Developing Trust in the Government with Blockchain Technology

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A Deficit of Trust

As we have seen from recent events, lack of accountability, opacity, forged documentation engender the single most crippling aspect of a government: the lack of trust in that government and its processes.

With trust, time, costs and risks are significantly reduced, society becomes more open and participative, and governance improves.  What is needed for trust, that most precious quality of governance? 

For example, if citizens do not trust in the veracity of the National Identity card, the processes which depend on it – financial and banking transactions, voting, security, privacy, personal recordkeeping – suffer a deficit of trust.  Additional solutions and processes incur cost, greater complexity and even less transparency.  Data about persons based on the national ID card become suspect.  All resultant transactions, be they healthcare, social services, financial, claims for benefits, suffer from a lack of trust.

There are various qualities, of which transparency, openness and an immutable audit trail rank among the most important, in developing trust. 

Similarly, transactions which are opaque to the transacting parties are costly, complex and take time because the parties do not trust each other.  If a buying party trusts the selling party and the insuring party through transparency and immutability, the transaction can be a lot quicker, cheaper and simpler.

An Open Government

The ultimate goal would be an Open Government, one where government becomes a trusted partner and reinvents processes to enable collaboration between corporations and citizens.  In such a system, activities, decisions and information would be open, transparent and consistent. 

Is this merely a pipe dream?

Estonia, a tiny but technologically developed nation, has a government-issued digital identity based 

on a technology called Blockchain (more later). A number of digital services is enabled to citizens with the e-Identity.  Citizens can verify the integrity of the records and who has access to them, enabling such electronic services as e-voting and filing taxes electronically.

Dubai has also staked a future based on Blockchain technology: by 2020, the Dubai Government intends for all visa applications, licence renewals and bill payments, about 100 million documents a year, to be based on Blockchain.  All real-estate transactions will be conducted on Blockchain. 

The underlying Blockchain technology is such that it is immutable, tamper-proof and provides a common view of activities, if implemented correctly.  The desired result is that trust in government will increase, and foreign investors will be attracted to such an environment.

Developing Trust in Government

Blockchain is a technology which famously underlies Bitcoin, but Blockchain technology itself is independent of Bitcoin, or any other cryptocurrency.  Essentially, it is a distributed, shared ledger that provides a single source of truth to all transacting parties.  It is trusted because it is protected by cryptographic technology.  It is revolutionary because it breaks the mould of each transacting party keeping its ‘own’ records and trusting a common, distributed ledger.

It is already used in various industries: Walmart, Driscol, Cole’s, Nestle, among others, are participating in a project on food safety to trace the provenance of food items:  tainted food, such as the recent E Coli contamination of Romaine lettuce in the US, may have been prevented or more easily traced if a Blockchain food traceability system were in production.  

European banks are running a number of pilots and projects to redesign financial transactions such as Letters of Credit and disputes on Blockchain.  Maersk, the world’s largest container shipping operator, is running blockchain to reduce the cost and time for shipping goods from one country to another.

Nearer home, Thailand’s K-Bank has implemented a system for Letters of Guarantee based on Blockchain, with at least one production system in Singapore and several pilot projects in the banking sector.

For Malaysia, reinventing itself anew, there are many opportunities to start by reinventing existing processes to be open, transparent and trusted. Some examples are real estate (land and property) transactions, asset management, contract management and regulatory compliance.

More specific examples are: a land registry with an auditable, immutable trail of ownership, a national registry of vehicle ownership that is auditable and improves road safety, a corporate registry of ownership for accessibility and auditability, even a national registry for citizen identity that is auditable.

While some organisations undertake these projects to reduce costs and improve processes, for Governments, there is the end-goal of engendering trust, innovation, co-ownership with citizens and corporates, and attracting investment.

