-world application. At this junction, based on the consensus protocols described above. BFT means the moment in time during transactions when it is clear that consensus is approaching and when consensus is attained and the mathematical surety that all nodes will reach exact consensus.

Hashgraph leverages on a gossip protocol to send messages to all computer nodes on every transaction sent and received on the network to facilitate a quicker time of reaching a consensus agreement.

It is essentially sending two compressed hash messages by a node to the next node, eventually forming a complete history of all communication in the entire network, referred to as hashgraph in memory.

With aBFT based consensus protocols, like the hashgraph, there is higher surety that consensus is going to be reached as opposed to nonbyzantine based protocols like PoW or PoS, which merely based on confidence level over time. Hashgraph addresses the concerns associated with PoW, these are increased scalability and transactions throughput, significantly lower computational overhead and power consumption and security.

Readers are referred to [39,40] for details on blockchain consensus models. However, despite the advantages with e-voting systems, there are still security concerns bordering on transparency and centralization of the systems [1,9].

Such security issues are still the only major factors slowing down its adoption in other developed democracies such as France and UK. Existing Voting System in NigeriaThe conduct of the general election in Nigeria before election was manually driven with a high level of electoral fraud by electoral authorities, government authorities, political gladiators and erring voters [41]. However, the year witnessed the embrace of application of electronic voting technology to authenticate and validate voters.

While the proposal for the automation of the voter's identification and verification could not be approved by the parliamentary screening for election, the aftermath of the application continues to generate momentum and will eventually reverberate sooner or later if necessary examinations of previous and possible security threats are not anticipated and solved before future elections [3,41,44].

The recent legislative amendment of the Electoral Act by the Nigerian Senate empowering the country's Independent National Electoral Commission INEC to introduce and implement any e-voting technology it deems suitable [45,46], is a good development towards the conduct of future elections and the possible adoption of BEEV in Nigeria.

Most of these solutions are still in the developmental stages. Some works on BEEV in literature are briefly described as follows and summarized in Table 4:In [9], the authors conceptualize a BEEV system to meet the requirements of authentication, anonymity, accuracy and verifiability.

With the first vote cast, the first transaction added to the block and referred to as the foundation block, which contains the elected candidate's name, on which other votes for that candidate are built on and voting transactions update for every casted vote.

The system also made provision for blank or protest vote, however, the system allows voting only once, which makes it impossible to change vote in case of a mistake. A general representation of the system from requesting to vote, authentication and vote casting, encryption and adding a vote to blockchain is depicted in Fig.

Figure 2. The author utilises a proprietary defined blockchain protocol named a Ballotcoin, as against using Bitcoin protocol since a different consensus method is proposed and implemented. The researchers in [48] proposed a BEEV system using blind signature encryption method for protecting voters' choices during elections.

The authors claim that the solution satisfies all e-voting requirements, except the coercionresistance attribute, which was challenging to implement due to the desirable transparency property of blockchain. As they have found global acceptance across all industries. From data analytics on Google or Microsoft platforms to the banking and financial sectors, as well as in smart cities, were they are being increasingly utilized.

In blockchain, data is stored in an encrypted distributed ledger format across numerous computers, hence the need for new AI techniques that will be able to analyze and make sense of data stored in this format.

All in all, state capacity is both a means to achieve development goals and a development goal in itself, particularly if resilient and long-term democratic regimes are part of the core goals.

Nevertheless, state capacity has rarely been considered when studying the links between ICTs, development, and governments e. While several competing theories and schools of thought have already emerged Zheng, , the field still faces three critical and interconnected challenges.

The second and closely related to the former is the lack of solid evidence on the actual impact of ICTs in developmental processes Foster and Heeks, ; Brown and Skelly, Estonia and South Korea are cited as examples of success but they are more the exception than the rule. Finally, the field has a bias toward technology and infrastructure Gomez, From a practitioners perspective, these three core challenges are closely related.

Access to digital technologies automatically empowers people who can then take matters into their own hands and propel human and sustainable development in the medium-term.

Measuring impact is thus based on metrics centered on access to and use of the new technologies ITU, Any resemblance with a trickle-down theory of digital development is not coincidental. Furthermore, current evidence does not provide support for such a theory. In effect, the rapid evolution of digital technologies such as the Internet and social media, have yet make a dent on development according to recent research Comin and Mestieri, The same goes for mobile technologies that have spread globally at an unprecedented pace 3.

For the purposes of this paper, ICTs are instead deemed to be enablers of development processes Zambrano and Eymann, ICTs have the potential to amplify existing programs and initiatives, bring new solutions to old problems and foster democratic governance and institutions.

Such potential should be harnessed by local actors and institutions who acting in concert can bring positive change forward. On the flip side, new ICTs also generate new challenges that might demand attention. Blockchain technology squarely falls into this framework but also goes beyond the digital divide and connectivity approaches. Blockchains work as long as people are connected but, unlike other digital technologies, are not destined to promote increased access to the Internet and close the digital divide.

The implementation of development agendas at all levels is in itself a challenge for developing countries where state capacity is incipient. Adding new technologies to the equation might complicate matters more. On the other hand, developing country governments should not attempt to drive development agendas on their own. Here, the distinction between private and public goods is crucial 4. In the case of private goods and services , the private sector, big and small, should take the lead. Governments should have adequate institutional, legal, and infrastructural capacity to ensure this is possible and, if market failures are pervasive, create incentive mechanisms to attract the required capital and human resources.

Nevertheless, governments should take the helm to guide the modernization of the public sector and the universal provision of public goods.

The former is the entry point to increase state capacity, in a sustained manner 5. The latter, which depends to a large extent on state capacity, fills development gaps that fall right into the purview of government. Governance provides a third pillar. State modernization and public goods service provision should be designed and implemented within a democratic governance framework where the rule of law, participation, transparency, and accountability are core drivers that permeate all of society.

Despite repeated failures Heeks, , initiatives did not fizzle out. This paper uses digital government broadly defined as public investments on ICTs to modernize the public sector, increase state capacity, and scale-up the provision of public goods. For developing countries where democratic regimes prevail, bringing into the equation the democratic governance approach mentioned above is critical. In this context, the net outcome of successful ICT investments in public institutions should not be limited to access, efficiency and effectiveness.

More relevant are the strengthening of democratic institutions where transparency and accountability shine the most and citizen and stakeholder engagement becomes part of daily life. Figure 1 presents the three pillars of digital government and its interconnections.

For developing country democracies, the key entry point is engagement with stakeholders to define policy agendas, identify key challenges, and prioritize interventions. Governments should then be able to identify the public entities that need to be involved according to existing legal mandates. Allocation of public resources is then finalized and changes in the provision of selected public goods should eventually improve. Stakeholders can then provide feedback and demand changes and improvements.

Sequencing between these pillars is also essential. For example, governments cannot start implementing e-service delivery if they have not first developed adequate internal ICT and human capacity, and updated or modernized existing business processes. However, nothing is preventing governments from starting with service delivery or ignore the co-creation phase and the engagement with stakeholders.

This is especially true for the participation and service delivery pillars. Instead, a multichannel approach is most suited in many cases, particularly in countries where ICT penetration is low and poverty is still pervasive.

The truth machine Casey and Vigna, The trust machine The Economist, The Internet of value Tapscott and Tapscott, These are some of the names coined by different authors, academic and pundits to capture the complexity of the technology in one phrase.

