Blockchain is a hot topic that has been widely discussed recently. K2 Venture Capital Co., Ltd., the VC fund of Lockley Public Company Limited, recently hosted a forum on 'Digital Transformation: Blockchain and its Application in Digital Identity.'

Dr. Phumi Phumirat, a senior advisor on cybersecurity and a blockchain technology expert, stated that blockchain has gained significant attention over the past year because it is believed to be a technology that will transform the world in the same way the internet did 20 years ago.

'The internet revolutionized communication and data exchange by breaking down geographical barriers, but it had limitations in that it could only exchange information. Other assets, such as goods and money, could not be transferred as easily as e-payments, which merely send instructions to banks to transfer funds. Today, there is still a need to send documents and highly reliable items over the internet, which blockchain can address, especially for exchanges that require high trust and identity verification.'

The key principle is to eliminate the central database system by allowing every computer in the network to connect using the same program, distributing the management of a database where each machine holds the same set of data, recording every transaction, and auto-checking simultaneously at all times to ensure that the entire network has the same data set, creating a system that guarantees no fraud without needing to verify from others' systems, relying solely on one's own data and computers, which cannot be altered or modified.

The blockchain process works by distributing new information to the entire network, verifying the accuracy of commands or data before adding it to everyone's central data system. Everyone thus has the right to verify the accuracy and process it themselves at all times.

This structure allows for quick recovery if any node or computer in the network fails, by simply installing new software and pulling data from the existing network or adding new nodes as needed. This results in high stability and security; to hack a blockchain network, one would need to compromise at least 60% of the machines in the network.

'The principle of blockchain is to have computers in the system collaboratively maintain the data, and once data is entered into the central network, it cannot be changed, ensuring reliability through continuous monitoring. The overall system costs are significantly lower than before, with automatic integrity and availability, while confidentiality can be designed in various ways depending on how much identity exposure is allowed in the network, supported by mathematical properties throughout the system.'

Many countries around the world have begun using blockchain to solve problems, such as exchanging money using Bitcoin, which has become an electronic currency akin to cash but without the limitations of movement and without intermediaries, ensuring that transactions occur almost instantly. The absence of intermediaries also significantly reduces costs compared to traditional methods.

Not only in money exchange, but there are many other applications. For example, all banks in Hong Kong are using blockchain to connect land and apartment data systems to know the prices of land and rent per square meter on the island, which greatly benefits the banks' lending processes.

'Such database systems previously required joint venture companies or intermediaries to collect data, which was much more costly than using blockchain, leading to a need for shared costs for data access, resulting in high expenses.'

It is not feasible to provide free access, and it is not just rental data in major cities like Chicago, which is experimenting with placing state land titles on the blockchain network.'

Private companies, such as Eveledger, are partnering with diamond mines to create records for each diamond, with a unique identification number recorded from the moment it leaves the mine and when it changes hands, allowing for immediate identification of the current owner. This will lead to increased use of blockchain for limited edition products.

'Smart grids and smart cities are also beginning to use blockchain to mitigate the risk of hacking and damage, as they establish nodes to store data from numerous IoT devices.'

Edmond J. Lowell, a blockchain expert from the United States, stated that blockchain can enhance the quality of life for farmers, such as using it for identity verification to access welfare, register with government agencies, and access bank accounts, which is still limited for many in Thailand. Blockchain is a technology that helps open doors for everyone at an affordable price and can work with existing IT infrastructure if supported by the government, especially for tasks related to identity verification and personal identification in digital systems. In Estonia, blockchain has been used to develop an e-Residency system that allows everyone to verify themselves online with a passport when opening a bank account or company. Meanwhile, Delaware in the United States will announce the implementation of blockchain companies house legislation this year.

Dr. Phumi added that private sectors in Thailand are becoming increasingly aware of blockchain, particularly in finance, banking, and healthcare, and are starting to experiment with systems for service delivery, such as creating a blockchain for exchanging patient records to facilitate medical expense reimbursements between agencies. It is expected that by 2018, we will see serious implementations, and by 2020, it will become a core technology used in Thailand.

'What I want to emphasize is that we should start from the business problems we want to solve, not just cling to any one technology. Each technology has its differences and suitability for various applications. If the goals are clear, it will also clarify what needs to be used where and how to invest.'

A significant obstacle is the nature of the technology, which requires cooperation and collaboration from multiple entities within the blockchain network. Coordination and collaboration are crucial, while laws, especially regarding electronic identity verification and electronic signatures, currently have the Electronic Transactions Act to support them. I believe the courts will accept and protect them, even though it is a very new technology.

'Many people say that due to the properties of blockchain that allow for confidentiality design, communication can occur without revealing identities, yet it is highly trustworthy and cannot be cheated. Blockchain is like a paradise for money launderers, so it should not be used. However, we must accept that this technology has already emerged and is in use. Whether we use it or not, the issue of money laundering must be addressed. Therefore, not using blockchain just because money launderers use it is not a solution, especially when it can provide various benefits.'

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