Blockchain and Trade in Malaysia

In September 2018, I was part of a panel discussion on the impact of Blockchain on trade in Malaysia.  It’s a rather esoteric topic, more macro-economics than technology, but here’s my take on it, with some caveats:

-        Blockchain for business has nothing to do with cryptocurrencies, and is an underlying technology with the main value proposition being to promote trust and transparency. For an ABC on Blockchain, refer to my blog post: http://yukits.blogspot.com/2016/03/the-buzz-on-blockchain.html

-        Having said that, Blockchain is a technology, not a fix-it-all, and you can get really bad implementations which bring no value to anyone except to give headaches all around. See my blog post on Blockchain in business: http://yukits.blogspot.com/2018/08/blockchain-and-why-its-not-about.html

(Blockchain technology engenders trust and transparency, and this can fundamentally affect the way business is conducted, when you see what the other participant is doing, when you know the recorded transaction cannot be altered.)

Blockchain in Malaysian trade is best tackled by breaking it down into smaller, more easily digested segments of the economy:

In Government.  If the Malaysian government decided to embrace blockchain technology, it would send an underlying message, that this government understands the value of technology, and promotes a business environment of trust and transparency.

For an investor, this is an encouraging sign, because of the cost of doing business in an open, transparent environment is lower than one where opacity and red tape is the order of the day.  

There are also many onerous Government processes which would benefit greatly from the adoption of blockchain technology, and which would grease the business infrastructure.  Examples are a blockchain-enabled national identity (no more dubious IC cards) land transactions (where title disputes, land transfer disputes and legal tangles happen), vehicle oversight (double registrations, written-off vehicles running around on our roads). This will not only send messages of certainty and resolve, but encourage businesses to start doing the same. 

Governments in Estonia (blockchain e-voting) and Dubai (blockchain enabling various processes) are early adopters of blockchain technology.

In Large Enterprises.  The economic contribution of large enterprises is out of proportion to their number, as they comprise a tiny fraction of businesses in Malaysia. Obviously heavy hitters and trend setters, large enterprises  generally have the resources and know-how to implement customised business blockchains, by which I mean blockchain systems set up to tackle specific business processes or issues. 

The main drivers are economic, as in ROI, productivity, and regulatory, as in compliance.  For example, TradeLens (https://www.tradelens.com/) is a blockchain enabled platform to facilitate trade and global supply chains that promises to significantly reduce trading costs and time taken.

Where does that leave SMEs, which comprise the majority of businesses in Malaysia? These range from small family businesses to manufacturing companies of a few hundred people. The drivers and economics for SMEs differ significantly from larger enterprises. SMEs generally have fewer resources to invest in new technologies, but they would also benefit from increased trust, transparency and innovation in their business processes, allowing them to increase productivity, reduce turnaround times and expand businesses.

For SMEs, blockchain platform providers could provide generic trading platforms which they could subscribe to, much as Taobao is an e-commerce platform for businesses. At the time of writing, Ant Financial Services is running a trial on a blockchain-based platform to enable Filipino workers to remit money back to their families in the Philippines (http://fortune.com/2018/06/26/alibabas-ant-financial-blockchain-bitcoin/) and IBM has unveiled a blockchain based cross-border payments platform: (https://www.zdnet.com/article/ibm-debuts-blockchain-network-for-cross-border-payments/)

There is also the promise of innovating new business models on blockchain; new businesses and processes will be created leveraging the strengths of the technology. One example is the Plastic Bank, dedicated to social good, using blockchain for its underpinnings: https://www.plasticbank.org/. 

Blockchain and Why It’s Not About the Technology

So you think a blockchain project is about technology? Think again

Photo by Hitesh Choudhary on Unsplash

The latest tech buzzword is Blockchain, (remember IoT, Big Data and all those earlier buzzwords?). By now, the concepts behind Blockchain – a shared, distributed ledger with cryptography – are well known.  The initial automatic association between Blockchain and cryptocurrencies such as Bitcoin have also subsided.  But there’s still plenty of confusion.

When should I use Blockchain?

Blockchain is not for everything and it’s rather worrying when companies want to implement Blockchain in case they miss the boat.  It’s fine if you’re doing a small pilot to learn and get feedback, but I’ve come across organisations that seem to want to force-fit the technology into their business. Bad sign.

