This month we celebrated the centenary of Nelson Mandela, the great statesman and father of modern South Africa. As we celebrate his life, I recall when he came up with the M-Plan in 1952. The M-Plan was a decentralised strategy of organising and executing the Struggle efficiently in all areas whether urban or rural. It was a preparation for the ANC to operate underground.
Embedded in the M-Plan was the matter of secure communication. It was important that in this M-Plan, the apartheid agents and its infrastructure did not know what was happening in the community. This process of concealing information even when it can be seen is known in computer science as encryption. Madiba’s M-Plan was, therefore, to encrypt the activities of the ANC. When one sends an SMS from Qunu to Duthuni, that message is normally not encrypted and as a result sophisticated technology can be utilised to read the message. The only way one can maximise the chance that this message is not read by a person other than the intended one is to encrypt it.
Messaging technology companies such as WhatsApp claim their messages are secure and cannot be decrypted by anyone except the intended recipient. Going back to Madiba’s M-Plan, messages were transmitted from national to local levels in an `encrypted` manner without using real names of people.
Similar to the M-Plan, a decentralised and encrypted technology that secures stored information called blockchain was developed. To illustrate this technology, suppose in a village there are 10 people who receive social grants. The first person to come is Thabo, to receive his R1000. To secure this transaction he brings two witnesses who indeed verify that Thabo received his R1000. In blockchain the whole process of Thabo receiving R1000 is called a block and the two witnesses are called miners. The second person who comes is Jansie, who also brings two witnesses. The process of Jansie receiving her R1000 is witnessed by two people she brought and the two people brought by Thabo.
So the second transaction is witnessed by four people. And so on. The word chain in blockchain is because all the previous witnesses are used in each transaction, making it increasingly harder to change the information because to do so one will need to conspire with all the witnesses. All these transactions are done with the aid of computers and thus blockchain is an information technology device. Blockchain was developed in the early Nineties by Stuart Haber and Scott Stornetta. It was then applied to develop bitcoin currency by an anonymous person called Satoshi Nakamoto. Currencies such as the South African rand are based on the concept of trust.
Many years ago all money printed was accompanied by a piece of gold that was stored in the central bank. This was known as the Gold Standard. When people exchanged money for goods they were transacting using gold. When the US in 1971 under President Nixon ran out gold to accompany printed money, he stopped linking the US dollar to gold and this was the end of the gold standard. From that moment people started using money because they trusted whoever printed it and that it was secure enough not to be produced by an unauthorised body. Unauthorised printing of money is called counterfeiting.
Blockchain is important in cryptocurrencies because money produced using this technology cannot be easily counterfeited. Cryptocurrencies such as bitcoin use the word crypto because they are digitally created using the principles of encryption. So Madiba’s M-Plan could perhaps be called crypto-politics, which is defined as a secret support and mobilisation for a political objective. Blockchain can be applied to many fields. One such application is in medical records of patients in hospitals.
Currently, if I fall sick in Thohoyandou and I go to Tshilidzini Hospital, a medical file will be opened for me and my medical records will be stored in the file. If I fall sick in Diepkloof and I go to Chris Hani Baragwanath Hospital, a new file that does not contain the information stored in my Tshilidzi Hospital file will be created. This is because our medical records are not integrated on a single system. And each time I change hospitals the new doctor does not have my full medical records. This of course compromises the quality of the medical service I will receive from the doctor.
One of the elements that impedes the integration of the medical records is security of information. Blockchain can be used to secure such information so that when the medical records are integrated, a complete, accurate and secure medical history can be generated. Another example of blockchain is in the management of schools and universities certificates which can be secured using this technology. Even though blockchain brings great benefits in society it also has its problems. One is that it consumes significant amounts of energy and running costs can be onerous. This then means that those without financial means can easily be locked out of this technology. Another problem with blockchain is that it can be vulnerable to coding errors. In our paper `Blockchain and Artificial Intelligence (Al),’ we identify that blockchain is vulnerable to software slip-ups. We proposed a framework where AI can be used to improve the design of blockchain.
AI is a technology which takes human intelligence and puts it in a computer or a machine. The miners or witnesses in the blockchain can be simplified using AI. Blockchain is one of the drivers of the Fourth Industrial Revolution. It is disrupting the world of work. In the field of finance there is a process of auditing which is important in the process of reducing the levels of information asymmetry between the investors and company management. Investors need to know what is really happening in the companies they intend to invest in.
To facilitate transactions, auditors produce reports mainly based on sampling the activities of the company which is always a snapshot and not a complete view. The deployment of blockchain in this process moves the whole process of auditing from sampling to a complete picture. As a country, can we implement this technology with the same effectiveness as Madiba’s M-Plan?
Prof Marwala is Vice-Chancellor and Principal of the University of Johannesburg and co-author of the upcoming book Blockchain in Science and Engineering.
*The views expressed in this article are those of the author and do not necessarily reflect those of the University of Johannesburg. This article was first published in the Sunday Independent (South Africa) on 29 July 2018.