While catchy, they fall short from elucidating the benefits of the technology from a public sector perspective. Almost 10 years after its birth, publication after publication continues to explore ways to explain the inner workings of the technology to the average person e. Technology diffusion does not depend on the level of technology comprehension by the public Kapoor et al. In this section, blockchain technology is characterized from the perspective of the public sector in developing countries, using the conceptual framework presented in the previous section as a guide.

A blockchain is a digital ledger supported by the smart integration of three existing technologies: peer-to-peer distributed networks; cryptography; and consensus algorithms.

Blockchain technology complexity stems in part from the fact that its supporting technologies have been hanging out at the fringes of the global network.

In that world, ledgers are analog or digital books where a series of transactions, mostly credits and debits, are sequentially recorded.

Not surprisingly, some have suggested that blockchains are indeed a form of triple accounting Simoyama et al. Being that as it may, the key point here is that blockchains are not part of the relational database technology family. Blockchains are thus not designed to store big data, for example. Moreover, and unlike traditional accounting ledgers, blockchain technology provides an open avenue for skilled users to write native computer code.

Developing applications that operate within the platform or interact with external sources and resources is thus a key feature. Usually presented under the umbrella of smart contracts, programming in blockchains is not limited to them, as discussed below. The underlying peer-to-peer or distributed network should not be confused with a decentralized one. Although the terms are used as synonyms in much of the literature, the latter allows for local centralization.

That is, a group of nodes close together depend on central local one which in turn provides the link to other node clusters operating under similar arrangements. In a truly distributed network like blockchain, all nodes are equal and live independently. One and two-way encryption tools are extensively used in blockchains. The first is known as hashing and creates an irreversible and unique digital signature for every transaction, a group of transactions, and blocks added to the existing chain.

The second is asymmetric public key cryptography that generates public and private keys for end users. Users share their public keys while keeping their private keys in a safe space, digital or analog. Most of the data recorded on a blockchain are thus comprised of hashes and public keys.

Two types of consensus take place in blockchain technology Beyer, The first one occurs when the specialized nodes working on adding a new block of transactions to the chain, the so-called miners, agree on which transactions should be included in such block. This is known as Nakamoto consensus. The second happens when the new block of transactions is actually added to the chain.

Here, any node or network user can validate such a block and agree to append it to the existing chain 6. In sum, a blockchain is a programmable digital layer operating within a distributed network, requiring cryptographic tools for access and transaction management, and using consensus algorithms for adding or appending new blocks of transactions to the ledger.

A vast literature on the key traits of blockchain technology already exists. This section presents key blockchain traits based on the contribution that each of its three underlying technologies furnishes. Two different sets of traits emerge. One stems from the unique contribution of each of the base technologies. The other is the result of the integration and interaction among them. Traits in the matrix diagonal represent standalone contributions. All other boxes are the result of the integration of the three technologies.

Resilience : In a distributed network, multiple independent copies of the blockchain can co-exist. There is thus no central point of failure. Pseudonymity : Cryptographic tools enable users to interact with others without having to reveal their real identities or providing any personal data. A relatively high degree of privacy thus exists. The same however does not apply to transactions that in principle can be viewed by anyone in the network. Immutability : Blocks of transactions in the chain are time-stamped and mathematically linked in sequential order.

Changing one block thus requires changing all other blocks. Incentives : Processing transactions and adding new blocks to the chain brings financial benefits to nodes involved miners. Transaction fees and cryptocurrency rewards are the most common forms of income. Traits stemming from the integration of the technologies include:.

Consensus : Transaction processing and block addition are validated by network nodes in all cases. This is algorithmic consensus that should not be confused with human-based consensus.

Transparency : User interactions and the resulting data can be viewed by any network member. Confidential information or data has no place here.

Security : Resilience, immutability, and consensus substantially increase the level of internal blockchain security. While still possible, hacking and network attacks are still possible. The standard way of classifying blockchains relies on the distinction between private and public, alongside permission levels.

In this perspective, three different blockchain types emerge public, private, and consortium blockchains e. While relevant for the private sector, such differentiation might not be as effective from a public sector perspective. The distinction between private and consortium blockchains hinges in part on how many entities control access to the application layer. Governments can also have multiple institutions involved in the deployment of one blockchain platform—as could be the case for government interoperability, is one of the main staples of digital government.

Calling such an arrangement a consortium does not add any value from the public sector perspective. The best way to avoid such potential pitfalls is to go back to the three core blockchain technologies described in section Revisiting Blockchain, Again and suggest an alternative typology that caters to the specific idiosyncrasies of the public sector.

Users either find the door open and walk right in or must first ring the doorbell to be able to enter. Cryptographic tools and consensus algorithms operate at the application layer. Nodes or users accessing such layers are first authenticated and then furnished an authorization to perform specific actions—such as creating a smart contract, mining the blockchain network or developing a Dapp, for example.

Table 2 depicts the matrix of options by separating the different layers. Note that blockchains require all users to be authenticated, regardless of access type. The difference between open and closed network access depends on how users are authenticated.

In the case of closed access, a third-party one or more entities issues the authentication credentials using cryptographic tools.

Note that open access authentication does not fulfill know-your-customer KYC or anti-money-laundering AML regulations and thus might be less attractive to both governments and businesses bound by them 7. Once authenticated, nodes will be able to access the application layer.

In the case of classic blockchain networks such as Bitcoin and Ethereum, authentication alone grants immediate access to the application layer. Authorization does not exist as a separate instance and thus, no central authority is required.

In this case, access to the application layer is fully decentralized. But open access blockchain platforms can also limit access to such layer.

For closed access networks, both authentication and authorization are managed by a central outfit—one single entity private, in the traditional scheme or many working together consortium.

However, it is also possible that a closed blockchain platform provides all authenticated nodes full access to the application layer.

This might be relevant to public sector initiatives where all actors within a single ministry or in multiple ministries or public entities work together in a cross-sectoral initiative. A GovChain is similar to a government dedicated network with secure links to external clients. A GovChain runs on such network but add functionality at the application layer. Finally, this typology highlights the similarities between hybrid open and closed centralized blockchains.

In both, the levels of authorization to the application layer are provided by a central outfit. However, since hybrid open networks do not control authentication, all nodes and users still have read access to the full blockchain. This is not the case in closed blockchain networks. The latter can also introduce more sophisticated access control schemes to assign different roles of nodes in the application layer. Undoubtedly, smart contracts are one of the most touted blockchain features.

While the idea itself dates from the end of last century Szabo, , blockchains created the platform for the actual implementation of the idea. For example, Ethereum provides the software Solidity 8 and platform Ethereum Virtual Machine 9 to program and execute contracts In this fashion, transactions envisaged on a given agreement can be triggered at a pre-established date or by action taken by one of the parties involved.

Not limited to financial agreements Murphy, , these type of contracts have attracted most of the attention of both practitioners and academics e. Here, a given community agrees to specific governance arrangements which are then coded into a binding smart contract.

DAOs suffered a devastating setback thanks to the well-known hack Falkon, but are still being explored by practitioners and academics e. Less well-known than the others, ALCs handle multiple smart contracts. Here, the line between contracts and regular computing programming starts to blur. ALCs resemble well-known software gateways that allow communication across different platforms at the application layer. As with most nascent technologies, smart contracts have limitations. On the technology side, they are prone to coding errors and bugs as the DAO hack shows.

This is exacerbated by the fact that programmers must translate legal contracts into code. Complex contracts might thus yield additional coding errors and bugs. As all nodes have to run and validate the code in smart contracts, code size is limited and thus running complex applications is not possible O'Connell, Again, complex contracts might not be suitable for blockchain execution.

