Back in 2017, Building Trust in Governments, a study by the IBM Institute for Business Value (IBV), surveyed 200 government leaders across 16 countries to reveal something interesting. Nine out of ten governmental organizations were planning to invest in Blockchain by 2018.
Also, seven out of ten public sector executives looked forward to the disruptive potential of Blockchain implementation. These numbers prove that blockchain government initiatives are only going to increase in the future.
More often than not, Blockchain is mistakenly equated with cryptocurrency. As a result, the blames on the latter are passed on to the former. It’s true that cryptocurrencies are the most common use cases of Blockchain. In fact, Blockchain came into existence alongside the first cryptocurrency – Bitcoin.
However, considering the lack of control on the cryptocurrencies that boast of processing transactions without intermediaries, governments are more interested in adopting the underlying technology – Blockchain.
Among other things, Blockchain can potentially remedy a multitude of issues which plague the public sector. It is a plausible answer to the globally diminishing trust in governments and their appendages.
This detailed insight dives into the depths of blockchain government initiatives while discussing various blockchain government use cases.
Why Use Blockchain in Government Processes?
On any given day, a Google search on blockchain in government reveals a flurry of news, past and present, from across the world. Most, if not all, of these point to how nation-states are adopting Blockchain for governance. Alongside, there exists a plethora of academic scholarship, white papers, reports and more revolving around blockchain government initiatives.
Now, the question is what makes this possible? Is it merely hype or are there real and pragmatic benefits that Blockchain adoption brings for governance? Moreover, a decentralized, trustless and permissionless system like the Blockchain is supposed to be in direct contradiction with a centralized government. Then, how is it that governments are considering ‘adopting’ this technology? These are some of the questions upon which this insight will shed light.
Over time, the concept of Digital Government emerged within the discourse of Public Administration Science. Among other things, it stresses on innovations for a dynamic and user-centric public service domain. Obviously, the expectation is to make good use of data points, as well as, the ongoing developments in digital technologies.
It is against this backdrop that nation-states from around the world are harnessing the Blockchain technology to revolutionize their governments. That said, let us now discuss the upsides of such shifts in favor of Blockchain implementation.
Benefits of Blockchain Government Initiatives
On the one hand, the private sector is thriving to provide better, consumer-centric services. That too, almost in the blink of an eye. We, as consumers, are developing a habit of expecting ‘fast,’ ‘hassle-free’ services.
The public sector, on the other hand, is performing rather poorly in this regard. Take any geographical location on the face of the earth and ask its people about their experience with governmental services.
You will inevitably listen to traumatic experiences of availing public services. And, this is irrespective of whether a person supports or does not support the prevalent policies of their respective governments.
Let’s look at some of the ways in which Blockchain can help in improving these processes.
- Improved Efficiency
Be it a developed nation or a developing one, standing in long queues or running around from door to door are common experiences with the public sector. By enabling seamless access to information over a distributed database, Blockchain presents a perfect remedy to these problems.For instance, consider the case of Malta. Here, institutions issue and distribute academic records on Blockchain. Among other things, this makes it much easier for the candidate to share, and for employers or the government to verify his academic records.That said, Blockchain also makes absolute, yet reliable, automation of governmental processes possible. Result? Much greater efficiency than at present.
Despite portraying democratic ideals, the activities of governments are mostly shrouded by a problematic opacity. Especially, when it comes to financial data. In short, we don’t really know where our tax money goes. At best, we know a version of the story, narrated by those in power.Can there be a better solution than a public database which indelibly stores each and every transaction data? Probably not. When data is stored on a Blockchain, every stakeholder will have direct access. Moreover, it becomes virtually tamper-proof.This has two major implications. One, we as citizens have more visibility of the system. Two, it significantly brings down the risks of corruption, frauds, and scams.
- Data Safety
Imagine a safe haven that stores all of the world’s wealth. As a thief, you have one central point to breach. And, all that is there is yours! On the contrary, consider the wealth being stored in boxes all over the world. Now, it becomes almost impossible for you to get all the wealth. For that, you’d have to break into each of these boxes, and, all at once.That’s exactly what Blockchain does. It distributes the data among participating nodes that can be located at different places across the globe, making data breach almost impossible. Moreover, using private keys, we are able to take control of our data and its privacy.
- Cost Reduction
Implementing blockchain in government would rule out the need for intermediary institutions and third-parties. Consequently, we would benefit from a significant reduction in the overall governance cost. Taxes can be reduced manifold and governments can invest in the betterment of welfare services.The blockchain government initiatives that can leverage these benefits can probably help in restoring the citizens’ trust in the government. Moreover, the mathematical basis of Blockchain verification makes governments more credible and reliable.
Blockchain Government Use Cases
At this point, a pertinent question is quite likely to hover at the back of the reader’s mind. Are these benefits at all possible? Or, are they mere conjecture? A justificatory strategy of those in favor of Blockchain?
As an answer to these questions, let’s discuss some of the blockchain government use cases that are either in development or are already live!
Even before the mass access to the internet was available, immediately after its independence from the Soviet state, the Estonian government started investing in IT. The nation’s persistent endeavors have led to its recognition as “the most advanced digital society in the world.”
