(by Nassisi Claudio, Aidr partner) Cryptocurrencies, in particular Bitcoin, and blockchain technology (which is its heart) have catalyzed the attention of professionals and the sector and not in recent years.
Bitcoins were introduced in 2008, at a time when trust placed in institutions was at an all-time low.
In the throes of the initial enthusiasm, it was imagined that the use of the blockchain would allow to achieve sensational results in extremely heterogeneous sectors. In fact, after many years, it can be said that, especially in the financial sector, we have seen the start of various projects and, cautiously, others are beginning to be seen in unsuspected sectors such as the fight against corruption.
Blockchain technology is a type of decentralized platform that can record, store and allow access to the digital transaction without a central authority. A modified version of the blockchain (called a private blockchain) on the other hand, provides for the presence of a central authority to regulate user permissions, to access and distribute records.
Each new record is, in fact, linked to the previous record through cryptographic methods, which is why the data cannot be changed. With the absence of intermediaries, the feature of immutability and a distributed consensus model, the implementation of the blockchain is able to question the concept of traditional governance.
Through its verification mechanisms, the blockchain promises to establish a reliable and distributed system among the different nodes, preventing any attempt to falsify the data it contains.
History
The need that has spread especially since the 90s to keep the time references of digital documents unchanged, has led to various solutions, including that of digitally marking documents and inserting individual certificates in a chain using, as tools of greater guarantee, encryption and digital signature.
The aim was to eliminate the possibility that it was possible to backdate or anticipate digital content in order to compromise its authenticity. The concept was further developed by grouping different documents into groups - or blocks. The term blockchain was coined.
Pre-requisites for the implementation of the Blockchain
While widespread enthusiasm for the use of the Blockchain is palpable, not all contexts have the right conditions to do so:
• records must be digital, which in many cases involves a complicated process for digitizing paper documents;
• You must have a secure digital identity for each access.
• the system must allow the use of the digital signature.
• users must be adequately informed through a minimum of digital literacy necessary to understand the ways in which to use the service.
The need for digital literacy, an adequate regulatory system or political decisions is perhaps the most critical aspect of the potential obstacles of a technical nature.
Properties of the blockchain relevant to anti-corruption
robustness
The blockchain, like the technology behind the network, has the ability to guarantee its operational solidity as it cannot be put out of use unless each component is deactivated.
Incorruptibility and security
In blockchain technology, information is distributed across the entire network and is therefore nearly impossible to corrupt or alter.
Consent
A third party is not required because the decision is of a dynamic nature. The transaction is completed only when all interested parties reach an amicable decision or an acceptable resolution.
Transparency and validity of information
Any change in information can be viewed by all participants. Therefore maximum transparency is guaranteed and the risk of tampering is minimized.
Theoretically it is therefore possible to design and test many new decentralized governance models without government oversight
This process could also rapidly change the principles on which current political systems are based, calling into question the traditional role of the state and centralized institutions.
Corruption, trust and the use of new technologies
Innovation and technologies have long been studied as tools to fight or, at least, limit corruption.
Together with traditional factors such as the level of development of professionalism, institutionalization and the quality of bureaucracy and law enforcement, the role of information and communication technologies in combating corruption is investigated.
Using the data from the 2018 United Nations e-government survey, its strong role is confirmed with benefits especially in developing countries.
Research indicates that new technology-oriented infrastructures together with the quality of online services have a significant positive impact on anti-corruption activities in strategic sectors such as procurement.
Implementing e-government reduces corruption in a country, in particular by increasing access to information and the transparency of any information.
If corruption in the public sector leads to a lack of trust between citizens and government institutions, transparency of government decisions and the opening of public records can facilitate the monitoring of records and reduce the risk of corruption.
The blockchain promises tamper-proof records that corrupt employees or bureaucrats cannot modify
In a recent report of last June by the World Economic Forum "Exploring Blockchain Technology for Government Transparency Blockchain-Based Public Procurement to Reduce Corruption", the results of a study carried out in collaboration with the Inter-American Development Bank (IDB) (which has the aim of fostering the economic and social development of the countries of South America) and the Office of the Inspector General of Colombia (Procuraduría General de Colombia) whose conclusions, especially referring to the procurement sector, allow us to say that, on the whole, Blockchain-based e-procurement systems provide important advantages related to procedural transparency, permanent registration and publicity of data.
On the other hand, even a blockchain-based solution is not able to reduce the risk of corruption in some human activities that can occur outside the electronic procurement system, in particular on corruption or collusion between sellers or between sellers and bidders.
To conclude, the MISE, in the “Proposals for the Italian strategy on technologies based on shared ledgers and Blockchain. Summary for public consultation ", considers that the main and potential feature offered by this technology is to reduce, in some cases even drastically, the cost of trust necessary for the completion of a transaction, intended as an exchange of information or value, guaranteeing the at the same time certainty of its execution.
Among the numerous sectors towards which to direct the experiments there is also that of the protection of Made in Italy through the creation of a transparent traceability and communication system aimed at combating counterfeiting in the various production sectors (agri-food, clothing, pharmaceuticals, etc.) and to protect industrial property.
Finally, it should be noted that the blockchain could also be used profitably in the fight against tax evasion. Several experts in the field suggest that a blockchain-based system can cancel VAT tax evasion, at least that due to fraud in cross-border transactions between EU countries, which would amount to 50 billion euros per year (according to an estimate of the European Commission).