Does Armenia Need Blockchain?
According to Google statistics, the number of queries on Blockchain in Armenia has doubled in the last 12 months, showing a clear rise in interest in the technology among Armenians.
Worldwide, hype about the benefits of blockchain continues to build, whether it’s challenging our belief in the need for traffic lights or transforming how we invest in green energy. But what even is blockchain? Where can it be used? Does Armenia need this new technology?
Blockchain: myth or reality?
The rapid growth of blockchain technology naturally leads more people to ask what it is. Unfortunately, there is a lack of textbooks devoted to the subject or courses at schools or universities. Often, it’s incorrectly associated only with Bitcoin, the cryptocurrency, which shook up the financial transactions world back in 2009. In fact, the concept of blockchain is much broader than just a cryptocurrency.
A blockchain is a decentralized database, which is extremely difficult to change. A single blockchain is located on servers around the world and helps to conduct secure transactions.
Imagine a situation with 50 people sitting in a room. Person A gives person B $75, while the other 48 people witness this deal. If after some period, person A claims they gave $100, the 48 people would assert that this wasn’t what happened, because they had watched as $75 was given and not a cent more. In other words, all operations are transparent, and visible to all parties that comprise a single blockchain — as such, short of vast computational power, manipulations are nearly impossible.
At the same time, blockchain is not only about financial transactions. The technology can be used to sell, buy or register land, digitize documents and personal information (such as health records or identification data), even to hold and process elections electronically. Nowadays some countries have already begun implementing blockchain technology, with some going as far to create their own digital currency.
One thing is clear — blockchain is the future.
Blockchain best cases
Blockchain inspires and frightens simultaneously. Much like the appearance of the Internet 20 years ago: incomprehensible, but undoubtedly important. For a country like Armenia, regional trends are showing its increased importance:
- Estonia. Considered to be a, if not the, leading nation in the adoption of blockchain technology. Its applications are diverse: in health care, the banking sector stock exchanges, in notaries, and more. It allows foreigners to run businesses and will soon be applied to help secure over 1 million patient healthcare records, allowing doctors to better react to emergencies by providing full access to full medical records at the click of a button.
- Georgia. The government of Georgia is using blockchain to register land titles and validate property-related government transactions. A custom-designed blockchain system has been integrated into the digital records system of the National Agency of Public Registry and is anchored to the Bitcoin blockchain through a distributed digital timestamping service.
- Russia. Several blockchain projects are already active, such as a service by the online aggregator of insurance companies, called Prosto.Insure, that allows customers to purchase insurance with a blockchain-certified guarantee that their data will not be changed. Another company, Sberbank, are transferring their whole document flow to a blockchain.
Others are beginning to talk up the possibilities of blockchain: the governments of Belarus, Ukraine, Kazakhstan, Kyrgyzstan and other former Soviet Union states have all made statements about impending use. In many countries, working groups have been established to explore the possibilities in application across different areas of the state.
Within this context, Armenia’s desire to implement the blockchain makes sense.
Is Armenia ready?
Taking note of these regional success stories, the Armenian government believes there are areas where blockchain can have real impact. In Armenia’s 2017 National Competitiveness Report, blockchain technology was singled out as an especially useful tool for reshaping businesses, transforming companies entire workflow models, whilst reducing levels of corruption. According to Manuk Hergnyan, Director at EV Consulting, applying this sort of critical technology in certain economic sectors in Armenia could generate up to $220 million USD per year.
Such prospects are encouraging for innovators. The message is spreading: a recent speech by the Prime Minister of Armenia, Karen Karapetyan, stressed the need to transform traditional approaches to the study of such disciplines as mathematics, computer sciences and engineering for training new personnel, using blockchain technology.
Now is the time to turn words into actions. In July 2017, UNDP in Armenia in partnership with the Centre for Strategic Initiatives (CSI), started mapping the opportunities for blockchain use within the public sector. A working group comprised of representatives from UNDP’s Alternative Finance Lab, and blockchain start-ups AID: Tech and Neocapita is identifying and prioritizing the areas where blockchain technology can enable better, more transparent and more engaged governance for the Armenian public and policymakers alike. Watch this space!