While smart contracts reduce transaction costs, which are now executed automatically, costs related to contract breaches, dispute resolution, and redress are much higher Szczerbowski, Smart contracts are also immutable and act as autonomous agents. In this light, researchers recommend using a hybrid approach where both regular and smart contracts act in sync Levi and Lipton, The question on the legality of the first type of contracts has received plenty of attention Frankenreiter, ; Waltl et al.

More generally, it seems that laws and regulations will need to be changed or updated. In developing countries with weak state capacity and incipient rule of law institutions, this might become a major challenge. Since its inception, dynamic innovation, backed by top human talent with access to substantial financial resources, has been part of the blockchain ecosystem. The community has thus been able not only to tackle the initial limitations of the technology but also to enhance its core functionality.

As seen above, blockchains come in many different formats and more are popping up by the day. This is a critical consideration for both academics and policymakers. Blockchain technology is not a monolith. On the contrary, blockchains are a moving target. Here, the distinction between blockchains and distributed ledger technologies DLTs is important Dexter, Blockchains are a subset of DLTs. A blockchain is a DLT that mathematically links blocks of data in sequential fashion using cryptographic tools.

A DLT is a digital ledger that runs on a distributed network and does not require the use of consensus algorithms for its full operation Just like its digital technology predecessors such as the Internet, both for-profit and non-profit innovators and practitioners continuously showcase the relevance of the new technology to tackle socio-economic, political, and environmental issues. Here, different layers and different labels appear in the scene.

The first layer, which in turn is the most generic, links blockchains to existing and emerging issues without necessarily referencing development or the SDGs—albeit the latter being universal.

Labels used to describe this link include blockchain for social good Podder and Venkat, ; BreakerMag, , blockchain for social impact Fernando, , and blockchain for social change Verlhust and Young, , the latter being a research project. Comprised of close to 50 entities, BSIC mentions the SDGs but has set its own agenda 12 For the most part, blockchain startups working under these labels take the initiative on their own and venture into the field to experiment with the nascent technology.

Pace Kewell 13 , a key issue with this set of initiatives is the lack of a rigorous definition of the concepts being put forward. Social good might have different meanings for different communities, more so if the work is undertaken on a global scale. Furthermore, social change and social impact can also be negative. That is, on the ground projects can also generate change and impact by exacerbating existing gaps despite the best efforts of those doing the implementation.

The Blockchain Commission, a partnership of three non-profit entities launched at the United Nations in , is a typical example. A second group includes UN agencies and development organizations that work in developing countries.

Reach and scale also play a role as covering 18 goals and over targets does require considerable human and financial resources that most do not have. Last but not least are the organizations working in the humanitarian space. This group also includes UN agencies as well as reputed organizations that have carried out this line of work for many years.

Perhaps surprisingly, one of the most well-known examples of apparent blockchain success occurred in this space thanks to WFP refugee program in Jordan Juskalian, ; WFP, , which is now expanding to other regions and thematic areas Baydakova, A recent report details the various initiatives in this space while highlighting some lessons learned so far Coppi, While governments in developing countries are not one of the main overall targets of these groups, very few take a more comprehensive and strategic approach, or explicitly consider the provision of public goods by governments as is the case, for example, of the blockchain for social change research project Verlhust and Young, These authors attempted to delimit the specific application of the emerging technology in the Global South while pushing back on the ongoing hype.

The Asian Development Bank produced a report targeting Asia and provided recommendations based on the analysis of five use cases Ferrarini et al. More recently, an overall blockchain research review included an analysis of the relevance of the technology in the implementation of the SDGs Hughes et al.

The authors highlight the goals and targets where blockchains technology could have the most impact while providing a couple of use cases based on selected current development challenges India is facing today.

Given the deluge of publications and academic research on the technology, the above examples show a giant gap when it comes to deploying blockchains in developing country governments. Furthermore, only a few of these directly link such deployments to digital government policies, strategies, and implementation agendas which, as reported by the United Nations UNDESA, , is ongoing in most countries, including developing nations. The relationship between blockchains and digital government has thus attracted little attention and real case studies are for the most part missing in action Three distinct patterns can however be identified.

First, blockchains are positioned as support infrastructure for ongoing e-government platforms and initiatives. Here, the emphasis is on the technology and innovation part of the equation, and not on the institutional benefits, thus drastically reducing its transformational potential Second, blockchains are seen as a threat, sometimes lethal, to public institutions as they seem to demand dramatic changes in the way they are run—to the point that might put their existence into question.

Perspective ARTICLE

By Ivan Homoliak and Richard Schumi. Theoretically, using pdf technology blockchain car could pay for the parking ticket by itself, blockchain in developing countries pdf. For example, governments cannot start implementing e-service delivery if they have not first developing adequate internal ICT countries human capacity, and updated or modernized existing business processes. It is regularly assumed that digital technologies automatically accomplish this, regardless of how the latter is defined. E-residency and blockchain.

Taming the Beast: Harnessing Blockchains in Developing Country Governments

However, the central concern in adopting an electronic voting e-voting system is security. Security challenges in e-voting are well articulated in numerous literature such as [3,[6][7][8] and drawbacks of public key cryptographic implementations in e-voting systems [1]. Drawbacks such as computational power needed to decrypt votes, possible hacking through random number generation, and system complexities.

Therefore, security remains the major concern since voting is done through the internet or dedicated network online [9] as well as trust in a central body to manage elections.

Trust and privacy are the key elements a voter demands during an election. Trust that the voter's vote will count and privacy that the voter's choice remains personal. Centralization of the internet and cloud computing platforms is another concern since data is residing in a central location and vulnerable to cybersecurity attacks [11]. Attention is therefore shifting to blockchain Distributed Ledger Technology DLT as a viable option for application in a peer-to-peer digitized voting system, beyond the traditional blockchain application domain in currency and finance.

This drive is due to blockchain's perceived security, transparency, verification and compliance attributes in a distributed environment, that could address shortcomings inherent in evoting systems. Blockchain is a peer-to-peer P2P distributed ledge technology DLT for transparent transaction devoid of a trusted middleman that leverages on the internet, originally developed for crypto-currency virtual currency transactions.

The initial focus of blockchain was in the financial sector, but it currently has applications in numerous areas majorly to enhance cybersecurity. Blockchain is defined as an appendable immutable universally distributed open ledger [12]. The key elements of this definition rests with the keywords: Here apendable means can add to the ledger, immutable means nothing can be deleted or altered from the ledger, universally distributed means equal accessibility of everyone to the same copy of the ledger each time information is updated to ensure validity of all transactions, which makes blockchain trustworthy and an open ledger database where all transactions are recorded in a clear, shared and transparent manner.

The transformation blockchain is envisioned to bring to society will potentially be more than the internet. Whereas internet changed the way information is shared, blockchain will potentially transform the way transactions are done, with trust as a core ingredient. Blockchain finds viable application potentials in many fields such as in education [13], healthcare system [14], smart cities [15], electricity industry [16][17][18], legal industry [19], Industry 4.

As reported in [32], Sierra Leone took a bold but cautious step towards utilizing blockchain-based distributed ledger technology, by leveraging on blockchain-based digital voting platform owned by a Swedish start-up company called Agora, to store and verify the votes cast during the country's presidential elections. The country however still maintained the same paper-based ballot casting process it has employed in past elections. The process includes manual verification of voters' relevant identification documents and casting of their ballots.

