According to the report, co-authored by representatives of the World Economic Forum and Chainlink, blockchain technology in general and smart contracts in particular can “reveal the hidden value of older digital systems.” To understand how to do this, just look at the Indian crop insurance scheme.
In a 40-page white paper released on Wednesday, the Geneva-based organization emphasizes the importance of interoperability between older systems and distributed ledger technology – but only for specific use cases suitable for blockchains.
“After readers have already demonstrated that blockchain is desirable for their use cases and business processes, this document aims to highlight the role of blockchain, smart contracts and oracles to accelerate the automation of such processes.”
While the document promotes high-tech and abstract solutions to improve interoperability between blockchains and older systems, which it calls a “bridge of connectivity”, it provides a concrete example in the form of India’s crop insurance scheme, established in 2016 as a way to achieve insurance coverage and financial support to farmers affected by natural disasters.
All issues, from transparency and accountability to corruption and information security, were raised by the agencies involved in the implementation of the scheme. Whitepaper describes how blockchain-based smart contracts and Oracle systems can overcome these challenges.
The document states:
“The crop insurance program serves as an appropriate opportunity to highlight the current shortcomings that most older systems face when dealing with multilateral activities.”
“If the goal of an organization is to automate business processes in a decentralized and unmediated way for various reasons, a blockchain-based architecture becomes necessary.
Indian regulators were ambivalent about cryptocurrencies, but were more receptive to blockchain technology. Earlier this year, the National Transformation Corporation of India, a government agency, released a report exploring its role as a blockchain to improve business, social and governance performance in the country.