Vaccine delivery to fraud detection: Here are some blessings of blockchain

From vaccines to chit funds, blockchain technology is helping streamline delivery and root out slippages and fraud

• In 2018, nearly 1.2 million vaccines were transported from Arunachal Pradesh’s capital Itanagar to 11 districts in the state, overcoming all the supply chain issues with nearly 100 per cent accuracy.
• In Telangana, the government's flagship initiative, T-Chits project, has minimised auction-rigging and other common forms of manipulation in over 800 chit funds.  
• More than one million farmers have signed up for the Indian government’s online agri-marketplace through Common Service Centres (CSCs) in five states to enable trading at fair prices transparently.

All this has been achieved by using one technology — blockchain, which has been emerging independently after its long-association with cryptocurrency.

Blockchain is a list of records or transactions, similar to a ledger, that keeps growing as more entries are added. Records stored in the database may be made visible to the stakeholders without risk of alteration. It is said to be highly secure as hackers can no longer attack just one computer to change any records.

“Blockchain is nothing but a database. But it has advantages such as decentralisation and immutability while being highly secure,” says Mayur Zanwar, co-founder of blockchain-digital identity startup Asset Chain Techlligence. “It is helping with tamper-proof health records and insurance claims in India. Once the Privacy Data Protection Bill, 2019, is passed, blockchain will play a bigger role and see greater adoption,” he adds.

According to a 2019 Gartner report, it is estimated that blockchain could generate $3 trillion per year in business value by 2030. The World Economic Forum anticipates that 10 per cent of the global GDP will be stored on blockchain by 2025.

Delivering vaccines on time

According to the World Health Organisation (WHO), around 50 per cent of vaccines are spoilt by the time they reach hospitals owing to breakage, lack of temperature control and shipment-related issues. Today, blockchain is helping to mitigate this problem.

For example, Hyderabad-based start-up StaTwig's blockchain-powered technology helped in dispatching shipments of vaccines in Arunachal Pradesh with real-time inventory data. This was part of a Smart Village Project done in collaboration with the University of California, Berkeley.

“A majority of our work was to capture inventory data—tracking the journey of vaccines from start to finish. We ensured that the quality remains intact while overcoming safety issues such as counterfeiting and thefts,” says Sid Chakravarthy, co-founder and chief executive officer, StaTwig.

 

Every touchpoint of the vaccine’s journey, starting from the drug manufacturer to the child to whom it is administered, critical information about it such as temperature, humidity, chain of custody and location are recorded on a blockchain ledger.

The tamper-proof data is accessible by all the stakeholders to ensure transparency.

Moreover, each vaccine or shipment is tagged with a quick response (QR) code. The QR code ensures unique identification for the product, and as the products change hands in the supply chain, the stakeholders scan it using the mobile-based application. The data typically includes quantity, batch number of the product, manufacturing and expiry dates.

“Internet of things (IoT) technology also comes into play here to automatically record telemetry, location and temperature into the blockchain and alert the stakeholders if there are any abnormal changes. This can be used for real-time tracking and the consolidated data can be used to trace larger issues of shortage or quality deterioration in a particular district,” says Chakravarthy.

Tamper-proof chit fund records

Chit funds, the country's oldest form of banking, is getting a digital makeover with the help of blockchain when it comes to the maintenance of records, reduction of fraud, rigging and non-payment to winners.

Chit funds pool money from subscribers every month and the subscribers participate in an auction to borrow the pooled amount in that month. The money is then given to the lowest bidder (or winner). The foreman (the person responsible for handling the chit fund process) also gets a collateral from the winner. However, irregularities such as tampering of minutes in case of defaults, rigging of auctions, exorbitant interest rates and commissions are common.

But with blockchain, each of these records— in terms of minutes, auction winners and interest rates are digitally maintained and can be tracked by the regulator in case of mismatch or complaints.

“Technology brings sanctity to the whole process by creating multiple digital ledgers. The subscriber or regulator can track end-to-end processes and decisions over the whole cycle of even 50 months, which is completely missing in the traditional method,” says Pavan Adipuram, co-founder and CEO of Chitmonks, a tech start-up which works with both the regulators and chit fund companies.

Chitmonks has collaborated with the Telangana government to bring the state’s entire chit fund transactions of over Rs 20,000 crore per annum and over 1 million subscribers on to the smart contract-enabled T-Chits platform. Launched in 2018, the project mandated all legacy chit funds to migrate to the platform by August last year. Blockchain ensures efficient payment collections, online auctions, maintenance of e-KYC details and better underwriting practices such as bank statement analysis and credit profiling, adds Adipuram. “We also help chit fund companies in detecting defaulters early through machine learning, using data points such as repayment patterns and credit history,” he says.

According to the Unicorn India Ventures-funded firm, there are about 30,000 registered chit fund companies operating in India with a total asset under management of about Rs 1.5 trillion.

Boost to agri-tech

StaTwig is working with the civil supplies department of the Telangana government to weed out quantity and quality problems in the journey of the agricultural produce from farmers to fair price.

“Like the vaccine concept, we identify every single gunny bag with a unique label, which is tracked at every point of its journey. This is to prevent deliberate contamination as well as natural deterioration in quality. As a phase-II measure, we are trying to capture the grade information of the grains through sample testing via a conveyor-belt system,” says Chakravarty of StaTwig.

In yet another example of agriculture benefiting from blockchain, litchi growers in Bihar are finding buyers from as far as London. This is being done with the help of global blockchain and artificial intelligence-powered e-marts built by Pune-based firm Agri10x Global in collaboration with the ministry of electronics and information technology (MeitY) in May this year.

“Blockchain ensures traceability and transparency during every step of transaction which helps secure the confidence of both the buyer and seller,” says Sundeep Bose, co-founder and chief technology officer, Agri10x.

The technology eliminates problems caused by middlemen who try to control the price or manipulate demand and supply, and also helps in improving supply chain efficiency and prompt settlement after delivery of consignments. Last year, the Coffee Board of India launched a similar platform for domestic coffee growers to tap into international markets.

Though blockchain technology is at a nascent stage in India, governments are increasingly stepping in to take advantage of it. However, experts feel that the uncertain policy in the country with regard to cryptocurrency or a distributed ledger framework could act as a deterrent to its quicker adoption.