Givi Murvanidze and David Kiziriya: Blockchain in state registries is a matter of national security
Why is it necessary to transfer state registries to the blockchain, and what dangers are behind the electronic voting? These and many other questions in an interview for LetKnow.News were discussed by Deputy Head of the Information Technology Center of the Revenue Service of the Ministry of Finance of Georgia Givi Murvanidze and Professor of the University of Georgia David Kiziriya.
- Georgia is actively introducing electronic public services, as well as developing projects on blockchain. What obstacles do you encounter during the launch of certain information structures on distributed registries?
Givi Murvanidze (GM): The main problem is that the current registry architecture of all government agencies and ministries is centralised. The blockchain itself represents a different architecture, and because of that, you need to rebuild services and change the business model.
David Kiziriya (DC): During the implementation of innovations, there are also psychological difficulties for officials. But once they become interested, the next task is to understand how to implement the concept and develop a business model, as well as find stakeholders who will help implement the project. Because, in general, it’s a transformation of relations between players.
- What is the danger of centralisation of government agencies?
DK: Do you remember the Petya and WannaCry cyber attacks, that were carried out towards the Ukrainian state bodies and brought down all state services? Obviously, centralised systems are vulnerable during cyber attacks and cyber warfare. And one of the possible solutions to this problem is decentralisation. That’s why blockchain is not just hype anymore, it is a matter of national security. The failure of the central point allows you to destroy the entire infrastructure. Therefore, it seems to me that state registries should move towards decentralisation.
- What projects on blockchain are already working in Georgia, have they given a good account of themselves and how effective are they?
DK: Gosgeokadastr is one of the world's first precedents of using blockchain in state registries. Therefore, the importance of this project is not so much in a technological solution but in the fact that this idea itself was first implemented in the public sector. The project has fulfilled its task of creating a precedent for using the blockchain in state registries, but now it would be unfair to expect for something more from it, so we need to move on.
GM: You need to understand that during the time passed, technologies were being improved and developed. And those opportunities that were to be used three years ago and the existing ones now - they are different.
- Your team met with members of the international organisation GUAM (Georgia, Ukraine, Azerbaijan, Moldova) and presented the project with Certificates of Origin of Goods on blockchain. What it is?
GM: Basically, this document confirms the origin of the goods. However, according to international agreements, there are some tax preferences and privileges, businesses sometimes use fraudulent schemes and manipulation of data to obtain those privileges. Therefore, it is important for the tax authorities to be sure that the documents are valid and meet all the requirements.
As long as all those documents are on paper, entrepreneurs can carry out manipulations with signatures. There is also a risk on the part of customs, whose employees may use their authority to accept or not accept goods, and thus receive bribes. Another disadvantage is the need to physically carry all those documents all the time.
In its turn, the new system on blockchain allows you to verify the document at all stages of its going through various authorities and eliminates the possibility of data manipulation, and, accordingly, the possibility of kickbacks and corruption schemes.
This is a joint project of the University of Georgia, the Ministry of
Finance and the Georgian Revenue Service. There is also an existing agreement between Georgia and Azerbaijan, and certain discussions have also begun on the implementation of the project between Moldova and Ukraine. And according to the results of the meeting, it was decided to create a working group in Ukraine.
- Recently, in the Russian Federation, attackers managed to seize someone else’s digital signature and rewrite other people's property. Could blockchain solve this problem?
DK: It is almost impossible to crack digital signature, i.e. a private key in blockchain, that is. There is another threat however - that the owner of the wallet might carry out transactions under someone’s pressure, and not voluntarily. Therefore, we recommend that you do not use remote services for serious commercial or legal transactions. So far, even decentralised systems do not confirm the fact of will, they only indicate compliance with the procedure. This is the task we are working on at the University. We want to create an ID on the blockchain using IoT.
- Where are the government services on blockchain needed and what problems can this technology solve?
DK: Everywhere where there is a database, blockchain is needed. This is a natural evolutionary transition that ensures the safety of the infrastructure itself. In case of a cyber attack on a centralised online e-gov system, there is a possibility of losing all the data and the economy of the country. It would be enough just to attack the register of property rights, passports register and data of the tax service. Therefore, in 2014, I was opposed to introducing Estonian XRoad (“Trembita” - interdepartmental communication system) and various centralised data buses in Ukraine. Not only because this technology is 20 years old, you need to understand that any centralised communication system is the main goal for criminals who might attack this center in order to totally disable the system.
- Is it possible to use blockchain in electronic voting? What are the risks of such a system of will?
DK: The problem is that today's identification systems can only guarantee compliance with the procedure, but not the fact of the will. However, there is no evidence that the action was not done under pressure. And in countries where such risks exist, electronic systems cannot be used in serious economic and legal transactions.
In Estonia, e-voting is used, because they have another problem - young people are too lazy to go to the polls and they try to solve this problem through a remote service. In Georgia, Ukraine there is another problem - we either have votes incorrectly counted, or the choice of a candidate on the ballot takes place under pressure while demanding to show the ballot. If a paper vote allows you to somehow get around this pressure, then electronic systems do not allow this, and this is a direct threat to democracy, because the people in power might not change for years.