Deep dive: how blockchain can improve government systems

1 June, 2018

While blockchain technology is the fundamental tech behind popular cryptocurrencies like Bitcoin and Ethereum, it can be applied to so much more. Governments around the world are researching blockchain solutions to improve efficiencies and develop new opportunities for their citizens. From healthcare and cybersecurity to voting and exchanging titles and deeds, the number of industries that can be enhanced by this emerging tech is staggering. The following are just a few areas where blockchain applications could improve government operations.

Voting security

John R. Patrick, author of Election Attitude: How Internet Voting Leads to a Stronger Democracy, said a big reason people aren’t voting in the United States is because they can’t make it to the polls. “This old [voting] system,” he said, “does not accommodate the busy people we are today.” But digital voting isn’t inherently safe either—which is where blockchain technology comes in.

Voting security improves by using blockchain tech because all blockchains are composed of decentralized computers that each help complete and verify transactions from a user. In order to complete a given blockchain transaction, the computers have to come to a consensus.

Various governments are already using blockchain technology for local elections. For example, citizens in Sierra Leone used a blockchain ledger to keep their anonymous votes secure and to provide access to election results. With voters clocking in 70% of their total votes through the blockchain, it seems clear that the technology has the potential to reduce time and transportation costs so people can get to the polls.

Sharing data and keeping data private

Security breaches in public or private data are a fact of life these days, but one of the most important features of blockchain technology is its decentralization, letting users see and track data in real time. Since every transaction requires the entire blockchain to complete, it’s nearly impossible to commit fraud.

This kind of security is perfect for decreasing the costs involved in producing passports, verifying social security cards, and generally making sure users are the ones in charge of revealing (or not revealing) certain attributes about themselves. Many governments prioritize incredibly secure data privacy—not only to guarantee citizen cooperation, but to incentivize trust in their leadership in the public sector.

Increasing efficiency and lowering costs

While it’s still early to make big predictions about where and how blockchain technology will be used in government decision-making, it’s safe to say that the U.S. General Services Administration (GSA) is already researching how blockchain data structures could reduce the time it takes to evaluate a GSA proposal by 80%.

The Treasury Department is also interested, launching a new pilot research project with the goal of decreasing processing times and cutting paperwork for people applying for government documents. As the technology matures, it’s reasonable to expect increasing research about blockchain applications for public institutions.

The federal government, industry, and blockchain technology

At CoinDesk’s Consensus 2018 panel, U.S. government and industry leaders shared that they were researching blockchain developers and the technology itself—and don’t have plans to heavily regulate the new tech. FedEx CEO Fred Smith said that companies who haven’t researched blockchain should start becoming more familiar with the technology or “face extinction.”

Smith further explained that one of the biggest industry conflicts is inconsistent delivery standards between countries, and that blockchain tech has the potential to solve this issue. FedEx recently joined the Blockchain in Transport Alliance initiative devoted to researching how to best help customers and sellers solve shipping problems with blockchain applications.

Regarding cryptocurrency market regulation, where blockchain development is most visible, Commodity Futures Trading Commission (CFTC) enforcing director James McDonald said the mission of his department is to provide a certain amount of flexibility to market regulation, and to make certain they aren’t slowing innovation or interfering with other project priorities.

The reduced development and implementation costs of blockchain tech have multiple departments of the U.S. government researching best practices. The Food and Drug Administration (FDA) is looking at blockchain methods to exchange influenza patient data and the Department of Homeland Security (DHS) awarded $199,999 to Austin-based Fatcom Inc. to further research security measures for Internet of Things devices that use blockchain data structures. The Department of Defense (DoD) is specifically interested in innovative uses of the distributed ledger technology.

Blockchain and state governments

There’s deep interest in blockchain innovation at the state level as well. With near unanimity, the Delaware House of Representatives officially signed amendments that gave the right for state residents and corporations to use electronic and distributed ledgers to trade stocks on blockchains. In a state that incorporates more than 50% of publicly traded companies and 64% of Fortune 500 firms, many believe the amendments will bring real industry opportunities to the state. By cutting the red tape for interested traders, the market can effectively cut the middlemen who profit from these trade regulations.

Delaware isn’t alone. In 2017, Illinois introduced the Illinois Blockchain Initiative, a collection of county and state groups focused on developing and exploring innovations within the cryptocurrency ecosystem. Its more specific focus is to improve the efficiency of blockchain applications in Illinois government systems. West Virginia is even hosting a trial blockchain platform for voting with mobile devices in the primary election. It’s a brand new election method limited to citizens in two different counties in order to test blockchain voting security and interest.

Future of blockchain use

While IBM isn’t the first to laud blockchain technology for having bigger uses than cryptocurrency, they might be the most visible. They now offer “Blockchain-as-a-service” (BaaS) to help companies use the technology at a lower cost than buying the tech for on-site use at work.

In 2017, IBM fellow Jeremy Cuomo gave a speech for the House Committee on Science, Space, and Technology, stating that IBM has over 400 blockchain research projects and that the technology was completely transformative. He described a partnership with the world’s biggest shipping company, Maersk, to develop the world’s first blockchain-based electronic shipping platform. The project enables a single look at all shipping items being processed and could save the company billions of dollars over using a mostly paper-based system. This magnitude of cost savings has far-reaching implications and would undoubtedly encourage others to follow suit, corporations and governments alike.

At VeriToken, our goal is to launch a platform that encompasses multiple fields where blockchain can introduce improvements to the status quo. Whether in government, healthcare, human resources, job recruitment, or even online dating, the VeriToken platform has applications that can disrupt entire industries—for the better.

And with so many industries potentially impacted by the improvements offered by blockchain technology, it’s difficult not to see this innovation as a world-class topic. The U.S. is a leader in blockchain development, but the improvements from the tech are bigger than purely national interests, and benefit everyone.



Image via Pexels.

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