AEF2016 - Брайан Томпсон - Building trust in blockchain
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This document discusses how blockchain technology can be used to build trust in tax collection systems. It describes the current manual tax collection process and proposes a blockchain-enabled process where tax payments are authorized through smart contracts and recorded immutably on the blockchain. While blockchain ensures integrity and transparency, privacy measures still need to be added. The document concludes that organizations should carefully evaluate whether blockchain is truly needed for their use case or if traditional technology would be better suited to their needs.
AEF2016 - Брайан Томпсон - Building trust in blockchain
- 1. Building Trust in Blockchain Astana Economic Forum 25 May 2016 www.pwc.kz “At PwC, our purpose is to build trust in society and solve important problems.”
- 2. PricewaterhouseCoopers Tax and Advisory LLP Why do we trust a system? Tax Collection Scenario 2
- 3. PricewaterhouseCoopers Tax and Advisory LLP Tax Collection Scenario Current State 3 • Back-office staff administer / supervise payment system, • OR manually handle mailed payments • Citizen logs on to e- Gov website with username and password, • OR prints a payment voucher • Staff accesses financial or property records to enter or update payments. • Citizen’s tax record is updated in central database. • Tax payment is authorised online, • OR payment is mailed.
- 4. PricewaterhouseCoopers Tax and Advisory LLP Creating trusted systems Foundation Considerations 4 Requirements Legal / Regulatory Who are the users / how identified? Scope Understand the purpose, boundaries, and stakeholders. Code the inputs & outputs, rules, logic Business Logic Procurement Security Testing Operates as intended Software Ok?
- 5. PricewaterhouseCoopers Tax and Advisory LLP Trust Mechanisms Operational Cost 5 Time Software Transparency Activists Audit Tax Collection System Database Journalists Press
- 6. PricewaterhouseCoopers Tax and Advisory LLP Tax Collection Scenario Blockchain-Enabled 6 • Tax payment is authorised online. • Citizen logs on to e- Gov website with national smart card ID. • Smart Contract processes the tax payment, creating a transaction that transfers funds from the taxpayer to the State. • Process is repeated throughout the network, with each node verifying and writing the transaction • Once verified, transaction cannot be deleted or modified.
- 7. PricewaterhouseCoopers Tax and Advisory LLP Trust Mechanisms Operational Cost 7 Time Journalists Press Software Transparency Activists Audit Tax Collection System Database
- 8. PricewaterhouseCoopers Tax and Advisory LLP Trust Mechanisms Operational Cost 8 Time Journalists Press Software Transparency Activists Audit Tax Collection System Blockchain
- 9. PricewaterhouseCoopers Tax and Advisory LLP Takeaways • Be precise in separating debate and hype about bitcoin and alternate currencies from the underlying technology – blockchain. • Does your “tax collection” system need blockchain, or would it benefit more from traditional technology? • Very good at integrity and immutability • Confidentiality / privacy must be added • Not a magical solution for security 9
- 10. “At PwC, our purpose is to build trust in society and solve important problems.” ©2016 PricewaterhouseCoopers Tax and Advisory LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Tax and Advisory LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
Editor's Notes
- #7: Insider threat mitigated Physical security irrelevant.
- #10: Confidentiality: Because blockchain is a shared database, every participant can see what every other participant is doing. Data may be encrypted and stored within the transaction, but the transaction itself must be visible to all participants While Bitcoin itself (the underlying blockchain technology) hasn’t been “hacked”, Bitcoin interfaces to the “real world” are regularly compromised. This underscores the need to carefully design how blockchain interacts with users and other systems. .