According to the draft framework, which The Indian Express has reviewed, all possible applications of blockchain technology will be investigated by the government, under the guidance of the IT Ministry.
The Ministry of Electronics and Information Technology has created a draft framework to allow the use of Blockchain technology in government services. It intends to use it for property record keeping and digital certificates, power distribution and health records, as well as supply chain and supply chain management.
The draft framework suggests that all possible applications of blockchain technology will be investigated by the government, under the guidance of the IT ministry. The draft called the National Strategy on Blockchain will also explore the possibility that the technology could be used for future medical supply logistics management.
Senior government officials stated that virtual and digital currencies like bitcoin have been excluded from the framework and will not be included in the near future.
"Despite all our efforts, digitization of the currency and banking system has not been able to catch up with inflation. Non-repudiation through in-person verification is still required for our banking systems. This makes it difficult to implement technological solutions, especially crypto-currencies.
Blockchain technology works on a distributed ledger system that is owned by everyone. Participants can read, write or make changes to the ledger.
The national framework suggested that the technology could be used to better suit the needs of India's government and the Indian people. It was possible to use one of four architectures: public and permissionless, public but without permissions, private but with permissions, private, permissionless or private and with permissions.
Public and permissionless architectures would allow anyone to join, read, create, and commit changes. They would be stored on public servers, but have limited scalability. A public architecture would only allow authorized persons to make and commit changes.
Similar to private architecture, permissionless architecture would allow only authorized persons to make changes to distributed ledgers, but there would not be a limit on how many people can use the technology.
While the technology has many benefits, the draft framework warns that it is necessary to establish legal guidelines and guidelines for how the technology should be used and its misuse before moving forward.
The framework draft also warns about potential problems associated with the adoption of blockchain technology, such as the replication of data on all nodes and a lack of the appropriate skillset or human resources in the country, as well as the threat from rogue state actors.
"Blockchain data are stored on every node of the network, so privacy is not an inherent characteristic that Blockchain has traditionally provided." According to the draft framework, the data should not be stored in a way that compromises privacy. Additionally, consent mechanisms should be developed in accordance with data protection laws.
For a while, the government has been exploring blockchain as a delivery method for certain state-run services. The government think tank NITI Aayog also suggested, in a paper, that distributed ledger technology be used to deliver state-run services like fertilizer subsidy disbursement or educational certificates.