Subsequently, the voting results were then manually recorded into Agora permissioned blockchain platform, with Agora appointed by relevant stakeholders to act as the party to validate the data contained inside the network. Two main positives came out of this process, timely delivery of results and avoidance of fallouts or violence associated with electioneering processes in the country.

Even though Sierra Leone did not use the Agora blockchain platform for the entire voting process, it clearly epitomises that democratic advancement through fair and transparent elections could be achieved using blockchain technology in Africa. According to Bitcoin Africa [33] and [34], a growing number of blockchain Financial Technology FinTech startups are springing up in Africa, mostly in the financial and non-cash remittance ecosystem. Some of these start-ups and their application domains are enumerated in Table 2.

In the long run, a number of these start-ups will eventually venture into other application domains driven by opportunities to solve numerous problems in the region. Including BEEV because of high stakes associated with elections thereby improving trust and transparency. The rest of this paper is organized as follows: section II overviews blockchain concepts and DLT consensus approaches. Section III reviews the literature on electronic voting and its peculiarity in a developing country like Nigeria.

Section IV reviews literature in blockchain voting systems. Section V discusses and highlight's Artificial Intelligence as an enhancer of blockchain technology. Section VII concludes the paper.

Generally, there are three types of blockchain technology namely, 1 Public blockchaineveryone got assess to transactions and are stakeholders in attaining consensus, as a permmissionless blockchain with no centralized authority required for the verification process.

Bitcoin and Ethereum are examples of public blockchain; 2 Private blockchain -There are restrictions on the distributed ledger data access, which is controlled by a few designated authorities, usually owned by an individual, government or private business.

It operates as a permissioned blockchain with a central authority for process verification; 3 Consortium blockchain -This is a hybrid blockchain implementation which can be private or public. But assess to distributed ledger data is permissioned. Examples are Eris and Hyperledger. Secure Hash Algorithm SHA encryption is the most used encryption and mostly associated with Blockchain, due to the unique attribute of its Hash function which produces unique outputs when specified by different inputs.

A Hash function is the private and public key uniquely created to identify an individual at the same time preserving privacy. A SHA is made up of bit encryption, 32 bytes, and 64 alphanumeric characters long every time. The structure of blockchain is basically made up of the block header and block body. The block header is made up encrypted unique hashes, while the block body is made of transaction counters and transactions saved in a block [9].

A summarised structure of the blockchain block structure is highlighted in Table 3 [9]. When a community of computers or nodes on the network need to reach an agreement on how transactions happen, and the information updated in the distributed ledger without trusting any one single computer or node. In order words, it is a way of deciding who in the community of computers has a right to add the next block onto the blockchain through arriving at a mathematical solution on supercomputers, to avoid chaos on the chain.

In the following subsections, we shall discuss the major distributed ledger consensus protocols and approaches. The drawbacks of this approach are the high computational cost associated with reaching a consensus and the massive amount of electrical energy needed by the supercomputers in the processes. There is also the issue of scalability and transaction throughput per second. With this bitcoin-based protocol, only seven transactions per second are feasible.

On the order hand, some experts are of the opinion that the slowness is for security reasons, to allow all nodes verify all transactions and allow time to agree on a consensus, in the process ensuring fairness and averting a fork. But with transactions such as in financial markets or stock exchanges where thousands of transactions occur per second, there is the need to scale up the transaction throughput from what is obtainable with this bitcoin protocol. Even though security experts believe that a combination of PoW with nonce value and SHA hashes translate to high security, there remain other problems associated with PoW systems, such as improving scalability and better consensus reaching mechanisms.

BFT can either be asynchronous Byzantine aBFT or partly asynchronous Byzantine paBFT , depending on the prior assumptions about existence and nonexistence of trustworthy stakeholders in the network environment. Hashgraph leverages on a gossip protocol to send messages to all computer nodes on every transaction sent and received on the network to facilitate a quicker time of reaching a consensus agreement. They offer a decentralised storage place similar to a cloud and allow exchanges between users.

This happens without operators, in a decentralised way. Blockchain technology could reinvent the democratic voting process, with a trustworthy system.

Compared to developed countries, developing countries are far more likely to be impacted by blockchain technologies. Some of the advantages are listed below:. The project is still at an early stage. However, they want to establish an intra-university coin system to have a showcase that demonstrably works! If the students can proof that a blockchain technology based currency works, they might identify the need for implementation throughout Indonesia.

For the state with many islands, a central system like a bank with many ATMs is not a suitable money system. Lack of transparency, corruption, and misuse of funds are among the challenges that international organisation face when providing cash assistance.

Blockchain platforms offer transparency and immutability. Vulnerable families received food and cash assistance from WFP which was authenticated and recorded on a public blockchain through a smartphone interface. This way, disbursements are accountable and can be matched with the entitlements. This makes the process faster and more accurate. A full-scale pilot project is planned next involving up to , persons. In August , energy-focused blockchain investment fund Solar DAO yesterday started its two-stage crowdfunding campaign to raise funds for the construction of new solar PV plants.

Solar DAO is a closed-end investment fund built on Ethereum blockchain. The company said its solar plant investments will focus on the Israeli, Portuguese, Kazakhstani and Ukrainian markets over the next four years. Blockchain technology reduces transaction costs. Therefore, also in the energy sector, blockchain technology has the potential to play a significant and potentially game-changing role:. Blockchain, or distributed ledger technology, could soon give rise to a new era of the Internet even more disruptive and transformative than the current one.

Blockchain's ability to generate unprecedented opportunities to create and trade value in society will lead to a generational shift in the Internet's evolution, from an Internet of Information to a new generation Internet of Value. The key to enabling this transition is the formation of a multistakeholder consensus around how the technology functions, its current and potential applications and how to create the regulatory, cultural and organizational conditions for it to succeed.

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Skip to main content. Log In Sign Up. Download Free PDF. Blockchain 3. Olaniyi Olayemi Mikail. Eustace Dogo. Download PDF. A short summary of this paper. The people who cast the votes decide nothing. The people who count the votes decide everything" -Joseph StalinDemocracy is the pillar of every political system and ensures an equal and fair voting system by guaranteeing the right of all eligible voters to freely vote for their preferred party or candidate.

The concern on every voters' mind is whether their vote will count and if the votes recording and the final result is accurate. Despite the tremendous technological advancement and digitization of numerous spheres of modern life, most elections are still conducted using paper-ballot and usually offline, especially in developing democracies around the world.

Traditional ballotbased voting have the following inherent flaws [1][2][3]: Paper ballot prone to fraud  Manual counting errors  Compromise during the distribution of election materials from central locations to voting centres  Possible compromise and interference by external companies or contractors handling the manufacture of election materials or voting database management.

This is in order to eliminate human errors, fraud, and biases, thereby improving trust in the electioneering processes. Consequently, over the years, scholars and democratic experts have advocated for an evoting [4,5] to address issues inherent in traditional ballotpaper based voting earlier outlined. This will improve voters' turnout and trust in elections by directly using electronic devices on the internet or voting software application to improve the overall democratic processes.

Therefore, security remains the major concern since voting is done through the internet or dedicated network online [9] as well as trust in a central body to manage elections.

Trust and privacy are the key elements a voter demands during an election. Trust that the voter's vote will count and privacy that the voter's choice remains personal.

Centralization of the internet and cloud computing platforms is another concern since data is residing in a central location and vulnerable to cybersecurity attacks [11].

Attention is therefore shifting to blockchain Distributed Ledger Technology DLT as a viable option for application in a peer-to-peer digitized voting system, beyond the traditional blockchain application domain in currency and finance. This drive is due to blockchain's perceived security, transparency, verification and compliance attributes in a distributed environment, that could address shortcomings inherent in evoting systems.

