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Georgians know what it’s like to have their land stolen from them.
The small nation in the Caucasus, with a population of just under 4 million, gained independence from the Soviet Union in 1991. But in 2008, under the pretext of supporting separatist movements, Russia invaded from the north, seizing control of several Georgian territories — South Ossetia and Abkhazia. Russia still occupies both, and in July Russian troops annexed yet more Georgian land in what Georgian president Giorgi Margvelashvili called “creeping occupation.”
This is perhaps why the government in Tbilisi, under the leadership of justice minister Tea Tsulukiani, decided to make Georgia the first country in the world to use a blockchain to protect its land registry system.
Blockchain is a system that makes an immutable ledger using sophisticated cryptography, distributing the database across thousands of participating computers. This makes it almost unhackable; even if an attacker was able to access one unit of the blockchain, any changes they managed to make would be permanently visible on the ledger, like graffiti scratched on a steel tabletop.
How About an Immutable Blockchain-Based Voting System?
Blockchain is the technology behind the cryptocurrency bitcoin, which has hit headlines in recent weeks for its extraordinary tenfold increase in value during 2017. But experts say blockchain has the potential to change not just currency but also any industry or state activity in which data is exchanged.
“The blockchain, as a decentralized and perfect ledger and selective and impenetrable store of data, can replace anything where people can make mistakes. Government comes to mind,” Tim Draper, a venture capitalist and early evangelist of both blockchain and bitcoin, tells me. “The blockchain can replace many bureaucrats whose jobs are to keep track of data and secure financial transactions around contracts with the people.”
The possibilities are almost endless, Draper says. “Medical insurance, welfare, census, health records, insurance provision and payments, land use and ownership.” And election integrity — which has become a hot-button issue as the extent of Russian interference in the U.S. presidential election and the UK Brexit vote, among other things, has begun to become clear. Imagine a UN-backed electoral blockchain that could be used as the gold standard to prevent corruption in elections, replacing the need for costly election monitoring programs.
More Secure National Records
The Georgian land registry is one of the first examples of blockchain being used in this way. The registry worked with a blockchain development company called BitFury to create a private blockchain on a custom platform called Exonum. Because the security of a blockchain is a direct function of its size, BitFury came up with a clever new idea: The entire Georgia blockchain, every few moments, is automatically backed up to the bitcoin blockchain itself.
That’s important. A blockchain with a thousand or so computers on it, such as the Georgian land registry, but theoretically also a hospital patient database, electoral roll, or anything else you can think of, is much more secure than holding the database on a single server — as is the norm today — because attackers would have to breach each atomized unit of data separately.
If someone breaks into that server, they then have access to the whole database — as the UK’s National Health Service found out to its horror earlier in 2017. Dozens of hospitals across the country fell victim to an attack using a notorious virus called WannaCry, which locked them out of their computer networks and then demanded a hefty ransom to give back their data. North Korean hackers were later found to have been behind the attack.
But by anchoring the smaller private blockchain to the behemoth bitcoin blockchain, which has millions of nodes and unbelievable amounts of computer power maintaining its integrity, the database becomes even more immutable.
Land Records and Smart Contracts
Other countries have taken notice. At a blockchain summit in 2016, according to BitFury senior communications manager Rachel Pipan, the former prime minister of Haiti said with regard to rebuilding the country after the catastrophic 2010 earthquake that “the first building to get hit and collapse was the building of public records — so every piece of paper which said who owned what was gone in a flash.”
On blockchain, no matter what buildings were lost, every record would be absolutely secure.
The next step, according to Mari Khardziani, head of the international relations unit at Georgia’s National Agency of Public Registry, is to add the ability to incorporate “smart contracts” onto the blockchain itself, so that a Georgian citizen would be able to sell or buy land directly and instantaneously using an app on their phone. It is at the same time infinitely more secure and requires infinitely less bureaucracy.
Blockchain might be sucking up the headlines now because of the skyrocketing value of cryptocurrencies like bitcoin, but in the long run, it might be in the mechanics of government where blockchain has the potential to make the most difference.