Indonesia is turning to blockchain system in attempt to fix its traditional paper-based system. Country has historically struggled to keep in order all the records due to a lack of expertise and resources and now is looking at blockchain technology as a better alternative to its data system. Blocktech, the digital data structure, is considered as decentralized system.
It has potential to encrypt and share sets of data via distributed ledgers instead of the centralized authority. It can guarantee a more organized and cost-effective approach to storing and using permanent data (medical records, ID cards, driving licenses, etc.). That is why Indonesian authorities are willing to substitute the current states mandatory identity card program KTP system with blockchain.
Every Indonesian citizen has lots of cards issued directly by the government. They have to track their driving license, medical records, ID card, also a tax ID card NPWP. In case of loss it will take a lot of time and efforts to get the card back due to the complexity of the system. With introduction of distributed ledger technology, it will be possible to create a digital storage of all the cards and there will be no more “burden” for the government in the face of the physical documents.
The system will also allow to create a blockchain-based app: the local tech firm Online Pajak will help people to share their tax data with treasury offices, Indonesian central bank and other government bodies.
“Today in Indonesia there’s no proof you’ve paid”- Charles Guinot, co-founder of Online Pajak.
Rico Usthavia Frans, from Bank Mandiri, Indonesia’s second-biggest bank by assets, said country's banks were looking at implementing blockchain technology for trade financing, but creditors were waiting for “instructions” from regulators.
In countries like Indonesia, where large populations spread far from big cities and islands has poor access, blockchain verification can also remove doubts with the procedure of elections.
In July, Horizon State, Australian company, specializing in secure voting systems, is planning to provide a phone application for the citizens of Sumatra Island. It will help for enable direct polling on various local policy issues.
According to the Finance Minister of Indonesia Sri Mulyani Indrawat, blockchain could be widely used in the country’s agriculture sector to deploy domestic subsidies to those in need (e.g. small farmers). However, there are people who are not so optimistic with rapid changes of the existing system.
“It takes time to process a management change before we adopt a new technology. Even cloud technology is still being debated, let alone blockchain” - Iwan Djuniardi, the tax office’s director of transformational technology.
By Anastasia Bugaychenko