Blockchain is a peer-to-peer P2P distributed ledge technology DLT for transparent transaction devoid of a trusted middleman that leverages on the internet, originally developed for crypto-currency virtual currency transactions.

The key elements of this definition rests with the keywords: Here apendable means can add to the ledger, immutable means nothing can be deleted or altered from the ledger, universally distributed means equal accessibility of everyone to the same copy of the ledger each time information is updated to ensure validity of all transactions, which makes blockchain trustworthy and an open ledger database where all transactions are recorded in a clear, shared and transparent manner. The transformation blockchain is envisioned to bring to society will potentially be more than the internet.

Whereas internet changed the way information is shared, blockchain will potentially transform the way transactions are done, with trust as a core ingredient. Blockchain finds viable application potentials in many fields such as in education [13], healthcare system [14], smart cities [15], electricity industry [16][17][18], legal industry [19], Industry 4.

Blockchain is therefore, evolving beyond its initial application in currency and in the financial sector to other numerous domains collectively referred to as Blockchain version 3. The summary of these evolving blockchain application domains are outlined in Table 1. As reported in [32], Sierra Leone took a bold but cautious step towards utilizing blockchain-based distributed ledger technology, by leveraging on blockchain-based digital voting platform owned by a Swedish start-up company called Agora, to store and verify the votes cast during the country's presidential elections.

The country however still maintained the same paper-based ballot casting process it has employed in past elections. The process includes manual verification of voters' relevant identification documents and casting of their ballots.

Two main positives came out of this process, timely delivery of results and avoidance of fallouts or violence associated with electioneering processes in the country.

Some of these start-ups and their application domains are enumerated in Table 2. In the long run, a number of these start-ups will eventually venture into other application domains driven by opportunities to solve numerous problems in the region. Including BEEV because of high stakes associated with elections thereby improving trust and transparency.

The rest of this paper is organized as follows: section II overviews blockchain concepts and DLT consensus approaches.

Section III reviews the literature on electronic voting and its peculiarity in a developing country like Nigeria. Section IV reviews literature in blockchain voting systems. Section V discusses and highlight's Artificial Intelligence as an enhancer of blockchain technology. Section VII concludes the paper. Generally, there are three types of blockchain technology namely, 1 Public blockchaineveryone got assess to transactions and are stakeholders in attaining consensus, as a permmissionless blockchain with no centralized authority required for the verification process.

The block header is made up encrypted unique hashes, while the block body is made of transaction counters and transactions saved in a block [9]. A summarised structure of the blockchain block structure is highlighted in Table 3 [9]. When a community of computers or nodes on the network need to reach an agreement on how transactions happen, and the information updated in the distributed ledger without trusting any one single computer or node.

In order words, it is a way of deciding who in the community of computers has a right to add the next block onto the blockchain through arriving at a mathematical solution on supercomputers, to avoid chaos on the chain. The whole idea is to have a ledger forming a fine single-chain as blocks are added to the blockchain, rather than a chaotic tree-like blockchain, which results to a massive amount of wasted energy on computation and no consensus attained. This chaotic treelike occurrence is technically referred to as forks.

The specific technical challenges include high computational cost, massive energy consumption, scalability, transaction throughput and speed, security and fairness in reaching a consensus. In the following subsections, we shall discuss the major distributed ledger consensus protocols and approaches. The drawbacks of this approach are the high computational cost associated with reaching a consensus and the massive amount of electrical energy needed by the supercomputers in the processes.

Infrastructural capacity: Ability to carry out institutional and fiscal responsibilities in all the territories under their control of the state. Includes Weber's well-known state monopoly over the means of violence or military capacity.

From a governance perspective, three issues are pertinent. First, distinguishing between state capacity and political regimes is essential. Strong states are frequently seen as a proxy for authoritarian or non-democratic regimes.

However, most Western democracies have states with high capacity, while many non-democratic regimes operate with little to no institutional development Tilly, a thus having to use force and repression to support existing regimes. Second, democratic governance regimes can only be sustained over the long haul if a high capacity state is in place. De-democratization processes can indeed take place as has in fact occurred in the last 20 years throughout the world. The rise of populism, nationalism and some forms of proto-fascism in this period provides the necessary evidence.

Finally, states also need to have the necessary capabilities to harness new technologies, especially new ones such as blockchains and Artificial Intelligence that have a relatively high degree of complexity. This capacity, however, is not limited to technical knowledge, which is important, but also demands institutional capacity to develop successful policies and support on the ground initiatives, directly or indirectly via third parties, including the private sector.

However, the same technologies that help provide basic public goods to vulnerable and excluded populations can also be used to support de-democratization processes. This is the conundrum that developing countries must address as they deploy digital technologies.

All in all, state capacity is both a means to achieve development goals and a development goal in itself, particularly if resilient and long-term democratic regimes are part of the core goals. Nevertheless, state capacity has rarely been considered when studying the links between ICTs, development, and governments e. While several competing theories and schools of thought have already emerged Zheng, , the field still faces three critical and interconnected challenges.

First and perhaps most obvious, is the link between ICT and development which boils down to the question of how exactly do ICTs foster development Heeks, ; Zheng et al. It is regularly assumed that digital technologies automatically accomplish this, regardless of how the latter is defined. The second and closely related to the former is the lack of solid evidence on the actual impact of ICTs in developmental processes Foster and Heeks, ; Brown and Skelly, Estonia and South Korea are cited as examples of success but they are more the exception than the rule.

Finally, the field has a bias toward technology and infrastructure Gomez, From a practitioners perspective, these three core challenges are closely related. Access to digital technologies automatically empowers people who can then take matters into their own hands and propel human and sustainable development in the medium-term. Measuring impact is thus based on metrics centered on access to and use of the new technologies ITU, Any resemblance with a trickle-down theory of digital development is not coincidental.

Furthermore, current evidence does not provide support for such a theory. In effect, the rapid evolution of digital technologies such as the Internet and social media, have yet make a dent on development according to recent research Comin and Mestieri, The same goes for mobile technologies that have spread globally at an unprecedented pace 3.

Blockchain technology squarely falls into this framework but also goes beyond the digital divide and connectivity approaches. Blockchains work as long as people are connected but, unlike other digital technologies, are not destined to promote increased access to the Internet and close the digital divide. The implementation of development agendas at all levels is in itself a challenge for developing countries where state capacity is incipient.

Adding new technologies to the equation might complicate matters more. On the other hand, developing country governments should not attempt to drive development agendas on their own. Here, the distinction between private and public goods is crucial 4.

In the case of private goods and services , the private sector, big and small, should take the lead. Governments should have adequate institutional, legal, and infrastructural capacity to ensure this is possible and, if market failures are pervasive, create incentive mechanisms to attract the required capital and human resources. Nevertheless, governments should take the helm to guide the modernization of the public sector and the universal provision of public goods. The former is the entry point to increase state capacity, in a sustained manner 5.

The latter, which depends to a large extent on state capacity, fills development gaps that fall right into the purview of government. Governance provides a third pillar. State modernization and public goods service provision should be designed and implemented within a democratic governance framework where the rule of law, participation, transparency, and accountability are core drivers that permeate all of society.

Developing countries are no strangers to the deployment and use of digital technologies within governments. Over 20 years ago, E-government appeared in the scene and rapidly spread to most countries. As mentioned above, many developing countries ended up designing e-government strategies. Despite repeated failures Heeks, , initiatives did not fizzle out. This paper uses digital government broadly defined as public investments on ICTs to modernize the public sector, increase state capacity, and scale-up the provision of public goods.

