Decentralizing India with Distributed Ledger Technologies - Part 1

My home country India, with a population in excess of 1.3 billion people, has become a 21st-century example of the dangers of an increasingly unsustainable model for a civilization. Unlike many western countries, the sheer population density and diversity of this country require a radically different kind of governance philosophy. This article aims to outline a non-political and non-ideological overview of India’s problems and how the concept of decentralization can be applied to solve them.

There are 22 officially recognized languages in India (31 totally) and many with their own unique scripts. The country is also split into 29 different states and 7 union territories, many of which differ in culture, language or dialect. India is also a secular nation and houses many theologies such as Hinduism, Islam, Christianity, Sikhism, Zoroastrianism, Jainism, Buddhism and more. Even the landscapes, forests and natural beauty of the country share such a diversity. In essence, India should be the epitome of a decentralized country.

Without going into the history of this country, by observation itself, it is clear that India does not have an obvious sense of a unifying identity as most countries do. Further, such diversity of population may not even need to have a strong sense of a unifying identity to thrive as a nation. It may sound counterintuitive but the true strength and resilience of this population are in its diversity. The diversity of the population reflects the diversity of the environment. Only a diverse population can face the challenges of sustaining and protecting a diverse environment with complex issues and deeply rooted interdependence.

To elaborate on the previous point, people from various indigenous cultures spread across the country are the bastions of local knowledge. Local knowledge on how to farm, build, govern, communicate and solve problems. This local knowledge is also an inheritance of several decades and in some cases even centuries of ancestral wisdom from the land, forests, animals, and people.

So naturally, there is a rich diversity of knowledge and wisdom among the different parts of India. A localized knowledge and wisdom that can only be understood and kept alive by the local people and culture. This is how nature itself functions, it develops localized ecosystems that live in balance with other ecosystems and collectively they form the biosphere; a global self-regulated and self-healing superorganism that we call mother nature.

The intelligence of nature is a bottom-up approach and is in no way centralized, it is everywhere. The intelligence of nature is expressed in tree branching patterns, leaf veins, flower patterns, mountain ridge patterns, river tributary patterns, lightning patterns, neural network patterns and even the supercluster of the universe has a similar pattern. The intelligence of nature is purely localized and decentralized. It sheds some profound insights into the saying “God is everywhere”.

Nature also expresses its intelligence in an emergent fashion. This is most easily notable in the animal kingdom. Birds instinctively use formations to alleviate the burden of long flights. Ant colonies collectively create bridges, homes, migrate and even defend themselves. Larger animals like buffaloes, elephants, lions etc form groups to improve the chances of survival. Fish also instinctively gather in schools to protect themselves from predators and improve chances of survival. Nature, in essence, is a framework for this intelligence to emerge without any centralized control. Every ant, fish, bird or buffalo has an instinctive genetic memory that tells it what to do when amongst others of kin. This, much like the indigenous cultures of humans is the fruit of centuries and centuries of ancestral memory.

On a slight tangent, let me make it clear that I am not speculating on any conspiracies or agendas that are far-fetched and counter-productive. I am merely making observations from an unbiased and neutral perspective. The only bias that I can admit to, is an admiration for the intelligent and leaderless regulatory aspects of nature itself. I have no political or ideological interests when it comes to this write-up. Just wanted to make that clear.

Now back to 21st century India. What we are seeing today is an unnatural level of centralization of the civilization in various aspects. Let us start with the population itself – The current economic landscape of the country incentivizes mass migration of the population from their indigenous homelands to a handful of big, clustered and chaotic cities. People flock from all over the country to these mega-cities that are the very definition of unsustainability. They go there in search of jobs, money and ironically, a “better life”.

What do they sacrifice in return for this better life? Well, things that nature gave them for free – clean air, rich soil, clean rivers and streams, fresh fruits and vegetables, peace of mind, family and a sense of community amongst their neighbours and village-folk.

What do they get in return? More pay, job security, processed foods, processed water, entertainment, fleeting acquaintances and a misguided sense of freedom from the “backwardness” of their homelands.

If we analyze the trade-offs, the pattern is obvious. People are incentivized to give up their natural assets for artificial ones. Of course, it is not the people to blame, but just one of the traits of a centralized model of human civilization.

Next, we are seeing an unnatural level of centralization of political power. As described earlier, the people of India are extremely diverse and don’t have an obvious national language or identity as most countries do. However, there is a political landscape that is getting increasingly centralized and a top-down model of governance is being envisioned for the country. Such a model requires an artificial unification of the country and breaking the diverse natural clusters of population. It is analogous to herding cattle as opposed to wild animals forming herds naturally. Again, I do not blame the people nor the politicians for that matter since this too, is just a trait of a centralized model of human civilization.

Businesses and industries are also being incentivized to join the bandwagon of centralization. Historically, India has been a reservoir of small-scale industries and businesses so monopolies for goods and services were rare. However, more and more large mega-corporations are starting to become influential players in the market. Shopping malls, telecom service providers, IT companies, logistics companies, infrastructure builders etc. Etc.

Of course, this is not something that is unique to India and it works actually quite well in unified countries with relatively small populations. However, India cannot adopt such a model where a few players own all the businesses serving a billion + customers.

Digital centralization: The data that is gathered from a billion + people will become the biggest jackpot of gold in the coming economy. We are seeing the philosophy of centralization here too. For example, a national identity drive in the country is based on a questionably centralized architecture where the approach is again top-down. This involves an identity card that is being linked with every aspect of a person’s life from bank accounts to telecom services to food stamps and subsidies. It is a noble initiative in intent but the philosophy of centralization will eventually open access to this data to greedy and or malevolent entities.