The viability of a Blockchain project should be carefully vetted, because here’s the thing -  it’s not a technology thing, it’s a business thing – ie, what are you trying to solve or build that Blockchain plays a part?  If you have a bad or poorly thought through business proposition, Blockchain isn’t going to make it better, only more expensive, confusing and frustrating.  And if the project fails, it’s not Blockchain that’s failed, it’s the business proposition.

That seems to imply that technology should come in last, ie that it enables business, but it can also work the other way, because Blockchain now provides capabilities that didn’t exist before.  So the other way to approach this is bottom-up – what business proposition that was previously not possible is now doable thanks to this new way of doing things?  What new processes and ideas might spring up?

For the creative, this could be a magic carpet. Just think – the big organisations will have the resources to explore and implement the technology, but how about the SMEs who are drivers of the economy in many countries?  The 50 or 100 person manufacturing shop, the small trader, the crafts maker, the importer-exporter who doesn’t have the knowledge or resources to implement what could be a game-changer?

After all, which trader wouldn’t like to connect with their overseas counterparts, receive confirmation and make payments in minutes rather than wait days or weeks, going through intermediaries, not knowing for certain if a transaction is happening?  The game changer here is TRUST, of course.

And Blockchain engenders TRUST, if you do it properly.  Yes, and how about that SME?  Now, wouldn’t it be interesting if someone built a Blockchain trading platform to which small traders and SMEs could subscribe?

Part 2: Wither the Human Brain?

Part 1 introduced artificial intelligence or cognitive computing, the characteristics of the technology, and how its increasing use is consistent with another trend, which is the generation and consumption of vast amounts of data.

Big Data and Cognitive Computing

Floods, deluges, vast oceans of data, pour in remorselessly from the computer systems that hum behind the scenes of modern life, everything from banking to travel to any form of commerce, to data generated by all of us texting away on our smartphones, to the embarrassing excesses of email flooding every inbox with spam, to videos and photographs posted on social media of special meals and holidays to devices themselves sending signals all the time. Your car, your smartphone, airplanes in the air, any connected device, is generating data all the time.  

(Technology geeks call these Big Data and the Internet of Things, among other things. Analysts talk about ‘billions’ of connected devices and by some estimates, sometime in the first decade of the 21^st century, the number of connected devices exceeded the human population.  IBM says that some 40% of all data generated by 2020 will come from devices and machines.)

Part 1: Wither the Machine Brain?

A two-part series, examining the growing trend towards cognitive machines, or artificial intelligence, and what it means.

Skynet comes Alive?

It’s almost inevitable, given dire warnings about the threat to the human race by some prominent commentators, including a billionaire and visionary entrepreneur, and one of the world’s most prominent physicists, that you would associate Artificial Intelligence (AI) with the rise of the machines, aka, Skynet, aka the Terminator.

Futurists predict that it’s only a matter of time before we create a computer that’s smarter than the human brain, and after that the very smart machines can create even smarter machines, eventually leapfrogging the capacity of human intelligence.  It doesn’t take a Hollywood imagination to predict the doomsday scenario of super smart computers creating machines with capabilities vastly beyond the human ken – after all, even the lowliest computer today can out-compute, at vastly superior speeds, the average human.

Humans however, have always been able to think, and therefore outsmart fast, efficient computers programmed to do whatever they’re programmed to do.  Until now.

The Buzz on Blockchain

Blockchain and Bitcoin

If you’ve been keeping up with what’s happening in the world of technology, you’ll realise there’s a lot of buzz around Blockchain technology.  Blockchain is trending upwards and like all nascent technologies, it is in the hype phase of its lifecycle.  But what is it?

Blockchain is best known for its association with the shadow crypto-currency Bitcoin.  Bitcoin is the only industrial application of blockchain technology.  The concept of blockchain technology was first described by the mysterious founder of Bitcoin, known only by his pseudo-name, Satoshi Nakamoto. (The identity of Satoshi Nakamoto was been claimed by an Australian entrepreneur, Craig Wright, in April 2016) 

Leaving Bitcoin aside, why the fascination with Blockchain? And what is it?

The Internet of Things is not about the Things.