For developing countries where democratic regimes prevail, bringing into the equation the democratic governance approach mentioned above is critical. In this context, the net outcome of successful ICT investments in public institutions should not be limited to access, efficiency and effectiveness. More relevant are the strengthening of democratic institutions where transparency and accountability shine the most and citizen and stakeholder engagement becomes part of daily life. Figure 1 presents the three pillars of digital government and its interconnections.

Allocation of public resources is then finalized and changes in the provision of selected public goods should eventually improve. Stakeholders can then provide feedback and demand changes and improvements. Sequencing between these pillars is also essential. For example, governments cannot start implementing e-service delivery if they have not first developed adequate internal ICT and human capacity, and updated or modernized existing business processes.

However, nothing is preventing governments from starting with service delivery or ignore the co-creation phase and the engagement with stakeholders. This is especially true for the participation and service delivery pillars. Instead, a multichannel approach is most suited in many cases, particularly in countries where ICT penetration is low and poverty is still pervasive. The truth machine Casey and Vigna, The trust machine The Economist, The Internet of value Tapscott and Tapscott, These are some of the names coined by different authors, academic and pundits to capture the complexity of the technology in one phrase.

A blockchain is a digital ledger supported by the smart integration of three existing technologies: peer-to-peer distributed networks; cryptography; and consensus algorithms. Blockchain technology complexity stems in part from the fact that its supporting technologies have been hanging out at the fringes of the global network.

While the concept of digital raises little doubt, the same cannot be said about the ledger nature of blockchains. Despite the increasing popularity of spreadsheets, accountants are perhaps the group most familiar with ledgers as they continuously use them for business purposes. In that world, ledgers are analog or digital books where a series of transactions, mostly credits and debits, are sequentially recorded. Not surprisingly, some have suggested that blockchains are indeed a form of triple accounting Simoyama et al.

Being that as it may, the key point here is that blockchains are not part of the relational database technology family. Blockchains are thus not designed to store big data, for example. Moreover, and unlike traditional accounting ledgers, blockchain technology provides an open avenue for skilled users to write native computer code.

The underlying peer-to-peer or distributed network should not be confused with a decentralized one. Although the terms are used as synonyms in much of the literature, the latter allows for local centralization. That is, a group of nodes close together depend on central local one which in turn provides the link to other node clusters operating under similar arrangements.

In a truly distributed network like blockchain, all nodes are equal and live independently. One and two-way encryption tools are extensively used in blockchains.

The first is known as hashing and creates an irreversible and unique digital signature for every transaction, a group of transactions, and blocks added to the existing chain. The second is asymmetric public key cryptography that generates public and private keys for end users.

Users share their public keys while keeping their private keys in a safe space, digital or analog. Most of the data recorded on a blockchain are thus comprised of hashes and public keys. Two types of consensus take place in blockchain technology Beyer, The first one occurs when the specialized nodes working on adding a new block of transactions to the chain, the so-called miners, agree on which transactions should be included in such block.

This is known as Nakamoto consensus. The second happens when the new block of transactions is actually added to the chain. Here, any node or network user can validate such a block and agree to append it to the existing chain 6.

In sum, a blockchain is a programmable digital layer operating within a distributed network, requiring cryptographic tools for access and transaction management, and using consensus algorithms for adding or appending new blocks of transactions to the ledger.

The other is the result of the integration and interaction among them. Traits in the matrix diagonal represent standalone contributions. All other boxes are the result of the integration of the three technologies. Resilience : In a distributed network, multiple independent copies of the blockchain can co-exist.

There is thus no central point of failure. Pseudonymity : Cryptographic tools enable users to interact with others without having to reveal their real identities or providing any personal data. A relatively high degree of privacy thus exists. The same however does not apply to transactions that in principle can be viewed by anyone in the network.

Immutability : Blocks of transactions in the chain are time-stamped and mathematically linked in sequential order. Changing one block thus requires changing all other blocks. Incentives : Processing transactions and adding new blocks to the chain brings financial benefits to nodes involved miners. Transaction fees and cryptocurrency rewards are the most common forms of income. Traits stemming from the integration of the technologies include:. Consensus : Transaction processing and block addition are validated by network nodes in all cases.

This is algorithmic consensus that should not be confused with human-based consensus. Transparency : User interactions and the resulting data can be viewed by any network member.

Confidential information or data has no place here. Security : Resilience, immutability, and consensus substantially increase the level of internal blockchain security.

While still possible, hacking and network attacks are still possible. The standard way of classifying blockchains relies on the distinction between private and public, alongside permission levels. In this perspective, three different blockchain types emerge public, private, and consortium blockchains e.

While relevant for the private sector, such differentiation might not be as effective from a public sector perspective. The distinction between private and consortium blockchains hinges in part on how many entities control access to the application layer. Governments can also have multiple institutions involved in the deployment of one blockchain platform—as could be the case for government interoperability, is one of the main staples of digital government.

Users either find the door open and walk right in or must first ring the doorbell to be able to enter. Cryptographic tools and consensus algorithms operate at the application layer.

Nodes or users accessing such layers are first authenticated and then furnished an authorization to perform specific actions—such as creating a smart contract, mining the blockchain network or developing a Dapp, for example. Table 2 depicts the matrix of options by separating the different layers. Note that blockchains require all users to be authenticated, regardless of access type.

The difference between open and closed network access depends on how users are authenticated. In the case of closed access, a third-party one or more entities issues the authentication credentials using cryptographic tools. Note that open access authentication does not fulfill know-your-customer KYC or anti-money-laundering AML regulations and thus might be less attractive to both governments and businesses bound by them 7.

Once authenticated, nodes will be able to access the application layer. In the case of classic blockchain networks such as Bitcoin and Ethereum, authentication alone grants immediate access to the application layer. Authorization does not exist as a separate instance and thus, no central authority is required. In this case, access to the application layer is fully decentralized. But open access blockchain platforms can also limit access to such layer. For closed access networks, both authentication and authorization are managed by a central outfit—one single entity private, in the traditional scheme or many working together consortium.

However, it is also possible that a closed blockchain platform provides all authenticated nodes full access to the application layer. This might be relevant to public sector initiatives where all actors within a single ministry or in multiple ministries or public entities work together in a cross-sectoral initiative. A GovChain is similar to a government dedicated network with secure links to external clients.

A GovChain runs on such network but add functionality at the application layer. Finally, this typology highlights the similarities between hybrid open and closed centralized blockchains.

Undoubtedly, smart contracts are one of the most touted blockchain features. While the idea itself dates from the end of last century Szabo, , blockchains created the platform for the actual implementation of the idea. For example, Ethereum provides the software Solidity 8 and platform Ethereum Virtual Machine 9 to program and execute contracts In this fashion, transactions envisaged on a given agreement can be triggered at a pre-established date or by action taken by one of the parties involved.

Contractual transactions are automatically executed and, since the parties have direct access to digital currency, payments occur smoothly. Smart contracts also come in different flavors OSTechNix, The first one mirrors traditional legal contracts which can now be executed on a blockchain platform. Not limited to financial agreements Murphy, , these type of contracts have attracted most of the attention of both practitioners and academics e. Here, a given community agrees to specific governance arrangements which are then coded into a binding smart contract.

Here, the line between contracts and regular computing programming starts to blur. ALCs resemble well-known software gateways that allow communication across different platforms at the application layer. As with most nascent technologies, smart contracts have limitations. On the technology side, they are prone to coding errors and bugs as the DAO hack shows.

