Blockchain Technology, a Boon for the Government

Blockchain Technology

Blockchain has evolved into a technology of the mainstream over the recent past. With several myths being busted, this technology has emerged as the go-to solution for various sectors including the government. The public sector can benefit in the following ways from Blockchain Technology.

  • Trustworthiness in the Government– One of the essential ways of securing trust by the government can be with the use of blockchain technology and blockchain-based solutions. The technology ensures a degree of transparency and decentralizes various processes which otherwise are under the centralized control of the government. Blockchain solutions can be effectively used for providing public services to citizens and this would also enable independent verification of government claims. It would help in the protection and verification of data as well as make these services more citizen-centric. Governments can allow citizens to use cryptocurrency to make payment for certain government utilities and can make use of blockchain for their processes. For instance countries like Estonia, Sweden, Georgia are “experimenting with blockchain-based land registries, enabling multiple parties to securely hold copies of the registry.” If this model is implemented then it can help in quick resolution of property disputes or withhold them from arising. Transparency and in due process trustworthiness in the government increases as both people and the government get access to records which brings down mutual mistrust.
  • Cost Reduction and Efficiency Augmentation– Government resources are never enough especially in developing countries, where the government has to maximize its work with minimum resources. Adoption of blockchain technology can help in “streamlining processes, reducing burden of audits while providing increased security and data integrity.” For example the US government is often encountered with the challenge of reconciling intra-governmental transfers, with colossal amounts blocked in unreconciled funds of the federal government’s budget. The reconciliation process is expensive, exhaustive and also generates some degree of uncertainty in the budget. The government can make the process less time consuming and more efficient with the use of blockchain solutions. This is because, “blockchain could provide a permanent audit trail and facilitate faster reconciliation.”
  • Management and Protection of Data and Digital Assets– Although government agencies put in their best efforts to protect citizen data, yet there is always a possibility of hackers obtaining access to critical databases. They can even manipulate the data and there remains the risk of a data breach, like in 2015 when criminals had gained access to employment history, social security numbers, personal details and fingerprints of 20 million US citizens whom the government was doing a background check on. Even blockchain technology is not absolutely fooling proof but data encrypted with blockchain is far more difficult to be breached than in ordinary cases. It certainly reduces its vulnerability and many countries are adopting them to protect public data. Estonia has introduced a technology named Keyless Signature Infrastructure (KSI) to keep open data secure. It works through a system of hash values that “represent large amounts of data as much smaller numeric values. The has values can be used to identify records but cannot be used to reconstruct the information in the file itself.” The values are stored in blockchains and made available on a private network in government computers. Other countries can also take cues from this technology like keeping health records digitally and implementing them across different government agencies.
  • Monitoring and Regulating Markets– It is the government’s duty to keep a check on the market so that it remains sustainable ensuring the protection of consumers from market vulnerabilities. For this the market regulating agencies need adequate data, that is usually obtained from financial services or few companies or they inspect themselves. The process is a tedious one and does not guarantee the accuracy of the data as there may be fraud or genuine mistakes by the other parties.Blockchain technology can redress this issue through its distributed ledger system which makes data collection convenient and regulators can collect data on a real-time basis. A shared blockchain-based platform can allow banks and various companies to provide data that the government can access by simply ‘plugging directly into their system.’ This eliminates the chances of time lag and difficulties associated with self-reporting.
  • Wide Range of Implementation– Several cases of blockchain implementation has come to the fore from across the globe. Blockchain technology with its obvious advantages can be put to various uses some of which may be enlisted. It can be used for better development of the smart cities, in central banking services, in validating and certifying educational and professional qualifications, keeping track of vaccinations, providing loans, students grants and also in tax and duties collection, e-voting etc.. Besides it can be used for title registrations, identification and in healthcare services. It also helps in improving the efficiency of existing transactions and collection systems for various services.

Thus Blockchain can find an array of applications in public services and can prove to be a real boon for the government. While certain precautions need to be taken care of when this technology is implemented on a large scale, yet the benefits are too obvious to be ignored. Be its use for military applications and security or democratization of education, one can name it and find the application of blockchain in that field. Therefore governments should utilize this technology through its effective and versatile implementation on a large scale.