First published in The Star, January 12, 2016

Certain trends, such as ‘wearables’, get a lot of media attention because of their obvious visibility and relevance to the man in the street. Because of a small electronic bracelet on his wrist, a person can now measure the number of steps he takes in a day, his sleep patterns, his heart rate and a host of other data that always existed but simply didn’t resonate.  

Waiter, there’s a chip in my soup!

First published in The Star, July 14, 2015

We generally don’t associate technology with food – they seem inherently incompatible.  Technology is cold, metallic and digital, while food is – well, food! – comforting, organic, nourishing and something to be looked forward to.  And yet, invisible as it may be, technology can and does play a big part in the modern food chain, from tracking inventories to supply chain management.  This article highlights a couple of lesser-known examples.

The case for detecting food borne diseases

In 2011, more than 50 people died and about 4,000 were sickened following an E. coli bacteria outbreak in Germany that originated from contaminated sprouts. It took public health officials 60 days and thousands of case reports before the outbreak cause was identified.  In the process, Russia banned food imports from the EU, imports of cucumbers from Spain were wrongly identified, with Spain claiming economic losses in the millions of dollars.  The cause of the outbreak was finally identified as sprouts from a farm in Germany.

About 3,000 people die from contaminated food each year in the U.S. alone. Recently, grocery stores in the U.S. and Canada were forced to remove spinach suspected to be contaminated with Listeria, which can cause listeriosis, a serious and sometimes deadly infection.

Outbreaks of food-borne diseases can be costly, both in economic and social terms, but the folks at IBM Research may have come up with a better way. 

Being on the Radio

Radio is an underestimated media channel; it lacks the glamour and impact of visual media, yet radio plays a big part in our lives without our realising it.  Next time try sitting out a traffic jam with the radio turned off.

I'm fortunate to have had the occasion to speak on radio several times, and from being rather tense the first time around, these episodes have become rather fun.  I try to make the sessions interesting, because no-one wants to hear someone drone on about some obscure topic.

These are links to a few radio interviews I've had with BFM, the Business station, on various topics related to technology.

On Food
http://www.bfm.my/tech-talk-ibm-food-traceability-watson.html

On the Internet of Things:
http://www.bfm.my/tech-talk-internet-of-things-enterprise-mdec-ibm.html

On 5 technologies that will change our world
http://www.bfm.my/tech-talk-ibm-5-in-5-everything-will-learn-yu-kit-lee.html

On IBM Watson, when it was new:
http://www.bfm.my/techtalk_ibm_watson.html

On the senses, enhanced by technology:
http://www.bfm.my/techtalk-ibm-5-in-5-touch-sight-hearing-taste-smell.html

Cooking with my Computer

We’re used by now to celebrity chefs, those hard-working, talented people who inhabit kitchens and TV cooking and reality shows, and turn out their own cookbooks.  Have you heard of Chef Watson?

Maybe not, but he’s a celebrity chef anyway, and of a different sort, because Chef Watson is … a computer.

Watson, IBM’s human-beating technology, first appeared on a Jeopardy show in 2011, handily beating the human champions, in a quiz show that uses quintessentially human qualities – such as understanding arcane clues in natural, as opposed to, computer language.  Being a computer, Watson also ingests vast amounts of data, and it doesn’t forget, doesn’t get fatigued, get confused or have human frailties such as prejudices and preferences.  What’s more, Watson operates at blinding speeds.

The Failure of Innovation

First Published in  The Star, Malaysia  March 26, 2015

Is it enough to be innovative to be successful?

Innovation … it’s a frequently encountered buzzword, appropriated by everyone from politicians to CEOs and all the way down the pecking order.  That’s understandable.  Enormous economic value is attributed to the innovativeness of companies and governments. The glitterati of the tech world – the Googles, Facebooks and Apples – are widely perceived to be innovative companies.  The poster child for innovation is often held up to be Silicon Valley, which has created a multibillion dollar industry affecting all aspects of our lives, from what was essentially land under fruit orchards.

How Much Data Is Big Data?