This is exacerbated by the fact that programmers must translate legal contracts into code. Complex contracts might thus yield additional coding errors and bugs.

As all nodes have to run and validate the code in smart contracts, code size is limited and thus running complex applications is not possible O'Connell, Again, complex contracts might not be suitable for blockchain execution. While smart contracts reduce transaction costs, which are now executed automatically, costs related to contract breaches, dispute resolution, and redress are much higher Szczerbowski, Smart contracts are also immutable and act as autonomous agents.

In this light, researchers recommend using a hybrid approach where both regular and smart contracts act in sync Levi and Lipton, The question on the legality of the first type of contracts has received plenty of attention Frankenreiter, ; Waltl et al. More generally, it seems that laws and regulations will need to be changed or updated. In developing countries with weak state capacity and incipient rule of law institutions, this might become a major challenge.

Since its inception, dynamic innovation, backed by top human talent with access to substantial financial resources, has been part of the blockchain ecosystem. The community has thus been able not only to tackle the initial limitations of the technology but also to enhance its core functionality. As seen above, blockchains come in many different formats and more are popping up by the day. This is a critical consideration for both academics and policymakers.

Blockchain technology is not a monolith. On the contrary, blockchains are a moving target. Here, the distinction between blockchains and distributed ledger technologies DLTs is important Dexter, Blockchains are a subset of DLTs. A blockchain is a DLT that mathematically links blocks of data in sequential fashion using cryptographic tools. A DLT is a digital ledger that runs on a distributed network and does not require the use of consensus algorithms for its full operation Just like its digital technology predecessors such as the Internet, both for-profit and non-profit innovators and practitioners continuously showcase the relevance of the new technology to tackle socio-economic, political, and environmental issues.

Here, different layers and different labels appear in the scene. The first layer, which in turn is the most generic, links blockchains to existing and emerging issues without necessarily referencing development or the SDGs—albeit the latter being universal.

Indicators and metrics to assess and measure change are missing in most of these efforts. The second layer includes entities directly supporting the achievement of the SDGs. Three groups comprise this layer. The first works on a global scale and have advocacy and awareness-raising role. The Blockchain Commission, a partnership of three non-profit entities launched at the United Nations in , is a typical example. A second group includes UN agencies and development organizations that work in developing countries.

These entities work on the ground and disburse their own resources as grants to finance projects. Note that these grants go to local innovators and entrepreneurs in developing and not to governments. Most entities working in the SDG realm select the goals and targets that reflect their own internal mandates. Reach and scale also play a role as covering 18 goals and over targets does require considerable human and financial resources that most do not have.

Last but not least are the organizations working in the humanitarian space. This group also includes UN agencies as well as reputed organizations that have carried out this line of work for many years. Perhaps surprisingly, one of the most well-known examples of apparent blockchain success occurred in this space thanks to WFP refugee program in Jordan Juskalian, ; WFP, , which is now expanding to other regions and thematic areas Baydakova, A recent report details the various initiatives in this space while highlighting some lessons learned so far Coppi, While governments in developing countries are not one of the main overall targets of these groups, very few take a more comprehensive and strategic approach, or explicitly consider the provision of public goods by governments as is the case, for example, of the blockchain for social change research project Verlhust and Young, These authors attempted to delimit the specific application of the emerging technology in the Global South while pushing back on the ongoing hype.

The Asian Development Bank produced a report targeting Asia and provided recommendations based on the analysis of five use cases Ferrarini et al.

More recently, an overall blockchain research review included an analysis of the relevance of the technology in the implementation of the SDGs Hughes et al. The authors highlight the goals and targets where blockchains technology could have the most impact while providing a couple of use cases based on selected current development challenges India is facing today.

The current approach to deploy blockchains in support of development is centered on the elaboration of relevant use cases, which might be openly linked to development goals. Once completed, they are then pitched to social ventures, development organizations or even governments in the Global South to secure either funding or support -or both—for small pilots. Given the deluge of publications and academic research on the technology, the above examples show a giant gap when it comes to deploying blockchains in developing country governments.

Furthermore, only a few of these directly link such deployments to digital government policies, strategies, and implementation agendas which, as reported by the United Nations UNDESA, , is ongoing in most countries, including developing nations. The relationship between blockchains and digital government has thus attracted little attention and real case studies are for the most part missing in action Three distinct patterns can however be identified.

And third, on the ground evidence from blockchain deployments within governments is incipient at best. While many blockchain pilots and projects are taking place in developing countries, some even involving the public sector, only a few are actually led by governments. This subsection highlights some of these cases, bearing in mind that keeping track of all such initiatives is a complex task. Estonia is often cited as a best practice for blockchain deployment Sullivan and Burger, ; Guarda, and an example to follow.

Estonia gained its independence in and rapidly gained a legitimate reputation of a country able to harness ICTs to promote overall human development.

E-governance became its main staple. Nowadays, the country provides assistance in this area to many others almost on a global scale. The cyber-attacks on Estonia's overall infostructure opened the door for further innovation in the area of security.

That same year a company called Guardtime was launched, offering government a solution called KSI Keyless Service Infrastructure , which allowed for the decentralized verification of public records, data, and access points without having to use a digital signature. Instead, KSI uses one-way hashing and a decentralized ledger. Deployed in , KSI does resemble blockchain technology sans one of its core components: consensus algorithms.

Being that as it may, the key point of the Estonia example is the role KSI played in supporting existing e-governance platforms and services. It furnished a new solution to a major digital challenge that could perhaps not be solved otherwise. While the company claims it beat Nakamoto by a couple of years 16 , KSI is not in the same ballpark as Bitcoin or Ethereum Technological replication of the Estonia case using a different platform might thus be more complex than expected.

While not a country, Dubai is certainly larger in population than Estonia and hosts over nationalities. The Dubai Emirate also operates almost like a city-state and has its own policies and institutions in addition to federal ones. Back in , the Prime Minister of the Emirate announced the launching of a blockchain strategy planned to be fully implemented by Gulf News, Spearheaded by Smart Dubai, a local entity that oversees the strategic deployment of new technologies and innovation in close collaboration with the private sector, the strategy set three core goals: foster government efficiency; create new business opportunities and startups; and assume a leadership position on blockchain technologies Bishr, In terms of efficiency, two key priorities have been identified: a paperless government and a blockchain-based payments system Jones, Note that both themes were already part of the overall policy agenda of Smart Dubai, which also happens to host the Smart Dubai Government initiative The second theme focusing on startups is also part of the Smart Dubai agenda.

More recently, Smart Dubai launched a decentralized open data initiative, yet another local priority previously identified, in partnership with a blockchain company Andrikopoulos, While getting updated information on the evolution of these projects is cumbersome, the core lesson from Dubai is similar to that of Estonia: blockchains are brought in to support existing digital government issues and priorities and are effectively deployed to address related challenges.

But in the case of Dubai, the Emirate has developed a strategy and created an international multi-stakeholder board to oversee its implementation Berryhill et al. Kenya seems to be following these same steps. Early last year the government announced the creation of a blockchain task force under the leadership of the Ministry of ICT. The task force prepared a report which was submitted to the Minister last November.

While the report is apparently not publicly, press reports suggest that its contents are fully aligned with Kenya's development priorities Kenyan Wallstreet, ; Tanui, Perhaps coincidentally, the government announced a program to provide affordable housing a month before Alexandre, Countries such as Georgia and Peru have taken a more sectoral approach.