Prior to the Blockchain implementation in 2012, the nation had already initiated services like digital ID, e-tax, i-voting and so on. Then, what was the need for Blockchain? Security and safety of digital data, a precursor to a truly digital state. That is what Blockchain meant to the ambitious e-Estonia project.
Presently, the Estonian government provides Blockchain-based services in almost every sphere of governance. This includes revenue, health, education, residency and so on.
In an article published in the Quartz, Kersti Kaljulaid, the fifth and present Estonian president, succinctly points out the essence of a blockchain government initiative. She says,
Governments must learn to provide public services as efficiently as Amazon sells books: no physical presence, no cost of application, no opening hours.
Apart from Estonia, Dubai is yet another nation that has achieved a similar degree of blockchain implementation. The concerned project is named Smart Dubai and aims at making it “the first city fully powered by Blockchain by 2020.”
It’s true that Estonia and Dubai are the most vivid blockchain government use cases live examples. Yet, many other nations are also contributing to the scene by undertaking various projects for Blockchain adoption.
Let’s have a brief look at some of these.
Georgia – Land Registry
In April 2016, Georgia’s National Agency of Public Registry (NAPR) collaborated with Bitfuri Group to implement Blockchain in the land title registry. The project supplements the traditional land registry protocol with Blockchain. In turn, this enhances public confidence in property records.
How does it work?
The Georgian citizen initiates a title registration request with the concerned notary. The notary records the title on the private Exonum blockchain. The Exonum hash is anchored on the public Bitcoin blockchain. NAPR assigns cryptographically encrypted digital asset certificates to the requesting citizen.
So, what positive changes does this bring?
- Land registration processing time reduced from about 3 days to a matter of a few minutes.
- Around 90% reduction in the overall land registry cost.
- Enhanced transparency and reliability in the process.
Presently, this service is available for purchase, sale, and registration of both existing and new land titles. Since its incorporation, more than 100,000 land titles have been registered using the Exonum protocol which has a capacity of 5000 transactions per second.
Malta – Academic Record
In Malta, the Ministry for Education and Employment (MEDE) adopted the Blockcerts platform to manage the nation’s academic records. On this blockchain framework, it is possible to create, issue, view and verify academic credentials of the Maltese citizen.
Using the Blockcerts app, the citizen enlists their academic institution as an issuer of certificates. The institution creates a certificate with its own private key and the citizen’s public key. The inclusion of the public key means that the certificate is automatically saved in the citizen’s Blockcerts wallet.
Alongside, the issuer hashes the certificate onto the blockchain. The citizen can provide any required party with the digital certificate, as well as, the Blockcerts URL.
How is it helpful?
- The citizen, and not the institution, is in charge of sharing their academic credentials.
- The risks of academic data falsification are significantly reduced.
- Enhanced means of storage and shareability of academic information.
Switzerland – Decentralized Identity
In the Swiss city of Zug, the government is using the Ethereum blockchain to issue decentralized IDs, known as uPort. The project was launched in November 2017 and was limited to residential proof in its first phase. Presently, the ID can be used for other municipal services, including the casting of votes.
The uPort app is the users’ point of interaction with the system. To ensure the validity of the identity, as well as, for protection in case of loss of the mobile device hosting the app, the protocol uses two smart contracts. One, a controller contract and two, an identity contract.
An individual’s primary and stable identification data comprises the identity contract. It can interact with other smart contracts and uPort identities. The controller contract is, in some sense, an overseer of the identity contract. Broadly put, it assigns and revokes the authorization of sign statements. Also, it is used to assign a new public key to the identity contract in case the host device is changed.
Blockchain for Government – The Obstacles
Despite the anticipated, and already realized, benefits of adopting blockchain for government, there are certain obstacles to the same. If not anything else, these issues have hindered the mainstreaming of the otherwise beneficial blockchain government initiatives.
Some of the major issues in this respect include the following:
- Risk of private-key theft and the consequent data breach
- Lack of Blockchain awareness
- Social repercussions of decentralization
All of these are valid concerns. However, a closer look will tell us that most of these are the general drawbacks of Blockchain technology. These problems aren’t specific to the implementation of blockchain for the government. Presently, the blockchain community is holistically striving to find solutions to these problems.
Blockchain and Government – The Future
It’s true that there are issues which plague the relationship between blockchain and government. It’s also true that the technology itself isn’t yet in a position to enable mainstream adoption in governance. Yet, there’s a lot that works in its favor.
Even if only for certain functions, governments across the world are implementing Blockchain to relieve many pain points. Alongside, a large volume of academic scholarship is being produced in this regard. Investments are being made into research aimed at ensuring holistic development of the technology.
In itself, the Blockchain community is striving towards betterment. Projects like Ethereum 2.0, among others, are working incessantly to remedy the inherent problems of the technology. The best part? Their endeavors are indeed quite promising.
In all, it isn’t an overstatement to assert that the future for the blockchain and government relationships is bright. Dubai’s dream, as dreams of many others, does seem achievable in the days to come.
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