The idea of a nationally recognized identifier for each citizen is not bad at all, but a centralized top-down approach to achieving it is what is bad. This data is not safeguarded by new technologies like distributed ledgers that allow for bottom-up verification where the user owns the data, not the government.

Another part of this digital centralization is the retail and peer to peer payment application market. The biggest mobile payment application in the country is a centralized data harvesting corporation that is slowly monopolizing the market. This monopoly is also government approved as the application is encouraged by the digital India initiative led by the government.

Again, the problem here is not the idea of a digital India or a cashless society, but the centralized and proprietary versions of these ideas themselves. Data ownership should always be with the people, not their leaders or businesses.

Other areas where things have already been centralized for a while are education boards/syllabi, wealth generation/concentration, and the energy grids. These are all areas that too, can benefit from applying policies, technologies and economics that encourage decentralization and anti-monopoly.

Now let us look at how these challenges can be tackled with decentralization. Of course, decentralization is just a concept that can be applied to ensure fairness, diversity, and resilience in a civilization. It is not a solution for everything, but it is a powerful philosophy when applied in the right areas.

Let’s start with finance and data – The cryptocurrency and distributed ledger technologies that are now nearly 10 years old need to be taken a lot more seriously. They may not quite fit well with the current ideas of national interests and monetary policy but they are indicative of the failure of the current systems. The failure being that shared resources of any kind, whether it be money, data, assets or anything of value, become problematic when they have gatekeepers. The centralization of these shared resources amongst a few is usually aided by gatekeepers (irrespective of how noble they may be when they start).

Just like the original internet revolution got rid of the gate-keepers of data creation and exchange, the distributed-ledger revolution will be the first time humanity can get rid of the gatekeepers of value creation and exchange. Of course, existing gatekeepers themselves can either adapt their businesses and grow alongside by becoming service providers or perish. When email got created, it is not the post office but email service providers who grew with the technology. Similarly, cryptocurrency and distributed ledger service providers in India will grow with the technology. Since the technology is open and decentralized, the ecosystem of service providers and businesses will also be open and decentralized, such is the nature of a free non-monopolized market.

Distributed ledger technologies can essentially become the backbone of governmental bodies and services. Taxpayer money would be transparently trackable from source to final spending destination. Voting results would be seen in real-time by any citizen whether a farmer or a business tycoon. Campaign funding would be transparently known by the entire population from source to destination. Infrastructure costs, service costs and personnel costs for government bodies would be fully open and independently verifiable. Essentially we could open-source the government itself.

This would essentially decentralize the power structure of the government and consensus amongst local governing bodies would become more organic and driven by mathematical laws. A bottom-up approach would emerge.

It would also incentivize people to focus on local solutions to local issues and challenges instead of politicizing and nationalizing every problem in the country. Nationalizing issues don’t create solutions, they only create more noise and in-fighting.

Of course, it is rather naive to think that the current form of governance would be interested in transitioning to such a model at all, given its profound consequences to the political landscape. Though in the end, it is only the demand for these systems from the governed, that will change the government.

When cryptocurrencies and tokenization become legalized and well regulated, businesses naturally tend to become less monopolistic and more decentralized. Wherever there is a frictionless liquidity pool and a leveled playing field, diversity thrives.

Money flows more fluidly to local regions and funding, loans/lending and investing become more localized with players within the region. Thereby the businesses cater to the local economy, language, and populations. The evolution of such a market can, in essence, retain people in their home states/villages and thereby retain the local culture, traditions and their ancestral ways of achieving ecological balance.

As liquidity, loans/lending and investing become more decentralized, education can also become more decentralized and focused on local issues. Education can become a more peer-driven and peer-reviewed system where syllabi focus on the needs of local people and local problems. This can create smart engineers, doctors and civil servants that are able to apply rich global knowledge with local influence and in local languages. This can also prevent the mass migration of people to clustered cities in search of job opportunities.

Another area where distributed ledger systems can bring about decentralization (and thereby more resilience and reliability) is the energy grid/infrastructure of India. If energy production and distribution are not centrally sourced, coordinated and supplied, then the reliability of power in villages and cities increases by a large magnitude. If each village district (ideally every house) has it’s own solar and wind farms, that in itself can sustainably and reliably electrify each and every settlement in any corner of the country. What's better? If a village receives more sunshine or wind than neighboring settlements, it can sell excess power to these villages thereby tokenizing electricity in a decentralized playing field. This can be done today, with distributed ledger technologies and renewable power sources by any well-educated engineer that has the funding and support.

The interdependence of money, education, jobs/businesses, governance and population densities will ensure that all these get decentralized together in a symbiotic fashion.

Now think of the typical issues plaguing a modern bustling Indian mega-city – Lung destroying air pollution, dog-eat-dog competition in the job market, potholes on the roads that can break spines, lack of reliable water supplies, lack of reliable electricity supplies, ineffective municipal bodies, garbage and sewage mismanagement, extreme traffic jams, long queues for every damn service, rampant corruption in all manner of supply chains and disillusioned populations who have given up hope.

Who do we blame for all this? Apathetic people? Corrupt politicians? Lawlessness?

I personally think not. Apathy, corruption, and lawlessness are not a symptom of the people of a country but the system the country is forced to function under. For each of those aforementioned issues, look me in the eye and tell me that decentralization, the way I have tried to explain it, cannot be a universal solution.

Feel free to counter anything I may have misstated or any logic of mine that is just plain wrong. I am just a random guy expressing his point of view. I would be more than happy to hear different ones.