Georgia is one of the leaders in the use of blockchains for land title registration which has already been the subject of critical academic research Lemieux, ; Thomas, Recently, Peru announced a new government procurement system based on blockchain technology in partnership with a local blockchain startup and the Inter American Development Bank IADB. Public procurement is one of the main sources of corruption and a traditional priority of e-government initiatives.

In any event, neither of these two countries have an overall blockchain strategy. In principle then, the results and outcomes of ongoing sectoral initiatives can provide fertile ground for such development. A counterexample for the developed world can also offer additional insights. Illinois became the first US state to embrace blockchain technology. Launched at the end of , the initiative was part of the broader Smarter State initiative sponsored by the Department of Innovation and Technology.

The blockchain project has three overall targets: increase government efficiency by integrating services; develop a local ecosystem; and modernize governance to handle a distributed economy Illinois Blockchain Initiative, Pilots on land titles and self-sovereign identity were launched a few months later. However, by the beginning of , the project seems to have fizzled. The final report published February last year highlights the limitations of the technology, including the lack of successful pilots, scalability, interoperability, and lack of privacy Van Wagenen, So while Illinois follows the same path as some countries discussed above, technical limitations seem to have prevented success.

In addition, the fact that the project was requesting specific legislative changes at the state level might have also ruffled some feathers. The intersections between development, ICTs and developing country governments provide the fodder for the conceptual framework developed in this paper.

Figure 2 below depicts such interconnections. Governments play various roles when it comes to sustainable development and ICTs, and are not limited to the digital government sphere per se. But governments should lead to promote digital government within a sustainable development context. On the flip side, the traditional approach to e-government centers on the relation between the public sector and technology while assuming development outcomes are either the natural and automatic.

For example, the standard e-government transactional approach that emphasizes G2B, G2C, and G2G interactions—depicted in Figure 2 by the intersection between government and ICTs, has limited scope for targeting specific development gaps as the onus is on interactions among key sectors and stakeholders.

Having governments as part and parcel of the overall equation also demands serious consideration of the relationship between state capacity and both development and digital technologies. The dynamics between these three can be complex, bearing in mind that sustainable development itself encompasses four pillars governance included while digital government comprises three, as discussed in section Conceptual Framework above.

Nevertheless, the essential point is that state capacity is both a means to promote digital government and sustainable development and a goal in itself, as clearly established by the UN SDG agenda. For starters, and like most digital technologies, blockchains are exogenous to the national ecosystems of developing countries.

Governments thus continuously play catch-up with such technologies. A core issue here is the lack of local capacity to effectively harness the new entrant, even if the platform is Open Source and thus has no per-user licensing costs. Such capacity is not merely technical but also scientific and managerial as governments and partners should fully comprehend the inner workings of the technology to, for example, launch public bidding processes calling for the adoption of blockchains to support specific digital government priorities or gaps.

In this regard, blockchains are not at all different from previous digital technologies migrating into developing nations. While the complexity of blockchains might add additional entry barriers, governments are probably better off focusing on both the three underlying technologies that support it and the different types of blockchains, DLTs included, that are available.

Regarding the former, many countries in the Global South lack adequate cryptographic expertise, have weak public key infrastructures PKIs in place, and are not very familiar with consensus algorithms. Furthermore, while peer-to-peer networking is readily available, limited Internet access will surely pose constraints to widespread utilization. As described in section Characterizing Blockchain Technology for the Public Sector above, developing country governments can choose among different types of blockchains and DLTs.

However, the first question they need to ask is if blockchain technology is the most optimal solution for the issue at stake. Several models for making such a decision have already been developed Rustum, and should be further refined to fit developing country contexts. Selecting the adequate platform will mostly depend on the type of digital government priority under the radar screen.

It is however possible to conclude that, in general, governments should opt for private or closed blockchains Atzori, , hybrids included. On the other hand, in terms of the dissemination of public documents, information, and data, public or open blockchains can provide the right vehicle as they guarantee immutability, integrity, and transparency while ensuring pseudonymous access—or access based on self-sovereign identity, if available.

The cases discussed in the country examples subsection yielded essential insights for deploying blockchains within governments. The evidence compiled so far, which is still incipient, suggests that the technology can deliver when explicitly linked to both digital government institutional instances and digital government priorities and gaps.

For the most part, successful blockchain implementation in emerging countries have either complemented existing digital government platforms and initiatives or provided a new solution to vexing issues that could not be solved otherwise. In both cases, the technology was not deployed in a standalone fashion. Integration with other digital technologies was also part of the process. This is perhaps a crucial point as blockchains seem to add real value when brought in as a new member of an existing technology team.

In this light, it is possible to suggest that smart contracts could become really intelligent if they could effectively interact with Deep Learning algorithms and platforms, for example Salah et al. While not having a happy ending, the Illinois experience sheds light on the risks of deploying blockchains.

Technical limitations of the blockchain platforms selected for the various pilots helped stall the project. The initiative also attempted to address its governance implications. Consequently, specific legislative changes were requested to the local assembly, including biometric-based notarization, self-notarization of documents and several other measures to improve the management of public land records State of Illinois, While having potential for increasing state capacity, demands for institutional change, grounded mostly on technological grounds, might not take off if local decision-makers have not been involved in the process from the start.

Surely, this is not unique to blockchains. But the fact that the technology is also touted as governance and institutional changer e. As discussed in subsection Blockchains, Development and Governments, blockchain deployment in developing country governments is still in its infancy. Hype, complexity, lack of successful implementation, and an overemphasis on cryptocurrencies and new financial markets are factors that might help explain this state of affairs—not to forget the fact that blockchain technology is still maturing.

The conceptual framework presented in this paper targets this gap by providing governments and development practitioners with potential entry points to explore the effective deployment of blockchain technology systematically. If governments are the main target of blockchain technology initiatives, then digital government and state capacity must take center stage. Early evidence suggests that blockchains can make a difference when aligned with existing digital government institutions, strategies, priorities, and platforms.

This, in turn, indicates that a more nuanced approach to the interplay between blockchains and key digital government components is required. For starters, governments in the Global South should capitalize on existing South-South and North-South cooperation agreements and networks to extract more information on ongoing blockchain deployments in the public sector.

Collaboration across government peers on a global scale could add more value than published reports and thus help avoid pitfalls that pioneers in the sector have unexpectedly faced. Looking at the way blockchains can tackle core digital government themes and bottlenecks will be as important, if not more.

For example, government interoperability has traditionally been one of such issues. More often than not, public entities happen to run their own technology platforms that almost never talk to each other.

On the other hand, citizens and stakeholders will surely benefit from having one-stop shops to undertake all the business they do with government.

4 Ways Blockchain can improve the lives of People in developing Countries

Furthermore, this is blockchain directly from customer to customer without an intermediate bank or otherwise trusted entity. Walsham, G. Secure Hash Countries SHA encryption is the most countries encryption and mostly associated with Blockchain, developing to the unique attribute of its Hash function which produces unique outputs when specified pdf different inputs. Developing countries with low capacity states and nascent capitalist development might find such new governance options less developing given pressing sustainable development demands and calls to sustain democratic governance regimes. Furthermore, only blockchain few of these directly link such deployments to digital government policies, strategies, and implementation agendas which, as reported by the United Nations UNDESA,is ongoing in most countries, including developing nations, blockchain in developing countries pdf. This might be relevant to public sector initiatives where all actors within a single ministry or in multiple ministries pdf public entities work together in a cross-sectoral initiative.

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Taming the Beast: Harnessing Blockchains in Developing Country Governments

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