The Warsaw Voice » no category » Monthly - July 6, 2018
Business & Economy
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Blockchain – Poland’s ‘Eureka Moment’?
While there is no doubt that blockchain is one of the newest and hottest technologies, its adoption is yet at early stage and at Polish public sector not even planned. However, from managing registries of identities, trusted document exchange, to data and currency transactions, the technology has the potential to make a huge impact. This impact is two-folded.

Its benefit is clear - embedded technological trust. For public sector organizations and governments the notion of trust is critical. Blockchain inspires trust through decentralization. As a distributed ledger, data or monetary transactions are transparent since they need to be verified by members of the network. Record-keeping becomes immutable as it is almost impossible to change data without others on the network detecting that a change has been made. Users can have confidence in the permanence of records and they become owners of their own identity and related digital assets.

The second most obvious reason to explore blockchain as the underlying technology is cybersecurity. It brings the change in the paradigm to handle data. Instead of protecting data centers where data is stored, it cryptographically protects the data that is dispersed in the distributed ledger. All kind of attacks become extremely difficult and costly. Data leakage or theft is challenging. A successful ransomware attack becomes a big problem too.

It is for these reasons that a number of countries have started to explore the potential for blockchain to overhaul government processes and create new nationwide infrastructures whereby trust and security need to be inherent. These are initiatives that put citizens back in control of their digital identities, alleviate the burden of data management for compliance purposes and bring significant improvement into countries’ cyber defense strategy.

With recent deployments at publicly-backed institutions such as the Biuro Informacji Kredytowej (the Polish Credit Bureau), Poland has already hit global headlines and shown itself to be a pioneer of an emerging blockchain-powered world. With the right support, Poland has the potential to achieve so much more. Here’s why.

Blockchain on the international stage

As with any new technology, blockchain has been met with both excitement and skepticism. While some countries have provided a favorable environment for innovation, others have created roadblocks. Tomorrow’s blockchain innovation hubs are likely to be where governments encourage this technology today. During Impact 18 conference in Kraków, Noah Raford, COO at Dubai Future Foundation, announced that the emirate will move all the critical records onto a blockchain based country IT solution. The reason is the need to build a digital country that is safe and built on trust.

Estonia – a foreword tech-thinker on many fronts – is another example. In Estonia, blockchain has been in active use since 2012 for data registries including its national health records, as well as judicial, legislative, security and commercial code systems. Having the country’s critical infrastructure on the blockchain means that neither a military nor cyber-attack could compromise or destruct the country critical records; particularly important for those countries with volatile foreign relationships.

Our close neighbor - Lithuania - is currently tendering a LB Chain where its Central Bank plans to develop a country’s blockchain structure to manage various records that are either critical for security or for business agility. According to Marius Jurgilas, Member of the Board of the Bank of Lithuania, blockchain technology has particularly great adaptation possibilities in those areas where high data transmission security and credibility is required, e.g. financial operations or electronic voting.

Blockchain and its uses in the public sector

On the blockchain system, the data (a digital value) once it is being created at a trusted organization it then is encrypted and secured in a distributed ledger with no central administration. Consequently, the distributed nature of storage means that it would be almost impossible for an attacker to know the exact location of the data. To do so would involve connecting scattered fragments across numerous server systems – by design it is therefore much more costly and at the same time less attractive for attackers to compromise the data.

What’s more, with added robust encryption, multi-level encryption keys would need to be retrieved to gain visibility into the data. This takes time, which attackers don’t have when they’re launching the likes of a ransomware attack. The more time spent on the network, the greater chance of identification and interception; consequently making attack becomes even less attractive.

The granular control of data afforded by the blockchain also has the potential to give people control of their digital identities. A huge issue when it comes to governing. Citizens will decide who they want to share their own information with. They will also have a full control on when to revoke the access rights. When moving data from one institution to another, instruction or permission control will stay with the data owner, rather than a third party (administrator). From banks to mobile carriers, citizens could use the blockchain to store, share, change and prevent access to their details; control that has typically sat within complex legacy structures. This can also help towards GDPR compliance, as data is able to be indexed and granularly managed.

The foundations of blockchain’s potential are clearly already in place. Technically it has already been proven. Some pioneering countries spare no efforts in adopting the technology into its public services. What’s needed now is an appetite for change and an environment where a new innovative structure can flourish. This is where Poland comes in.

The opportunity for Poland

Poland has a unique opportunity to apply its experience and technical expertise in building cutting-edge blockchain solutions to its public administration. Using blockchain, Poland could put its citizens in charge of their own digital identities and, in doing so, generate an unprecedented level of trust that could rival any other country in the world.

By taking the first step in moving parts of its public infrastructure to the blockchain, Poland is already ahead of the game and it should now seize the opportunity to broaden the use of blockchain within the public administration. In doing so it could transform not just Poland, but become a blueprint for other countries wanting to implement a digital infrastructure designed for trust and cyber security.

Poland has been famous for its cryptologists and mathematicians and continues to have extremely talented people in those fields. In Poland there has been significant investment in blockchain. From the Polish Accelerator of Blockchain Technology – designed to invest in startups innovating the technology – through to established banking giants like Santander choosing Poland as one of the four countries to launch its blockchain foreign exchange platform. And as mentioned, one of the most significant blockchain development this year has been the project sponsored by Związek Banków Polskich (the Polish Banking Association) to move a trusted banking documentation onto blockchain to comply with EU regulations. This is also thanks to the large pool of technology geeks and experts able to design and deploy our own, Polish blockchain for critical and mass scale use. This is clearly a trampoline into areas demanding even more critical trust and security.

In an age where threats of foreign interference have never been as high as today and political volatility remains frequent, there is no doubt that gaining citizens’ trust and securing governmental processes could transform the world we live in. For Poland, blockchain could be its ‘Eureka moment’.

Jacek Figuła
Chief Commercial Officer of Billon, a company that reinvented technology behind data and money flow. Before 20 + years’ of experience in sales leadership in global corporations, like Cisco most recently.