10thWEST AFRICAN INTERNET GOVERNANCE FORUM (WAIGF 2018) BURKINA FASO - PowerPoint PPT Presentation

10thWEST AFRICAN INTERNET GOVERNANCE FORUM (WAIGF 2018) BURKINA FASO TOPIC : Digital Economy and Blockchain Technology Dr. Steven Bassey (Ph.D., DTh, CPMA, CEH, CHFI, USLPI/CSM, EC Council Certified) Chair Subcommittee on Data Protection & Privacy Act, Senate Expert Working Group. Cyber/Forensic Research Fellow / Lecturer Center for Cyberspace Studies Nasarawa State University- Keffi dr.stevenba@gmail.com

OUTLINE  Introduction  Blockchain  DIGITAL ECONOMY  Blockchain technology core principles  Indicators for Consideration  Conclusion

INTRODUCTION The vision of a digital economy can be fulfilled by implementing Blockchain based platforms in the financial sector to ensure transparency and a corrupt free system. Through this, the total circulation of money in an economy can be easily traced. It is because every node present in the network validates every transaction and the same is updated in the ledger; the ledger cannot be tampered. Blockchain technology has the potential to offer an infrastructure which makes the transaction cost effective (cross border payment), time effective (transfer of funds) and transparent (non-involvement of third party). We should think about blockchain as another class of thing like the Internet, a comprehensive information technology with tiered technical levels and multiple classes of applications for any form of asset registry, inventory, and exchange, including every area of finance, economics, and money; hard assets (physical property); and intangible assets (votes, ideas, reputation, intention, health data, information, etc.)

Blockchain  Blockchain is the decentralized network and has no single point of failure.  It is incorruptible, undeniably resourceful invention in digital era.  It is entirely encrypted and digitalized form of data.  All transaction are visible to all participants in the blockchain.  The concept of digital economics is comprising under the rule of block chain technology which is entirely based on algorithm program  These blocks are interlinked each other and peer network with storing transactions in each block.  It cannot be deleted, replicated or be corrupted and hack  blockchain technology operates without central body of network like central banks or government  is a public ledger of all cryptocurrency transactions that have ever been executed.  It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings .  The blocks are added to the blockchain in a linear, chronological order & each node (computer connected to the network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the network.  Block chain is a public ledger containing transaction records of digital money  Blockchain security methods use encryption technology

Blockchain 1  A blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity.  The real magic comes, however, from these digital ledger entries being distributed among a deployment or infrastructure. These additional nodes and layers in the infrastructure serve the purpose of providing a consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them.

DIGITAL ECONOMY  Utilize blockchain technology to maintain profile of national database system  Governance and electoral system controlled under blockchain technology to maintain transparency.  Entire concept in civic activities such as, utility bills payments, transferring property & land ownership.  Stock market buy and sell the equity shares against digital currency.  Blockchain for global trading and industrial productions.  Blockchain for infrastructure funding and project investments.  Enabling peer-to-peer payments, the blockchain opens the door to direct interaction between parties, a truly decentralized sharing economy results.  Uber and AirBnB flourishing, the sharing economy is already a proven success.

Financial and Public Records Applications Financial instruments Public Records 1. Currency 1. Land titles 2. Private equities 2. Vehicle registries 3. Public equities 3. Business incorporations 4. Bonds 4. Criminal records 5. Derivatives commodities 5. Passports 6. Spending records 6. Birth certificates 7. Trading records 7. Death certificates 8. Mortgage/loan records 8. Voter Registration 9. Servicing records 9. Voting Records 10. Crowdfunding 10. Health/safety inspections 11. Microfinance 11. Building permits 12. Proxy fights 12. Court records

BLOCKCHAIN TECHNOLOGY CORE PRINCIPLES:  Lawfulness, fairness and transparency personal information collected to deliver goods or service must be done so lawfully and fairly, and individuals must be told what their personal information will be used for; personal information can only be collected with the individual’s consent, and a record of this consent must be kept  Purpose limitation personal information may only be collected for a specific and legitimate purpose and not for a new, incompatible purpose (unless consent for this new purpose is gained)  Data minimization the processing of personal information needs to be limited to what is necessary in order to achieve the processing purpose  Accuracy personal information must be collected accurately and kept up to date in order to avoid risk to the individual; inaccurate information must be erased or corrected without delay  Storage limitation personal information may be stored only for as long as necessary in relation to the processing purpose, with the exception that it be kept longer for scientific purposes and/or archiving purposes in the public interest  Data security holders of personal information are responsible for keeping it secure from internal threats such as unauthorized use, accidental loss and damage, as well as external threats such as cybercrime  Accountability holders of personal information need to implement technical and organizational measures to ensure that processing activities are carried out according to the data protection regulation

ADVANTAGES OF BLOCKCHAIN DISINTERMEDIATION  The core value of a blockchain is that it enables a database to be directly shared without a central administrator. Rather than having some centralized application logic, blockchain transactions have their own proof of validity and authorization to enforce the constraints. Hence, with the blockchain acting as a consensus mechanism to ensure the nodes stay in sync, transactions can be verified and processed independently.  Empowered Users  High Quality Data  Durability, Reliability and Longevity  Process Integrity  Transparency and immutability  Ecosystem Simplification  Faster Transactions  Lower Transaction Cost

THE BIGGEST DISADVANTAGE: PERFORMANCE Because of the nature of blockchains, it will always be slower than centralized databases. When a transaction is being processed, a blockchain has to do all the same things just like a regular database does, but it carries three additional burdens as well:  Signature verification . Every blockchain transaction must be digitally signed using a public-private cryptography scheme such as Elliptic Curve Digital Signature Algorithm (ECDSA).  Consensus mechanisms . In a distributed database such as a blockchain, effort must be expended in ensuring that nodes in the network reach consensus..  Redundancy . This isn’t about the performance of an individual node, but the total amount of computation that a blockchain requires.  Other Disadvantages  Nascent Technology – transaction speed, verification process  Uncertain Regulatory Status  Large Energy Consumption  Control, Security, and Privacy  Integration Concerns  Cultural Adoption  Cost

Conclusion Indicators for Consideration  Less Simple = Less Secure The more features and complexity in a distributed application, the more potential vulnerabilities What is our strategic goal? What functionality is necessary vs. just desirable?  Jurisdiction issues Consider cross-border transactions, different laws and regulatory schemes Ensure clear and comprehensive choice of law, venue and jurisdiction provisions for resolving any disputes  Vendor issues Blockchain vendors will want to disclaim as much risk and liability as possible Consider necessary service levels and performance required for business application in determining when to walk away  Testing / Liability Robust testing environment to validate and debug application before launch Consider risk of improperly settled transactions, network failures, and other risks inherent to business application In customer and vendor agreements, clearly allocate risks and liabilities under all potential dispute and/or failure scenarios  Privacy / Customer Data Understand benefits and need for comprehensive permission-based structure Verify identification of participants and set access levels to ensure compliance with all applicable privacy and security regulations