In January 2015, I was invited to speak at a bank’s Corporate day.  The audience comprised analysts from the Finance industry, drawn from various firms. Their normal job is to look at company financials, speak to other analysts and industry pundits and come up with pronouncements on the future performance of companies’ stocks. 

Since the audience was not from the IT industry but have been subjected to the blizzard of IT terms we in the industry carelessly toss about, I thought I’d give them a layman’s perspective on two frequently-encountered buzzwords:  Big Data and the IoT (Internet of things).

We talk a lot about Big Data as if we grew up with the stuff, but in fact, the truth is far more interesting than this blasé attitude suggests.  There’s lots of data in the world, and 90% of it was created in the last 2 years. You’ve probably heard this before, but what you may not know is that that statement will be true in 2, 3, 5, years time from now and was true last year, and the year before that and the year before. 

Brave New World

First Published: The Star, August 2014

One of the big technology industry analysts predicts that 2014 to be the breakout year for wearable technology. There’s a big takeup in wearables, with more and more people sporting wristpieces that measure their lifestyle, or sports activities or are an extension of their smartphones.  Unlike earlier models, latter-day models are sleek and stylish.  Google’s Glass has also been attracting media attention for quite a while now, just one of a number of smart eyeglasses.  

Wearable technology is only one small sliver of a much larger trend. Google’s acquisition of Nest, the home thermostat company in early 2014 is an example of the hive of activity in connected devices, while Apple’s inclusion on its latest smartphone operating system (iOS8) of Homekit, which allows developers to connect their devices to Apple’s platform, provides tantalizing hints of what’s to come in the area of the connected home. 

In 2014 Google unveiled its driverless car, which depends on sensors to sense its surroundings and navigate its way to the destination. All the major car manufacturers are working on some version of autonomous driving cars.

What's Big Data?

First Published:  The Star, (Malaysia) May 2014

What does “Big Data” mean? Is there a “Small Data?” Don’t they mean “Lots of Data” rather than “Big Data?” And where’s it all coming from?  (I tell you, these IT folks are just plain weird sometimes…)

Actually, “Big Data” sounds a lot better than “Plenty of Data” or “Lots of Data”, both of which sound terribly mundane.  “Data” is not very useful on its own, its just a fact or a statistic, (for example, a single record of a toaster sale, but data can become useful if we know how many toasters were sold, the combination of colours, and where they were sold, for example, because then we know which coloured toasters to make more of, or if our pricing is right.) At this stage, our data has become “information” because it informs us, so in effect, collections of facts or statistics, meaningless in themselves can be organized or assembled to provide useful ‘information’.

Hybrid Clouds

Hybrid flowers, Hybrid cars and Hybrid clouds?

 First Published in November 2014:

The Star: On Hybrid Clouds 

Most CIOs have their heads in the cloud these days. But if they’re leading established enterprises, they’d better have their feet firmly planted on the ground.

Many CIO’s are feeling pressure – whether from CEOs, employees, customers, partners or the market - to implement the latest cloud-based IT technology for efficiency, agility and economy.

But they also have their existing IT infrastructure, and as a Malaysian CIO may say “So how??”

For these CIOs, with conflicting demands, the answer may lie in “hybrid clouds”, which combine private and public clouds and maybe even some non-clouded dedicated servers.  Say what?

Cloudy and Hold the Meatballs

First published in  The Star, April 14, 2014

The IT world is up in the clouds. That should be a capital “C”, because the latest buzz is about Cloud technology.  Cloud is not new, having been with us now for a number of years. Conceptually, pundits claim that cloud computing goes much further back to the days of the greenscreen and mainframe computer.  However, everyone - the media, analysts, vendors – have never been hotter over Cloud than now.  And perhaps the picture has never been cloudier.

In the simplest terms, Cloud computing can be thought of as a utility: computing power on tap.  It’s there when the user needs it at the click or two of a mouse.  Like tap water or electricity. To the end-user, the promise is enormously seductive: no more need to worry about IT infrastructure, security, maintenance and having to put up with geeky IT managers who always want more money to upgrade the servers, whatever those are.