Chain Reaction: How Blockchain Will Transform the Developing World by Paul Domjan, Gavin Serkin, Brandon Thomas and John Toshack, 114 pp, Palgrave Macmillan, Switzerland (2021), €24.6 Blockchain technology or distributed ledger technology (DLT) has a promising potential for propelling future innovation in different sectors. The discourse on blockchain technology and its applications often gets sidelined by cryptocurrencies. In this regard, this book on blockchain by four field experts is a useful read. Though the opinions expressed may seem debatable, the narrative of the book is lucid and comprehensible. Unlike other books on the same topic, this book abstracts itself from overly technical explanations, and tries to build on the potential of technology for developing nations. The book explores diverse applications of DLT and explains its status, working, issues and possible future course using case studies from different countries. DLT refers to any networked system that facilitates expanding, chronologically-ordered list of immutable records, and allows all users within the system to verify the data. The premise of the book is that the problems in developing countries linked to trust, verification and value transfers can be solved using DLT. Thus, the value of blockchain solutions outweighs the value delivered by more traditional methods. The book draws parallels from mobile phones, which helped developing countries “leapfrog” the intermediate technology of communication used in advanced economies. The book is arranged as follows: after a short introduction, Chapter 2 explains the problem of trust, Chapter 3 tries to answer what blockchain solves and Chapter 4 goes on to discuss the technical details of blockchain and who controls it. Chapter 5 focuses on the money transfer solutions, and Chapters 6 and 7 talk about all other applications. The final chapter evaluates the future course of technology adoption. The chapter on trust highlights the importance of trust in running the global economy. Reliance on intermediaries in property registration and credit rating helps banks in dealing with private mortgages and investors in buying stocks, respectively. Many developing countries lack such institutions of trust, as illustrated by the example of property registration frauds in Nigeria. The ease of enforcing contracts projected by the World Bank’s Doing Business paints a similar picture. The next chapter builds on the first one and explains that the objective of blockchain is to provide the confidence that the information is beyond any influence. Although verification related risks are reduced by DLT, other risks like forgetting one’s key still exist. There is a possibility of taking greater risk in a secure environment or ‘risk homeostasis’. Chapter 4 spells out in brief the technical aspects of blockchain like users, nodes, miners, hashing and tokens. The authors take an example of a blockchain solution used by Walmart to improve its food supply visibility, which helped to track food items as well as identify contaminated food quickly. This showed that the DLT applications encompass various fields from legal to medical to foreign aid and make a case of blockchain being more than a technology, in fact, an infrastructure. The interaction of blockchain with the Internet of Things (IoT) and the issues of scalability and security are also discussed in the book. Chapter 5 delves into the contentious topic of cryptocurrencies and compares them with physical cash and electronic cash on parameters of transactions, settlement, handling, storage, altering transaction and acceptance. The authors note the complications cryptocurrencies can pose to macro-stability, and yet choose an optimistic view on the subject. In Chapter 6, crucial applications in the context of property registrations, foreign aid, health records, government identity, financial inclusion, voting, tax revenue and notarisation are discussed with examples. In the case of property registration, blockchain helps in providing the proof validation or provenance. Users can create a digital record of proof of transaction and upload the record. This hash, once appended to the blockchain, can create an immutable evidence. Such a system, according to the authors, could be transparently inspected or verified. Such formal and secure property rights can form the backbone for further development in an economy. While the advantages of using blockchain in creating secure property rights are well-appreciated, property registration systems are at various stages of development across countries and replacing such heterogenous systems without inheriting their errors is a major challenge. And hence, the authors themselves note that if an easier alternative is available to solve a given problem, it may be tried first instead of going for a purist concept of blockchain. Following the estimate that about one-third of its budget goes to validate whether the aid is received by the intended recipient or not, the World Bank launched its Blockchain Lab in 2017 to assist in transparency and verification. Not just authentication but donor coordination can also be taken care of by using blockchain. A case study of Oxfam’s project in Vanuatu illustrated in the book highlights how in addition to ensuring end-use, administrative tasks like accurate distribution and monitoring can be reduced using blockchain. Similarly, TruBudget, a system by KfW, which creates traceability on all activities related to each item of expenditure, has been made open-source and free to access by the German government. The system breaks each project into sub-projects and then into workflows. Each workflow has one assignee, who uploads the proof of completion of the task, which being immutable, holds him/her accountable. There are multiple use cases of blockchain illustrated in the book. In the field of medical records, blockchain helps in creating secure audit trails of access to records and enables the patient or the regulator to check who views the report. From the perspective of financial inclusion, the Philippines’ Union bank case study to enable rural unbanked sections to receive remittances more efficiently and safely is discussed. There is also a case for using DLT for innovative approaches to credit score. The book notes the role blockchain solutions can play in voting and identity. The most difficult problem, however, with regard to applications of DLT is to ensure the legitimacy of initial data entered – an intersection between humans and blockchain. Counterfeit drugs are a rampant problem in the developing countries. The blockchain solution can help buyers to validate provenance using a unique QR code on the packaging. Any counterfeit QR code can lead to an enforcement action. To replicate this solution on a larger scale would require a public authority to create QR codes and greater international cooperation. Another popular use of blockchain is in the supply chain validation adopted by major tech firms. A case study in the book brings out how blockchain can help companies to tokenise the receivables and collateral with creditors, which ensures that the same invoice cannot be pledged multiple times. In the area of international trade, digitalised systems offer simplified trade documentation by creating timestamped historical records of each document, thereby allowing differential access rights. Adding digital currency, digital ports and smart contracts to the equation, can reduce dependence on trade credit insurance. The book argues that for South-South trade, where the normal trade credit route is not robust enough, such a solution can be utilised. The last chapter evaluating the future course of technology adoption predicts two possible trajectories for this adoption, conditional on government reaction. In both scenarios, the usage of blockchain technology will continue to grow. However, the authors anticipate the technology to stay predominantly in the informal sector, with the government essentially being on the other side of the fence. The authors club all applications of blockchain, including cryptocurrencies, and expect a similar treatment for all applications from the government, which seems unlikely. For a more nuanced and academic discussion on this subject, the book “Blockchain and the Public Sector” can be considered for further reading. In this book, Sobolewski and Allessie investigate seven real-life blockchain deployments in the public sector in Europe and find that governmental experiments dealt with primarily three blockchain functionalilities viz., notarisation, shared database and workflow automation. As per their analysis, current blockchain-driven innovations mainly consist of automating the enforcement of transactions and that the applications primarily seek to reduce bureaucracy and costs of administrative processes, like record-keeping. Various applications of blockchain have been dissected primarily from the perspective of developing countries in the book. However, even if the book focuses on developing countries, it is still context specific and recommends that the adoption of blockchain will depend on the nature of prevailing institutions and technologies. This can also be observed from case studies. Thus, while Kenya benefitted greatly from money transfer solution, a company in Taiwan utilised blockchain technology to develop an application to help contain COVID-19. Despite some of the omissions discussed in the foregoing paragraph, the book under review does justice to what it sets out to achieve. The authors take care to explain blockchain in a way that is intelligible to the uninitiated and offers sufficient depth to comprehend the issues involved in its implementation. As blockchain technology and its utilisation are evolving, it serves well to stay updated. The book under review is useful precisely for the same reason. Anshu Kumari*
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