How will blockchain affect the public and private sectors?

Middle East and Africa spending on blockchain will reach $80.8 million by the end of this year, up from $38.9m in 2017, according to International Data Corporation in the US. Here is a look at this technology sweeping across both the public and private sectors:

What is blockchain?

Blockchain is a growing digital chain of blocks (or transactions) that are linked with each other using cryptography – a mechanism for secure communications – that creates an open ledger to record transactions in a fast and efficient manner. It is a database technology behind cryptocurrencies such as Bitcoin and can work as an archive for recording the history of financial transactions, contracts, physical assets and supply chain information. The chain is an open network and everyone in it can see the details of each record. Every block is encrypted and can only be edited by its owner with a private key.

How does it work?

Each block is digitally encoded to certify its legitimacy and protect it. It ensures the digital security of transactions while reducing operational cost and speeding the decisionmaking process. The UAE plans to use blockchain for digital transactions, giving each customer a unique identification number. It is being adopted in many commercial applications.

How does it help companies and governments?

Besides adding transparency, blockchain technology saves the public and private sectors time, effort and resources. It allows them to process transactions at any time from any place. Smart Dubai’ s block chain powered Payment Reconciliation and Settlement System went live in October, performing accurately and in real time.

What is the UAE’s strategy on blockchain?

The UAE unveiled the Emirates Blockchain Strategy 2021 in April this year. It aims to switch almost 50 per cent of government transactions into the blockchain platform in three years. By adopting blockchain, the UAE is expected to save 77 million work hours annually, Dh11 billion costs in transactions and regular document processing and 398 million printed documents a year. The UAE plan includes four pillars focusing on citizen and resident happiness, government efficiency, advanced legislation and global entrepreneurship.