NewsThe Transformational Powers of Blockchain

Aisha Hillary-Morgan Aisha Hillary-MorganMarch 27, 2019
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While previously individuals placed trust in institutions, the underlying technology of blockchain enables the anonymous disintermediation of trust that helps build foundations for platform innovation.

As Blockchain technology enables two parties to establish trust independent of a central body, below, Blockchain Australia magazine delves into some of ways blockchain can strengthen the reliability of voting and personal information.

Blockchain for Political Transparency

Giuseppe Porcelli, Founder and CEO of Lakeba Group, suggests that one application of blockchain is to ensure transparency and confidence in political decision making.

“Any time that Australians – or indeed most constituents around the world – are called to vote in an election, ballots are collected on paper and placed in a box. The paper is subsequently removed from the box and tallied, but we have no transparency over who opens the box and records the votes.”

There’s inherent trust in the political system currently, but it’s misplaced, claims Porcelli.

“Voters put their trust – and in doing so the future of their kids – into the hands of an individual who should be acting with absolute integrity. However, there’s insufficient oversight to ensure mistakes cannot be made with their vote-counting.”

Philosophically, society is built upon and should function on an underlying foundation of trust and transparency, suggests Porcelli. “Trust and the promise of transparency ensures we can all keep each other accountable, which ensures fairness and equality.”

For Porcelli, the focus is not just on the decentralisation of trust, but more importantly, the immutability of information. He considers a critical part of blockchain technology the fact that an item cannot be imitated or passed off as something it’s not. “If my vote is for one thing, it’s vital no one can change it,” he says. “If you make information available in the public domain, it’s impossible for anyone to make a decision to change it. It’s like open-sourcing trust. If trust is open-sourced, and the flow of true and false comments can be checked, reviewed, and validated by the global community, there’s no chance for people to corrupt the system.”

Of the myriad benefits blockchain technology offers, the greatest impact that Porcelli sees is fundamentally around transparency, which will in turn lead to new opportunities, industries and ways of doing business. Continuing on his thoughts around the importance of open elections, he says, “Imagine in an open democracy, if people are unable to physically travel to a polling booth on the day of an election. They could be ill, or have a parent, spouse, child or friend they can’t leave alone. This could render them unable to attend a polling station. If they were able to vote through a secure mobile app with a layer of transparency provided by blockchain, it’d be life-changing for a great many people.”

Porcelli is quick to point out that his philosophical approach to the empowerment and transparency inherent in the blockchain model is not based on ideology. It’s grounded in an ability to understand not only the technical aspects of the technology as well as business applications.

“When speaking about blockchain technology, the explanation of the benefits of disintermediated trust is very similar. For example, if you are a representative of a business or government body, it’s critical that blockchain offers transparency.” The same is true across all interactions: “The inherent ability for people to manipulate either votes, ownership, financial records, logistical operations or any other business-critical operation is avoidable,” he explains. “On top of that, as a business, blockchain has the capability to provide your investors with transparency and the confidence to invest. If your investors trust that you will return not just their initial investment but also the profit, they will be more inclined to provide funds. Likewise, if a government chooses to provide its electors with transparency, it builds confidence that it’s entitled to run the country, and will similarly secure votes. Fundamentally, what Blockchain does is covers gaps in transparency and puts everyone on a level playing field.”

Blockchain for Economic Success

For Porcelli, information is critical to the success of any economy. He points to the Australian property market and its significant impact on the Australian GDP, highlighting that it’s a combination of banks, lenders, insurance companies, legal professionals, real-estate agencies, architects, conveyancers and a myriad of other professionals that keep the industry buoyant.

“In Australia, there is a big issue with the lending industry. Over the last five years, more than seven billion dollars have been lost in mortgage applications that were unfit to exist. This is because investors attempted to acquire their dream home using fake or false documentation. They were using various tools to fake documents and then providing them to banks, which went on to lend money; therefore, defrauding investors.”

Lakeba’s suggestion is to make documents transparently – but securely – available to detail the incomes and tax returns of Australians in a safe, secure and encrypted model. Blockchain technology would be able to secure and disintermediate the information, yet banks and mortgage providers would be able to access it via a public ledger to ensure no investor is capable of securing loans if they’re not in the financial position to do so.

Today, the only opportunity that banks have to validate a customer’s pay slip is cross data or giving a call to the employer, asking if this person is one of the employees on their payroll. This is not sufficient and open to human error and fraud. Lakeba’s BAF solution, developed on the blockchain, offers the potential to improve the validation process, delivering the much-needed single source of truth.. The solution for the financial industry is timely given the recently completed report by the Hayne Royal Commission for the banking industry.

All told, Porcelli sees tremendous opportunity in the capacity of blockchain to change the way the world operates and thinks about trust and ownership.

“Cryptocurrency was the first – and most hyped – use case for blockchain technology, but it’s the tip of the iceberg. From changing the way people think about property ownership, facilitating smart contracts that ensure open, honest and secure transactions between parties, to revolutionising a great many industries, the potential applications are manifest,” he concludes.

 

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Article originally published by Blockchain Australia March 2019, Blockchain as a Transformational Change Agent.

Aisha Hillary-Morgan

Aisha Hillary-Morgan

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